Crain's Detroit Business, October 30, 2023 by Crain's Detroit Business

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Many auto suppliers are worried about losing workers during and in the aftermath of the UAW strikes against the Detroit 3 automakers. | GETTY IMAGES

Strike takes toll on suppliers UAW work stoppage with Detroit 3 likely to result in higher labor costs, loss of employees for supply chain | By Kurt Nagl Despite having no say in contract negotiations between the United Auto Workers and the Detroit 3 automakers, suppliers could be hit hardest by the strikes and their aftermath. Tier-one and sub-tier suppliers have laid off thousands of workers in Michigan and around the

country to mitigate financial impact, but it’s going to get a lot worse as the strike drags on and even after it’s settled. The automotive industry has a labor problem — and it isn’t just the UAW. When auto factories go down, suppliers have two choices: ◗ They can keep workers on the

payroll, bleeding money while production lines are idled; ◗ They can implement layoffs, which might come at a much higher cost as employees who are shown the door temporarily might never come back through it. “It is absolutely a concern,”

By Jay Davis

In March 2017, Detroiter Raphael Wright announced his plans to open a community grocery store in the city. In October, after a lot of hard work and fundraising, Neighborhood Grocery opened at 500 Manistique St. in Detroit’s Jefferson-Chalmers neighborhood. The venture is a passion project for the 34-year-old Wright, who grew up on the city’s east side. “I saw all the developments happening downtown and in Midtown, and I wanted to do

something where I live,” Wright told Crain’s. “I wanted the neighborhoods to see the type of development and that we can redevelop where we come from.” Neighborhood Grocery sits in a 6,000-square-foot space that previously housed a liquor store. The main floor and rear inventory space are about 3,000 square feet each. The store operates 9 a.m.-9 p.m. Tuesday-Sunday. Along with Wright, four employees run the store each day. It’s believed that Neighborhood Grocery is the first grocer in Jefferson-Chalmers in at least 20 years. A grand opening event is planned for Nov. 18. Wright said he’s invested

Suppliers, whose blue-collar wages are substantially lower than automakers’, have struggled with labor for years. At the same time, their margins are also much thinner and have not returned to pre-pandemic health. See SUPPLIERS on Page 18

Shinola bets on bricks and mortar

Black-owned grocery opens on east side Aims to fill gap in healthy food options

said Ann Marie Uetz, partner at Foley and Lardner PC whose practice centers on automotive supply chain and bankruptcy. “We talk about the Amazon effect of employees who are laid off and going to work for similar or in some cases better wages in other industries.”

Brand to open retail location in Grand Rapids By Kurt Nagl

Neighborhood Grocery owner Raphael Wright opened his store to offer more healthy, accessible options to Jefferson-Chalmers residents. | KEITH HORTON

about $1 million into the business. Earlier this year, he earned the $85,000 top cash grant prize from Motor City Match. Wright See GROCER on Page 19

Shinola Detroit plans to open a retail location in downtown Grand Rapids as part of a broader push back into brick-andmortar, where the maker of watches and luxury goods is seeing a resurgence of sales it hopes will help yield a profit this year. The Detroit-based manufacturer of Runwell clocks, watches and leather accessories is set to open a 1,300-square-foot shop at the corner of 40 Monroe Center St. NW just in time for the Black Friday holiday shopping week-

end next month, said Awenate Cobbina, CEO of Shinola parent Bedrock Manufacturing Co. Once open — the exact date is still to be determined — the new retail store in Grand Rapids will be Shinola’s first since the COVID-19 pandemic began in early 2020, the sixth in Michigan and 23rd in the U.S. While many businesses rethink brick-and-mortar, especially during turbulent economic times of late, Shinola is reprioritizing its physical presence. See SHINOLA on Page 17

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Sanders Bumpy Cake could be in scarce supply By Jay Davis

Sanders’ iconic Bumpy Cake could be in short supply by the end of the year if a new baking partner is not found soon. Stock of the beloved treat is dwindling as Sanders parent company Second Nature Brands, which acquired Clinton Township-based Sanders Candy in 2018, aims to find a new baker after the Sept. 30 closure of Livonia-based Awrey Bakeries LLC, which for years made the Bumpy Cakes for Sanders. Second Nature Brands CEO Vic Mehren detailed the issue in a social media post last week. He said the Madison Heights-based company has been seeking a new baking partner since the Awrey closing was announced in August but have so far been unsuccessful. Mehren told Crain’s that a national search for a new bakery partner began soon after the announcement of the Awrey’s closure. “As much as we love Michigan, we’re regionally agnostic as far as where the cakes come from,” the CEO said. “We were hopeful someone would come in and buy (Awrey), but we didn’t rely on that. “Part of the reason the Bumpy

Sanders’ Bumpy Cake may no longer be available if Second Nature Brands cannot find a new bakery to make the more than 100-year-old cake. | SANDERS CANDY

Cake is special is the way its made. That’s the reason it’s special. It’s tricky to make. It requires certain processes not all bakeries have. We also have high quality standards, and we need a partner who can produce in the quantities we need. Sometimes these things take a little time.” Minnie Marie Bakeries Inc., which acquired Awrey in February 2013, announced the closure in August. At the time, Awrey Vice President Diane Lynch attributed the closure to an increase in production costs and a perceived declining interest in desserts. Nearly 100 staffers were laid off due to the closure. The social media post detailing

the possible end of the Bumpy Cake in six hours had nearly 600 comments and more than 1,400 shares on Facebook, with fans of the chocolate fudge and buttercream cake raving about the dessert that has been sold for more than 100 years and bemoaning its possible loss. The Bumpy Cakes remain available at Sanders stores, on the company website and at select retailers in Michigan. Mehren told Crain’s that Bumpy Cake is an important part of the Sanders lineup but a temporary pause in production would not hurt its bottom line. Sanders’ total sales have doubled since Second Nature took over, he said.

Royal Oak vegetarian restaurant for sale By Jay Davis

A Royal Oak restaurant has closed for good and the business and building that housed the beloved vegetarian eatery for more than 40 years are for sale. Inn Season Cafe owner Nick Raftis and Realtor Joe Tinpan confirmed the listing at 550 E. Fourth St. last week. The 2,708-square-foot property built in 1945 and business is listed at $1.1 million. The offering includes a liquor license, which Raftis acquired in 2017. The vegetarian restaurant, which also catered to vegan and kosher eaters, had been closed for about three years for remodeling, Raftis said. Recent health issues contributed to the reason for not reopening. Inn Season Cafe opened in 1981 and Raftis, 68, has owned the business for the last 20 years. In its last full year of operation in 2019, the business brought in more than $1 million in sales, he said. “I’ve owned the place for more than 20 years. Everybody else kind of aged out,” Raftis told Crain’s on Monday. “Re-establishing the business was very difficult to do.”

Raftis did not say how much he invested in the unfinished remodel. Tinpan last week said the hope is to sell to a party interested in re-establishing the Inn Season Cafe brand. “A younger person with drive could bring (Inn Season Cafe) back to life quickly,” said Tinpan, of New Michigan Realty in Troy. The closure comes less than a year after Raftis closed another restaurant. Inn Season Kitchen, at 32867 Woodward Ave. in Royal Oak, was a mostly carryout sister restaurant to Inn Season Cafe. It closed Dec. 19, 2022, after about a year and a half in business. Raftis cited rising costs as the reason for that closure.

Correction A story on retaining and attracting tech talent in metro Detroit that appeared in the Oct. 16, 2023, issue of Crain's Detroit Business incorrectly said the Materials Advancement and Research Hub based in Lansing and led by the Michigan State University Research Foundation was seeking a Tech Hub designation. It had only applied for a related grant.

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Strand Theatre in Pontiac selling to church

Music Hall

$20M restoration of venue completed in 2016

Music Hall seeks tax-exempt bonds

TOD WILLIAMS BILLIE TSIEN ARCHITECTS/PLOMP

By Kirk Pinho

Nonprofit tapping lower-cost financing for $122 million expansion that includes new concert venue | By Sherri Welch

In financing a $122 million expansion that will bring a new concert venue to the city, Music Hall Center for the Performing Arts in Detroit is taking a note from the Detroit Opera and its late founder, David DiChiera. The nonprofit is tapping 501(c) (3) tax-exempt bonds, a finance product used in affordable housing, nonprofit hospitals and university projects across the country but something Music Hall leaders don’t believe has been used in Detroit since the renovation of the Michigan Opera House almost 25 years ago. The 501(c)(3) tax-exempt

bonds, which are available for use by charitable nonprofits and must be issued by a public body, will finance up to $80 million or two-thirds of the cost of the expansion planned for the vacant lot next to Music Hall’s historic home in the Foxtown neighborhood. Plans include a new, contemporary concert venue with capacity for 1,900 people, recording studios, offices for agents and other music industry professionals and a music academy operated by Music Hall.

“We’re hoping other nonprofits can learn from our model, and they’ll be able to use it as a precedent.” — Vince Paul, president, Music Hall

See MUSIC HALL on Page 19

The historic Flagstar Strand Theatre for the Performing Arts in downtown Pontiac is being sold to a new church. Pontiac Church, which opened last month, is buying the property at 12 N. Saginaw St. several years after the Westberg brothers completed a $20 million renovation of the formerly dilapidated theater in late 2016. The pending sale is disclosed in a Michigan Strategic Fund briefing memo requesting board approval of an amendment to a $4.5 million low-interest Michigan Community Revitalization Program loan from October 2015, of which $1.5 million is forgivable. The amendment removes Kyle and Brent Westberg from the obligations of the loan. The MSF board approved the change last week. The memo says there have been “some operational challenges due to lagging performance offerings and the impacts of the COVID 19 pandemic” at the Strand, which also had a Slows Bar BQ outpost when it opened that has since closed. A statement from Kyle Westberg and Dustin McClellan, one of the church’s lead pastors along with his wife Collett, says negotiations on the sale continue. “The church intends to continue the venue’s existing operations and expand community programming,” the statement reads. “The process included getting approval from the Michigan Strategic Fund board to approve the ownership transfer. Negotiations are ongoing and the entities will plan to make a formal announcement regarding an official agreement in the coming weeks.” Crain’s reported in 2016 that financing for the project came from the Opportunity Resource

The Flagstar Strand Theatre for the Performing Arts is selling to Pontiac Church, seven years after a $20 million restoration was completed by the Westberg brothers. | COSTAR GROUP

Fund, which provided pre-development financing and has been repaid; Enhanced Capital, which is the investor in $3.3 million in federal historic tax credits the project received; the Michigan Economic Development Corp., which provided the $4.5 million loan; and Develop Michigan Inc., which provided a construction loan and some of the permanent debt on the project, along with IFF. A $1.85 million PACE loan took out the Develop Michigan and IFF debt on the project, according to a board briefing memo from last week. Other sources included about $900,000 in developer equity and $7.6 million in equity from a city of Pontiac renovation that was never completed. There was also about $1.97 million in deferred developer fees. In August, Kyle Westberg also listed the mixed-use Lafayette Place multifamily and retail project he redeveloped downtown for sale for an unlisted price. The development, in the 80,000-square-foot former Sears, Roebuck & Co. department store, cost $20 million and opened in late 2012. It has 46 apartments and had a market, which closed during the pandemic, as well as an Anytime Fitness, which remains open under new ownership, Westberg said at the time.

Data breach impacts students, employees, donors UM begins notifying 230,000 that their information was compromised By Anna Fifelski

Social Security numbers, health and financial information and other data may have been accessed during a far-reaching data breach that prompted the University of Michigan to remove itself from its internet network shortly before the start of the fall semester. An unauthorized party may have accessed the personal information of anybody affiliated with

UM, including students, applicants, employees, donors, contractors and alumni as well as research study participants and patients of University Health Service and the School of Dentistry, the university said in a news release last week. UM began the process of notifying 230,000 individuals whose sensitive information was compromised during the data breach Oct. 23, a spokesperson for the university said. They declined to

share how far in the past data could be accessed and if more people were impacted. UM sent a letter to all university-affiliated individuals affected by the breach. The letter states an unauthorized party was able to access the university’s computer network Aug. 23-27, at which time UM shut down its connection to the internet in an attempt to “contain the incident.” See BREACH on Page 19

An unauthorized party may have accessed the personal information of anyone affiliated with the University of Michigan, the university said last week. | UNIVERSITY OF MICHIGAN OCTOBER 30, 2023 | CRAIN’S DETROIT BUSINESS | 3

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REAL ESTATE INSIDER

Ilitches to sell parcels to UM for $9.57M A

And it might be a lot couple years ago, I more than you might told you about think. some property The land was primarily sales downtown that assembled starting in the seemed to be linked to the summer 2021, around the Ilitch family. time it became the city’s As of this month, we got worst-kept secret that mesome details about that Kirk Pinho ga-developer and UM land’s fate. mega-donor Stephen Several of the parcels make up what the University of Ross had started working with the Michigan says is a 1.18-acre block Ilitches in the District Detroit area it is purchasing from the Ilitch to bring the UM building there infamily’s Olympia Development of stead of the site of the former halfMichigan for $9.57 million. It will built Wayne County Consolidated be used to create a new parking Jail controlled by Dan Gilbert at structure for the University of I-375 and Gratiot Avenue. Did that knowledge about Ross’ Michigan Center for Innovation efforts drive up the cost? Almost across the street. Put another way: $8.11 million certainly. But it was clear that the Ilitches wanted that land, and badly. per acre. Gulp. They paid $3.466 million for The university isn’t releasing details on the parking structure, in- three parcels at 220 West Adams, cluding its size, cost and who is 212 West Adams and 204 West Adbuilding it, but we do have a gener- ams. For 0.306 acres, that’s $11.33 al idea of how much the Ilitches, million per acre. As part of another deal, they who I emailed seeking comment, paid for the land on which it is to bought another property at 231 West Elizabeth in that footprint as sit over the years.

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All in, the Ilitches spent an estimated $8.31 million on land on that block of the District Detroit in the last two-plus years. | KIRK PINHO

The University of Michigan is purchasing a 1.18-acre block in the District Detroit area from the Ilitch family’s Olympia Development of Michigan for $9.57 million. | UNIVERSITY OF MICHIGAN CENTER FOR INNOVATION

part of a $1.25 million deal in June 2021. For that 0.083-acre chunk of land, that amounts to about $15.1 million per acre. In another deal in November 2021, they paid $2.33 million for properties at 228 West Adams, 248 West Adams and 223 West Elizabeth. For those parcels totaling 0.206 acres, it’s $11.3 million per acre. And another property at 245 West Elizabeth got scooped up in a $1.26 million deal. For 0.11 acres, that’s $11.45 million per acre. All in, they spent an estimated $8.31 million on land on that block in the last two-plus years. That doesn’t include several parcels they had long owned.

Belle Tire leaves longtime Allen Park headquarters for Southfield By Kirk Pinho

Belle Tire Distributors Inc. called Allen Park its headquarters for nearly four decades. Not anymore: The company has relocated to a Southfield office tower with ample room to keep growing. Belle Tire, which was founded more than a century ago, has moved into about 22,000 square feet in The Century office building — up until a few years ago, known as The Maccabees Center — with another 11,000 square feet available as part of its lease on the 10th and 11th floors for a total of 33,000 square feet or so. Approximately 100 people, ranging from the C-Suite to legal, finance, HR, IT, property management and other departments, made the move from Allen Park, the company’s home base since 1984. Don Barnes III, president and chief tire guy for Belle Tire, said the move was necessitated because of a large addition being added to its 306,000-square-foot distribution center at 1000 Enterprise Drive. Construction on the 90,000 square feet of new space there began in July and is expected to wrap up in June. “We ended up losing all of the employee parking,” said Barnes, who was a Crain’s Detroit Business 40 Under 40 honoree in 2022.

The Belle Tire headquarters in Southfield. | KIRK PINHO

two in Indiana — with a current store count of 173 plus 3,200 employees on payroll, up by 500 or so since earlier this year prior to the Tireman acquisition. The move also allows Belle Tire to operate more efficiently. Its previous office space at 1000 Enterprise was scattered throughout the large building, which was originally built as a potato chip factory, Barnes said. “It really gave us the opportunity to get teams really together to be able to collaborate a lot more,” Barnes said. The Century building is at 25800 Northwestern Highway at Civic Center Drive and is owned by Livonia-based Schostak Bros. & Co., which developed the property in the 1980s. It is about 308,000 square feet, according to CoStar

“But it was fitting, anyways. This is really supporting all of our new store growth, so the addition was put on in order to support all of the new organic greenfield growth we have going on. That was the catalyst, but to relocate them to Southfield was really more of where is probably the best spot from our current staffing where it’d be great and easy to get to.” — Don Barnes III, president and chief tire guy, Belle Tire Earlier this year, Belle Tire acquired Toledo-based Group Inc., a Washington, D.C.Tireman Auto Service Centers, based real estate information seradding 18 Tireman locations and vice. CoStar says the asking rent is 300 Tireman employees to its $18.95 per square foot per year, plus electrical costs. workforce. Schostak and the Royal Oak ofBarnes said that Belle Tire currently has 10 locations under con- fice of Chicago-based brokerage struction — Eight in Illinois and house JLL worked on the lease.

“It really gave us the opportunity to get teams really together to be able to collaborate a lot more.”

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10/27/23 12:05 PM

State budget director leaving for MSU job By David Eggert

Researchers work in the VanCamp Incubator facility in East Lansing. | 517 VISUALS

Michigan loses out on hub; MSU wins grant By Anna Fifelski

The state of Michigan was shut out from a federal program that seeks to create 31 tech hubs across the country, but a consortium from the Michigan State University Research Foundation did win a related grant. “Designation is an endorsement of the region’s plans to supercharge their respective technological industries to create jobs, strengthen U.S. competitiveness, and protect national security,” the U.S. Economic Development Administration said in a statement released last week. “The Tech Hubs announced today focus on industries ranging from autonomous systems, quantum computing, biotechnology, precision medicine, clean energy advancement, semiconductor manufacturing, and more, and highlight how the Biden Harris Administration is investing in innovation and economic growth in every region of the United States.” The U.S. Economic Development Administration’s “Regional Technology and Innovation Hub Program,” also known as “Tech Hubs,” is offering $10 billion in funds. The program was authorized by the CHIPS and Science Act of August 2022. The chosen Tech Hubs are located in 32 states and Puerto Rico, and they can now apply to receive between $40 million and $70 million for implementation funding, totaling nearly $500 million. The Phase 1 winners were selected from nearly 400 applications that included industry, academia, state and local governments, economic development organizations, and labor and workforce partners. As part of the Tech Hubs competition,

each consortium outlined plans for strengthening its region’s capacity to manufacture, commercialize and deploy critical technologies. Four regions in Michigan applied but were denied the federal designation. They include the Detroit-Ann Arbor Mobility Tech Hub led by Michigan Central, the Greater Grand Rapids Global Center for Battery Production Innovation led by Grand Valley State University, the Discover Blue Consortium led by Traverse Connect and Skylift led by Western Michigan University. The Materials Advancement and Research Solutions or MARS Strategy Development Consortium based in Lansing and led by the Michigan State University Research Foundation did receive one of 29 strategy development grants from the federal government. The operation seeks to foster a regional coalition and develop a strategy to advance synthetic diamond — a lab-made material widely used as coating for industrial equipment ranging from semiconductors to quantum sensors — and rare isotope production. “I am thrilled that Michigan has won a competitive, national Tech Hub grant to develop and deploy technologies critical to the future of the economy and our national security,” Gov. Gretchen Whitmer said in a press release. “(MARS) will use this grant to work on synthetic diamond and rare isotope production. The national network of Tech Hubs, funded by President Biden’s bipartisan CHIPS and Science Act, will help Michigan continue to be a center of game-changing innovation. Let’s keep building the future.” Jeff Smith, the director of research parks for the MSU Research

Foundation said he believes receiving the funding was more important than the chance of an official designation as a Tech Hub. “A lot of the recipients of that designation were shovel ready,” Smith said. “And we didn’t actually feel like we were at that point. What we needed more than anything was the planning funds to develop a strategy and build this consortium out further.” Smith said it’s not known when the $400,000 federal grant will come in. In addition to the grant, MARS is receiving a $100,000 inkind donation from the MSU Research Foundation. MARS may have another chance at the Tech Hub title later on. Smith said the organization will be putting together a strategy to compete against a smaller pool of the applicants who received EDA funding. “It’s an honor to be recognized as the lead and to represent the state,” Smith said. “However, the applications that came from around the state were excellent, and really do represent our competitive advantage and competitive strengths in the state and those should not be discarded at all.” Also receiving a grant: The Midwest Wireless Innovation Strategy Development Consortium, which is led by the University of Notre Dame and will serve Illinois and Michigan. The consortium seeks to develop a strategy to connect, strengthen, and grow a network of 21 physical centers into innovation clusters that specialize in advanced manufacturing and advanced materials development and workforce training. The release did not specify how much grant money that consortium received.

LANSING — State budget director Chris Harkins is leaving state government and will be succeeded by Jen Flood, an aide to Gov. Gretchen Whitmer. Harkins, the Democratic governor’s third budget chief, was Chris Harkins Jen Flood appointed in September 2021. He will continue to serve in the Whitmer said in a statement. position until mid-November “I’ve signed five historic budand in an advisory capacity un- gets into law that make record til mid-December before start- investments without raising taxing a finance-related job at es. She has been my point person with the Legislature and the Michigan State University. “It has been an honor to serve budget office every year as we Gov. Whitmer and the state of crafted and passed bipartisan Michigan in this capacity. Pub- budgets that put Michiganders lic service is a noble calling and first.” Flood said that as a mom and I consider myself lucky to have worked alongside such dedicat- lifelong Michigan resident, buded public servants these past get work “holds special meanseveral years,” Harkins said in a ing to me. I look forward to working with (legislative budstatement Wednesday. Flood is a deputy chief of staff in the executive office, overseeing the legislative affairs, federal affairs, policy, appointments and — Chris Harkins, state budget director community engagement divisions. The East Lan- get) Chairs Sarah Anthony and sing resident has bachelor’s and Angela Witwer on future budmaster’s degrees from MSU and gets to help empower our compreviously directed legislative munities and show that anyone and public affairs for Whitmer, can make it in Michigan.” Harkins formerly led the Senwas a lobbyist at Dykema, a strategist with Byrum & Fisk ate Fiscal Agency, worked in the Communications Advocacy and budget office during Gov. Rick Snyder’s administration and a legislative assistant. “Jen knows this job well and was a Republican legislative has what it takes to deliver,” policy aide.

“It has been an honor to serve Gov. Whitmer and the state of Michigan...”

Detroit Employment Solutions names new CEO By Dustin Walsh

ready built a strong and successful partnership at Detroit at Detroit Employment Solu- Work, and as a city we are fortutions Corp. last week an- nate to have the sort of strength nounced the promotion of Dana and depth of expertise that we Williams to the role of president have in our workforce team.” Williams joined DESC in 2020 and CEO. from DTE Energy Williams, formerly where she served in the Michigan Works! various leadership agency’s chief strategy roles, most recently as officer, succeeds Terri a senior manager for Weems in the role, who the DTE Energy Founleft in June to become dation. She also worked the city of Detroit’s in human resource group executive for roles at Butzel Long PC workforce developand Ianni & Associates. ment. Dana Williams Williams earned a Williams’ main priority will be expanding the city’s bachelor’s from University of Detroit at Work program started Michigan and a master’s from under Mayor Mike Duggan in Walsh College. “I am honored to continue 2017 to provide job training to city residents as well as the my Detroit at Work system caGrow Detroit Young Talent pro- reer and become a part of the strong legacy of leadership at gram. “I’m delighted by the DESC the DESC and especially at a board’s decision to appoint time when economic opportuDana to this role, which will nities for Detroiters abound,” continue to be so critical in de- Williams said in a press release. livering opportunities for career “It is our system that helps unadvancement to Detroiters,” lock the vast talent we have Duggan said in a press release. here, ensuring our residents can “Dana and Terri Weems have al- take part.” OCTOBER 30, 2023 | CRAIN’S DETROIT BUSINESS | 5

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10/27/23 12:33 PM

EDITORIAL

MSU board antics hinder search for president

SYLVIA JARROUS

t was, again, not a great week for Michigan State University. When a record-setting football drubbing at the hands of the Wolverines is the best thing making news, it’s time for some serious change. A nearly inexplicable scoreboard trivia question featuring a photograph of Adolf Hitler went viral, making national news. Interim President Teresa Woodruff promised a review. The board of trustees demanded to know what happened. And then the big fractures on the school’s board of trustees began spilling into full view, with trustee Brianna Scott accusing board Chair Rema Vassar of, among other things, taking part in leaking the name of Brenda Tracy, former football coach Mel Tucker’s accuser, to the media. Vassar fired back saying the accusations were fabrications and an airing of personal grievances. The university’s lawyers are now investigating the accusations. It’s now been more than a year since Samuel Stanley resigned as MSU president after less than a year and a half on the job. The university is in dire need of strong, buck-stops-here leadership that is em-

powered and in it for the long term. Woodruff has handled the job on an interim basis with a steady hand, but she also evidently concluded that there was no long-term percentage in working with this board and removed herself from consideration for the presidency. The allegations against Board Chair Rema Vassar are serious, especially the accusation by Scott that Vassar leaked the

name of Tracy. Vassar vehemently denies that she had any involvement in the leak. But the degree to which board members have gone public with their grievances with each other is inexcusable. Disagreement on a governing board is normal. This kind of public sniping among presumed adults with a governing and fiduciary responsibility to the university is not. It’s inexcusable. At a minimum, some members of this

board need to grow up. That’s because the most critical job they have right now is attracting a talented new president who is empowered to lead. The series of embarrassments to the university only underscore the desperate need for competent leadership. Woodruff has carried on with important business without much support from this board, but she’s also a short-timer in an interim role who can only do so much. The board’s antics only make finding a new leader for the university that much tougher. Who wants to deal with that headache? It’s worth noting that the co-chair trustees of the university’s presidential search committee are Scott and Dennis Denno, who has publicly lined up on Vassar’s side. This doesn’t bode well. MSU is one of Michigan’s signature institutions and does work every day that all of us can be proud of. It’s one of our most important economic engines. Leadership is key, and MSU needs it now. Hiring a president, is, after all, the most important duty the board has. And the infighting is only making that harder.

COMMENTARY

How Michigan can strengthen its position in the Battery Belt

proximity to OEM offtakers who cross the United States, the could use either processed batroads are changing: Among tery material or finished batteries the internal combustion in their products. Second, the engines that made Michigan fastate offers many brownfield mous are more and more electric and/or abandoned sites suitable vehicles. As the electrification of for rehabilitation to build plants mobility picks up speed, a new vefor new technologies. Stemming hicle supply chain is emerging to from the decades of outsourcing provide the batteries to build the future of transportation. To fortify John DeMaio, that preceded recent recognition its clean energy and automotive CEO of Graphex of a homegrown supply chain’s importance, these brownfield leadership, Michigan should so- Technologies, a sites offer a way to re-energize the lidify its membership within the midstream local economy with minimal disBattery Belt through investments graphite ruption to the local natural enviin mineral processing. processor with ronment. And third, state and loThroughout the past decade, an upcoming cal support focused, among other Michigan has established itself as plant in areas, on workforce development a clean energy leader. The past Warren. maximizes potential to train toyear, it produced more than 15,800 clean energy jobs, a number that places the day’s workforce for the jobs of tomorrow. Despite this clean energy leadership (and state first in the nation for green job growth and ~10% of the way toward its goal to pro- the state’s undisputed general automotive duce 167,000 clean jobs over the next de- might) Michigan is still considered by many cade. Former Gov. Jennifer Granholm’s to be a “maybe” on the Battery Belt map. Great Recession EV investments mean While some journalists describe the Belt as Michigan’s stake in the EV industry pre- extending as far northwest as Michigan, not dates the Tesla Model 3. Current Gov. all do. Furthermore, in its EV funding round Gretchen Whitmer’s MI Healthy Climate last fall, the DOE did not award funding to Plan emphasizes how vehicle electrifica- any Michigan battery projects. This shortcoming can be corrected. tion is key to the next decade’s progress toward 2050 decarbonization goals. And the From its announced and operational batstate’s current legislators are proposing tery gigafactories to its proximity to alwhat The New York Times calls “some of the ready-operational Canadian critical mineral mines, Michigan is well placed to be a most ambitious climate laws in the world.” Within this context, Michigan presents a centerpiece of EV battery production. Within the battery mineral supply chain strong case for EV battery supply chain investment. First, thanks to its world-lead- (which connects mineral mining to battery ing automotive heritage, the state possess- manufacture), Michigan is placed extremees outstanding engineering talent and ly well to drive and derive value from the

midstream: battery mineral processing. First, unlike mining, which is geographically dictated by the location of existing mineral deposits, mineral processing can thrive anywhere with the appropriate infrastructure and workforce. Michigan has both. The local workforce may not yet be skilled in the specific nuances of battery mineral processing, but those skills can be taught, and Michigan’s MEDC and community colleges already have a system in place to teach the basics. Next, unlike battery manufacturing, whose use of advanced technologies and robotics can somewhat limit job creation, battery mineral processing opens significant skilled and semi-skilled work opportunities for the local population. Michigan has one of the nation’s highest densities of engineers and a significant population left underemployed after decades of automaker outsourcing. Both populations would benefit from (and are already familiar with) the kind of skilled work such plants would provide. Third, Michigan’s location makes it an ideal spot to foster a “hub” approach to electric vehicle production. The state is already home to world-leading automakers. Its strategic location between mines in Canada and gigafactories in the southeastern United States is an additional boon. Overall, the state’s geography is well suited to build out processing capacity nearer to where minerals will be mined, manufactured, and ultimately deployed in vehicles. By encouraging critical mineral process-

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

ing, Michigan can accelerate a much-needed collaboration within the EV supply chain. Currently, mineral processors and OEMs want to execute offtake agreements for battery material, but the long runways and high costs of requisite testing can be seen as delaying the scaling of North American processing capacity. If Michigan could support this testing, either through provisions in the Inflation Reduction Act or anticipated legislation around the state’s Climate Strategy Plan, then OEMs could feel the confidence they need to commit to offtakes. In turn, offtakes would enable processors to scale North American production capacity faster, thus averting EV mineral bottlenecks. By disbursing this money for OEMs directly, Michigan could support its homegrown industry while enabling the market to support capable mid-stream processors to receive funding. Plus, by setting stipulations on that funding — for example, that it be repaid once the material has been tested, produced, and sold at scaled quantities, or that a certain percentage of the overall sup-

Michigan’s location makes it an ideal spot to foster a “hub” approach. ply chain’s value must be added in a Michigan plant — then that investment can pay dividends for state economic development as well for electric vehicle supply chains. Michigan is inseparable from our nation’s automotive history. Investment in the critical mineral supply chain will help ensure it is equally essential to automotives’ electric future.

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

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Gotion not pursuing IRA tax credits for Michigan plant By Kurt Nagl

Chinese manufacturer Gotion Inc. is not pursuing federal tax credits for its $2.4 billion electric vehicle battery materials plant near Big Rapids, according to a top North American executive. “Although Gotion Inc.’s planned facility in Green Charter Township is not pursuing IRA tax credits at this time, our financial and legal teams are in the process of reviewing and assessing the law,” Chuck Thelen, vice president of North American manufacturing for Gotion, said in a statement to Crain’s Detroit. “Our main focus is how we can potentially pass these cost-saving credits onto our American customers.” The company’s attitude toward lucrative incentives for domestic battery manufacturing is significant for a couple of reasons. First, manufacturers and joint ventures have pointed to the nearly $200 billion worth of advanced manufacturing credits up for grabs as part of the IRA legislation signed into law last year as a primary reason for investing in the U.S. Secondly, Gotion is a subsidiary of a company based in China, making it a potential “foreign entity of concern” and possibly ineligible for tax credits. Domestic automakers and their Asian battery manufacturing partners have for months been anticipating rule clarifications on tax incentive eligibility from the U.S. Department of Treasury, which is expected to update its guidance by the end of the year. Michigan has plenty at stake with several new battery plants in the works, including two with ties to China: Gotion and Ford Motor Co.’s $3.5 billion plant in Marshall, which was paused last month due to concerns over operating costs, according to the automaker. Gotion has been a major source of controversy for its ties to China, but not just companies with ownership connections to the Far East will be impacted by the Treasury’s eligibility rules. “Beginning in 2024, an eligible clean vehicle may not contain any battery components that are manufactured by a foreign entity of concern and beginning in 2025 an eligible clean vehicle may not contain any critical minerals that were extracted, processed or recycled by a foreign entity of concern,” the Treasury said in March. That would apply to essentially every EV battery company in the U.S. because China has a near stranglehold on the processing of battery materials and the manufacturing of battery components, said Kristin Dziczek, automotive policy adviser with the Federal Reserve Bank of Chicago’s Detroit Branch. “Given China’s dominance of refining and processing, the foreign entity of concern is a wider spread issue than just those companies that have ownership ties (to China),” Dziczek said. The IRA’s promise of a $35 per kilowatt hour tax credit for cell manufacturing, plus $10 per kilowatt hour for battery packs, helped spur much of the $100 billion in

North American EV investments recently announced by automakers and battery producers. Lisa Drake, vice president of EV Industrialization for Ford Model e, told reporters earlier this year that the IRA helped sway the company to build a plant in Marshall. “The IRA was incredibly important for us, and frankly it did what it intended to do,” she said then. “It allowed the United States to capture 2,500 fantastic technical jobs and all the indirect jobs that go with it, plus future growth. So, a big win for the U.S.” Now, locked in a bitter labor dispute with the United Auto Workers

and facing mounting criticism over its licensing agreement with Chinese giant CATL, the automaker halted the project. “We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” spokesman TR Reid said last month. Our Next Energy CEO Mujeeb Ijaz said last year that the IRA helped compel him to commit to a $1.6 billion battery plant in Van Buren Township. “We’re happy to see the U.S. government focused on the localization of the supply chain, as well as having cell manufactur-

ing be a very big part of the Inflation Reduction Act’s purpose,” he told Automotive News a year ago. Gotion’s plant near Big Rapids, expected to produce at least 150,000 tons of cathode material and 50,000 tons of anode material annually, would be eligible for IRA tax credits if the company passes muster with the Treasury, said Jacob Whiton, research analyst for watchdog policy and research center Good Jobs First, which tracks subsidies. Its battery pack plant in Illinois would net billions in incentives over the life of the credit, he said. It is not clear whether Gotion will

seek IRA tax credits for its Illinois plant. Thelen said he is not overseeing that project, and a company representative could not be reached. While it is not clear what exact guidance the Treasury will issue in the next couple months, the incentives clearly played a major role in luring investments to the U.S., which officials aren’t likely to lose sight of, Dziczek said. “The U.S. is playing catch up on building out a battery supply chain and building up battery production capacity,” she said. “You can’t make the eye of the needle so small that nothing qualifies.”

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After 20 years of work, Detroit’s east riverfront fully opens By Sherri Welch

seven parks and Detroit’s historic Eastern Market via the connected Dequindre Cut greenway walking and biking path. And two other greenways — Southwest Greenway between Ralph C. Wilson Jr. Centennial Park on West Jefferson to Bagley Street and the Mayor Dennis W. Archer Greenway between Larned and Jefferson, give access to the riverfront from neighborhoods in Southwest Detroit.

After 20 years and more than $300 million invested, the Detroit Riverfront Conservancy has completed the city’s east RiverWalk and connected a system of seven parks, returning the Detroit riverfront to the people. For the first time in decades, Detroiters and visitors can walk 3.5 miles from Gabriel Richard Park just east of the MacArthur Belle Isle Bridge to the site of the former ‘A very complicated thing’ Joe Louis Arena. Anyone who has ever tried to The east RiverWalk spans an move around the Motor City un- area previously dotted with cederstands it’s not fun to deal with ment factories that was the former traffic and crossing JefferUniroyal tire site, one of son Avenue, the main the most contaminated road running parallel to sites in the country. the river, can be daunting, Planning for the $325 said Mark Wallace, presimillion+ RiverWalk projdent and CEO of the Deect, which encompasses a troit Riverfront Conser5.5-mile span from the vancy. That made it tough Belle Isle Bridge to the for people to get to the Ambassador Bridge, beriver and enjoy it. By gan in 2003 with a $50 jumping on the east Riv- Mark Wallace million lead gift from the erWalk, residents and visTroy-based Kresge Founitors, alike, can avoid all of that, dation, support from the city of Wallace said. Detroit and General Motors. “The riverfront has had a proCommunity engagement led by found impact on the way our com- the conservancy’s founding presimunity comes together. Complet- dent and CEO Faye Alexander Neling this last piece of the East son helped shape the project, WalRiverfront will unlock a system of lace said. parks and trails that will provide The approach of seeking commemorable experiences for our munity feedback as the project was visitors and will provide a literal in planning was unique at the safe corridor for people to move time, he said, noting most park through the city without having to spaces were done by an architect fight with traffic,” Wallace said. or donor. “The riverfront is a powerful nat“When the conservancy ural feature that draws us to its launched, there were seven propbanks, and we are so excited that a erty owners we knew we had to beautiful section of our river that bring to the table,” Wallace said. has been fenced off for over a hun- “It’s a very complicated thing to acdred years will now be open for ev- complish when a nonprofit is just eryone to enjoy.” getting going.” A ribbon-cutting ceremony was But General Motors donating its held Oct. 21. piece of the riverfront in front of Pedestrians can walk or bike di- the GM Renaissance Center to the rectly to Belle Isle, fish from the conservancy in 2004 and John RiverWalk, head west to Cullen Stroh II and his cousin Peter Stroh Plaza to frolic in the sidewalk foun- transferring properties to the contain, ride the Cullen Family Carou- servancy through easements set sel, rent a bike, do yoga, grab a bite precedents that proved helpful in or board a boat for Diamond Jack’s negotiating with other property River Tours. They can also access owners, Wallace said.

For the first time in decades, Detroiters and visitors can walk 3.5 miles from Gabriel Richard Park just east of the MacArthur Belle Isle Bridge to the site of the former Joe Louis Arena. | DETROIT RIVERFRONT CONSERVANCT

“Some might say they couldn’t make their land available because of their insurance company or the financing,” Wallace said. “We could point to GM and say, ‘They figured it out. Can you?’” And in regards to the Stroh properties, “We could point to (those) and say, ‘These guys actually think the RiverWalk is going to enhance their values,’” he said. GM donated the first half mile of the riverfront, and the conservancy opened Cullen Plaza (named after the conservancy’s founding chairman Matt Cullen) and approximately two miles of East Riverfront RiverWalk, in 2007.

Battling contamination The last piece of the east RiverWalk took the longest to complete, given its location on one of the most contaminated sites in the country, Wallace said. Uniroyal was operating at the site up until 1978, he said. The city of Detroit bought the property, which included remnants of the Detroit Stove Co., in 1981. It sat untouched for another four years before the buildings on it were demolished in 1985-86. Cleanup of the site began 25 years later in 2011-12 to pave the way for the

RiverWalk. But it wasn’t until 2021 that construction of the last piece of the east RiverWalk began on the site, following litigation over who was liable for cleanup, land and then sediment remediation along the shoreline. “For us to repair the edge of the river, make sure the RiverWalk wasn’t going to be structurally unsafe, we had to do a $3 million project with the (Environmental Protection Agency) that did a big cleanup of that material and gave us confidence the ground would be stable and the path would be safe. That added an extra year,” Wallace said. “It’s been a long ride.” With a total investment of $200 million or more to date, the conservancy completed the first two pieces of the two-mile, west RiverWalk in 2020. Those pieces connect the east riverfront to the west riverfront. One of them, a boardwalk in front of the Riverfront Towers apartment complex, is completed but is not yet open because there isn’t a connection to the west of it, said Marc Pasco, director of communications for the conservancy. The nonprofit is now working to complete the Ralph C. Wilson Jr. Centennial Park by 2025.

It teamed up with the Joe Louis Greenway Partnership in January to raise the remaining $50 million needed for the west riverfront and another $300 million to $200 million to support the construction of the Joe Louis Greenway and a permanent endowment that will support the perpetual maintenance of both. “What the Detroit Riverfront Conservancy has accomplished in the past 20 years is just extraordinary and opening this final piece of the east riverfront is a perfect exclamation point,” Detroit Mayor Mike Duggan said in an emailed statement. “For 300 years, Detroit had a riverfront that was almost completely inaccessible to the public. In just two decades they have turned it into the best RiverWalk in America three years running. Thanks to their tremendous leadership and partners, it won’t be long before the conservancy completes its vision of a public RiverWalk stretching from the Belle Isle Bridge to the Ambassador Bridge.” Work on the next piece of the west leg along property owned by the Detroit Downtown Development Authority taking the RiverWalk to the Ralph C. Wilson Jr. Centennial Park is underway and set to be completed next year.

New carpool lanes now open on I-75 in Oakland County By Crain's Detroit Business

Some 14 miles of High-Occupancy Vehicle, or HOV, lanes are now open on I-75 in Oakland County — a first in the state. The Michigan Department of Transportation opened the lanes Tuesday afternoon as part of its yearslong I-75 modernization project. The left lane in each direction between 12 Mile Road in Madison Heights and South Boulevard in Pontiac are open to vehi-

cles with two or more people inside during the peak commuting hours of 6-9 a.m. and 3-6 p.m. Monday through Friday. Motorcycles, buses and emergency response vehicles can use the HOV lanes at any time. Outside of those hours, all drivers can use the HOV lanes. Gov. Gretchen Whitmer earlier this month signed legislation that authorized MDOT to create HOV lanes on new highway lanes built using federal dollars. Drivers can identify the HOV

Vehicles with two or more people can use the new High-Occupancy Vehicle lanes on I-75 in Oakland County during peak commuting times. | MICHIGAN DEPARTMENT OF TRANSPORTATION

lanes by diamond-shaped symbols on the pavement and designated signs. State and local police will monitor the lanes to ensure vehicles have the correct number of occupants and for safe movement in and out of the carpool lanes. Violators risk a civil fine of at least $250. Previously, the state had no operational carpool lanes, which add capacity and encourage carpooling to reduce congestion in an environmentally friendly way, according to MDOT.

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10/26/23 2:31 PM

Being a great place to work has its rewards. And awards. Because of our investments in industry-leading programs and resources, and our commitment to helping teammates achieve their personal and professional goals, we were awarded the Grand Stevie Award for Organization of the Year. I’m proud of this recognition, really proud of our dedicated employees, but most especially proud to be part of this community we all serve. Matt Elliott President, Bank of America Detroit

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ANALYSIS

Henry Ford Health-Ascension deal will have challenges how the deal will stem Ascension’s operational losses. “This joint venture addresses financial difficulties for Ascension, but success depends on addressing underlying operational issues and improving efficiencies,” said Alex Calderone, managing director of Birmingham advisory firm Calderone Advisory Group. “… this is a wait-and-see situation to determine (the deal’s) effectiveness.” HFH declined to discuss the integration at this time.

By Dustin Walsh

The same year that Henry Ford Health announced the largest-ever health care investment in the metro Detroit area — a nearly $3 billion new hospital tower in Detroit — it is becoming the largest health system in the region. This month’s announcement that HFH would merge eight Ascension Michigan hospitals into its control effectively doubles the size of the health system. Upon completion of the deal, HFH will have grown its acute care hospitals from five to 14, surpassing Corewell East’s (formerly Beaumont) footprint in the region of eight hospitals. HFH also operates a hospital outside the region, in Jackson. Henry Ford Health will also now employ 50,000 across the state at 550 locations, including its integrated insurer Health Alliance Plan, behind only Corewell Health, which was formed when Spectrum acquired Beaumont in 2022 and employs upwards of 60,000 in the state. But questions remain about the integration. HFH is already working hard to redevelop the New Center neighborhood where its headquarters and legacy hospital reside. Not to mention the challenges of integrating a massive chunk of a national system, one that’s culturally different as a Catholic health care organization.

Ascension and relief The joint venture, which involves transferring the eight Ascension hospitals over to Henry Ford Health in a no-cash deal, clearly provides relief to the struggling St. Louis-based Ascension, which has been bleeding cash in recent years. Last fiscal year it reported a $2.7 billion op-

Tough times

Henry Ford Health plans to merge eight Ascension Michigan hospitals into its control and effectively double the size of the health system. | HENRY FORD HEALTH

Ascension St. John Hospital on Detroit’s east side. | ASCENSION

erating loss despite $28 billion in revenue. “The American health care system is experiencing unprecedented operational and financial challenges, and Ascension is no exception to these larger trends,” Liz Foshage, executive vice president and CFO at Ascension, said in a September release. “The aftereffects of the COVID-19 pandemic, continued health care worker staffing shortages, ongoing supply chain challenges and persistent inflation were head-

winds we faced throughout the last fiscal year.” HFH, while much better off than Ascension, also posted losses last year. The Detroit system reported a net loss of $234 million in 2022 — though much of that can be attributed to losses tied to its investment portfolio. Even so, it’s not raking in the cash, reporting an operating margin of just $138,000 last year. HFH will manage the new entity under CEO Rob Riney and a new board of directors. Yet it’s unclear

It’s notoriously difficult to integrate competing health systems as each one operates with different backend technology and, ultimately, cultures. Beaumont had a noted rift between management and its providers under former CEO John Fox. Following the acquisition by Spectrum, leading to Corewell, the system struggled to contend with poor financial performance and unhappy doctors. In the first half of 2022, Corewell East had lost $100 million. Corewell hired doctor-friendly executive Ben Schwartz to lead its integration and culture turnaround of the former Beaumont hospitals in July last year. Then the system parted ways with Schwartz barely a year after he started. The system didn’t comment on why he departed, but two sources told Crain’s he simply couldn’t fix the broken economics — Beaumont historically had the highest labor wages in the region — and get buy-in from the once-burnt, twice-shy providers at the system.

Bear witness or move on? Adding more hurdles to the HFH/Ascension deal is two differ-

ing cultures. HFH is a secular system that defended its patients’ rights to an abortion during the hotly debated Roe v. Wade battle that played out across the country and in front of the U.S. Supreme Court last year. HFH said it would continue providing abortion services unless the laws in the state changed. Ascension is a national Catholic system and must abide by religious order. Catholic hospitals are required to follow the ethical and religious directives, approved by the U.S. Conference of Catholic Bishops, that state a hospital under their order may not provide abortion or sterilization services and may not promote or condone contraceptives. It’s unclear how that massive cultural divide will play out in HFH’s takeover of the Ascension hospitals and its impact on integration. HFH said it would abide by the Catholic order — for now. “Both organizations are committed to working to maintain the Catholic identity of the Ascension Michigan facilities included in the partnership,” the company said in a press release. ” It’s also likely some of the Ascension workers enjoy employment with a health system that directly aligns with their values. That impact, during consistent labor shortages in the industry, could be problematic for HFH as well. The reality is HFH is taking big swings to establish a dominant foothold in the region, juggling a $3 billion construction project to define itself as a “destination hospital” and a major expansion in the region to stake its claim as the metro Detroit provider of record. The question remains if it will be able to make all the big swings into home runs.

$273M in public funding sought for Henry Ford Health, MSU campus By Kirk Pinho and Dustin Walsh

Henry Ford Health, Michigan State University and Detroit Pistons owner Tom Gores are seeking more than $273 million in incentives and tax abatements for $3.02 billion in construction and redevelopment around the city’s New Center area. The public subsidy ask for the series of projects that includes a new 21-story hospital tower was first publicly disclosed in a presentation document for the nine-member Neighborhood Advisory Council. The partnership was first revealed in February. The incentives package includes the following: ◗ A $219.6 million transformational brownfield financing package that includes $114.4 million in state taxes, $69.1 million in non-city prop-

erty taxes and $36.1 million in city property taxes. That TBP package would encompass a new Henry Ford Health and MSU research building; a new parking garage; the redevelopment of One Ford Place into residential housing; and the construction of two new residential buildings. The new hospital and some other components are not included in the TBP. ◗ A Commercial Property Rehabilitation Act exemption of up to 10 years totaling $11.8 million on the two new residential buildings. ◗ A Commercial Redevelopment Act exemption valued at $1.4 million over the course of up to 12 years. ◗ A Neighborhood Enterprise Zone exemption for up to 17 years valued at $40.3 million for the redevelopment of One Ford Place. ◗ All of the proposed tax breaks and

incentives require multiple layers of public approval at the local and state level. In addition, more specifics on a series of mixed-use proposals have been spelled out, including a 154unit, $79 million new apartment building; a new $54 million, 105unit apartment building; and the $189 million proposed redevelopment of One Ford Place into 403 units of housing. Overall, the buildings would have 311 studios averaging 540 square feet, with 63 of them being considered affordable; 288 one-bedroom units averaging 749 square feet, with 57 of them being considered affordable; and 63 two-bedroom units averaging 1,076 square feet, with 13 of them being considered affordable. “We believe this development will provide great benefits for the

A rendering of a new planned hospital tower at Henry Ford Health’s Detroit campus. | HENRY FORD HEALTH

neighborhood and for the city of Detroit,” said Pistons Vice Chairman Arn Tellem. “The CBO process is part of a healthy public-private partnership and we look forward to working with everyone involved to maximize the positive impact.” The NAC presentation outlined mostly known designs for the Henry Ford Health development — such as the 21 floor, 1.2 millionsquare-foot new hospital tower with 877 patient rooms. But the plan also calls for a new parking garage with 1,500 spaces

and the central energy hub, which is projected to make the hospital all-electric. The CBO process requires that developers proposing development projects with a $75 million price tag receiving $1 million or more in property tax abatements or $1 million or more in city land engage with a Neighborhood Advisory Council to establish community benefits. Those can include jobs, local hiring, environmental protections, land use programs and local small business and resident inclusion.

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Michigan suing Meta over harm to children’s mental health By Barbara Ortutay Associated Press

manipulate its most vulnerable consumers: teenagers and children.” The lawsuits seek financial damDozens of U.S. states, including Michigan, California and New ages and restitution and an end to York, are suing Meta Platforms Inc. Meta’s practices that are in violafor harming young people and tion of the law. In May, U.S. Surgeon General Dr. contributing to the youth mental health crisis by knowingly and de- Vivek Murthy called on tech companies, parents and careliberately designing feagivers to take “immediate tures on Instagram and action to protect kids Facebook that addict chilnow” from the harms of dren to its platforms. social media. A lawsuit filed Tuesday “Kids and teenagers are by 33 states in federal suffering from record levcourt in California claims els of poor mental health that Meta routinely coland social media compalects data on children unnies like Meta are to der 13 years old without blame,” New York Attortheir parents’ consent, in Dana Nessel ney General Letitia James violation of federal law. In addition, nine attorneys general said in a statement. “Meta has profare filing lawsuits in their respec- ited from children’s pain by intentive states, bringing the total num- tionally designing its platforms ber of states taking action to 41 and with manipulative features that make children addicted to their Washington, D.C. “Meta has harnessed powerful platforms while lowering their and unprecedented technologies self-esteem.” Michigan Attorney General to entice, engage, and ultimately ensnare youth and teens. Its motive Dana Nessel outlined her reasons is profit, and in seeking to maxi- for joining the lawsuit: “Meta has, for some time, been mize its financial gains, Meta has repeatedly misled the public about aware of the dangers that ongoing the substantial dangers of its social and constant exposure to social media platforms,” the complaint media has on young people,” Nessays. “It has concealed the ways in sel said in a news release. “Docuwhich these platforms exploit and ments recently made public show

that Meta put its desire to profit from teens’ engagement on its platforms above the physical and mental health of that very impressionable demographic. I stand firmly with my colleagues in asserting that Meta has misrepresented the addictive nature of social media and has violated the Children’s Online Privacy Protection Act, for which it should be held accountable.” In a statement, Meta said it shares “the attorneys general’s commitment to providing teens with safe, positive experiences online, and have already introduced over 30 tools to support teens and their families.” “We’re disappointed that instead of working productively with companies across the industry to create clear, age-appropriate standards for the many apps teens use, the attorneys general have chosen this path,” the company added. The broad-ranging federal lawsuit is the result of an investigation led by a bipartisan coalition of attorneys general from California, Florida, Kentucky, Massachusetts, Nebraska, New Jersey, Tennessee and Vermont. It follows damning newspaper reports, first by The Wall Street Journal in the fall of 2021, based on Meta’s own research that found the company

U.S. Surgeon General Dr. Vivek Murthy called on tech companies, parents and caregivers to take “immediate action to protect kids now” from the harms of social media. | BLOOMBERG

knew about the harms Instagram can cause teenagers — especially teen girls — when it comes to mental health and body image issues. One internal study cited 13.5% of teen girls saying Instagram makes thoughts of suicide worse and 17% of teen girls saying it makes eating disorders worse. Following the first reports, a consortium of news organizations, including The Associated Press, published their own findings based on leaked documents from whistleblower Frances Haugen, who has testified before Congress and a British parliamentary committee about what she found. “Meta has been harming our children and teens, cultivating addiction to boost corporate profits,” California Attorney General Rob Bonta said. “With today’s lawsuit, we are drawing the line.”

The use of social media among teens is nearly universal in the U.S. and many other parts of the world. Almost all teens ages 13-17 in the U.S. report using a social media platform, with about a third saying they use social media “almost constantly,” according to the Pew Research Center. To comply with federal regulation, social media companies ban kids under 13 from signing up to their platforms — but children have been shown to easily get around the bans, both with and without their parents’ consent, and many younger kids have social media accounts. — Associated Press writers Michael Casey, Michael Goldberg, Susan Haigh, Maysoon Khan and Ashraf Khalil and Crain’s Detroit Business contributed to this report.

WSU, others announce semiconductor education plan By Anna Fifelski

Four area colleges and universities are moving forward on expanding education and training programs into the manufacturing of semiconductors after receiving funding from the state. Representatives from Wayne State University, the University of Michigan, Oakland University and Washtenaw Community College gathered last week at WSU to announce how they plan to use the funding from the Michigan Economic Development Corp. to further semiconductor development in Michigan. “These programs allow Michiganders to come together to do what we do best: find solutions,” MEDC CEO Quentin Messer Jr. said at the event. Wayne State shared that they received $900,000 to create three programs: PCBCraft, Semiconductor Stars and Career Craft. PCB, or printed circuit boards, are the circuit boards most used in electronic devices and automotive components. The program is open to students and working professionals and will be hosted on the Wayne State campus. Semiconductor Stars is designed to introduce middle school and high school students to semiconductor engineering through workshops and hands-on activities. CareerCraft is open to adult learners with an associate degree

Avazeh Attari (left), director of higher education partnerships at the Michigan Economic Development Corporation; Louay M. Chamra, dean of the School of Engineering and Computer Science at Oakland University; Amar Basu, professor of Electrical and Computer Engineering at Wayne State University; Valeria Bertacco, professor of Electrical Engineering and Computer Science as well as vice provost for Engaged Learning at the University of Michigan; Mohammed Ismail, chair and professor of Electrical and Computer Engineering at Wayne State University; Ali Abolmaali dean of the College of Engineering at Wayne State University; Quentin Messer, the Michigan Economic Development Corporation’s chief executive officer and president and chair of the Michigan Strategic Fund; and Rose Bellanca, president and CEO of Washtenaw Community College. | ANNA FIFELSKI

or undergraduates at Wayne State in the college of engineering and computer science. The program will take participants through electrical engineering training and offer an opportunity for them to earn certifications. Wayne State President Kimberly Andrews Espy called the funding “the largest investment in state history to expand semiconductor education and training programs.” “We have a tremendous oppor-

tunity. The global semiconductor market is expected to grow to $1.38 trillion in 2029,” Espy said at the event. “In order to meet that projection, a more robust workforce of manufacturers, engineers and fabricators is necessary to keep the supply chain intact, solve technological challenges and fuel U.S. efforts toward self-reliance in this industry.” In May, Lt. Gov. Garlin Gilchrist II announced the creation of the

Semiconductor Talent Action Team, which aims to make Michigan a top state for semiconductor talent and growth. Prospective higher education institutions could apply for up to $3.6 million in grants and matching funds to develop programs, increase awareness or create a new Michigander Semiconductor Scholarship incentive program. It comes as job growth for the sector is projected to rise at least

11% in the next five years. The other schools did not disclose how much funding they were given. Valeria Bertacco, UM Vice Provost of Engaged Learning and Professor of Computer Science and Engineering, said UM will be using their portion of the MEDC funding to develop a series of short courses designed for semiconductor fabrication. Courses will occur bimonthly for up to two days at the UM campus, with each course open for 25 participants. Washtenaw Community College is developing a new semiconductor training program for students at Ypsilanti Public Schools, with the goal of training around 400 students and adults each year. WCC President Rose Bellanca said the programs will begin next year. Oakland University is offering three kickstart training courses to General Motors employees, set to begin in winter of 2024 and train a total of 2,000 metro Detroit engineers per year. “Our vision is for Michigan to become home to the leading educational institution in America in semiconductor learning,” Ali Abolmaali, dean of Wayne State University’s College of Engineering, said. “And our focus is to provide accessible and industry relevant training to equip students and workers with the knowledge and skills necessary to excel in these high demand high paying sectors.” OCTOBER 30, 2023 | CRAIN’S DETROIT BUSINESS | 11

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The Lip Bar to open new location amid expansion push By Jay Davis

Business is booming for The Lip Bar, and the Black woman-owned business is moving to a larger space. The Lip Bar had its grand opening event on Oct. 20 at its new location at 1444 Woodward Ave. in downtown Detroit. The new space is about 800 square feet, which is 500 square feet larger than the original location that opened in 2019 at 1435 Farmer St., Suite 122. The Farmer Street space closed in September, as The Lip Bar founder and owner Melissa Butler prepped to open the new space. Bedrock is Butler’s landlord at the new space and was also her landlord at the Farmer Street location. The new flagship space will offer experiential shopping and will feature a beauty bar for makeup services and a brow bar. Detroit native Butler said she’s excited about the move and expansion.

“... I owe everything to this city,” 3,000 CVS stores. Butler, a past Crain’s 40 Under 40 Butler said in a statement. “Growing up here inspired my grit and honoree, is making a push to exrelentless pursuit of excellence and pand her brand. The Lip Bar Inc. in September equality. There are very few beauty destinations in the city and to build 2022 announced it had raised an something beautiful in the heart of oversubscribed $6.7 million fundraising round to further grow its the city is a dream come true.” The new location will have a staff house of brands, including The Lip of four, according to The Lip Bar head of business development Ashley Gilbert Winfrey. Win- — Melissa Butler, founder and owner, The Lip Bar frey declined to disclose information related to Bar. The funding positioned The the investment put into the space Lip Bar for growth in its existing and new retail channels, leading to and the terms of her lease. Established in 2012 in Detroit, the expansion of its flagship store The Lip Bar offers a broad range as a place for the brand’s commuof inclusive products, including nity to try products in real time. Butler said she plans to scale and 40 vegan, cruelty-free lipsticks for women of various back- grow her business. “Our new flagship store will regrounds. The products can be found in several major retailers flect the creativity and beauty that including Target and Walmart. Detroit has given so many,” Butler The Lip Bar recently launched in said.

“Our new flagship store will reflect the creativity and beauty that Detroit has given so many.”

In addition to opening a new retail location, The Lip Bar Inc. owner Melissa Butler recently saw her skincare products placed in 3,000 U.S. CVS stores. | THE LIP BAR

This Lansing music shop is the country’s best small business By Jack Grieve

Increases in costs and the health of the owners has led to the closure of Ferndale’s Hilton Road Cafe. | COSTAR GROUP INC.

Ferndale cafe closes after 15 years By Jay Davis

A handful of issues has led to the closure of a family-owned Ferndale restaurant. Hilton Road Cafe is closed permanently as of last week, according to a letter posted Oct. 22 on the restaurant’s social media accounts. The restaurant, at 3150 Hilton Road, has served the area since 2008. Continued increasing food costs and the “declining health” of owners Steve and Effie Lambros are listed as reasons for the closure. The couple said they’re disheartened by the closure. “After 15 wonderful years, we are extremely saddened to have to write this, but we must close our doors,” their post reads. “We tried the best we could to give you all our love for this community through our food. We wanted (Hilton Road Cafe) to be your

local diner, and for everyone to feel at home with that home cooking feeling. We believe we accomplished that. “... Thank you for your understanding, as this decision was very hard to make. Thank you for allowing us to be part of your celebrations and part of your family.” The owners could not be immediately reached for comment. Hilton Road Cafe was known for its breakfast menu, along with a variety of sandwiches and soups. “This is such a bummer. Hilton is an absolute gem — it smelled exactly like my grandma’s house and always gave me the warm and fuzzies remembering her while eating there,” Gracie Moses commented on the restaurant’s post. “The potato pancakes were life changing, and I will miss the best spinach salad on earth. Thank you so much for everything!”

A second-generation family-owned music store in Lansing is the top small business in the country, according to the U.S. Chamber of Commerce. Elderly Instruments accepted the honor — along with a $25,000 check — at an Oct. 19 award ceremony at the U.S. Chamber’s headquarters in Washington, D.C. The shop was one of more than 15,000 small businesses across the country considered for the award. Elderly was selected “for its ability to embrace change, adapt to new challenges, and constantly innovate while remaining true to the company’s 50-year legacy and heritage,” according to the award announcement. The company began as something of a hobby for Stan Werbin and Sharon McInturff, who in 1971 started repairing vintage instruments and selling them out of the attic at a fraternity house in Ann Arbor. A year later, they decided things were going well enough to put the business on a more formal footing. They rented an 8-by-10-foot space in the basement of a retail building in East Lansing and opened for business on July 5 that year with maybe 15 instruments for sale. The word “elderly” reflected their plan to sell only vintage instruments, though the business has since expanded to include amplifiers, strings and other accessories, CDs, record albums, books about music and even some new instruments. Over the next few years, the business repeatedly expanded, eventually taking over the entire basement before moving in 1983

Stan Werbin and Sharon McInturff started repairing and selling vintage instruments in 1971. | ELDERLY INSTRUMENTS

to its current location, a three-story brick building near downtown Lansing that was built in 1914 to house the local chapter of the Independent Order of Odd Fellows. Stan Werbin’s daughter, Lillian Werbin, now runs the day-to-day at the shop. “We kind of have never changed and continue to change constantly,” she said when asked about Elderly’s success. “For 51 years now, my dad has run a business that understands how to meet the customer where they are at every time.” The shop now has about 40 employees, 25 of whom have worked there for more than 25 years. “The people who apply to work with Elderly, whether that is the guy we hired last month or the woman who’s worked for us since ’78, they’re all there for the same reason,” Lillian Werbin said. “It’s to get good musical instruments to people who will care about them.” Elderly’s success is in part a product of the company’s longheld core values, which the Werbins recently made a point of codifying. They include being community-driven, knowledge-

able, authentic, enthusiastic, resilient and results-oriented. Elderly also benefits from the industry that it serves. “The business that we’re in attracts good people, and we are apparently a good business that good people want to stay around,” Lillian Werbin said. An unrelenting commitment to the craft of making good instruments has also driven success. “Instead of trying to nickel and dime people, he just wanted a good business,” the second-generation CEO said of her father’s mindset when it first started. “He just wanted a music store that felt like a living room.” As for what other business leaders can glean from Elderly’s success, Lillian Werbin said the most important piece of advice is to stay true to oneself. “It’s cheesy, but you have to remain unapologetically yourself,” she said. “The times are going to change and you probably will have to change, too, so remember what the core mission is.” — Freelance reporter Tom Henderson contributed.

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Developers get $1.5M state grant for apartment building renovation By Nick Manes

A Detroit development firm was awarded a $1.5 million grant from the state to rehabilitate a vacant building near the historic Boston-Edison neighborhood into below-market-rate apartments. The Michigan Community Revitalization Program grant, awarded last week by the Michigan Strategic Fund board, aims to allow Clairmount Apartments LLC to undertake an $8.4 million renovation of the vacant 26,000-square-foot building at 100 Clairmount Ave., between the Lodge Freeway and Woodward Avenue. The MSF board also approved tax capture for the development

of just more than $204,000. “A financing need exists due to the City and development team’s interest in preserving affordability in a changing neighborhood immediately adjacent to the Woodward corridor,” reads a memo from the Michigan Economic Development Corp. outlining the grant. Plans call for the currently functionally obsolete property to offer 42 mixed-income residential units, 60% that will rent for between 50% and 80% of Area Median Income and 40% of units that will rent at 120% AMI. The income restrictions mean the units would be reserved for those making between $33,150 annually up to $79,500 for one person. For two people, units

would be reserved for those earning $37,900-$90,960, according to figures from the Michigan State Housing Development Authority. Rental rates are projected at $875 for studio apartments, $1,075 for one-bedroom units, $1,492 for two-bedroom units and $1,900 for three-bedroom apartments, with an average of $2.22 per square foot, according to the memo. The developer, Clairmount Apartments LLC, is an affiliate of Detroit-based residential real estate firm Century Partners LLC, which was founded in 2014 by Andrew Colom and David Alade. They have more than 200 units across metro Detroit in their portfolio, according to the memo. The developers have lined up

Clairmount Apartments LLC plans to renovate this vacant 26,000-square-foot building at 100 Clairmount Ave. near Detroit’s Boston-Edison neighborhood. | NICK MANES

leveraging an equity investment from the Ebiara Fund, a Neighborhood Enterprise Zone tax abatement and brownfield tax increment financing. The memo says the developers anticipate a return of around 5.4% over 20 years. Several other apartment renovation projects are also in the works in the Boston-Edison neighborhood.

myriad financing mechanisms for the project, according to the MEDC briefing memo. That includes loans from Detroit’s Housing for the Future Fund, administered by Detroit nonprofit Local Initiatives Support Corp., and Team Financial/MiSaves. Additionally, the developers have obtained a loan and a grant from the Detroit Brownfield Redevelopment Authority, and the project is

Program that helps Detroiters buy their homes gets a boost By Nick Manes

Even as new apartments come online, such as the Lafayette West development east of downtown, demand continues to outstrip supply, leading to rent increases in the region | NICK MANES/CRAIN’S DETROIT

Rent on the rise in metro Detroit By Nick Manes

Rents nationally continue to decline as large Sunbelt metros come back to earth. However, metro Detroit and other Midwest cities are continuing to gain some momentum, though rents are far below the national average, according to a new report. The September Rental Report from Realtor.com — part of the National Association of Realtors — shows that rent nationally fell for the fifth month in a row and last month was down 0.7% year over year, with the median asking rent at $1,747 per month. But in the metro Detroit region — the Detroit-Warren-Dearborn metro statistical area — median rents grew 2.1% from a year ago and stood at $1,312 per month, according to the report. The rental increases being seen in metro Detroit are “in alignment with historical averages,” and are largely a reflection of the under-supply of housing in general in the region, according to Andrew Kuhn, founder and CEO of Royal Oak-based multi-family real estate investment and management company Sunrise Communities. Kuhn is also the president of the Apartment Association of Michigan, a Bingham Farms-based trade group for apartment owners. “The Midwest, in general, did not

(see rents) shoot to the moon like a lot of the smile states — Arizona, Florida and Texas — did,” Kuhn told Crain’s. “So we didn’t overcorrect. We just kind of did what the Midwest does and plugged along relatively (normally).” The current housing market nationwide is turning some long-held personal financial truths on their head. “As rents ease and both home prices and mortgage rates continue to climb, it’s become more economical to rent than to buy in nearly all major markets,” Realtor.com Chief Economist Danielle Hale said in a news release. “However, even with an influx of new apartment units coming onto the market and putting a lid on rent growth, renters are claiming these new apartments faster than prior to the pandemic.” That rents in Southeast Michigan continue to rise — albeit fairly modestly — as Sunbelt metro areas such as Phoenix and Tampa see declines of 4%-5% mirror what is occurring in the for-sale market as well. By and large, renters in the Detroit region are increasingly eyeing “lower-cost” apartment properties, while higher-amenity and higher-cost Class A apartments face headwinds, according to a third quarter market report by commer-

cial real estate firm Marcus & Millichap. While rents are rising, so too are vacancies, according to the Marcus & Millichap report. “After hitting a record low at the end of 2021, vacancy in Detroit has been steadily rising,” the report reads. “By year-end, the metric will reach 5.5 percent, approximately 220 basis points above the 2019 mark and the highest rate since 2014.” And while apartment construction is seemingly everywhere around Southeast Michigan and roughly 6,000 new units are slated for delivery in 2024 and 2025, the Detroit region is expected to have “the second-lowest completion total among major Midwest markets in 2023, slotted above only Cleveland,” according to Marcus & Millichap. The added supply in the region is unlikely to have significant impact on overall pricing, said Kuhn with Sunrise Communities and the Apartment Association of Michigan. “Even the supply that’s coming to market is still under the amount of increased demand that we’re going to continue to see,” Kuhn said. “And so we’re actually still going to continue to trend behind, which would give us pressure to continue (rent increases).”

A public-private partnership aimed at enabling Detroit residents to remain in — and eventually purchase — tax-foreclosed homes has additional funding. The Make It Home program, a partnership consisting of the Rocket Community Fund, United Community Housing Coalition and the city of Detroit, last week announced the infusion of $750,000 to assist residents with repairs to their homes. Launched in 2017, the Make It Home program enables eligible Detroiters occupying tax-foreclosed houses to become homeowners rather than face eviction. It does so by leveraging the city’s power of “right of refusal,” allowing the city to purchase properties before the tax foreclosure auction for the value of the back taxes owed, or two times the state equalized value if a claim of interest was filed by the previous owner. These properties are then purchased by the United Community Housing Coalition using funding from the Rocket Community Fund, the philanthropic arm of billionaire businessman Dan Gilbert. The homes are then sold by

UCHC “through a 0% interest land contract with a payment plan that enables each resident to make payments into an escrow account for roughly a year until they reach the purchase price for their property,” according to a news release. Over the last year, families paid an average of $8,400 to achieve homeownership, according to the release. Once payments are completed, they receive the deed to their property while also gaining access to home repair grants, loans and financial counseling provided through the program. Last week, the Rocket Community Fund announced an additional $750,000 commitment to the program, bringing its total support for repair funding to $3 million. “Make It Home was created to transform a complex and inequitable system into an opportunity to build homeownership, wealth and stability for Detroit families,” Laura Grannemann, executive director of the Rocket Community Fund, said in the release. “We are proud to work alongside our partners at UCHC and the City of Detroit to deepen the impact of Make It Home by expanding access to home repair grants and loans to participating families.”

Laura Grannemann, executive director of the Rocket Community Fund, on Wednesday announces new funding for the Make It Home program in Detroit. | ROCKET COMMUNITY FUND OCTOBER 30, 2023 | CRAIN’S DETROIT BUSINESS | 13

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10/26/23 2:43 PM

Former automotive engineer cooks up new career Novi resident finds niche as franchisee of commercial kitchen cleaning business By Jay Davis

After 35 years in the auto industry in various capacities as an engineer, Novi resident Steve Bral was looking for his next act. Bral, though, couldn’t see himself calling someone else boss. “I kind of always wanted my own business,” Bral told Crain’s. “I had a good career going, had kids in college. So I kind of waited. Once the kids were out of school and had their own careers, I discussed it with my wife, and said if I’m going to do it, now’s the time.” After spending about six months researching nearly 20 business opportunities, Bral settled on an oil filtering and restaurant kitchen cleaning franchise that had everything he was looking for. A recurring revenue stream was key for Bral, who also brought his family along for the ride. Over five years, Bral has battled through the COVID-19 pandemic and grown his Filta Environmental Kitchen Solutions franchise to the point that he’s tripling his warehouse and office space. In early 2018 Bral signed on to serve as metro Detroit franchisee with the Orlando-based company. Founded in 1996, Filta offers restaurants and other commercial kitchens oil micro-filtration services, which extends the life of cooking oil. Filta also cleans kitchen frying equipment and recycles the oil with a mobile vacuum system, turning it into biodiesel fuel. The company’s client list includes Dairy Queen and Whole Foods Market. Filta also works with sporting venues including Minneapolis’ Target Field and Coors Field in Denver and franchisees service more than 7,000 kitchens in 13 countries. Bral, through Bral Enterprises Inc., invested about $100,000 to get his new Filta business started. That cost is now between $123,300 and $137,000. The Novi resident joined the ranks of the self-employed after an extensive career with Ford Motor Co., Laird Technologies, AxleTech International and Bosch Automotive. He left that behind in October 2017. For his maiden voyage into entrepreneurship, Bral went in a completely different direction.

lost nearly all of its customers as restaurants had to pause in-person dining and some never reopened. Hospital clients such as the Detroit Medical Center and Beaumont Health helped Bral tread water. He was able to keep about 60% of his staff, but drastically cut their hours to just two days a week. To offset some of the losses, Bral and his sons got certified in electrostatic spraying for bacteria and offered the sanitation services to businesses during the pandemic. That helped cut the company’s monthly losses in half, Bral said. “(The pandemic) was really tough,” he said. “That’s the only time I’ve ever lost a client.”

Planning for the future

Steve Bral, left, his wife Karen, and sons Michael and Jason are all a part of the staff of Steve’s Filta Environmental Kitchen Solutions. Steve Bral signed on in early 2018 as a Filta franchisee after a 35-year career in the auto industry. | STEVE BRAL

“I was looking for something with a recurring revenue stream. With something like windows, you install those once and you don’t see that customer again for 20 years,” Bral said. “I wanted something with a pretty low investment cost, and something where I could hire personnel where it wouldn’t take them too long to get up to speed. “One of the things that drew me to Filta was its management model. I could work on the business and not in the business. Sure, I was cleaning fryers when we started out, but now I’m able to do the sales, marketing, and all the other things it takes to run a business.” Bral, who handles operations for the business, boasts a list of about 135 customers in Macomb, Oakland, Wayne and Washtenaw counties, including the University of Michigan’s sports venues. Bral’s Filta franchise also works with Delaware North, which manages food operations for Little Caesars Arena, along with Blue Cross Blue Shield, Detroit Wing Co. and Vinsetta Garage in Royal Oak. The franchisee early this year added Levy Restaurants, which handles food operations at Ford Field.

Bral operates his business on four main principles: excellent quality, on-time service, billing appropriately and on time, and great communication. “As long as we hold ourselves to those, our customers will be happy,” Bral said.

New additions Bral’s Filta franchise, which has annual revenue of about $2 million, is positioning itself to grow. The company recently signed a lease for a new 6,900-square-foot warehouse and office space in Madison Heights — nearly three times the size of its current space at 25431 John R Road. He expects the new space to be operational by late November. The additional office space will eventually house the company’s sales team. Bral is looking to add two new technicians to a staff of 15. The extra room will allow Bral to add an additional revenue stream. In addition to oil filtration, cleaning and recycling, the company will package fresh oil in recycled containers and sell it to its customers. “The goal was to supply to cus-

Bral hasn’t been alone on the journey. His wife, Karen, handles HR business administration. His sons, Michael and Jason, left careers in security and insurance to join the team. Now Steve Bral has succession planning at the top of mind. “It’s been a great relationship. I know a lot of people talk about how hard it is to have a family-owned business,” Bral said. “It’s been pretty good.” Following the pandemic-related slowdown, Bral’s company now is on solid footing and Bral believes it will continue to grow. The entrepreneur said he expects his company’s revenue to double over the

tomers at a competitive price, and to save on throwing away cardboard and plastic,” Bral said. Filta officials have taken notice of Bral’s success. “(Bral’s) journey with Filta exemplifies the power of entrepreneurship through acquisition,” said Rob Totten, Filta vice president of franchise development. “We are thrilled to — Steve Bral, Filta franchisee have franchise owners like (Bral) who leverage next year. our resources and support to drive “Like any business, if you’re not such outstanding growth. This sto- growing, you’re probably dying. ry is evidence of the strength of Annual growth is crucial. We’ve our franchise system and the in- got some growth targets. We’re credible potential for success that looking at being at double the staff it offers.” we have now in two years,” Bral said. “I’m looking to transition out of Weathering the storm running things. My sons are doing But things haven’t been perfect. sales now, but they’ll eventually Like many other small businesses, run the day-to-day operations and the COVID-19 pandemic put the I’ll be a strategic planner. “This is one of the best decisions brakes on the company’s growth. Bral said the company hit $1 I’ve ever made. It hasn’t been all million in annual revenue just pri- roses, but entrepreneurship, ownor to the start of the pandemic in ing my own business, is more fulearly 2020. Then the Filta franchise filling than I expected.”

“...Entrepreneurship, owning my own business, is more fulfilling than I expected.”

Huntington National Bank names new chief officer of DEI By Jeremy Nobile Crain's Cleveland Business

Huntington National Bank said it has appointed Donnell White as the organization’s chief diversity, equity and inclusion officer. White joined Huntington in June 2021 as a senior vice president and has previously served the bank as a regional DEI director, according to the company. Prior to Huntington, White was a senior executive vice president at TCF Bank, where he worked between June 2018 and

June 2021. Huntington acquired TCF in 2021. Prior to that, White served as executive director of the NAACP-Detroit Branch. Donnell White “In his new role, (White) will lead Huntington’s efforts to foster a culture of inclusion, advocate for equity, cultivate a sense of belonging for all colleagues across the company and

ensure Huntington is a leading employer in DEI,” according to a news release. In this position, White effectively succeeds Donald Dennis, who had held the chief DEI post since October 2020. Dennis moved to a community development director role at the bank in September. “We are excited to have Donnell lead Huntington’s DEI efforts. He brings rich experience and expertise to this role, and he has a strong track-record of delivering results,” Huntington CEO Steve Steinour

said in a statement. “Huntington has long championed diversity, equity, and inclusion. I look forward to working together to build upon our strong culture and commitment to DEI.” White serves on the board of the National Diversity Council and Wayne Metropolitan Community Action Agency. In addition, he serves on the Sustainability Leadership Council of Michigan, Grow Michigan Board of Managers, Wayne State University President’s Community Advisory Group and

the Focus: Hope Advisory Group. He is board trustee for Michigan Children’s Foundation, the Detroit Symphony Orchestra, Detroit Public Safety Foundation, and the National Association for the Advancement of Colored People Foundation. White earned his bachelor’s degree in finance from Michigan State University. He is a certified diversity professional through the National Diversity Council and The Ohio State University’s Fisher College of Business Executive Program.

14 | CRAIN’S DETROIT BUSINESS | OCTOBER 30, 2023

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10/26/23 4:15 PM

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Detroit Golf Club mansion lists for first time in decades By Nick Manes

A nearly century-old mansion on Detroit Golf Club designed by the engineer known for the Ford Model T is being quietly shopped around, its first time on the market in two decades. The home, located across the street from Palmer Park near the southwest corner of the Detroit Golf Club property, dates back to 1928 and was originally designed and built by József Galamb, a Hungarian engineer. Galamb is “best known for his crucial role in designing and developing Ford’s Model T and Model M,” according to the listing, and “utilized his expertise and innovative mind to create the most coveted residence in all of Detroit.” Priced at $2 million, the 9,300-square-foot home is owned by Robert McPherson, the CEO of Detroit-based Crystal Home Health Care, public records show. McPherson, through his Realtor, declined to comment for this report. While the home has been listed on multiple listing services since earlier this month, listing agent Armen Shahrigian with EXP Realty in Northville said they’re foregoing listing on third party sites like Zillow and Redfin for the time being. Rather, the goal is to find a buyer — perhaps out of the state or country — who has a passion for the historical features and significance of the home.

This mansion on the Detroit Golf Club seeks $2 million. |STYLISH DETROIT

“If you’re just looking for a big house to live in in Detroit, there are probably better, cheaper options for you,” Shahrigian said. “For this house … you’re actually getting a steal just because of what

this house is made of and the materials used to build this house.” Built in 1928 for Galamb and his family, the home has had only one other owner besides McPherson who bought it in the early 2000s,

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construction executive Donald Emanuel. “No two rooms are the same shape or size,” reads the listing. “The jaw dropping, handcrafted woodwork is custom stained,

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much like the textured plaster walls, ceilings and trim. The custom wood doors, doorknobs, mouldings, and flooring were imported from Hungary, along with the full built-in basement bar.” The home also features two walk-in vaults with one lined for furs, a “grand foyer,” four fireplaces, and an Olympic-sized swimming pool situated on its double lot. Major infrastructure work such as HVAC, boilers and central air conditioning has been completed, according to Shahrigian, who called the house “move-in ready.” Features such as plaster walls, the Realtor said, do require some regular maintenance and specialty contractors. While touting the uniqueness of the home, Shahrigian did acknowledge a couple of nearby properties that could compete for the same level of buyer as the Detroit Golf Club home. That includes the Benjamin Siegel mansion, designed by Albert Kahn and located to the south in the Boston-Edison neighborhood, which was listed earlier this month for $2.5 million. And to the north of Detroit Golf Club in the Palmer Woods neighborhood sits the Bishop Mansion, a 32,000-squarefoot home that hit the market back in May with an asking price of $9 million that has since been reduced to $7 million. Still, Shahrigian said he’s doesn’t really see the three homes as being in direct competition with one another. “If there is competition for (the Detroit Golf Club) house, I definitely see it as being those,” the Realtor said of the Bishop and Siegel mansions. “But honestly, I don’t really see any of these houses as competition for each other, just because they’re so unique.”

16 | CRAIN’S DETROIT BUSINESS | OCTOBER 30, 2023

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10/27/23 12:41 PM

SHINOLA From Page 1

“We’ve seen an uptick in retail traffic this year. I know some brands haven’t,” Cobbina said in an interview with Crain’s. “Coming out of COVID … e-commerce and digital dominated. We’ve seen a trend away from that, frankly, and to brick-and-mortar stores.” Shinola is also dealing with another general trend in retail: flat revenue. In a quest to do better than break even for the first time since before the pandemic, the company is rolling out discounts for the first time in its decadelong history. In a campaign commemorating 10 years in business, it rolled out a 25% off sale earlier this year, which it brought back for Christmas. The campaign, called “Thank You, Tenfold,” will feature discounts online and in stores for designated items each weekend leading up to Christmas Day. “We’ve been trying to think, how do we, a lifestyle brand that is the entryway to luxury that hasn’t in the past really discounted product, really say ‘thank you’ and celebrate 10 years without being self-congratulatory,” Cobbina said. The new store in Grand Rapids aims to engage customers with in-person events and ideally replicate the “community hub” feel of its flagship store in Midtown Detroit. The company is also exploring other hotel branding opportunities in addition to the Shinola Hotel in Detroit, and opening more physical stores is also a priority. Cobbina said he hopes to have at least one more new store in the next year. That’s not to say Shinola is turning its back on online sales — it has made significant investment in that space — but it is embracing the old-fashioned business model that brought it success when it launched 10 years ago. “We think that the consumer is looking for great experiences and quality products near where they live, not just at Shinola but also Filson,” the holding company’s other major brand, Cobbina said. “That’s the reason we’re bullish on retail stores broadly.”

Detroit-based Shinola is set to open a 1,300-square-foot shop at the corner of 40 Monroe Center St. NW in downtown Grand Rapids — its first since the COVID-19 pandemic began. | JOE BOOMGAARD

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CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455 / sjanik@crain.com

REAL ESTATE Shinola’s flagship store in Detroit’s Midtown sells its famous watches as well as bikes, home goods and leather accessories. | SHINOLA DETROIT

ner of Monroe Center and Division Avenue by property owner Rockford Construction. The company declined to offer financial details of the buildout. “Downtown Grand Rapids over the last decade has undertaken a huge upswing in the number of businesses, the quality of those businesses, how those businesses are doing from a profitability perspective,” Cobbina said. “So we think that there’s an opportunity there.” Mike Mraz, president of real estate development at Rockford Construction, said the retail space provides a “small footprint, with large impact.” “The district has re— Awenate Cobbina, CEO, Bedrock Manufacturing Co. ally rebounded postFor its part, Seattle-based Fil- COVID,” Mraz told Crain’s Grand son has seen an explosion in de- Rapids Business. “The confimand for its high-end outdoor dence of a nationally recognized clothes, largely thanks to the hit group like Shinola, I really think TV series “Yellowstone.” The that will attract more retailers company told the Seattle Times downtown. “The prominence and visibiliearlier this month that it was outsourcing two-thirds of its ty, it’s really the perfect location production in Seattle to the Los and just with the connection Angeles area. Shinola imports down Monroe Center to other the bulk of its watch parts from retailers, restaurants and culmiSwitzerland and Asian countries nating at Rosa Parks Circle and the hotel district — it’s just a and assembles them in Detroit. Shinola signed a three-year great fit.” Shinola does face some headlease for the new store in Grand Rapids, which is being built out winds in the luxury retail space. Consumer excess savings in in the Peck Building at the cor-

“We’ve seen an uptick in retail traffic this year. I know some brands haven’t. ”

the U.S. peaked at $2.1 trillion in the second quarter of 2021, according to research by J.P. Morgan Chase, fueling consumption of luxury goods and spending in general over the past two years. The shopping spree looks to be nearing an end, though, as companies report tepid sales heading into the holiday shopping season. Earlier this month, Louis Vuitton owner and luxury goods behemoth LVMH reported slowing sales, likely reflecting the market more broadly. Shinola’s new store, which will be staffed with around 10 employees, will do full-price business like most in its portfolio. It has just two outlet stores — one south of Grand Rapids and the other at Great Lakes Crossing Outlets in Auburn Hills. Shinola will also invest in store refreshes over the next couple of years, though company officials declined to say how much will be spent on brick-and-mortar facelifts. While the company makes a push for more retail storefronts, Cobbina said it will not turn its back on the online and outlet businesses. “We obviously always want the business to grow more,” he said. “We need to do all three if we’re going to sustainably grow.” — Crain’s Grand Rapids Business reporter Kate Carlson contributed to this report.

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SUPPLIERS From Page 1

The labor exodus from manufacturing jobs to industries with better balance and more stability has been among the biggest painpoints for suppliers over the past couple of years. Another major disruption like the strike will lead even more workers to pursue a living away from the factory floor, Uetz said. The first month of autoworker walkouts have been a dull financial headache for parts producers, as most third-quarter earnings reports this month are likely to reflect. That changes with more big-ticket shutdowns, such as the Stellantis Sterling Heights Assembly plant and General Motors’ Arlington Assembly plant in Texas last week. Many suppliers have built their businesses around high volume, high content pickup trucks and SUVs coming out of those factories. Suppliers alone have lost nearly $3 billion in wages and earnings through week five of the strike, according to an analysis by Anderson Economic Group. Financially beat down and virtually powerless to help themselves — it's familiar territory for the supply base. In the past couple of years, rapidly rising inflation and sporadic production brought many parts manufacturers to the brink, with no choice but to ask their OEM customers for help. The same will happen coming out of the strike, Uetz said, especially when it comes to labor. The moment the strikes are over, automakers will rush to make up for lost production. While they return to full strength on the labor side immediately, suppliers will have to scramble to bring workers back and fill out extra lines and overtime. That will likely mean bumping up wages and offering bonuses, as they did during the labor shortage. Suppliers might not be in the room when it comes to UAW labor talks, but they are still at the negotiation table with automakers, haggling over price concessions. When the labor dispute is settled, automakers won’t be the only ones saddled with higher labor costs. “Who’s going to pay for the signing bonuses? Who’s going to pay for the increased wages?” Uetz said. “It’s going to be that all over again but with the added pressure that these hourly employees from the automotive suppliers are going to look and see what the UAW achieved in terms of wages, and they’re going to ask for it.”

Workers want their piece of the pie Count Chris Hayes among them. The 54-year-old Detroiter works for $23.85 per hour building seats at Lear Corp.’s Conner Avenue plant in Detroit, which supplies GM’s Factory Zero. He expects financial gains made by union autoworkers to trickle down to his plant, where production workers are represented by UAW Local 155. “I mean, it is kinda hard living

Striking UAW workers demonstrate outside Stellantis’ Sterling Heights Assembly plant last week. | JACK HALLAUER/AUTOMOTIVE NEWS

“As long as we’re not losing a ton of money, we’re maintaining our staff.” — Craig Carrel, president, Team 1 Plastics

Chris Hayes hangs out with a coworker before clocking in for second shift at Lear’s seating plant in Detroit. | CRAIN’S DETROIT BUSINESS

check to check,” Hayes said Tuesday before clocking in for the second shift. “We're building stuff that we can’t even afford. Y’all got houses all over the world, boats, cars, get to fly anytime, private jets and all that old crap. I barely can put gas in my car or I gotta catch the bus. I mean, make it make sense.” While many auto supplier employees are organized by the UAW, they are covered by individual plants and not a master agreement like autoworkers. There is no strike pay for supplier employees laid off as a result of walkouts, and deals between the UAW and automakers don’t have any direct impact on suppliers and their employees. “There’s only 20 weeks of unem-

ployment pay. Most of our plants have been laid off sporadically through the year and probably have lost maybe even 10 of those weeks,” Waymon Halty, vice president at UAW Local 155, told Crain’s last month. “That is one concern that people have, you know, parts suppliers, we’re only going to get $362 (in unemployment per week), and who can live off of that?” Craig Carrel, president at Albion-based Team 1 Plastics, said he can’t afford to make any layoffs given how tight the labor market continues to be. The tier-two supplier, whose largest programs are on Ford trucks, said sales in October are already 15%-20% below normal. The company’s push to diversify away from the Detroit 3 over the past couple of years has helped it win business to stay afloat through the strike. “As long as we’re not losing a ton of money, we’re maintaining our staff,” Carrel said. Starting pay at the plastic parts supplier is $15 an hour, but Carrel said he is prepared to raise it if need be. “It’s difficult because people can go down the road for a buck more an hour,” he said.

Competing pressures Executives at several tier-one

suppliers told Crain’s that they have instituted furloughs and temporary pay cuts among white collar employees. Many have laid off factory workers, including Ford Bronco seating supplier LM Manufacturing, Magna, Flex-N-Gate, Detroit Manufacturing Systems, Detroit Chassis LLC, Sodecia Automotive, Eagle Industries, Faith Plastics and CIE Newcorp. Dana Williams, chief strategy officer for Detroit at Work, said the agency has helped about 800 people who have been laid off over the past month. She said they generally haven’t had trouble filling manufacturers’ labor needs, but in some cases, impacted employees are ready to move on from the city’s signature industry. “I anticipate that there will be some folks who kind of naturally see this as a career transition, who might say, ‘I always really wanted to be a nurse, I’m out, I’m going to nursing school,’” Williams said. LM Manufacturing brought some laid-off employees back to work recently, Williams said, though it is unclear how many or what work is being done at the plant. Magna, a joint owner of the company, declined to provide details. “We have focused considerable attention on contingency planning to proactively address any

temporary business disruptions to our operations,” Magna spokesman Dave Niemiec said in an email. “We’ve been prepared in terms of temporarily scaling back production on affected programs as efficiently as possible, and just as importantly we are equally prepared to ramp-up quickly when ready.” Uetz said some of her clients have tasked skilled labor employees with general maintenance work just to keep them on the clock while production is down. Many companies are anticipating employee demands for higher wages. “There will definitely be negotiations between the supplier and the customers for cost recovery on labor after this strike,” she said. Carrel said his labor costs depend on what his customers are willing to absorb. Automakers were generally willing to share some of the pain of the supply base these past couple of years, but that was a time of record profits for OEMs. They will emerge from the strike with dramatically higher labor costs and rising pressure to decrease costs elsewhere — such as parts purchasing — before foisting higher prices on the consumer. “We were able to get some price concessions with our customers, but it was really tough to get some of that through. I’m not sure we could do it in another six months,” Carrel said. “Obviously, you can’t give what you don’t have, from a profit standpoint. You gotta be careful that way.”

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MUSIC HALL

GROCER

After learning about the lower borrowing costs associated with the bonds for charitable nonprofits, Music Hall President Vince Paul reached out to Sandy Duncan, longtime president of Music Hall and former treasurer of Michigan Opera Theatre (now Detroit Opera), to find out more about how they worked. Duncan was able to dig up paperwork on its use of the tax-exempt 501(c) (3) bonds before he died in late August, Paul said. To have that documentation “was like gold,” Paul said. No one on staff currently at the Economic Development Corp. in Detroit and the Detroit Economic Growth Corp. where it is housed were there in 1999 when Detroit Opera secured tax-exempt bonds for the renovation of the Detroit Opera House, he said. Having the documentation from Duncan enabled Music Hall to show the EDC that the bonds had been used previously by a cultural institution in the city. The tax-exempt 501(c)(3) bonds are “a very valuable mechanism ... that has been dormant for (25) years” in Detroit, Paul said. “By bringing (it) to light, we hope we’re following in the steps of David Dichiera. We’re hoping other nonprofits can learn from our model, and they’ll be able to use it as a precedent” to secure underwriters and issue nonprofit bonds of their own, he said.

crowdfunded the rest over six years through GoFundMe, with donations coming from a variety of sources. He continues to raise funds to help sustain the business, giving Michigan residents a chance to invest in the business for as little as $50 a share. Investors will receive discounts on products and voting power on some operational issues, Wright said. Detroit Economic Growth Corp. Vice President of Small Business Services Sean Gray said in a statement to Crain’s that the group that oversees the Motor City Match commends Wright for his efforts. “We began working with Raphael on the early stages of the Neighborhood Grocery project over six years ago, providing various support services and funding through our Motor City Match and Green Grocer programs,” Gray said. “Neighborhood Grocery will be transformative for residents by making fresh and nutritious food choices, once inaccessible to some Detroiters, now within reach.” Wright sees good things for the venture, projecting $500,000 in annual sales. “And that’s being conservative,” Wright said. Wright said he works with local and national distributors to secure inventory. Like any grocer, the healthier items like produce lining the perimeter of the store. In the back, a refrigerated area houses milk and organic items like eggs and chicken. Plant-based burgers and sausages and seafood are available, too. Canned foods including beans and collard greens are on the shelves. Locally made snacks from Better Made chips and Faygo are prominently displayed. In the aisles are plenty of essentials, including toilet paper, paper towel, garbage bags, toothpaste, lotion, shampoo, feminine products and supplements. Books on healthful living are available near the register. “I think a lot of good things for people start with healthy food,” Wright said. “People will begin to move into and populate different areas of the city when the areas have all the things they need. I think something like that boosts morale and can facilitate change.” Deliveries are made daily to the

From Page 3

How it works Unlike municipal bonds where a public entity issues them and is on the hook in the event of default, Music Hall will be both the obligator and borrower on the tax-exempt bonds, securing them with its current cash flow and a fund reserve of 5%-10% of the amount borrowed to ensure payments aren’t missed. The bonds lower the cost of borrowing for charitable nonprofits by almost 2 percentage points, said Ghebre Mehreteab, development and financial adviser to Music Hall on the project. Mehreteab, the former CEO of national affordable housing developer National Housing Partnership Foundation for 20 years, was a member of the team that worked on the Grand Bargain during Detroit’s bankruptcy and other local efforts for the New York-based Ford Foundation. Currently the prevailing rate for taxable bonds or loans is a 7% return. With the nonprofit bonds, the return would be 5% or 2 points less because bond holders are not liable for capital gains tax, said Mehreteab, a native of the East African country Eritrea who came to the U.S. in the 1960s to attend college in Pennsylvania. With the tax-exempt bonds, Music Hall’s monthly payments will be lower than if it borrowed on taxable, commercial loans and will enable it to borrow

op, also a Black-led collective, plans to open in 2024. The group this summer earned $100,000 from Motor City Match to help support its more than $18 million project. The co-op’s Detroit Food Commons project will be located at 8324 Woodward Ave. in Detroit’s North End. The co-op has a member-owner group of more than 1,900 people from all over the state, according to board President Lanay Gilbert. Once the Food Co-op opens, there will be four Black-owned grocers in the city. Greene told Crain’s that, like Wright, she saw a need. “As an RN for 28 years, I knew I didn’t have much time to waste to make an impact,” Greene said. “As a health professional, I know what poor eating choices and unhealthy choices can do to your health. We as Black Americans are some of the unhealthiest people on the planet due to a lack of options. There aren’t a lot of healthy options in this neighborhood. There’s another store people walk 13-14 blocks to, but I wanted to put in something more accessible. “I feel really good about what I’ve done. My story is a bit different from (Wright and the Food Coop) because I didn’t get any grants or loans, but it’s really good to see some people from the community taking it upon themselves to essentially reteach and reprogram people on how to eat healthfully.” Like Greene, Wright is proud of what he’s built. The Detroiter handled all the cleanup and interior work at Neighborhood Grocery. He sees the business becoming a staple in the community. “Getting this all together was a pretty painstaking task,” Wright said. “I was really focused on getting this going. I’m really grateful

From Page 1

Vince Paul

Ghebre Mehreteab

more, Mehreteab said. New York-based Stifel Public Finance and Siebert Williams Shank & Co. LLC, a minority-owned firm led by founder and CEO Suzanne Shank, who is based in Detroit, are expected to underwrite the tax-exempt bonds that will help finance Music Hall’s expansion, and have provided Music Hall with a term sheet, he said. The non-binding agreement provides the basic terms and conditions of an investment. “We have been working with them for the past eight months,” Mehreteab said. “Music Hall has enough cash flow in its projections to serve the debt.” Tom Butler, a spokesman for Siebert Williams Shank, said the brokerage’s policy is not to comment on transactions in advance of any closing.

The plan for expansion The expansion, in planning for about five years, began taking tangible shape last year, he said. It’s expected to create more than 400 new jobs and will bring world-renowned architect Tod Williams — the brother of former Detroit Opera Chair Rick Williams — and his firm, Tod Williams Billie Tsien Architects, to Detroit as lead architect. Detroit-based minority-owned Hamilton Anderson is serving as local architect on the project and Barton Malow as general contractor. The Ballmer Group and Kresge Foundation provided $2.5 million to fund pre-development costs, Mehreteab said, enabling the project to move forward quickly without Music Hall taking out a loan. The cultural group is now launching a campaign to raise at least $42 million of the project’s cost from foundations, corporations, the public sector and individuals in exchange for naming rights. Music Hall’s leaders have been making the rounds meeting with local, county and state officials to share details on the project. Local government must agree that a development is needed to qualify it for the tax-exempt bonds, Mehreteab said. “All of them said not only is the design good (and) the demand for the charitable purpose is great, but also the building serves as a gateway to Paradise Valley, one area that people feel has been neglected,” Mehreteab said. The EDC last month approved the site plan and site plan district as required to issue the nonprofit bonds and will review the project plan next month. Paul said he expects the project plan to then go before City Council in January and break ground in 2024.

BREACH From Page 3

The unauthorized party may have had access to Social Security numbers, government-issued ID numbers, financial account numbers, payment card numbers and health information. Patients or research study participants may have had their demographic, clinical and information pertaining to participation in research studies compromised as well. The university used a dedicated review team to conduct a detailed analysis of the files included on the systems accessed by the unauthorized actor, UM said. “We are currently in the pro-

A portion of the produce section at Neighborhood Grocery. | JAY DAVIS

east-side grocer. Wright told Crain’s that was crucial early on, as he nearly sold out of everything in stock at the Oct. 8 opening. “That first day was overwhelmingly successful,” Wright said. “A lot of people came out and most of the shelves were cleaned out that day. We’re still restocking a little bit, which is not a bad thing.” The grocer has a lot of essentials, but Wright continues to take feedback from customers. At the top of their wish list is the addition of some prepared foods. “That’s the one thing that’s come up most,” Wright said. “People want things you can grab and go, things they can take home after work when they’re tired. We’re taking all of that into consideration.” Wright isn’t the only Detroiter taking matters into his own hands as it relates to grocery options. Linwood Fresh Market opened in March at 12737 Linwood St. Detroit resident and 28-year nurse Sonya Greene opened the store in a 1,800-square-foot space that’s a part of her The Shift development. The — Raphael Wright, owner, Neighborhood Grocery development is also slated to include a barber shop, apart- to be open and have the opportuments and nonprofit space. nity to show the people in the Greene in 2017 bought the grocery community something like this space from her aunt, Juanita Full- can be done by someone from the er, a registered nurse. Greene pre- community. “Everybody can’t get to Whole viously told Crain’s that she put $175,000-$200,000 of her own Foods or go to the ’burbs for money into the project. She even Walmart. We need more of these sold her home to help finance the options in the city and I’m glad some people are taking on the task venture. The Detroit People’s Food Co- to offer more options.”

“...I wanted to do something where I live.”

cess of notifying relevant individuals,” the letter said. “We understand this news is difficult and we are committed to supporting every member of our community.” For those whose sensitive information was accessed and for whom UM has an address, a physical letter has been mailed and will arrive in at least five business days, the online letter said. UM established a call center for those with questions about the incident and who suspect their information was involved in the incident. The call center can be reached at (888) 998-7088 from 9 a.m.-9 p.m. Monday through Friday. UM is also offering compli-

mentary credit monitoring services to people whose information may have been compromised. The three-day internet shutdown left students without online access to their courses and in-person students combing through a 545-page course guide to figure out where they needed to be on the first day of classes. “As a general matter, individuals should always remain vigilant for incidents of fraud and identity theft, including by regularly reviewing their account statements and monitoring credit reports,” UM said. “Any suspicious or unusual activity or suspicion of identity theft or fraud should be reported to the appropriate financial institution immediately.” OCTOBER 30, 2023 | CRAIN’S DETROIT BUSINESS | 19

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THE CONVERSATION

Allandra Bulger breaks down systemic challenges to funding nonprofits CO.ACT DETROIT: Co.act Detroit launched as a place-based, capacity building center for nonprofits, just nine months before the pandemic but expanded its work in the years following. After foundations tapped it as one of several groups to help nonprofits evaluate their organizational structures and boost earned revenue during COVID, it has emerged as a convener of philanthropic, nonprofit and private-sector groups. Executive Director Allandra Bulger and her team are driving conversations aimed at collaboration, equitable grantmaking and filling service gaps. With the stature the organization is gaining, it’s working to tackle systemic challenges and to remove barriers to resources for BIPOC-led and other nonprofits. When she’s not immersed in supporting nonprofits and the people leading them, you’ll find Bulger kicking up her heels as she listens to her favorite musical genre. This conversation has been edited for length and clarity. | By Sherri Welch How would you describe Co.act Detroit at this point? It’s a hub that is working to accelerate collaboration among nonprofits, philanthropy and folks in the private sector that have a social lens to their work. Support is one way we do that. Another way we do that is by promoting an equitable funding environment, working with philanthropy directly, as well as administering grant programs in partnership with foundations. That is important because we have the opportunity to bring diverse perspective to the grantmaking process. In our role, we are also amplifying community voices and decisionmaking by including community residents and leaders in our advisory committees and grant selection process. We catalyze critical conversations between funders and nonprofits, expand access to innovative resources and (spur) responsive programming to fill service gaps and promote innovative approaches. The center launched virtual programs during the pandemic, right? We provided relief grants to organizations during COVID, workshops on critical topics such as mergers and acquisitions, connecting to government resources, fund development and fundraising. Our signature program that we launched two weeks before the pandemic, the Activate Fund, a $1.9 million grant fund, we transitioned that into a virtual program. That provided capacitybuilding grants and technical assistance, collaboration support and funding to a cohort of organizations looking to expand their earned revenue offerings. The other thing we launched during the pandemic was a podcast to continue candid conversations that had previously taken place in the Co.act space in Detroit’s New Center. The conversations provided space for dialogue around critical issues in the nonprofit sector like the importance of working together, of having diverse leadership, and the importance of well-being and mental health in the nonprofit sector. Some of the issues that

CrainsDetroit.com President and CEO KC Crain Group publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Executive editor Mickey Ciokajlo, (313) 446-0319 or mickey.ciokajlo@crain.com Managing editor Michael Lee, (313) 446-1630 or malee@crain.com Director of audience and engagement Elizabeth Couch, (313) 446-0419 or elizabeth.couch@crain.com Creative director Thomas J. Linden, tlinden@crain.com Audience engagement editor Matthew Pollock Assistant managing editor Beth Reeber Valone Assistant managing editor Lauren Abdel-Razzaq Assistant managing editor-special projects Leslie Green Projects editor Stacy Sominski Associate creative director Karen Freese Zane Digital design editor Jason McGregor Art directors Kayla Byler, Carolyn McClain, Joanna Metzger Senior digital news designer Stephanie Swearngin Design and copy editor Beth Jachman Research and data editor Sonya Hill Notables coordinator Ashley Maahs Newsroom (313) 446-0329 REPORTERS Jay Davis, restaurants, retail and small businesses, (313) 446-1612 or jason.davis@crain.com David Eggert, politics, policy and energy, (313) 446-1654 or david.eggert@crain.com Anna Fifelski, banking, investment and innovation anna.fifelski@crain.com Jack Grieve, audience engagement, jack.grieve@crain.com Nick Manes, residential real estate and mortgage industry, (313) 446-1626 or nmanes@crain.com Kurt Nagl, manufacturing, law and courts, (313) 446-0337 or knagl@crain.com Kirk Pinho, real estate, (313) 446-0412 or kpinho@crain.com Dustin Walsh, health care and cannabis, (313) 446-6042 or dwalsh@crain.com Sherri Welch, nonprofits, philanthropy and higher education, (313) 446-1694 or swelch@crain.com

Allandra Bulger is executive director of Co.act Detroit.

nonprofit leaders face based on research done locally are around letting go and delegating effectively, larger system barriers such as nonprofit funder dynamics, scarcity mindset and a culture of overwork. We think about well-being both in the context of self care and community care, taking care of each other in the nonprofit sector. The importance of self care for nonprofit leaders and staff was an important conversation at a Co.act event before the pandemic, wasn’t it? Yes. During our community engagement when we were building Co.act, some of the feedback we received identified the need for self care in addressing burnout as one priority. The high work loads in the sector contribute to burnout. Being in a profession of service can often require more mental and emotional labor. Speaking of self care, you were recently on sabbatical as one of the McGregor Fund’s 2023 fellows in the Eugene A. Miller Fellowship Program. Did you do anything interesting during your time off? I spent a month in Costa Rica

at a wellness retreat. I also took pottery lessons, and I did some meditation training. It was definitely beneficial and needed, particularly after leading a startup through a pandemic. And I do think it is something that should be made available to more nonprofit leaders to address burnout. This gives you an opportunity to think creatively and strategically. When you are in the day to day of the work, it’s very hard to be in a creative and strategic mindset. Co.act worked with other support organizations to help nonprofits assess their organizational strengths and weaknesses and the go-forward model for operating, whether on their own or in collaboration of some sort with one or more other nonprofits. Are we at a point where nonprofits are still concerned about long-term sustainability and in need of organizational consulting? Yes, we’re still hearing from nonprofits that type of support is needed. We’re still providing some of that support through our CoLab Connect program, where nonprofits can meet one-on-one with subject matter experts to address pain points in their organizations. The

need for funding continues to be a number one issue for organizations. The pandemic actually exacerbated needs in our community. A lot of organizations have had to increase their response to those increased needs. You’re now bringing programs and nonprofit leaders back to the Co.act space for monthly drop-in days. Why is that in-person connection important? Bringing folks together in person helps to foster relationship building and collaboration in a way that I think is missing from a virtual space. It’s an opportunity for folks to share and learn from each other, from their experiences, from their challenges. That’s what we see from folks getting together in person, an opportunity to learn from each other and problemsolve together. OK, a fun question: what’s something people would find surprising about you? I think most people would be surprised my favorite genre of music is country music. I love country music because of the storytelling. There are layers of storytelling you don’t find in a lot of other places.

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Read all the conversations at CrainsDetroit.com/TheConversation 20 | CRAIN’S DETROIT BUSINESS | OCTOBER 30, 2023

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Working with Detroiters like Marcus Jones to restore homes and build community.

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Working with Dana Williams to place Detroiters in apprenticeships, full or part time jobs.

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