October 31, 2022 issue

BY KIRK PINHO

e company formerly known as Compuware Corp. is leaving the downtown Detroit o ce tower its co-founder built in 2003 into space in the suburbs that's a fraction of its current footprint.

It's the latest sign of an o ce market shakeup triggered by the COVID-19 pandemic.

A source familiar with the matter said BMC Compuware, which is now owned by Houston-based BMC Software Inc. after a June 2020 acquisition, has not renewed its lease in the 1.3 million-squarefoot trophy building at 1000 Woodward Ave. that today is called One Campus Martius.

at lease is for 58,000 square feet, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.

Another source briefed on the matter said Compuware is taking about 10,000 square feet in the 2000 Town Center high-rise in the South-

Peter Karmanos Jr., who co-founded Compuware in 1973, moved the company from Farmington Hills to the new downtown Detroit building, which cost some $350 million to build. It was a major employment victory for the city at the time and not long after, another new o ce building was built nearby and Dan Gilbert began buying up old buildings, ushering in a renewed corporate interest in downtown.

Evictions could get tougher

Landlords

BY ARIELLE KASS AND KIRK PINHO

e coronavirus pandemic brought eviction moratoriums and rental relief checks for tenants, stabilizing their housing and frustrating some landlords who felt like they had lost control of their properties.

Now, the State Court Administrative O ce is proposing new rules wit says are aimed at codifying some of the lessons from that period, allowing more time for both commercial and residential tenants to pay what they owe when they fall behind and in some cases, lengthening the eviction process.

Landlords, on the whole, are opposed to the recommended changes, which they say will make it harder to turn over properties to new, paying tenants. Tenant advocates say they would help make sure fewer renters end up without a home.

Tom Boyd, the state court administrator, said the proposed rules are intended to bene t landlords and tenants alike. With more time, he

eld Town Center o ce complex o the John C. Lodge Freeway/M-10.

Whitmer, Dixon on

 DELAYED FLAGSTAR DEAL GETS AN APPROVAL

THE NEWS: Top executives at Flagstar Bancorp Inc. and New York Community Bancorp Inc. say they're getting closer to consummating their longstalled merger agreement. e banks said the federal O ce of the Comptroller of the Currency had signed o on the proposed $2.6 billion acquisition that would bring Troy-based Flagstar Bank under the wings of the New York City area lending institution, creating a bank with about $87.8 billion in assets.

WHY IT MATTERS: e OCC approval allows the banks to once more extend the termination agreement on their M&A deal, this time to Dec. 31. Initially, the deal was expected to close last year.

 MICHIGAN MEDICINE REPORTS ANOTHER DATA BREACH

THE NEWS: For the second time this year, Michigan Medicine has su ered a data breach. e Ann Arbor-based health system has contacted 33,850 patients in the past week after a cyberattack in August gained access to employee email accounts and potentially exposed health information of patients, Michigan Medicine said in a press release.

WHY IT MATTERS: Cyberattacks have been a growing concern for businesses for a decade and an increasing problem for the health care industry that deals with so much sensitive information.

 KARMANOS COMPLETES $48M FARMINGTON HILLS EXPANSION

THE NEWS: McLaren Health Care completed the long-awaited $48 million expansion of its Farmington Hills outpatient center division of the Barbara Ann Karmanos Cancer Institute. the renovations mirror the original chalet style of the building that Karmanos acquired in 2001.

WHY IT MATTERS: e 50,000-squarefoot expansion of the Lawrence and Idell Weisberg Cancer Center was announced in 2018 and scheduled for completion in 2021, but the COVID-19 pandemic slowed the timetable.

HOUSING MARKET STARTS TO HIT PAUSE BUTTON

THE NEWS: Metro Detroit's housing market continued its deceleration in August, along with the nation, according to a national index. e S&P Case-Shiller Home Price Index, which tracks sale prices for homes sold in a month as compared with their last sale, showed metro Detroit prices were 9.7 percent higher in August than they were the year prior, even as they were .6 percent lower than they had been in July.

WHY IT MATTERS: High interest rates have started putting the brakes on what was a blazing-hot housing market.

 32 PACKARD PLANT PARCELS REVERT TO CITY

THE NEWS: A group of Packard Plant properties has reverted to city of Detroit ownership. Wayne County Treasurer Eric Sabree said in an email Tuesday that 32 foreclosed parcels once owned by Fernando Palazuelo did not sell as part of a larger "blight bundle" auction with about 400 foreclosed properties earlier this month, and therefore are now owned by the city.

WHY IT MATTERS: Demolition on parts of the mammoth abandoned plant has started and the move will give more leeway to continue moving forward.

MOBILITY

Farley: Self-driving vehicles are still ‘a long way o ’



Ford Motor Co. on Wednesday posted a third-quarter loss of $827 million that it largely blames on newly revealed plans to shut down Argo AI, a self-driving vehicle development company in which the automaker had invested heavily.

CEO Jim Farley said Ford now believes mass deployment of fully self-driving vehicles is "a long way o ," while CFO John Lawler added it could be “ ve-plus years away.”

As Argo winds down, Ford now plans to halt spending on what is known as "Level 4" self-driving technology that involves advanced driver-assist systems to focus on lower-level advanced systems that can be deployed sooner.

Ford originally had planned to begin commercializing Level 4 vehicles in 2021.

"But things have changed, and there's a huge opportunity right now for Ford to give time — the most valuable commodity in modern life — back to millions of customers while they're in their vehicles," Farley said in a statement. "We're optimistic about a future for L4 ADAS, but pro table, fully autonomous vehicles at scale are a long way o and we won't necessarily have to create that technology ourselves."

 MICHIGAN AMPS UP SPENDING ON TALENT MARKETING

THE NEWS: Michigan will spend $10 million on a new marketing campaign focused on attracting and retaining talent to ll in-demand and high-growth jobs. e Michigan Strategic Fund board approved the allocation Tuesday. It will go to the companies with

which the Michigan Economic Development Corp. contracts for business marketing — Grand Rapids-based communications and marketing rm Lambert & Co. and its joint-venture partner 9th Wonder Agency.

WHY IT MATTERS: Other states are also ramping up talent marketing efforts amid a worker shortage.

Self-driving startup Argo AI is shutting down. | ARGO AI

CRACKDOWN

Price freefall, illegal products in focus under new acting weed chief

For Michigan’s marijua na industry, a crackdown is coming.

e state’s Cannabis Reg ulatory Agency is preparing to launch a new o ensive to combat illicit market prod uct that’s been long-ru mored to be making its way into the regulated industry, Brian Hanna, the newly ap pointed acting director of the agency, told reporters in a media roundtable last week at the CRA’s Lansing head quarters.

Hanna, who was appointed by Gov. Gretchen Whitmer as the suc

cessor to to the agency's founding Director Andrew Brisbo in September, de clined to reveal details, but the proposed crackdown is designed to rid the legal market of oversupply due to illegally grown products en tering the market and driv ing down prices.

Legal marijuana prices have plummeted in the state in the past 18 months, down to $109.88 per ounce of ower in September from $203.84 per ounce a year earlier.

Pressure on the Cannabis Regula tory Agency has been mounting in

BY| DUSTIN WALSH

recent months. After Brisbo's resig nation, the appointment of Hanna, a former Michigan State Police crime analyst, was received as a positive by industry players concerned about il legal cannabis a ecting prices.

Hanna said the agency is aware of illegal market marijuana in the sys tem but is unsure of its scope.

“Anybody cutting corners or cheat ing, we want to expose that,” Hanna said. “But we don’t know at what point it’s coming into the supply chain.” e number of active marijuana plants being grown in the licensed

Developer reworks plan for Grand Rapids factory

GRAND RAPIDS — As a housing shortage continues to plague Grand Rapids, a Detroit developer is recon guring its plan for a massive apart ment complex southwest of down town that’s been hitting speed bumps since 2021.

Detroit-based Sturgeon Bay Part ners is in the process of retooling a previously announced plan to con vert the historic Sligh Furniture

property in the Roosevelt Park neighborhood into a mixed-use de velopment containing residential, retail and commercial.

John Gibbs, co-owner of Sturgeon Bay Partners, said the project’s price tag is now about $100 million, with rising construction costs and inter est rates factored in. Original project costs were not disclosed.

Sturgeon Bay is now back to the drawing board with both the con cept design and the mix of incentives

the rm plan to pursue for the proj ect, Gibbs said.

He said Sturgeon Bay rst began planning this development in 2020. In early 2021, the rm began buying up properties in the block bounded by Wealthy Street to the north, Logan Street to the south, Century Avenue to the east and Cesar E. Chavez (at the time called Grandville) Avenue to the west.

After name change, Corewell looks ahead

CEO discusses future for ex-Beaumont-Spectrum

BY DUSTIN WALSH

Earlier this month, the merged Beaumont-Spectrum health system got a new name in Corewell Health. And with it, the top executive hopes for a new view of its operations in Southeast Michigan.

A lot has transpired leading up to the new name, including leadership accelerating e orts to integrate the two systems and to patch nancial bleeding from the former Beaumont operations.

Sources have for years dis cussed the exodus of top physicians from Beaumont for competing hospitals in the state under its for mer leadership, and that out ow has continued since the merger.

Crain’s talked with Corewell Presi dent and CEO Tina Freese Decker about the new name, addressing the nancial and labor issues in South east Michigan and what the state should expect from its largest health system moving forward.

 The Corewell name was met with some groans, especially after part ing ways with the Spectrum brand. How do you feel about the new name and its place in the health care space?

We’re feeling really good about it. We know it’s a big change and it takes time for people to get used to that new name, but we’re proud of the team for putting this together. Coming up with a new name is surprisingly challenging, but the process was excellent. We engaged our team members with surveys and that name really comes from our team members.

a year earlier. | GETTY IMAGES

Freese Decker

RACHEL WATSON

SW in Grand Rapids’ Roosevelt Park neighborhood.

STURGEON

PARTNERS

Hanna

“ANYBODY CUTTING CORNERS OR CHEATING, WE WANT TO EXPOSE THAT.”

—Brian Hanna, acting director of Michigan’s Cannabis Regulatory Agency

See

One fallout from the unexpected bankruptcy of a prominent construction contractor in August has been delays on a long-in-the-works West Village neighborhood redevelopment in Detroit.

In a lawsuit led Oct. 21 in U.S. Eastern District of Michigan Bankruptcy Court, an a liate of developer Michael Higgins (more on another case in a hot minute) claims a construction lien that the now defunct Bloom eld Hills-based T.H. Marsh Construction Co. led this summer seeking $267,000 for alleged unpaid work is hindering nancing on his mixed-use redevelopment proposal for the northwest corner of Je erson Avenue and Van Dyke Street.

An attorney for T.H. Marsh in its bankruptcy case did not respond to a message seeking comment Tuesday.

For several years, Higgins has oated reimagining that Je erson/ Van Dyke corner as 42 apartments — 36 across four stories atop a new parking structure, six in a redeveloped carriage house — renting for 50 percent to 120 percent of the Area Median Income, plus about 17,000 square feet of commercial/retail space.

Even though some removal of underground storage tanks took place over the summer, the July 27 lien is causing a lender to not authorize construction draws — in this case, these are basically releases of funding from a loan escrow account set up with a title company.

In short, if you can’t withdraw money from the account to pay contractors, you probably shouldn’t have the contractors be doing work. e lien came less than a month before T.H. Marsh led for Chapter 7 bankruptcy liquidation on Aug. 22,

claiming $50,001-$100,000 in assets and $1,000,001-$10 million in liabilities to 100-199 creditors.

A trustee, Mark Shapiro, has been appointed. And the lien, the lawsuit says, was led long after T.H. Marsh did any sort of work on the project. e lawsuit also says that pre-construction liens are prohibited under state law, and that it was led well after it was legally required.

On Monday, Higgins told me he anticipates his lawyers in the Detroit o ce of Kotz Sangster Wysocki PC will get the court to “quiet” the title, meaning that funding for the work to be done — in particular, demolition of the existing parking deck behind Belle Isle Pizza — can commence.

Higgins’ complaint calls the lien “the last desperate act of a failing company.”

T.H. Marsh’s website says the company started in 1954 by father and son Alfred Marsh and Ted H. Marsh, rst by building gas stations along the expanding highway system fueled by the Federal-Aid Highway Act of 1956. Since then, it has built projects in health care, nonpro ts, multifamily, retail and education, the website says. e company reported $90 million

in revenue in 2020, placing it at No. 142 on the Crain’s Private 200 list; that gure was down from $92 million in 2019.

Another Higgins lawsuit just dropped

Fun fact: After I talked to Higgins on Monday, the Detroit Free Press reported that he was being sued by Detroit-based architecture rm Kraemer Design Group for what it says is about $688,000 in unpaid bills.

e company says it did that work on a proposed $125 million redevelopment of the Leland Hotel at 400 Bagley St. (where Higgins keeps his o ce) into primarily market-rate apartments, but Higgins hasn’t paid, the Freep report says.

He told the Free Press that nancing for the redevelopment, which has been in the works for several years, hit snags and he is pursuing other avenues to pay for it.

I reached out to Higgins and Robert Kraemer, the head of Kraemer Design Group, seeking additional information on Tuesday.

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

Developer Michael Higgins’ planned redevelopment

Je erson and Van Dyke

BERARDI PARTNERS

Kirk PINHO

Kid Rock's old mansion sells, along with items left behind

BY ARIELLE KASS

Ashley Dunworth recently came into possession of 29 bottles of Jim Beam that once belonged to Kid Rock. She also has two cases (and a sixpack) of his American Badass beer.

Dunworth inherited the Kid Rock paraphernalia while helping her friend and colleague, Amy Trahey, clean out his former home on the Detroit River. e musician (birth name Robert Ritchie) moved out in 2019 without so much as taking the art o the walls. Most of it was still there when Trahey bought the home in May 2022.

Dunworth didn't nab an infamous wall decal of a woman snorting cocaine o a Kid Rock album, nor did she get his massive Hitsville, USA mural — "the backs are sticky and it didn't come o well," she said.

Dunworth had planned to sell the art. She doesn't know what to do with the liquor.

" ere is so much Jim Beam," she said. " ere was just a lot of alcohol in that house."

Trahey sold Kid Rock's former mansion earlier this month, the third time it has changed hands since his exit. And this time, the new owners didn't want his old stu .

What they did want, Dunworth said, was a dining room table emblazoned with an eagle and Kid Rock's catchphrase, "American Badass." ey also kept a poker table from the Palms Casino Resort in Las Vegas and poker chips with Kid Rock's name on them.

"It's just that they didn't want Kid Rock," Dunworth said.

Matt O'Laughlin, the Max Broock Detroit agent who sold the property to Trahey in May, said the new owners are a young family moving back to Detroit from Washington, D.C. ey didn't want most of the objects left behind in the house, a trove of items that O'Laughlin said included a jar of weed left in a dresser.

A spokesperson for Kid Rock did not respond to a request for comment about the sale of his onetime home. Betty Warmack, who represented the new owners for Real Estate One, declined to speak about the buyers.

" ey don't want any publicity," she said.

e family paid $2.2 million for the 6,000-square-foot house, just shy of its $2.25 million listing price. Trahey bought it for $2.03 million and had planned to use it as a summer home and attraction for fans.

"I can do curated events for fans only," Trahey said in May. "I think they'd like to sni the sheets."

Dunworth said there was a 30th birthday party held at the house, as well as two corporate events. But Tra-

hey, who did not respond to phone calls seeking comment, apparently decided to sell because she wasn't going to be able to operate the mansion as she intended, O'Laughlin said.

Built in 1930 at 9090 Dwight St. in Detroit, the home is down the street from the Manoogian Mansion, the o cial residence of Detroit's mayor. Kid Rock bought it in January 2012 for $300,000, according to public records.

Crain's previously reported that the home was purchased in August 2019 for $2.2 million by Detroit Boathouse LLC, which is registered to Kevin Washburn in Grosse Pointe and which granted a $1.83 million mortgage to the Dwight W. Edwards Living Trust in August 2020, according to Wayne County land records. e house, each time, has been sold as-is — until now.

Dunworth said she poured out the contents of the open bottles — she has no idea how many, but noted there was alcohol on every oor of the house — and threw away anything broken or cracked. She's planning to sell the empty cigar boxes, shot glasses, towels and other possessions.

"I'm not going to keep them," she said. "We've got to gure out what to do with it. I'm not drinking 29 bottles of Jim Beam."

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

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Kid Rock’s former riverfront home at 9090 Dwight. | STYLISH DETROIT

Candidates square o on business issues

Tudor Dixon on cutting regulations, business incentives, vocational education

DAVID EGGERT

DAVID EGGERT

Gov. Gretchen Whitmer said if voters ap prove Proposal 3 guaranteeing a right to abortion, it will help Michigan recruit people and companies over neighboring states with abortion bans.

"If and when we lock reproductive rights into law, that will be an additional tool for us to go into Indiana and Ohio and eat their lunch," the Democratic governor told Crain's in a wide-ranging interview. "I want to re cruit talent. I want to recruit businesses who say they're not going to put any more re sources into those states because they've so dramatically pulled back women's ability to make their own decisions about their bodies and their health. I think that could be a great strength for us."

After Indiana in August became the rst state to enact tighter abortion restrictions since the U.S. Supreme Court overturned the landmark Roe v. Wade case, the Indianapo lis-based pharmaceutical company Eli Lilly said it will be forced to plan more employment growth outside Indiana. Enforcement of the law in Michigan is on hold amid a legal chal lenge.

Michigan has had a near-total abortion ban on the books for 176 years, but it is not being enforced after Roe's reversal due to in junctions issued this year by two di erent state judges. Ohio prohibits abortion after 20 weeks, and a stricter law barring virtually all abortions is temporarily blocked as a lawsuit advances through the courts.

When Whitmer made similar comments at a Detroit Economic Club candidate fo rum, Republican strategist and Prop 3 opponent Fred Wszolek tweeted: "Aborting babies is not an economic de velopment strategy. at's just depraved."

Whitmer discussed a variety of topics in the Crain's interview, including her view that pending jumps in the minimum wage and paid sick leave re quirements are probably not sustainable for businesses. She also defended incentives for Chinese battery-component maker Gotion Inc., which have been criticized by Republi can Tudor Dixon.

Business incentives

Whitmer touted the state's Strategic Out reach and Attraction Reserve Fund, which she and lawmakers created less than a year ago after Ford Motor Co. announced major electric vehicle-related spending in south ern states. e fund has been used to secure Ford and General Motors Co.'s EV produc

tion in Michigan but also investment from less familiar or established companies such as Gotion and Our Next Energy.

"I think we've got to be aggressive here," she said, pointing to competition with other states and expressing con dence that the deals are structured to "mitigate some of the perceived risk about jumping in with a Go tion or Our Next Energy."

Whitmer endorsed nding a way to re plenish the fund on an ongoing basis rather than the Legislature periodically depositing money into it.

Population

She said a second-term priority would be developing a population-growth strategy. She said in the days after the election, she will focus on convening stakeholders to work on the strategy.

"It needs to be bipartisan but not led by anyone who's partisan," she said, saying aca demics and business leaders should be at the table. "It needs to transcend my time as governor. It needs to transcend my succes sor's time as governor. is is three, four ad ministrations (that) are going to have to be focused on this."

Asked what Michigan should do to grow the population, she said "we've got to protect women's ability to make their own decisions about their bodies." She said she was glad to see the state's civil rights law interpreted to prohibit discrimination against LGBTQ peo ple. Placemaking and high-speed broad band are important, too, she said.

Pandemic relief

Michigan this year paid out $117 million of $409 million that was allocated for certain types of businesses hurt by COVID-19-

Tudor Dixon suggested that her criticism of state incentives for a Chinese company's planned battery-component factory does not mean she opposes the need for a fund to land large-scale business expansions. e Republican candidate for governor said the money should instead go to companies with a "proven record of success" in the United States or to those based in allied countries. Go tion Inc., which is headquartered in China but has a U.S. subsidiary based in Silicon Valley, will receive at least $675 million in grants and tax breaks to build a nearly $2.4 billion plant and add up to 2,350 jobs near Big Rapids.

"China is becoming the most powerful country in the world, and they may already be. ey have the largest Navy in the world. ey overtook the United States in exports in 2010. We know exactly where they're going. For them to be coming into the United State, buying property, and us to be handing them our tax payer dollars to do so is very upsetting to me," Dixon told Crain's in an expansive interview.

Asked if the state should continue with the Strategic Outreach and Attraction Reserve Fund, which was created nearly a year ago af ter Ford Motor Co. expanded electric vehicle production in southern states, she said: "We have to be competitive with the other states. We know that that's what they're doing. ... I want to make sure that the return on invest ment is strong for the state of Michigan. It goes beyond the SOAR fund. e SOAR fund is the nal step in the process. ... We have a problem well before we get to that point." e state, she said, should be doing more to prepare shovel-ready sites and better commu nicate licensing and approval processes. It has a "petty horrendous" reputation "for not being a cohesive state that can come together and say we're going to get through the red tape and have you an answer in three weeks," she said.

Dixon talked about a mix of issues in the Crain's interview, including what she said is her top business priority — cutting state reg ulations by 40 percent in four years. She did not specify what regulations she would nix but mentioned agricultural rules as needing a comprehensive review.

"It's the No. 1 complaint I hear when I travel around the state, is that it's too challenging to get through the red tape ... to start business, to do business, to expand business," Dixon said.

Workforce

Dixon said she would put a vocational tech nical school in every high school. She cited her experience in the steel industry, when she was it was a struggle to nd people to work at the foundry. Part of the challenge is the perception that jobs at machine shops and other manu facturing facilities are "dirty," she said. "But it's mostly computer talent that they're looking for. I knew before I started running for gover nor, ve years ago we had a talent problem.

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

include your complete name, city from which you are writing and a phone number for fact-checking purposes.

at's something that Michigan has not kept up with other states over the past 30 years, of making sure that we're working toward that core competency of having skilled labor."

Education

Dixon said the state's poor infrastructure, a low-ranking education system and crime are "big deterrents" to attracting businesses.

She advocated for "education freedom," mentioning bills that would have created scholarship accounts for K-12 students to pay for educational expenses, including pri vate school and tutor ing, and given tax credits to people and corporations that do nate to the program.

Democratic Gov. Gretchen Whitmer vetoed the legislation, and the DeVos family has since nancially supported nearly identical ballot initia tives that could go to the Legislature in 2023.

"I'd like to see edu cation savings ac counts. If parents want to go to a di erent school, they should be able to go a di erent school," Dixon said, referring to Florida, where a school voucher program was signi cantly expanded last year. " e idea that you're going to suddenly crush all of your public schools, I would never allow that to happen. ... is is a scare tactic from the Democrats. But why would we continue on the trajectory that we're on because right now everything is indicating that we’ll be in the bottom ve states."

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

“IF AND WHEN WE LOCK REPRODUCTIVE RIGHTS INTO LAW, THAT WILL BE AN ADDITIONAL TOOL FOR US.”

Gretchen Whitmer on abortion as an economic issue, pandemic business relief

“IT’S TOO CHALLENGING TO GET THROUGH THE RED TAPE ... TO START BUSINESS, TO DO BUSINESS, TO EXPAND BUSINESS.”

JEFF KOWALKSY FOR DETROIT ECONOMIC CLUB

Amazon’s new Canton facility focuses on faster delivery

KURT NAGL

At Amazon Inc.’s new 180,000-square-foot delivery station in Canton Township, shifts start at 1:20 a.m.

e time may seem arbitrary, but the early morning start puts workers in the best position to deliver pack ages to doorsteps on time, said James Kingsley, senior regional manager for the e-commerce giant. By the time the sun rises, packages are processed, sorted and ready for delivery around the region.

It’s the result of continuously re ning processes with data and algo rithms that speed up delivery times and improve safety for drivers.

“It’s all about driving e ciency,” Kingsley said during a tour of the de livery station at 49000 Michigan Ave., which began operating Wednesday. “It’s all in the algo rithms and how we process our vol ume.”

e facility in Canton Township, Amazon’s 11th delivery station in Michigan, is a “last mile” stop, meaning packages leaving the sta tion go to doorsteps around the western suburbs of metro Detroit and the Ann Arbor area.

After a customer paces an order online, the inventory is shipped to a ful llment warehouse in the region before going to a sorting center and then being shipped to a speci c de livery station depending on the des tination ZIP code, Kingsley said. Same-day deliveries typically skip the sorting center step.

Starting at 1:20 a.m., employees begin sorting inventory received from warehouses by zone and ZIP code. e picking process begins around 9 a.m., when employees be gin sorting the goods into driv er-speci c piles. Finally, drivers dis patch from the station with the goods between 10 a.m. and noon.

e purpose of the early start is to keep drivers o the road at night, Kingsley said.

“Especially during wintertime when it gets darker earlier, having the daylight really helps from a safe ty standpoint,” he said.

In addition to meeting customer demands, the company has worked to improve employee satisfaction. A national labor movement that’s led to the unionization of hundreds of Starbucks stores, including a dozen in Michigan, has also targeted Ama zon, whose executives have voiced opposition to unions.

Amazon workers in Staten Island, N.Y., formed the rst union in April.

Amazon workers in Michigan have not organized, and a company spokesman said he is unaware of any e orts to do so among the 26,000 people it employs in the state.

Asked about how the company approaches the discussion of union izing, Kingsley said Amazon has an “open door” policy.

“We like to interact with our asso ciates and understand any concerns that they have. … ose one-on-one engagements, and the ability to build those strong relationships with our associates really provides a great culture and a great place to work,” he said.

e company has also raised pay to attract workers in a strained labor market, Kingsley said. Pay ranges from $16-$26 per hour, with an aver age of $19 per hour.

Rodney Richardson, 58, started working at Amazon’s facility in Ro mulus ve years ago, climbing his way up to area manager at the new Canton location. He said the com pany has been a good place to build a career.

“We’re always exible, we’re al ways changing to meet the needs of our community,” he said. “I don’t feel restricted by my job."

Kingsley said the Canton delivery station will ramp up to hire “hun dreds of employees” and “hundreds of drivers,” but the company de clined to provide a speci c gure.

Amazon has slowed down its ex

pansion plans in Michigan and around the country as online buying cools o from record demand during the pandemic. Still, Kingsley said he has not noticed any slow downs at the company’s warehous es.

“I would say overall our sites stay extremely busy,” he said. e new delivery station along Michigan Avenue was constructed by Pure Development Inc. on vacant land. e cost of the project was not disclosed.

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

Amazon Inc. opened a 180,000-square-foot delivery station in Canton Township on Wednesday. | KURT NAGL/CRAIN’S DETROIT BUSINESS

BIG

Magna

Charged up but under pressure

Our Next Energy CEO Mujeeb Ijaz now has to execute on big battery plan

Mujeeb Ijaz feels the pressure.

e 55-year-old founder and CEO of Our Next Energy Inc. recently host ed U.S. House Speaker Nancy Pelosi, Gov. Gretchen Whitmer and a host of other dignitaries who praised him as a visionary and even likened him to auto pioneer Henry Ford.

By the end of the year, the EV battery startup will close a $250 million Series B funding round, bringing its total raise to $443.5 million since its founding in 2020, Ijaz told Crain’s last week. at, paired with $237 million in state incen tives, will help it launch a $1.6 billion battery plant in Van Buren Township.

It’s not all the attention that weighs on him, or even delivering on the promise of thousands of jobs and big returns for investors.

“It’s internally born,” Ijaz said over lunch at ONE’s new headquarters in Novi. “Personally, I feel pressure. My mission is long-term electri cation for the masses.”

While Ijaz said he doesn’t fear fail ure, he knows there’s a chance the mission could be stalled — again.

Parked inside the lobby of the company’s 114,000-square-foot of ce and R&D center are a 1912 Baker Electric Victoria and a 1922 Detroit Electric Coupe. A century-old Gener al Electric car charging station sits on display between them.

It’s a reminder that electric cars were supposed to be the future. e rst car to top 100 mph was electric. e rst person, Andrew Riker, to win a 50-mile road race did so in an elec tric car. e rst car to travel 200 miles? Electric. And so on.

But when auto pioneer Henry Ford found a way to make cars cheap, the rest was gas-burning history.

“Why, with all of that success, did an electric car not win?” Ijaz said be tween sips of soup inside the Riker conference room. “It was because of cost and range.”

CEO Mujeeb Ijaz is aiming to build Our Next Energy into an EV battery powerhouse. PHOTOS BY NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

KURT NAGL

“DON’T BE AFRAID OF SETTING A DISRUPTIVE GOAL. EVEN IF YOU DON’T KNOW HOW TO GET THERE, DON’T WORRY ABOUT THAT. JUST SET THE GOAL, AND THEN STRUGGLE TO GET THERE BECAUSE YOU’LL BE THE FIRST TO DO IT.”

—Mujeeb Ijaz, founder and CEO of Our Next Energy Inc.

Engineering technician Jason Bird works to install an integrated battery management system Our Next Energy in Novi.

EV maker Via Motors is moving headquarters to Michigan

KURT NAGL

Electric vehicle manufacturer Via Motors is moving its headquarters from Utah to Auburn Hills, where it plans to invest $12.4 million and cre ate 300 jobs.

e company is opening a 98,000-square-foot o ce and R&D tech center at 3900 Automation Ave. with the help of a $2.5 million perfor mance-based grant from the state, ac cording to the Michigan Economic Development Corp., which approved the incentive Tuesday. e space had previously been occupied by Italian auto components supplier Magneti Marelli, which moved its base to South eld last year.

e company began moving em ployees to the new o ce Aug. 1, ac cording to spokesman Derek Larsen. e move will help the electric com mercial delivery vehicle maker plug into metro Detroit’s mature automo tive supply chain, according to the company.

“Our goal is to provide the best electric work trucks for eets every where, and this facility is critical to achieving that goal,” Bob Purcell, CEO of Via Motors, said in a news release. “We’re excited and proud to partner with the city of Auburn Hills and the State of Michigan, tapping into the re gion’s automotive expertise to help global eets shift towards a zero emis sion, commercial electric vehicle (EV) future.”

e jobs are expected to pay an av erage wage of $2,458 per week plus bene ts.

Incentives were necessary to sway the company toward a new adminis trative base in metro Detroit, accord ing to the MEDC. e company is also

considering expanding within its cur rent Utah footprint or in California.

“ e Company is attracted to locat ing this facility in Michigan because of the State’s robust supply chain for electric vehicles and mobility,” ac cording to an MEDC brie ng memo. “Even though the Company would

Magna plans

KURT NAGL

Automotive supplier Magna Inter national Inc. is planning to expand operations in Highland Park, Shelby Township and St. Clair while creating 1,569 jobs to support new business from automakers.

e Canadian company, whose U.S. base is in metro Detroit, plans to invest around $530 million into new and existing plants to build seat frames as well as EV battery frames, enclosures and components.

e projects are being backed by state and local incentives totaling around $50 million, according to the Michigan Economic Development Corp., which approved the projects Tuesday.

St. Clair

Magna intends to quadruple the footprint of its EV parts plant an nounced early last year. e plant pro duces battery enclosures for the 2022 BT1XX platform, which includes the GMC Hummer EV.

e company will increase its in vestment from $70.1 million to $497 million and boost job creation from 304 to 1,224.

e expansion, which would add 740,000 square feet for more than 1 million square feet in St. Clair, is the re sult of landing a new program over the next eight years from a “major OEM” that was not identi ed in the memo.

Crain’s contacted Magna for more information about the projects.

“ is new program will grow new business to support electri cation strategy which is a key growing priority for the Company to increase its leader ship position in the battery frame mar ket,” the memo said.

Wages for the newly created posi tions range from $17 per hour to $48 per hour, with an average of $27 per hour.

e project is being backed by $44 million in state and local incentives.

“”e are grateful to have earned this ... but we have to continue to earn fu ture investment,” MEDC CEO Quen tin Messer said Tuesday during a me dia call with reporters. “Obviously,

like to locate in Michigan, incentive assistance is necessary to ensure this project moves forward in Michigan.”

Via Motors started out converting General Motors Co. vehicles into plug-in hybrids before manufacturing fully electric commercial vehicles. e company builds plug-in trucks

and vans under the Vtrux brand, with customers including FedEx Corp. and Verizon Communications. It o ers a portfolio of electric work trucks from classes 2-5 with a variety of con gura tions from box trucks and cutaways to stake trucks and walk-in vans, accord ing to the release.

e company is in the process of being acquired by New York-based Ideanomics, whose founder and exec utive chairman is Shane McMahon, son of retired professional wrestler and former WWE CEO Vince McMa hon.

“Once it becomes part of Ideanom ics, Via can o er a total package that makes it easy for eets to transition to electric drive — vehicles, charging in frastructure and nancing,” the re lease said.

e company’s chairman is long time General Motors Co. executive Bob Lutz.

“Via is doing it the right way, taking their OEM experience and discipline, combined with the drive and creativi ty of a startup,” Lutz said in an email.

“ is new HQ and technical center is an essential next step, and shows the world what I’ve known for some time — that Via means business.”

e company will keep its presence in Utah, serving as a hub for the west ern part of the country.

“We’re a region and state of innova tors, it’s in our DNA,” Maureen Krauss, president and CEO of the Detroit Re gional Partnership, said in the release.

“VIA Motors is a high-tech company that’s going to be headquartered in the Detroit region as we continue to deliver cutting-edge automotive and advanced mobility technology to the world.”

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

million in Michigan expansions

“ e City of St. Clair is very excited to have won this signi cant project,” St. Clair Mayor Bill Cedar said in a news release. “I’m extremely proud of our city council, county o cials and economic development partners for aggressively competing to win the Magna project.”

Shelby Township

Magna Powertrain of America Inc. said it will invest $96.2 million into a leased 200,000-square-foot plant, ac cording to the memo, which did not disclose the project address.

e seating, foam and trim assem bly plant would employ 490 jobs pay ing an average of $700 per week plus bene ts.

e project is being supported by a $2.9 million performance-based grant by the MEDC, which said the incentives were necessary to keep the company from expanding out side the state.

“While Magna remains committed to Michigan, incentive assistance is necessary to make the expansion in Michigan a competitive decision,” the MEDC said.

anytime that you can add on your footprint, it makes it more di cult for them to leave. Magna is a very coveted company.”

To support the latest expansion, the MEDC increased the value of its Michigan Business Development Pro gram from $1.5 million to $7.5 million, approved a 100 percent SESA tax ex emption worth $6.3 million and au thorized a State Education Tax abate ment.

Other support includes $3.6 million from the Economic Development Al liance of St. Clair County for infra structure improvement. e project would require construction of a new water tower for $7.4 million, plus $8.2 million in water plant upgrades.

e company would manufacture internal components for EV battery trays at the plant with a production capacity of 13 million units by 2023 and nearly 74 million by 2030.

Magna expects to employ 159 workers at an average wage of $2,500 per week plus bene ts.

e MEDC approved a $1.3 million grant for the project and a 50 percent SESA tax exemption for up to ve years totaling $370,000 in value. Ad ditionally, Shelby Township antici pates approving a local tax abate ment for the plant.

Highland Park

Magna Seating of America Inc. plans to invest $3.8 million to build out a leased 114,000-square-foot plant at 12240 Oakland Parkway, ac cording to an MEDC brie ng memo.

Magna has 341 manufacturing plants and 89 product development, engineering and sales centers in 28 countries with more than 161,000 employees worldwide. Michigan is home to 35 of those facilities and more than 10,000 employees.

Jeremy Webb, interim managing director of the MEDC, said the state has claw-back provisions in place to protect the taxpayer incentives being given to Magna.

“We do have performance metrics that they have to make, so they have to create the jobs in order to get any of the funding, and if they were to re move those jobs within the term of the agreement, there would be claw back provisions in pace to work with the company on repayment,” Webb said on Tuesday’s call with reporters.

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

Magna Seating of America Inc. plans to invest $3.8 million to build out this leased

plant

Highland Park.

COSTAR GROUP INC.

Auburn Hills.

MOTORS

Utah-based Via Motors manufactures fully electric commercial vehicles. VIA MOTORS

ey are the two primary barriers to EV adoption, which ONE claims to have broken through. e answer — lithium iron phosphate — is not new, nor is ONE the rst or only to bet on the chemistry. Until recently, the au tomotive industry saw it as a losing proposition.

EVs on the road today are powered by lithium-ion batteries with several variations of minerals, the most prev alent being nickel and cobalt. Be cause lithium iron phosphate was thought to lack the same energy den sity potential, the industry swept it to the side.

at was ne until the industry took a harder look at the supply chain, said Greg Less, technical di rector at the University of Michigan Battery Lab. More than 70 percent of the world’s cobalt is mined in the Democratic Republic of the Congo. Russia is among the top producers of nickel. Not exactly stable.

Iron and phosphate, on the other hand, are in abundant supply. ONE did not disclose suppliers but said it will source the minerals from the U.S. or North American trading partners. e chemistry is also exponential ly less expensive, and it isn’t prone to bursting into ames like its nick el-cobalt counterpart.

“ e only barrier (to lithium iron phosphate) is energy density and range anxiety, but if the claims that Our Next Energy is making about their pack ranges are true, there’s no range anxiety anymore,” Less said. “ ey’re exceeding 300 miles, which is the gold standard right now.”

ONE made a big splash early this year when it documented a 752-mile road trip on a single charge of its pro totype battery in a Tesla Model S tak en late last year. at demonstration showed what’s possible, but the com pany, which has yet to mass produce its batteries, is taking smaller steps to get to market. A 300-mile range, without nickel and cobalt, is the near-term objective.

Mass production of that battery, the Aries, will begin in March at a plant in Van Buren Township operat ed by South eld-based automotive supplier Piston Group. e batteries are for Class 3-6 trucks, a lower barri er to entry than passenger vehicles.

en, the other plant in Van Buren operated by ONE will begin produc ing the batteries for passenger cars by 2024. According to the company, the plant is to be the anchor for a lo cal supply chain that will produce 200,000 units per year by 2027. It’s an ambitious plan.

“Don’t be afraid of setting a dis ruptive goal,” Ijaz said. “Even if you don’t know how to get there, don’t worry about that. Just set the goal, and then struggle to get there be cause you’ll be the rst to do it.”

Ijaz learned that at Apple, where he worked on the tech giant’s secret car project for six years before going out on his own. Prior to that, he was an executive for six years at A123 Sys tems, where the lithium iron phos phate plan sputtered out and ended in bankruptcy.

“LFP (lithium iron phosphate) was a big favorite back in the 2008 time frame with A123 Systems, and it got beaten out by some of the other chemistries for energy density,” said Less, who worked at A123 while Ijaz was there but did not know him then.

A123 was a darling innovator during the George W. Bush/Jennifer Granholm period. e Novi-based company won $388.4 million in state

and federal incentives, according to the Mackinac Center for Public Poli cy, which tracks government incen tives.

Bad timing and bad luck led to its unraveling. After a Fisker battery re problem, A123 led for bankruptcy in 2012 before being bought at auction by Chinese con glomerate Wanxiang Group Corp. Ijaz left in 2014.

“ ey were 10 years too early," Less said of A123.

Ijaz left Apple in 2020 to return to the lithium iron phosphate mission, but he initially doubted the decision. e industry had already moved past that chemis try, Ijaz said, and he lost clarity of purpose.

e iron phosphate combination was pioneered by Chinese compa

nies including Great Wall Motors and CATL, a supplier to Tesla Inc. It’s re mained popular in China, where range is less of a concern in urban settings with controlled movement, according to Less. It had no traction with range-obsessed Americans.

But the COVID-19 pan demic opened the eyes of the industry beyond the short-term, and ONE made its move.

“We’re not being led by the auto industry, we’re leading the auto industry,” Ijaz said. “ at’s a very important ip.”

e Aries battery is capable of 287 watt-hours per liter, nearly 30 per cent more than the CATL battery for Tesla, according to Ijaz. Proving that helped put ONE on the map.

“If the evidence of your technol ogy ideas can be translated rather quickly into hardware demonstra tion, then it will change peoples’ minds,” he said.

To deliver on his vision, Ijaz called on former colleagues from his 32year career in battery development.

Around 30 percent of the compa ny’s 160-person headcount previ ously worked at A123 Systems. But all of Ijaz’s C-suite is made up of people he met elsewhere, including Ford Motor Co., where he worked in electric and fuel cell vehicle en gineering for 15 years.

That’s where he met Tony Gam brel, 64, who has worked on EV bat teries for the past 45 years, includ ing at A123 Systems, where he worked for 12 years before being poached by Ijaz.

“When it was Mujeeb that called

that was an easy decision,” Gambrel said. “I’ve always enjoyed working with him, the dynamic of working with him. ere’s always a challenge. ings move pretty quickly, and that’s part of the culture here. at’s always been with Mujeeb. It’s been challeng ing the status quo as to what you can get done and how long it takes you to get there.”

After Aries will be the Gemini, a dual chemistry architecture capable of more than 600 miles of range, Ijaz said. at battery has 75 percent less nickel and graphite and 20 percent less lithium.

But before that comes launching the rst wholly American-owned manufacturing plant for lithium iron phosphate batteries. e rst cells and packs will be produced at the new 659,589-square-foot plant in Van Bu ren by the end of 2024.

Ijaz said the company has seven customers under contract and has booked $4 billion worth of business over the next ve years that could ll a “multitude of factories.” ONE has de clined to name customers besides Motiv, for its Class 3-6 battery, and BMW, which is an investor in the company and uses its prototype bat tery on the BMW iX concept car. e momentum for electri cation has never been stronger, and the re cently passed In ation Reduction Act, which calls for $370 billion in climate change investments, gave it another boost. Under the legislation, cells in the Van Buren factories will receive a $35 per kilowatt hour subsidy, and packs will be subject to a $10 per kilo watt hour bene t.

Still, as history shows, Ijaz said, an electric future is not a foregone con clusion, nor is the success of his lithi um iron phosphate mission.

“We’re talking about getting raw materials, integrating our own cell, getting a factory o the ground, in vesting in the equipment, training the labor force, localizing supply chain,” Ijaz said, wrapping up lunch before another meeting. “ at’s a big lift.”

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

Engineering technologist Greg McCown cross sections a piece of a battery enclosure at Our Next Energy in Novi. | PHOTOS BY NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Systems engineer Dennis Wang works at Our Next Energy in Novi.

Gambrel

Battle Creek aims to develop a food startup accelerator

BY RACHEL WATSON

in

Creek are betting the area has enough food industry talent to launch startups — and they’ve received federal funding to test that theory.

Creek Unlimited, an economic development group serving Southwest Michigan, earlier this month received from the U.S. Department of Commerce Economic Development Administration’s Build to Scale program a $375,000 venture challenge

with a $416,571 local match, to develop a Future Food Accelerator.

also received a $147,750 capital challenge grant from the EDA, with a $160,000 local match, to create a Food and Beverage Investors Network — an angel group that will fund the early stage food manufacturing companies that are part of the accelerator.

Local funding and in-kind pledges came from the city of Battle Creek and its Downtown Development Authority, the W.K. Kellogg Foundation and Michigan State University.

BCU’s President and CEO Joe Sobieralski said the nearly $1.1 million investment will encourage Cereal City’s food industry veterans to put their “institutional knowledge” toward food and beverage innovation — not as Kellogg or Post suppliers but as “something completely di erent” and largely undetermined.

“Battle Creek’s a food town — we’ve got Kellogg, we’ve got Post — and as folks retire out of the company, or leave the company, we have all this

institutional knowledge that either moves on, retires here, stays here or whatever,” he said. “So it’s an e ort to capture that talent and accelerate the food development in Battle Creek.”

Bob Samples, professor of food marketing and executive in residence at the Haworth College of Business at Western Michigan University, said in an email to Crain’s he doesn’t see evidence of a food startup scene in Battle Creek, though he’s heard the accelerator hopes to change that.

“ at’s a fair statement,” Sobieralski responded when asked about it later.

at’s exactly what he’s hoping to change.

Samples’ colleague, Russell Zwanka, director of the food marketing program at WMU, said he’s heard about the e ort to launch the Future Food Accelerator. But the only food innovation group he is involved with is Can Do Kalamazoo, a food business incubator that o ers training, funding and a rental kitchen for startups that don’t have their own commercial facilities.

Sobieralski said the Future Food Accelerator will be di erent than Can Do. It will have an all-virtual model

that will link entrepreneurs to research and development facilities, university technology innovation programs, entrepreneurial support programs and industry/market experts.

Its partners will include MSU, Kellogg Community College, Kellogg, the W.K. Kellogg Foundation and JPG Resources.

“Beyond Battle Creek, this could help leverage assets in the region, so as we get going, maybe Can Do (Kalamazoo) becomes one of those assets that can bene t from this, as well,” Sobieralski said.

JPG is a consulting rm that helps startups commercialize their ideas. Sobieralski said it’s a good example of consumer-packaged goods talent from Battle Creek leveraging their knowledge to launch new brands.

JPG was founded by Kellogg and Kashi alum Je Grogg, who now is president of Battle Creek-based SnackWerks. Grogg built a team of 10 other industry insiders who have helped 147 new food brands launch and/or scale, according to JPG’s website.

BCU is hoping to harness JPG’s expertise, alongside resources, to keep food industry talent in Battle Creek.

Kellogg’s plan to split into three companies was announced after BCU had begun planning the Future Food Accelerator. Sobieralski sees news of the spino as a boon.

“We’re going to have a company that’s going to have tentacles into the Chicago food scene, and they’re also going to be based in Battle Creek; they’re going to have dual-purpose campuses,” he said. “So we could get a lot more transient food individuals visiting our community,” like venture capitalists or industry experts.

BCU will use the EDA grant and local match to hire a leader, market the program to entrepreneurs and begin investing.

“ is is in its infancy; this is kind of the start of it, and we hope to grow it beyond just this initial EDM award,” he said.

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

ITC to spend $850 million to build new electric transmission lines

Projects to enhance Michigan’s access to regional generation

BY DAVID EGGERT

A company will spend an estimated $850 million to build approximately 110 miles of new transmission lines to carry electricity in Michigan, a move the owner said will increase the state’s ability to import power to maintain reliability.

Michigan Electric Transmission Co., a subsidiary of Novi-based ITC Holdings Corp., said the projects are part of long-range planning by the Midwest Independent System Operator, which manages the generation and transmission of electricity across 15 states and the Canadian province of Manitoba.

“This overall portfolio of new high-voltage transmission lines will provide numerous benefits and deliver value to electric consumers throughout Michigan,” ITC Michigan President Simon Whitelocke said in a statement. The two projects also will enhance Michigan’s access to regional generation as far west as Iowa, he said.

The projects will result in the first new interstate connection to Michigan’s grid in nearly 50 years. The lines will be constructed from northern Indiana to a new substation about 20 miles southwest of Lansing and extend west to Gratiot County. Another 75 miles of exist-

ing lines between Wayne and Jackson counties will be upgraded.

The news came after Gov. Gretchen Whitmer and the Legislature last December enacted a law to facilitate the construction and operation of regionally cost-shared lines.

“These investments are critical to the state as we transition towards a

clean energy and electric vehicle future,” Whitmer said in a statement.

ITC next will evaluate and propose route options and work with regulators.

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

TREASURY MANAGEMENT

Leaders in Battle Creek, which was the cradle of America’s breakfast cereal business, are again hoping to make it a hotbed of food entrepreneurship. | GETTY IMAGES/ISTOCKPHOTO

A portion of ITC Holdings’ high-voltage Thumb Loop transmission project. | ITC

Beacon for refugees for nearly 40 years buys its building

Freedom House buys from city, plans updates

Freedom House, a Detroit beacon for asylum seekers and refugees for nearly 40 years, has purchased its building from the city of Detroit.

e nonpro t paid $150,000 for the multi-story building at 1777 N. Rademacher St. in Southwest De troit, less than 3 miles from the Am bassador Bridge to Canada.

“For decades, the city of Detroit has supported people eeing perse cution by partnering with Freedom House Detroit on funding, service, and health initiatives,” said CEO Elizabeth Orozco-Vasquez, a Crain’s 2022 40 under 40 honoree.

“ is project is a continuation of that partnership. Freedom House would not have reached this goal were it not for the city’s stewardship of the process.”

e city acquired the building at auction earlier this month from the U.S. Department of Housing and Ur ban Development. e federal de partment had foreclosed on the building after its former owner, Southwest Housing Solutions, de faulted on a HUD loan, said Jason Friedmann, director of public private partnerships for the city of Detroit.

Southwest Housing had been re ceiving money from HUD to subsi dize its payments on the building, but HUD stopped providing that funding, he said.

“Southwest Housing no longer had that subsidy coming in. ey

were not able to keep up on the ad ditional loan payments they were making to HUD to acquire and im prove the building.”

Southwest Housing attempted to negotiate with HUD to release it from the federal requirements that were put in place when the building was created, President and CEO Sean de Four said in an emailed statement.

It was created for a Congregate Care Program that is no longer being funded, he said. Southwest tried for two years to navigate the situation with HUD to allow for requirements to be adjusted for modern-day use. But those negotiations were unsuc cessful, and HUD determined it could not release Southwest from the federal requirements.

“Ultimately, we determined in consultation with the local HUD

eld o ce that allowing HUD to foreclose on the property was the best avenue to allow Freedom House to purchase the property and allow it to be used to serve the com munity, as they would no longer be held to those original requirements,” de Four said.

After a roughly yearlong foreclo sure process, HUD sold the building to the city for $10 Oct. 21. e city turned around and sold it to Free dom House for $150,000 and trans ferred the net proceeds to HUD, Friedmann said.

e city issued a very speci c re quest for proposals.

“We wanted to make sure Free dom House could continue to o er their services, but we had to go through our normal city processes, though, to sell the property. at’s why there was that speci c RFP that

asked for someone to provide those speci c set of (refugee) services,” Friedmann said.

Freedom House was the sole bid der for the property in the request for bids for a buyer that would pro vide services to refugees and asylum seekers.

It moved to the building in 2019 after its former landlord at another Southwest Detroit location, the Catholic Archdiocese of Detroit, opted to reoccupy the former con vent space from which Freedom House had operated for more than three decades.

It’s important for Freedom House to have its own home “so we aren’t having to seek asylum of our own,” Orozco-Vasquez said. “We can give these people seeking asylum a home.”

Freedom House, which is operat ing on a $1.3 million budget, is working with Ferndale-based Fusco, Sha er & Pappas Inc. Architects and Planners on plans to update the building with a new roof, kitchen and bathrooms. It’s also considering an expansion on the property to meet increasing demand.

“ e nation is seeing an increase in demand for refugees coming in. Freedom House is seeing that same uptick that other states are seeing,” Orozco-Vasquez said.

Over the past year, Freedom House has seen more refugees coming from Venezuela and Colombia, she said, and there’s an expectation that more could come to Michigan as refugees arriving at the U.S. southern border are bused north by political factions and/or the U.S. Immigration Service looking for shelters in other states with capacity, she said.

“We don’t see the need of refu gees going down. We only see it in

creasing … this isn’t a problem that is going away. It’s some thing we need to prepare for and do it humanely.”

Freedom House, founded in 1983 when Salvadorans eeing civil war converged on De troit en route to Canada, is the only full-service provider for refugees and others seeking humanitarian protection in the state, the city said.

Each year, it provides housing, ba sic needs, legal aid, job assistance, medical care and other supports to 125-135 people seeking humanitari an protection. ose people have applied for asylum but aren’t eligi ble for bene ts until they are ap proved. On average, refugees stay at Freedom House for 18 months, Orozco-Vasquez said.

Last year, 79 percent had jobs upon exiting Freedom House or left to pursue job opportunities, and 88 percent moved into apartments or homes of their own, the city said.

“For refugees and others fleeing persecution, Freedom House serves as a place of hope, protec tion, and refuge,” Julie Schneider, director of the Detroit’s Housing & Revitalization Department, said in the release. “On behalf of the staff at HRD, we are proud to have played a role in helping Freedom House gain a permanent home to continue providing essential re sources to our newest community members.”

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

e nonpro t Mariners Inn is close to wrapping up nancing for a $25.5 million development of per manent supportive housing for the chronically homeless and retail space across from Little Caesars Arena in Detroit.

If all goes according to plan, the nonpro t could break ground on e Anchor development as soon as March and move people into the new apartments 18 months later, CEO Dave Sampson said.

e project has attracted just more than $13 million in low-income housing tax credits through the Michigan State Housing Develop ment Authority, $10 million in feder al HOME funds and block grant funding from the city, Sampson said, and a $1 million grant from the Mc Gregor Fund.

Mariners Inn, which provides sub stance use treatment, recovery hous ing and permanent supportive hous ing for the chronically homeless, planned to launch an appeal to raise

the remaining $1.5 million for the project during its annual gala Satur day night, Sampson said.

“It’s my prayer and hope that once we make the capital campaign public ... we’ll raise the money necessary to do it,” he said, but Mariners will take out short-term loans if needed.

“We’ve been always saying that we have got to get to a place where we are providing people with a place

they can make their own, a place to call home,” he said.

e expanded space will enable Mariners to shift to single-occupancy apartments rather than two-person units it currently o ers, and to serve women as well, for the rst time in its history, Sampson said.

It will also position Mariners to meet increased demand for sub stance use treatment and shelter that

have emerged during the COVID-19 pandemic, he said.

e Anchor, planned for Mariners’ campus just north of the downtown area, has been in the works since 2019 when it got approval from the city’s Historic District Commission.

It will more than double Mariners’ footprint on the campus it has occu pied since 1956 when complete, add ing to a main building and historic house on the property at Ledyard Street and Cass Avenue.

e 65,000-square-foot, L-shaped building will include mixed-retail on the rst oor plus 44 single perma nent supportive housing apartments and 40 temporary recovery apart ments for those in substance-use treatment on the upper oors.

e permanent supportive hous ing units will serve those experienc ing chronic homelessness and with little to no income, with rst consid eration given to people coming through the city’s the homeless refer ral system known as the coordinated assessment model or CAM, Sampson said.

KMG Prestige will serve as proper ty manager for the permanent sup portive housing units, he said.

e Anchor will also include coun seling, case management and thera py spaces, a computer lab, areas for exercise and family gatherings, an art

gallery, o ce space for Mariner sta and retail space.

“I envision street-level retail based on being right across the street from Little Caesars (Arena), Ford Field and Comerica (Park). We’re right in the heart of all that,” Sampson said. “We have spoken with a couple of possi ble tenants for the rst oor com mercial space, but it’s too early in the process to identify someone.”

Chicago-based Landon Bone Bak er Architects is the architect on the project, and O’Brien Construction is the general contractor.

e treatment programs will re main at the two Ledyard sites.

With the new space, Mariners will have capacity to serve more than 230 people, up from its current capacity for 150, Sampson said.

It currently has 110 people en rolled across its programs and no waiting list. But that could change at any time, he said, given the need to quarantine anyone contracting COVID or not yet tested for it.

Mariners, which is operating on a $4.1 million budget, plans to hire two new case managers and two new se curity monitors with the new devel opment, adding to its current sta of 52, Sampson said.

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

Freedom House in Southwest Detroit

Orozco-Vasquez

CARING FOR KIDS

Advocating for the strong mental health and resiliency of Michigan kids

ABOUT THIS REPORT:

Dr. Michele Leno

LARRY BURNS: Tell us about the type of consulting services you’re providing.

MICHELE LENO: I have been in practice for many years providing evaluations, traditional therapy services, and consulting services to ildren, families, adults, and corporations. When consulting on cases, I may not be the primary person involved in a clinical situation, but I have someone working under me.

Burns: Have you seen a change in the type of issues people are facing?

Leno: At the height of COVID, I had many people calling to get appointments, and most of those appointments were because people were anxious and they did not know what to do with that anxiety. Some people had existing conditions and others didn’t really know what was going on, they just knew that they didn’t feel like themselves. During COVID, we were forced to isolate and rethink life. I have people calling me about career transitions because working during COVID gave them the opportunity to think about making a ange. is may be a blessing in disguise. Although that’s a good thing, there’s also a lot of anxiety and uncertainty around it. More people are seeking therapy, and people who never thought that they would talk to a therapist are now saying, “You know what, maybe this isn’t so bad.”

Burns: Is online therapy something people are becoming more comfortable with?

Leno: Absolutely. Almost every clinician started using some virtual platform, and it opened the doors for people who never considered therapy. e virtual platform has made it so mu easier for people who couldn’t see themselves walking into an o ce to talk about their problems. It’s probably 50/50 in terms of who wants virtual versus who wants in-person. Not everybody connects in a virtual setting, some want to be able to connect in person. We’re trying to accommodate everyone because it’s their time, it’s self-care. erapy should encourage that.

Burns: Let’s talk about your show and what type of topics you cover.

Leno: “Mind Matters” with Dr. Mi ele covers anything that a ects your mental health. Nothing is really o -limits. I believe that if you can improve your mental health, you improve your life.

We’re going deeper into the personal stories and what’s really a ecting people. We want to give people some solutions. We want you to feel encouraged a er wat ing the show.

Burns: How broad is the coverage in Michigan?

Leno: We are on TV20 Detroit and all of the areas that TV20 covers. We have some streaming platforms including Flix TV, Las Vegas TV and we’re in the process of adding Tubi. Everybody has their phone in their hands and so people like to be able to wat at their convenience. We want everybody to be able to see the show.

Community Engagement Manager, Isabella County; Expert in Collegiate Recovery, Ten16 Recovery Network

LARRY BURNS: What’s your background?

JESSICA MILLER: I’m a licensed professional counselor and a CAADC (Certified Advanced Alcohol and Drug Counselor). I’ve been working with college students for over 15 years, and that’s a population I love to work with. I am a person in long-term recovery, so for me, that means I haven’t used alcohol or other drugs since February 2013.

Burns: What is the Ten16 Recovery Network?

Miller: We provide a full continuum of care around things related to substance misuse and recovery. We start with the prevention aspect with individuals in the communities and schools.

We also have our Project ASSERT program with wellness advocates in a variety of hospital Emergency Departments in the mid-Michigan area. When individuals come in, they’re able to have a conversation with those patients to plant the seed of what might help them. We offer our residential treatment program and outpatient treatment. We have recovery housing for individuals looking for support in an abstinence-based living facility.

We have our quick-response team that does home visits for individuals who have experienced an overdose. We also have our recovery centers where coaches are meeting with individuals.

Burns: How did you come up with the name, Ten16 Recovery?

Miller: The address of our original agency, now the men’s house, is 1016 Eastman Avenue. The number is also a police code, meaning open door. We provide an open door–a space with no judgment–and that’s what the number means.

Burns: Tell us more about CREW, a program The Children’s Foundation and the Jamie Daniels Foundation support.

Miller: We started in 2016 with our Collegiate Recovery Education and Wellness program. Central Michigan University is in Isabella County, and we partner with them to provide on-campus resources for students. As you can imagine, a collegiate environment can be abstinent-hostile. The CREW program provides prevention services and early intervention efforts. We also provide substance use disorder counseling, so they have an opportunity to meet confidentially with a licensed counselor and receive outpatient services. When needing help, students can be a little hesitant. Some are on their parent’s insurance and don’t want their parents finding out, or it could be cost-prohibitive. Thanks to the generous support of the Children’s Foundation, we’ve been able to offer help at no cost.

Burns: As students visit home, what are signs that there are some mental health issues?

Miller: Any time that you have your college person home with you, pay attention to behaviors. Stay engaged and connected. Ask how you can be helpful if your loved one is struggling. Would you like me to just listen? Would you like me to get you connected with a resource on campus? Then they can choose, because not assuming that we know best can go very far with them in conversation.

Operations Consultant, Crysler Club; Member, Entrepreneurs 4 Kids

LARRY BURNS: You are a true entrepreneur with a very popular podcast. Tell us about it.

DAVE CRYSLER: It’s called “Everyday Business Problems” and it’s on all the major podcasting platforms. You can also nd it on our website, thecrysler.club. e podcast is dedicated to nding and solving everyday problems that business owners are tasked with. A lot of business owners don’t have a support system built in. Bringing that to a podcast format is what the goal is. We bring on business owners and subject matter experts to talk about a wide variety of topics including customer service, sales, marketing, supply ain, and shipping.

Burns: You’re also a very active volunteer. Let’s talk about Entrepreneurs 4 Kids.

Crysler: e idea behind Entrepreneurs 4 Kids was set around a couple of things. A lot of the aritable work seemed to have a very transactional component to it; we were sear ing for a relationship-based approa to philanthropy. Also, there’s this entrepreneurial-thinking component that we wanted to share with the next generation. We felt there was a need to speak our stories and get them thinking. It was those two things coming together that was the genesis of Entrepreneurs 4 Kids. e aim is to build a community of business owners not only to raise funds but to ultimately impact that next generation.

Burns: What are some of the things you’ve done as a group?

Crysler: We’ve hosted great speaker series events, including Mary Culler of Ford Fund, who is responsible for the train station initiative. She did an amazing talk, a moderated at, that attracted a lot of local folks and a lot of interest around Entrepreneurs 4 Kids.

We also support the non-pro t group Give Merit to mentor ninth to 12th graders through a series of a er-s ool capstone projects. In addition to the mentoring, Entrepreneurs 4 Kids also supports its s olarship fund. Most recently we attended Ann Arbor SPARK’s Te Week with a class of 12th graders and listened to local entrepreneurs tell their stories. It drove home that centralized message of what entrepreneurship and entrepreneurial thinking can do for you. It’s been a ton of fun but also really tremendous stu .

COVID de nitely put some roadblo s up for us, but like any good set of entrepreneurs, we have successfully navigated those roadblo s.  We have risen above with resilience.

Burns: The Children’s Foundation is involved in a lot of mentoring programs, and one of the key things we’re trying to teach kids is to be resilient.  It sounds like you did that as well.

Crysler: I think it’s a tremendous lesson to pass on, e ecially to young folks, because life is full of setba s. Today’s environment, with access to social media, is a comparison culture. We need to let folks know that there will be some tough times but you’re going to come out the other side. You need to have that resiliency and the ability to take some lessons away from it. I think that’s a tremendous thing to be sharing.

Founder & Owner, DML Psychological Services; Host of “Mind Matters” with Dr. Michele

Dave Crysler

On this monthly radio program, The Children’s Foundation President & CEO Larry Burns talks to the community, government and business leaders about issues related to children’s health and wellness. This hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired on Oct. 26; listen to the entire episode, and archived episodes, at YourChildrensFoundation.org/caring-for-kids

Jessica Miller

HopCat to open new Royal Oak location this winter, hire 150

Gastropub to operate out of space on Main Street

BY JAY DAVIS

Popular gastropub HopCat will return to downtown Royal Oak this winter.

West Michigan-based BarFly Ventures CEO Ned Lidvall announced the plan in a news release last week. HopCat will operate out of a 6,000-square-foot space at 430 W. Main St., formerly home to Noodles & Co., bd’s Mongolian Grill and Gamestop. HopCat has had a lease in place for about a year.

Crain’s in January reported HopCat’s plans to take over the Main Street spaces, with o cials saying a return to the Oakland County hot spot was always in the plans.

HopCat plans to hire about 150 employees for the new Royal Oak location, Lidvall said in the release.

Jobs include front and back of the house positions, including line and prep cooks, dishwashers, barbacks, hosts, food runners, servers and bartenders. Employee training will begin in late November, according to the release. Prospective applicants can apply online, at the Detroit HopCat at 4265 Woodward Ave. or by texting BarFly to 85000.

“At HopCat, we’re always looking for enthusiastic people to join our team to help us deliver high-quality

service to our guests,” Lidvall said in the release. “We strive to provide the best work environment, where employees can be themselves, while fostering growth and development, and giving them the opportunity to discover a long-term, rewarding career.”

HopCat’s former location in Royal Oak at 208 Fifth Ave. closed in May 2020 after about three years in business due to issues with its landlord. BarFly Ventures days later led for Chapter 11 bankruptcy protection. An Italian restaurant, Pastaio, has

Detroit Institute of Bagels owner: ‘I’m excited and nervous’

taken over the three-level space.

HopCat is known for its extensive craft beer taps and seasoned french fries, once called Crack Fries but later renamed Cosmik Fries.

e new HopCat in Royal Oak would be the company’s 10th location, down

from a high of 15 in 2020. It has seven locations in Michigan, including in Midtown Detroit and Ann Arbor, plus Indianapolis and Lincoln, Neb.

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

A popular independent Detroit bagel shop is plotting a return a little more than two years after it closed.

Detroit Institute of Bagels will reopen in a new location later this year or early in 2023, according to owner Ben Newman. e popular business, which closed in 2020 after seven years in Corktown, will soon operate out of the 2,200-squarefoot space at 4884 Grand River Ave. that was previously occupied by Ochre Bakery and Astro Co ee.

e move was announced in a Facebook post recently.

“ e owners of Ochre and Astro (Dai Hughes and Jessica Hicks) are friends of mine. We were discussing co ee they could provide for this reopening. rough those discussions, they had said they wanted to close, and they invited me to take over their space,” Newman told Crain’s on Monday. “ ey made amazing food and had a great reputation, so I was a little apprehensive about moving in. We spoke, though, and I believe we can continue to add to the foundation they built.”

Detroit Institute of Bagels will o er upon opening a limited menu. A larger bakery operation that features classic Jewish deli items like pastrami and matzo ball soup should be ready by the spring, according to Newman.

e space will include seating for 50-60. A separate entryway will handle carryout orders, Newman said. e Grand River Avenue restaurant will have 20 employees, similar to the sta at the Corktown location. at 3,000-square-foot space, at 1236 Michigan Ave., is home to James Oliver Co ee Co.

Newman signed a ve-year lease, with options that could keep Detroit Institute of Bagels in Core City for 25 years.

e COVID-19 pandemic and “infrastructure hurdles” led to the 2020 closing, Newman said, and he could not nd a buyer for the business. e past two years have a orded him the time to restructure, he said, and he and his sta were en-

couraged by the community to come back.

“I think we have a better plan now and we’ll give people a variety of options,” Newman said. “Whether that’s more ecient carryout, dine-in or delivery to other businesses. We’ve had two years to strategize.

“ ere was a great reputation behind the business. e pandemic was rough. It’s still rough for a lot of restaurant owners. Trying to gure out how to pivot and still operate as a small food business is rough.

“I know the expectations of taking over the Ochre and Astro space will be high,” he said. “We’re going to do something di erent from what they did. I’m excited to provide good food for people. I hope people like it.”

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

BY JAY DAVIS Shop to reopen in Ochre Bakery, Astro Co ee space

The Royal Oak HopCat is now hiring. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

Detroit Institute of Bagels will move into the space on Grand River Avenue in the Core City neighborhood of Detroit that was previously occupied by Ochre Bakery and Astro Co ee, which closed in May. OCHRE BAKERY VIA INSTAGRAM

Michigan retailers see big sales increase in September

Report says many con dent heading into holiday shopping season but won’t change hiring plans

JAY DAVIS

Michigan retailers have good news heading into the holiday shopping season, according to a new report.

Some 47 percent of retailers in the state reported a sales increase in Sep tember over August, according to the monthly Michigan Retailers Associa tion report. Another 36 percent noted a decrease, while 17 percent reported no change.

at pushed up the MRA’s retail in dex 12.2 points to 61.5 in September, up from 49.3 in August.

e September 2022 index is 13.9 points higher than the 47.6 in Septem ber 2021, according to MRA President and CEO Bill Hallan.

“ is is the type of momentum re tailers need going into the holidays, and we know some retailers have al ready begun holiday marketing and sales,” Hallan said in a news release.

ACCOUNTING

BDO USA, LLP

BDO USA, LLP has named Emily Buckles a Partner in the rm’s Tax practice. Buckles focuses on tax compliance and consulting for privately held businesses and their owners. Her experience includes corporate, partnership and individual taxation. Buckles frequently consults on tax and business succession planning, mergers and acquisitions, as well as restructuring with various entity types, including corporations, ow-through entities and employee stock ownership plans.

ACCOUNTING

BDO USA, LLP

BDO USA, LLP has named Meghan Depp a Partner in the rm’s Professional Practice. Depp has extensive transactional experience with initial public offerings and reorganizations, as well as debt and equity offerings. She focuses on the review of registration statements and periodic lings for compliance with generally accepted accounting principles and SEC rules and regulations.

ACCOUNTING

BDO USA, LLP

BDO USA, LLP has named Michael Hansen a Partner in the rm’s Assurance practice. Hansen serves publicly traded and privately held companies in the automotive and manufacturing industry. He utilizes his in-depth knowledge of technical accounting and regulatory SEC reporting requirements to assist clients with complex business transactions, including acquisitions, divestitures, special purchase acquisition company transactions and initial public offerings.

LAW

ADVERTISING / MARKETING

MVP Collaborative

MVP Collaborative, one of Event Marketer’s “Top 100” experiential/event agencies, is excited to welcome advertising agency veteran Todd Yerman to its team of talented communications professionals.

Todd joins MVP as Vice President of Strategic Growth, where he’ll focus on expanding the agency’s capabilities to deliver best-inclass strategic value, marketing insight, and business impact for its clients. Prior to joining MVP, Todd led teams at Campbell Ewald, Doner and MSL Group.

Ron Hall, President and CEO of Bridgewater Interiors, LLC has become a member of the Detroit Regional CEO Group which is focused on systemic change to help drive regional prosperity. The CEO Group’s priorities include education, economic & workforce development, regional transit and public spaces & greenways.

Bridewater Interiors is one of the leading automotive seating manufacturing companies in the United States. They specialize in just-in-time (JIT) manufacturing, sequencing and delivery.

McDonald Hopkins

McDonald Hopkins is pleased to announce Detroit attorney David Schelberg has been elected to the rm’s membership. David focuses on employment defense, representing employers in state, federal, and administrative matters involving claims of discrimination, retaliation, harassment, disability, whistleblower, employee discipline, wage and hour, medical leave, labor disputes, and unfair labor practices. David also specializes in trade secret, non-competition, and nonsolicitation litigation.

“We know there is the fear from many that they will not be able to get the gift they are seeking, so we encourage shoppers to get out early to their local retailers and buy nearby.”

e seasonally adjusted perfor mance index is conducted by the MRA in partnership with the Federal Reserve Bank of Chicago’s Detroit branch. e 100-point index provides a snapshot of the state’s overall retail industry. Index values above 50 gen erally indicate positive activity.

Most retailers surveyed believe that positive activity will continue through the holiday season. Forty-seven per cent predicted their sales will contin ue to increase through December, ac cording to the MRA report. Another 32 percent said they expect sales to de cline and 21 percent anticipated no change. at comes out to an index rating of 59.5, down from the previous month’s 63.2.

ose surveyed also said they ex pect sales percentages to increase in the fourth quarter over the same peri od in 2021. Twenty- ve percent be lieve their sales will increase by more than 10 percent, while 17 percent ex pected sales to jump 5 percent-10 per cent and another 17 percent expected their sales to equal those in 2021. Just 8 percent of retailers said they expect ed a sales decrease of more than 10 percent, according to the MRA report. However, most retailers — 66 per cent — do not expect to change their holiday hiring plans. Twenty percent expect to hire more sta , while 14 per cent plan to hire less.

A report released earlier this month said that most Michigan small busi ness owners are not hiring at all this holiday season.

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

ACCOUNTING

BDO USA, LLP

BDO USA, LLP has named Vincent Mercader a Principal in the rm’s Advisory practice. He focuses on providing valuation consulting services across a diverse group of industries, including automotive, consumer products, construction, nancial services, gaming, healthcare, life sciences, manufacturing, sports franchises and technology. His responsibilities include performing valuations for purposes related to buy-sell side advisory, litigation matters, tax planning and nancial reporting analyses.

CohnReznick LLP

CohnReznick LLP has expanded its Transaction Advisory Services capabilities in the Midwest with the addition of Ryan McCaslin and Collin Kooy, who are both based in Grand Rapids, MI. Ryan joins as a Partner with more than 20 years of professional experience. He has led nancial due diligence projects for mergers and acquisitions deals ranging in size from $5 million to $1 billion of enterprise value.

Collin joins as a Director and focuses on buy and sell side quality of earnings for private equity groups and strategics.

REAL ESTATE

Colliers Detroit

Colliers is pleased to welcome Brian Cooper as Project Manager in our Detroit of ce. Brian will provide advisory services to real estate leaders to assist in feasibility, constructability review, cost estimating, scheduling, and construction contract negotiation. Prior to joining Colliers, Brian was a PM with a prominent development rm in Detroit. He has successfully ful lled management and construction roles with construction rms and national homebuilders for more than 22 years.

CohnReznick LLP is a leading advisory, assurance, and tax rm, that helps forward-thinking organizations achieve their vision by optimizing performance, maximizing value, and managing risk.

ACCOUNTING

McCaslin

Kooy

BOARDS

Detroit Regional CEO Group

Retailers in Michigan are reporting improved sales and good momentum heading into the important holiday shopping season.| DAVID PAUL MORRIS/BLOOMBERG

related shutdowns. Whitmer ex pressed interest in directing the re maining $300 million to businesses but did not specify how, except to suggest utilizing grants while noting she will have to negotiate with law makers.

"I do think that there's some op portunities," she said, mentioning the restaurant industry and venues such as banquet halls that "su ered quite a bit." She suggested taking a second look at rules that potentially kept some businesses from qualify ing or receiving as much aid.

COVID orders

Asked for her response to business owners who still feel stung by her 2020 and 2021 coronavirus restric tions they feel were too harsh, Whit mer said: “I understand. It was hard. We were dealing with a brand-new virus we didn’t know anything about, how it was spread. We were operat ing with the best information from the University of Michigan to nation al experts to what my fellow gover nors were doing. We were hit hard early on. ... We took kids out of schools. I’ve heard my opponent say for two years. It was three months. ere was a pause and the next fall. But I think it’s important to go back to the facts. is part of our state was hit so hard we had refrigerated trucks outside our hospital to store corpses. We can’t forget that. at doesn’t make any business owner today feel better about the pain that they had. But I think it’s important to level set to remember what we were dealing with and how fast we had to move

and how many lives were on the line. irty- ve thousand Michiganders have died from COVID. We don’t talk about that very often. ousands are here because we took it seriously and moved fast. ... If there are thoughtful ways that we can help small busi nesses who still feel stung and we’ve got some resources to do it, we should explore that.”

Business growth

Whitmer said workforce develop ment — upskilling the population — is key to helping businesses grow. She pointed to progress toward her goal, established in 2019, to have 60 percent of adults with a post-second ary degree or certi cate by 2030.

"We were just under 45 percent at

the time. We are now at about 50 per cent. ... We've made a third of our goal is in the mist of all these historic challenges, which is pretty incredi ble. But it also tells you: People want the education. It's the money that stands in the way," she said.

She has spearheaded two tui tion-free programs, Michigan Recon nect and Futures for Frontliners, to help workers return to school. She also recently signed a bill creating a program to award scholarships worth up to $5,500 annually to 2023 high school graduates and future classes.

Roads

When asked her next step on x ing the roads, Whitmer noted her 2020 move to borrow money after

legislators rejected her proposed 45-cents-a-gallon fuel tax increase and did not propose a long-term al ternative. She also pointed to addi tional federal infrastructure fund ing.

She called for transitioning away from a per-gallon tax as the auto in dustry goes electric.

"I do that think that we've got to look to perhaps lane miles trav eled," she said, calling the gas tax an "outdated source" of revenue. "Ev ery state is grappling with this. None has gured it out. But I think it would be dangerous and foolish to pretend like an old system is going to take care of this long term as this evolution is happening right before our very eyes and faster than a lot of people ever thought it might."

Auto insurance

Whitmer said a ruling striking down parts of an auto insurance law she signed "will require that we come back to the table and nd a solution here."

Slashed reimbursements for the care of people injured before the law took ef fect have lowered premiums but have come under criticism for reducing care quality and hurting the rehab and at tendant care industries.

Nuclear power

Whitmer, who is trying to reopen the Palisades nuclear plant in south west Michigan, said she is open to exploring a lot of di erent energy op tions, including new nuclear power and community solar.

Page

She also called for changing the constitution so the governor, not the State Board of Education, appoints the superintendent who oversees the state Department of Education.

COVID orders

Asked how she would have han dled the COVID-19 pandemic di er ently than Whitmer, Dixon support ed the governor's initial stay-at-home restrictions when the coronavirus hit. But she criticized her decision to not "open up" when other states did and said Whitmer later than year should not have closed high schools to in-person instruction, prohibited indoor restaurant dining and closed various entertainment businesses during a second wave of infections.

"Any normal person would know that they're not going to survive. You cannot do that to a person's private business. Imagine government com ing in and overtaking your company. It's outrageous," she said.

Dixon, who said all schools should have resumed in-person classes in the fall of 2020 (that call was left to dis tricts), added: " e decisions she made made zero sense. When people ask you what you would do di erently, it's al most like how can I even acknowledge what she did? It was so catastrophic. I would have looked at it from a reason able standpoint. ... What she did was a complete abuse of power."

Pandemic relief

Michigan this year disbursed $117 million of $409 million that was allo

cated for certain types of businesses hurt by shutdowns. Dixon supported using the nearly $300 million left over to support another round of grants to help businesses, which she said are still struggling.

" ere's a culture shock in the state of Michigan from the amount of busi ness that we lost and just the commu nity places that are gone," she said.

Taxes

Dixon, who wants to gradually eliminate the personal 4.25 percent income tax over eight to 10 years, said the move would be a "draw. Peo ple want to keep their own money. ey want to keep their income. I be lieve that was drawing people to the state, we can increase the economic development in the state as well."

She conceded that the revenue loss — $12 billion, or more than a third of the general and school aid funds — would be "massive" and did not specify what spending she would reduce. " at's something that we have to look at," she said. Asked about increasing other taxes to o set the budget implications, she said: " at would be something we'd have to have the voters vote on," appear ing to refer to boosting the 6 percent sales tax. "But that's certainly not something that we are committed to at the moment."

Minimum wage

A judge in July declared unconsti tutional a 2018 Republican lameduck maneuver to weaken voter-pro posed minimum wage increases and paid sick leave requirements to make them more business-friendly. e original initiatives will take e ect in

February. Dixon said "it needs to be something that we address quickly." e minimum wage for tipped work ers, currently $3.75 an hour before tips are included, will rise to $9.60 barring judicial or legislative inter vention. "We're going to lose people because they make a heck of lot more under the tip credit than they do if you go to minimum wage," she said.

Roads

Dixon said road funding should be a higher priority in the budget and funded with enough money to be ad equate to maintain roads. but did not detail what she might cut to shift more money to infrastructure. She opposed raising fuel taxes or vehicle registration fees. She said she would explore alternative funding models such as charging people per miles traveled or using public-private part nerships because the gas tax is not a sustainable long-term option with the advent of electric vehicles.

Auto insurance

Dixon expressed concern with an "unintended consequence" of the 2019 auto insurance overhaul, por tions of which a judge has declared unconstitutional. "I think that we're in serious danger of losing some of our rehab facilities," she said, referring to steep cuts in reimbursement rates for the care of people who were injured before the law took e ect. She did not call for a speci c x but noted a re cently news announced increase in the Michigan Catastrophic Claims As sociation fee assessed on drivers. " at may be the right answer, but I think we need to see what happens with the

lawsuit before we make any decisions from state government," she said.

Abortion

Dixon, who opposes abortion, said if voters do not pass the Proposal 3 abortion-rights initiative, legal experts have told her they expect the Michigan Supreme Court to uphold lower court rulings blocking enforcement of a 1931 abortion ban that is on the books after the reversal of Roe v. Wade. "If the 1931 law is the law that's on the books, I'm going to support it. If Proposal 3

passes, I'm going to support it because that's my job as governor," she said. Asked whether the ban should be changed if courts allowed it to be en forced, she said "it's not my decision. You have to ask the legislators."

Nuclear energy

Dixon backed Whitmer's push to reopen the closed Palisades nuclear power plant in southwestern Michi gan. She said there also may be op portunities to install "micro-nuclear" reactors.

POSITION AVAILABLE

Modern Healthcare is seeking a reporter to cover post-acute care organizations and the growing movement in medicine to care for patients outside the hospital. You’ll cover daily news, write breaking news and enterprise stories for our website as well as longer-form articles for our magazine. There also are opportunities for video interviews and podcasts.

Visit crain.com/careers/ for more information

Gov. Gretchen Whitmer (left) takes notes while opponent Tudor Dixon speaks during their debate Tuesday evening at Oakland University. | SCREENSHOT FROM WXYZ LIVESTREAM

Lear plans $80 million plant ‘in our backyard’

NAGL

Lear Corp. will open an $80 million plant and create hundreds of jobs in Michigan after winning a program with General Motors Co. that marks its largest electric vehicle deal and in vestment to date, the supplier said ursday.

e South eld-based company (NYSE: LEA) struck a deal with the au tomaker to exclusively supply the bat tery disconnect unit on all full-size SUVs and trucks built on GM’s Ultium EV platform through 2030, according to a news release.

Lear said it is “working with state and local o cials on a plan” to open the plant. e speci c location was not disclosed, nor has the amount of potential incentives being sought for the project.

Crain’s inquired with Lear for more details.

CEO and President Ray Scott allud ed to the plan in an interview with Crain’s earlier this month when he said that a push to localize supply chain created a need for an E-Systems plant in Michigan. Last month, it launched a just-in-time seating plant

in Detroit on the former Cadillac Stamping site, which will supply GM’s Factory Zero on the Detroit-Ham tramck border.

Lear makes the bulk of its $19 bil lion annual revenue from supplying seats.

“Lear is developing innovative technologies that are driving the widespread adoption of electric vehi cles,” Scott said in the release. “ is additional new business with GM was made possible by Lear’s recognized value proposition in electri cation that combines exible manufacturing operations and advanced Industry 4.0 automation technologies with our vertically integrated capabilities.”

Battery disconnect units are the in terface between an EV’s battery pack and electrical system. Suppliers are locked in a erce competition to win contracts for content in electric cars, which for now appear to be the future of the industry and contain a fraction of the parts in a gas-powered car.

“… It is important to make this in vestment in our backyard,” Scott said.

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

Historic Christ Church Detroit gets boost to preservation e orts

WELCH

e National Fund for Sacred Places has made a third grant to a Detroit church.

Owner to decide future of nuke plant by January

WILL WADE, BLOOMBERG

Holtec International, the top U.S. provider of nuclear-plant decommis sioning services, expects to decide by January whether to reopen a Michi gan reactor that shut down in May.

A key factor is whether the compa ny receives federal funding under a US Energy Department program aimed at providing aid to struggling nuclear plants, according to Patrick O’Brien, Holtec’s director of govern ment a airs and communications.

Holtec took over the Palisades plant in June from Entergy Corp., which has said the facility was no longer economically viable. Reactors have struggled to compete against cheaper and cleaner natural gas and renewables, with a dozen US facili ties having closed in the past decade.

No U.S. nuclear site has ever been restarted after shutting down, ac cording to O’Brien, but the chances of Palisades being brought back on line began to improve after Michigan Gov. Gretchen Whitmer voiced sup

port for the idea in September.

“ ere’s a growing sentiment that the ability to reopen Palisades might become reality,” O’Brien said Wednesday.

Holtec would face some challeng es, including nding workers for the plant, since many have already re tired or moved to other Entergy sites.

Jupiter, Florida-based Holtec spe cializes in tearing down retired reac tors and would have to nd a compa ny to run Palisades. e plant would also need new fuel rods, and would require maintenance before it could go back into service.

Additionally, the Nuclear Regula tory Commission would have to ap prove restarting Palisades, a process O’Brien said could be onerous.

Holtec applied in July for funding under the federal Civil Nuclear Credit Program, and Whitmer has endorsed the plan, which would bolster Michi gan’s economy and reduce carbon emissions linked to climate change.

“ ere are some hurdles to cross,” O’Brien said, “but nothing insur mountable.”

Christ Church Detroit has se cured a $100,000 grant from the Na tional Fund for Sacred Places, a pro gram of the Philadelphia-based Partners for Sacred Places in collab oration with the National Trust for Historic Preservation.

e award is part of more than $2 million in grants awarded to 16 his torically signi cant congregations across the U.S. through the fund, with support from the Indianapo lis-based Lily Endowment.

Churches receiving grants also receive technical assistance to ben e t their preservation projects.

Christ Church Detroit, which dates back to 1864 and claims to be the oldest, continuously used Prot estant religious site in the city, ap plied to the National Fund last year and made it to the nals but didn’t get a grant, the Rev. Emily Williams Gu ey said. is year it did.

“We are thrilled to be recognized on a national level. Our mission is to be a beacon of hope in the heart of Detroit,” she said.

e historic church just east of the GM Renaissance Center has been working with Partners for Sa cred Places, led by metro Detroit na tive Bob Jaeger since 2019, learning how to better articulate its civic val ue and tell its story to its members and the broader community as it developed plans for a capital cam paign to fund repairs on its historic site.

e campaign has grown to a $2.7

million e ort that has raised about $1 million to date. It’s funding re pairs to the church and its 1924 Led yard Hall, including new roo ng and windows and updates to the kitchen so it can provide an expand ed meal program for the hungry, as well as stormwater management and Wi-Fi updates. e campaign is set to run through 2025.

Quinn Evans Architects is the de signer on the projects, and Ram Construction is doing tuck point re pairs of the masonry on the bell tower and front of the church and oor restoration in the sanctuary. e church has been working with Partners for Sacred Places since 2019 to preserve its historic building so it can be used more fully to meet community needs, Gu ey

said.

Renovating the hall “ultimately is to better ful ll our mission to be a community hub in downtown De troit,” she said.

At the same time, rental fees for the community spaces help support ongoing maintenance and opera tion of the church, Gu ey said. On any given Sunday, only about 85 people show up for service, and an other 25-30 tune in to the lives tream.

Like other churches in the city, Christ Church Detroit has been looking to supplement money in the collection plate as congregations dwindle.

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

South eld-based Lear Corp. is looking to invest in the U.S. | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

The Palisades nuclear plant in southwest Michigan shut down in May.

Christ Church Detroit dates back to 1864 and claims to be the oldest continuously used Protestant church in Detroit.

| NIC ANTAYA/CRAIN’S DETROIT BUSINESS

said, tenants are more likely to be able to nd money to pay their backdue rent while also avoiding default judgments that can a ect their abili ty to get housing in the future.

He said the court's goal is to have more landlord-tenant cases decided on their merits rather than because a tenant didn't show up in court.

"We need to capture the advances we made in the pandemic," Boyd said. "It is not intended to be a bogey man. It's intended to let people get help."

e rule changes are currently in a public comment period that ends Tuesday, Nov. 1.

e proposal includes requiring tenants to give just 48 hours' notice if they want a jury trial, which land lords argue could be manipulated as a stall tactic and end up cost ing them time and money. It also allows for online pretrial hearings in the future and a re quires tenants be served in person if a landlord is seeking an immediate default judgment.

e new rules would also provide for an automatic stay if a tenant has applied for rental aid, although land lords say there is no requirement that the tenant document that. ey would require a seven-day window between pretrial hearings and a trial.

ose changes have landlords and their representatives up in arms, said Lowell Salesin, co-chair of the De troit-based law rm Honigman LLP's real estate department.

In particular, the perceived re quirement that tenants be served in person has caused many to believe that if a tenant can't be found, it will be more di cult to get a default judgment allowing landlords to evict.

" e personal service aspect of the rule is one thing that will add time and expense to trying to evict some one who just isn't paying rent," Salesin said.

But Boyd said that under the pro posed rule changes, personal service is required only if the landlords want a default judgment "the rst day."

If they have been personally served, "now we know they have no tice; we know that they didn't come by choice," Boyd said.

'It hasn't been wellreceived'

Jeremy Piper, the founding attor

CANNABIS

market increased 120 percent be tween August 2021 and August 2022, just above sales growth of 103 per cent. Yet, licensed market inventory, by pounds, grew more than 400 per cent during the same 12 months, suggesting that at least some illicit weed is making its way into the sys tem.

Crain’s reported last week about how growers and retailers in the in dustry believe the illegal product is getting in.

Andrew Sereno, CEO of Manches ter-based grower Glacial Farms LLC, told Crain's that the variability of

ney and owner of Flint-based Jere my RM Piper PLC, raised concerns about separation of powers between the legislative and judicial branches.

" e clash between the proposed new rules and the statutes that are passed by the Legislature is a big deal," Piper said. " is new rule, in the eyes of many, is changing sub stantive law, which is not the pur view, or not within the powers of, the judicial branch."

But how the rules ultimately pan out after the Michigan Supreme Court considers the comments that have been o ered is up in the air.

"It hasn't been well-received by landlords," Boyd acknowledged. " at's why we have a public com ment period. I don't think it'll come out in the end the way it is in the proposal. I don't know how it'll change."

One of the reasons landlords op pose the proposals, Boyd said, is be cause they bene t from a fast-acting eviction process that prioritizes speed and volume. Randy Barker, an attorney and the immediate past president of the Detroit Association of Realtors, said what the court doesn't realize is that slowing down the eviction process adds strain on other parts of the system.

"You're trying to solve this prob lem dealing with the rental housing crisis, and you're making other problems bigger," he said.

Barker said more onerous regula tions make it harder to be a landlord and can cause landlords to raise rent on residents who abide by the rules to cover the costs for those who don't. He also said he was con cerned that the new rules would tip the scale toward tenants as opposed to landlords, when landlords are the ones who own the property that ten ants occupy.

He expressed concerns about people using rental programs for as

output and skill among growers makes it almost impossible for the state to determine how much prod uct should come from a plant. With out a somewhat standard yield, knowing if all the product coming from a grower was grown legally is di cult.

"It is very easy for a bad actor grower to 'harvest' some plants and then have outside material enter in at that point," Sereno said. "Who is to say whether they actually had a 20-, 40- or 60-pound harvest?"

e theory is that distillate — the re ned cannabis resins used in edi bles, tinctures and vape cartridges — is being produced in illegal states without the interference of regulato ry hurdles, such as Oklahoma, much

sistance, saying if people couldn't pay, they probably shouldn't be renting there.

"You don't help landlords any by stringing them out," Barker said. "It's all academic if landlords lose property because they're not getting their rent. You're making it more scarce and more expensive."

He was in favor of online hear ings, which he said add a lot of e ciency to the process and make it easier for people to show up.

In their comments and in conver sations, landlords said they were concerned the proposed rules would add signi cant delays to tenant disputes and cost them more money. More than one asked why it was OK to take housing without pay ing for it when people get arrested for walking out of a store without paying.

"Fundamentally, that's wrong," said Karter Landon, a landlord who has about 60 properties in Genesee County and who said he won't rent to tenants who have hired attorneys in the past. "If a tenant can't pay their rent, they need to move. ... It's not good for the economy to let peo ple steal."

Je rey Kaftan, who runs South eld-based Kaftan Communities, said his rm has a 132-unit building in Detroit where about 25 percent of the units are in some form of delin quency. If those units can't be leased to others in a timely manner, he said, that contributes to an a ord able housing problem that's roundly acknowledged as a pressing issue not just in Detroit and Southeast Michigan, but nationwide.

"So these are units are held o the market, not available for people looking for a ordable housing, kind of clogged up in the system," Kaftan said.

Jason Pool, who has about 20 units in Washtenaw, Wayne and

more cheaply, and then shipped in to be sold on the legal market at a higher price.

e anonymous retailer said a li ter of illegal distillate is $500 but is retailing for about $1,700 in Michi gan.

Hanna noted the same “rumors” of how illegal weed is nding a way in the regulated market.

Since taking over the job, Hanna, a former intelligence o cer in the U.S. Army, said the agency is boosting its forces to help tackle the problem.

e agency has hired a half-dozen regulatory agents so the industry can perform more random inspections and a new lab scientist to help the agency spot-check product in hopes of determining a yield so it can nd

Genesee counties with his Optimum Properties, said he works with ten ants who are behind and waives fees on occasion, but is wary of "profes sional renters" who he said take ad vantage of the system by not paying for months at a time, changing utili ties to a landlord's name and dam aging homes they live in, but can't be removed from.

" ey salivate over these rules," Pool said. "It's going to hurt the good people."

It's a particular burden for small landlords, he said, especially when more than one renter isn't paying.

Finding a balance

Briana Carpenter, the outreach team lead at Avalon Housing in Ann Arbor, said she had never encoun tered or heard of a professional rent er. Her agency deals with nding housing for people who are at risk of homelessness, and she recounted stories of tenants who would be helped by the changes, including one person who woke up from a coma after a two-month hospitaliza tion to learn they had been evicted.

Since the eviction moratorium was lifted, she said, there has been an increase in lings including those over small-dollar de cits that could likely be solved with a little more time or communication. She said the lings themselves often defeat the purpose, as residents with an eviction ling have a harder time nding new homes, even if they're trying to move out.

"We want people to be paid what they're owed," she said. "We need to create a less reactive, punitive space for people to catch up on things without a penalty that's so severe that it's homelessness."

Boyd said the proposed changes come from evic tion diversion e orts that be gan more than a decade ago. Ex panding the so cial safety net can be bene cial across the board, he said.

Carpenter said people shouldn't be penalized for using services that are available to them. She added that e orts to talk to residents in stead of simply ling to remove them, and connecting them with re sources early, can help them feel less traumatized and help landlords with their goal of getting rent.

"For a population with fewer per sonal resources to fall back on, time is key," she said. "Any amount of time that you're able to buy, 24 hours, it would have made a di er ence."

When she was a renter in the early 1990s, Kris Buboltz said time was of ten helpful in allowing her connect

inconsistencies in grower output.

Hanna said the agency had pulled back on inspections during the COVID-19 pandemic to protect its sta but is now planning to ramp up those e orts.

“Unannounced inspections are coming,” Hanna said. “ e majority of stakeholders want to see more in spections.”

A major issue the agency contin ues to contend with is the misuse of surveillance cameras required un der the CRA rules. Operators are re quired to continuously record, and store for 30 days, video of marijuana being grown, sold, processed or stored in a facility.

e agency has found operators are deleting camera footage at ran

with resources when she fell behind. She would sometimes ask to clean apartments to help cover her pay ments when she couldn't a ord them, or she would sell jewelry or ask others to lend her money to help make rent.

Now the property manager at the Sterling Commons apartments in Sterling Heights, Buboltz said the majority of tenants want to pay their rent. When they can't, she said, more information about what help is available might make a di erence. But she said she also understands how much the company she works for, Lombardo Property Manage ment, needs the money to come in. She's tired of owners being vili ed, especially because it's a long pro cess before eviction. It can be months, she said, between a ling and when a resident is out.

And in some cases, where a tenant is being destructive and making oth er residents in the community feel unsafe, she said, it can be frustrating for those who are following the rules to see neighbors disregard them.

"I don't want people to have to move, especially forcibly," she said. "I don't want either side to become the villain."

Other solutions might include the use of an online dispute resolution portal to give a ected tenants infor mation about funding, attorneys and the process that they would be entering upon an eviction ling, said Matt Sawicki, the court admin istrator in the 17th District Court in Redford. He said judges may not have to be involved in that process, and a mediator might help nd a balance between the di erent par ties' needs.

Still, Lolita Haley said, people need to realize that not all landlords are "inhuman." e 75-year-old bro

ker at Prime Financial Plus Realty said she's getting out of the property management business — she has 45 units now — because it's bad for her health. And Rachel Saltmarshall, the owner of Brice Winthrop & Associ ates brokerage who has six proper ties in Detroit, said every tenant isn't deserving of extra time.

In one case, she said, a tenant didn't pay anything from January 2021 until she was evicted in March 2022. Saltmarshall was responsible for property taxes, insurance and maintenance on the property, even though she wasn't taking in any rent. Such situations "put me in a hole."

"Sometimes, you have tenants you just want to get the hell out," she said.

dom points, which at worst would trigger a $5,000 ne from the agency. at’s a slap on the wrist compared with losing a grow or retail license.

“ ere appears to be a consistent camera issue at businesses,” Hanna said. “Camera issues are unaccept able.”

Hanna declined to say whether the agency planned to raise the ne or what other measures it plans to take.

He did promise the public and in dustry stakeholders would be made aware of a new crackdown and new rules in the near future.

“Stay tuned,” Hanna said.

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

The Towne Square Apartments in Detroit are owned by South eld-based Kaftan Communities. It has 132 units and Kaftan says about a quarter of the tenants are behind on rent. | COSTAR GROUP

Boyd

“SOMETIMES, YOU HAVE TENANTS YOU JUST WANT TO GET THE HELL OUT.”

—Rachel Saltmarshall, Brice Winthrop & Associates

As rates top 7%, mortgage rms feel pinch

NICK MANES

Mortgage interest rates are con tinuing their upward trajectory, something likely to be shown in the upcoming earnings reports of metro Detroit's big home nancing lend ers.

Housing nance company Fred die Mac said ursday that the 30year xed mortgage rate surpassed 7 percent for the rst time since April 2002, "leading to greater stagnation in the housing market."

market collapse that triggered the Great Recession.

e impact of surging interest rates has been acute in Southeast Michigan, a region that has become a hub for some of the country's larg est mortgage companies including Rocket Mortgage, United Wholesale Mortgage, Home Point Financial and Flagstar Bank.

e surge in rates comes as the U.S. Federal Reserve continues to ag gressively hike interest rates in an e ort to tamp down on rampant in ation. Rates at this time last year were just over 3 percent, and the last time they stood at over 7 percent was more than 20 years ago, a time when the U.S. was still reeling from the Sept. 11, 2001, terrorist attacks, but six years away from the 2008 housing

A fuller picture of how those com panies are faring will be made in the coming weeks, with Detroit-based Rocket Mortgage parent company Rocket Companies Inc. re porting third-quarter earn ings on the afternoon of Nov. 3, and Ann Ar bor-based Home Point re porting its earnings on the morning of Nov. 10. Ponti ac-based UWM has not yet released the date of its third-quarter report.

Troy-based Flagstar Bank, seeking to close a merger deal with a New York bank, reported its earnings Wednesday morning. e bank lender saw its mortgage loan origi nations fall about 45 percent yearover-year, with the bank reporting $6.9 billion in loan volume for the third quarter. e bank's overall

quarterly pro t declined about 52 percent from the third quarter of last year, falling to $73 million.

Many of the struggles for mort gage lenders were on display in sec ond-quarter earnings reports, as lenders saw large declines in vol umes and companies like Rocket and Home Point reported massive declines in pro tability and cutting of jobs.

All told, the mortgage sector in the U.S. is forecast to be about $2.26 tril lion, roughly half of last year's re cord-setting $4.4 trillion market, ac cording to the Mortgage Bankers Association, which forecasts further decline next year.

e overall housing market in metro Detroit has also been in de cline in recent months, with the S&P Case-Shiller Home Price Index —

which tracks sale prices for homes sold in a month as compared with their last sale — showing that metro Detroit prices were 9.7 percent high er in August than they were the year prior, even as they were 0.6 percent lower than they had been in July.

Experts attribute the deceleration to increasing interest rates.

— e Associated Press contribut ed to this report

From Page 1

Emails were sent to BMC seeking comment on Friday, Monday and Wednesday. Dan Gilbert's De troit-based Bedrock LLC, which owns One Campus Martius, declined com ment Tuesday.

Transwestern manages the South eld Town Center on behalf of New York City-based 601W Cos., which paid $177.5 million for the complex — the region's largest — in 2014. Transwest ern declined comment.

A representative for Cushman & Wake eld, which has a local o ce in South eld and represents BMC, also declined to comment Monday. Mes sages were left with 601W Cos. execu tives Tuesday.

In recent months, Deloitte LLP shed its large Renaissance Center o ce in favor of about 35,000 square feet of We Work Inc. co-working space at 1001 Woodward, and Blue Cross Blue Shield of Michigan is moving a chunk of its people from the RenCen as well.

And last week, coworking space gi ant WeWork announced it was shutter ing a location of its own, this one in the TechTown neighborhood at 6001 Cass Ave.

e move also comes less than a month after Meridian Health, which is owned by St. Louis-based Centene Corp., put all 266,000 of its square feet in One Campus Martius on the sixth, seventh, 14th and 15th oors up for sublease.

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

Tuskegee Airmen museum pushes back on planned closure of city airport runway

MINNAH ARSHAD

Tuskegee Airmen National Histor ical Museum is pushing the city of Detroit to preserve a runway at Cole man A. Young International Airport that is set for elimination in a new plan.

Museum President and CEO Brian Smith sent a letter to Mayor Mike Duggan on ursday to express con cerns over closing the prevail ing-wind runway, or Runway 7-25, stating that student pilots need the runway for educational purposes. A city spokesperson con rmed to Crain’s that the mayor’s o ce re ceived the letter.

Earlier this month, Duggan an nounced development plans for the airport following federal approval of the Airport Layout Plan. Part of the plan, the rst such in about 30 years, was to remove the crosswinds run way to open 80 acres for “airport-re lated development,” according to a news release.

e prevailing wind runway, which the city plans to decommis sion, is the smaller of the two that was built in alignment with typical wind direction, Smith said.

“It’s the runway we use when the

wind is blowing across the main runway. It’s a lot easier to land into the wind than the wind hitting you from the side,” Smith told Crain’s.

When that runway was too small to accommodate larger planes ying into the city airport, planes landed on the larger runway, which faces another direction.

e museum runs pilot classes for youth in the city, Smith told Crain’s. While the bigger runway accommo dates larger aircraft, Smith said stu

dents need Runway 7-25 to land on days with high winds crossing the direction of the main runway.

e museum is also disputing the city’s announcement that the FAA approved funding for the removal of the runway.

In an emailed statement to Crain's, the city stated, “ e City of Detroit is proud of the Tuskegee Air men and their rich history is so im portant. We will continue working to ensure their legacy is preserved at

the newly-renovated Coleman A. Young Airport. Additionally, the FAA would not have approved the Air port Layout Plan if it weren’t safe."

e museum has operated ight training for about 30 years, Smith said, with about 13 students current ly enrolled in its ground school, which teaches safety information and aerodynamics before students can take the FAA exam to start solo pilot training.

Graduates have gone on to y for Delta Air Lines, FedEx, the National Guard and other agencies, Smith said. e museum spends about $300,000 a year to maintain opera tions, most of which goes to the ight school.

Many pilot programs are expen sive, but the Tuskegee museum has kept its program free of charge to give Detroiters a path into the indus try, Smith said, which is expected to see a massive pilot shortage over the next decade.

e museum honors the legacy of the Tuskegee Airmen, the all-Black ghter squadron that fought in World War II. e late Mayor Cole man A. Young, for whom the Detroit airport is named, was a lieutenant in the unit.

Bloom

EMILY ELCONIN/BLOOMBERG

In February, the rm purchased the former Sligh Furniture building in that block, at 211 Logan St. SW. According to city property records, the building is 584,854 square feet. Grand Rapids History Center ar chives show it was built in stages be tween the 1880s and the early 1900s. Sturgeon Bay’s initial plan for the property was to create a mixed-use development with 753 apartments, a ve-story parking garage, and 22,647 square feet of ground oor retail space across three buildings.

e plan involved adaptive reuse of the Sligh building, and the other two buildings were to be ve- to sev en-story ground-up developments requiring demolition of existing buildings — and permission from the city to change the building height requirements for that area.

From the beginning, the Sligh re development plan was beset by ob jections from existing business ten ants in the properties Gibbs bought. Gibbs told Crain’s the Sligh building is somewhere between 30 percent and 50 percent occupied. Tenants listed on Google Maps include sev eral antiques stores, a screen print er, and furniture restoration and supply stores — all of which would need to nd new real estate or a home within the Sligh development.

“We are planning to engage, to have conversations with those ten ants to understand their needs go ing forward,” Gibbs said. “(And) when the time is right, we’re looking forward to incorporating the local community and the various neigh borhood organizations to make sure that they are involved in this project. Whether that’s with the public space or ground oor retail space, we want to make sure that their needs are heard.”

He said the project team — in cluding Boston-based architect Touloukian Touloukian Inc., whose

owner eodore Touloukian has Grand Rapids ties — is “still in the process” of determining how many apartments the new plan will have, and at what price points they’ll be.

He said it could be a couple of hun dred units — “give or take a couple hundred, but possibly more.”

When asked why the developers decided to scale back the project’s housing component, Gibbs said he wouldn’t put it that way.

“We didn’t decide to scale back. We’re just including di erent uses at this point that are more conducive to the current environment and cap ital markets,” he said.

ose “di erent uses” might “pos

sibly” include light industrial, in ad dition to the initial plans for retail and commercial, Gibbs said.

“We’re still trying to gure out the best plan to move forward with; we’re pretty close,” he said.

Gibbs said he does not yet know when his team will present revised plans to the Grand Rapids City Plan ning Commission.

In March, the planning commis sion approved an extension allow ing Sturgeon Bay’s planning partner, Aligned Planning, to have until Nov. 17, 2023 to submit a new land-use permit application after revising the Sligh concept.

Gibbs said the partners still hope

to begin construction at some point in 2023. After the new concept de sign is complete, they will need to sign a contractor to build the devel opment.

e plan was always complicated because of the Sligh building’s age, which will require a lot of work “to bring it up to current standards,” Gibbs said.

But he said the facts submitted with the original project plan are still true. e Kent County Housing Needs Assessment published in 2020 projects there will be a down town housing shortage of 2,299 units over the next ve years and a short age of an additional 5,340 units in the rest of the city during that peri od.

Brooke Oosterman, director of policy and communications and a member of the Housing Next team that coordinated that study, said the crisis is likely worse now than when the study was completed.

“We know market conditions and demand have likely changed since this study was done in 2020, largely due to the COVID-19 pandemic,” she said in a recent email to Crain’s.

Other big housing developments underway in the downtown Grand Rapids area that Crain's previously reported on include e McConnell (432 units) and Studio Park’s resi dential tower (almost 200 units).

Gibbs called the Sligh redevelop ment “a big undertaking,” but also an opportunity his team couldn’t pass up to buy “one of the few re maining” historic buildings in the city and turn it into housing.

Sturgeon Bay as a rm focuses on multifamily, mixed-use redevelop ments of historic buildings in the Detroit market, as well as in North Carolina and South Carolina and now Grand Rapids.

Gibbs said this will be the largest project (by number of square feet) that the rm has yet undertaken.

“We’re going to need a lot of sup port from the community and the state, but we’re looking forward to

bringing hundreds of units online over the next couple of years,” he said.

Sturgeon Bay is in talks with the National Park Service and the State Historic Preservation O ce about the feasibility of listing the Sligh building on the National Register of Historic Places. To do so, the rm must rst establish not only the property’s age, but its historical sig ni cance and integrity.

Getting the designation would al low the developers to seek historic preservation tax credits. But it also might complicate the original plan to demolish the concrete addition on the Sligh building, as landing the designation might require preserv ing the whole structure.

“While there is a lot of work, and it’s more complicated than putting a shovel on the ground, we are very passionate about historic preserva tion as a company, and this building is a bit of an eyesore right now. Re storing it the right way will be very impactful for the community and the region,” Gibbs said.

He said Sturgeon Bay envisions two scenarios: either locking histor ic tax credits or proceeding without them and looking for other incen tives, such as Brown eld Redevel opment Authority nancing.

“In order to make a project like this work, we need to secure di er ent grants and other incentives,” he said.

Sturgeon Bay has other plans for Grand Rapids besides just the Sligh building, Gibbs said.

“Grand Rapids is probably the larg est growth market or region in the state of Michigan,” he said. “We’re just very pleased with the growth that's oc curred over the last ve years — or ganic growth and strategic growth with leadership on all fronts — (and) we’re looking forward to working on this project and others in the region over the next decade or so.”

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

The surveys revealed that 60 percent of our team members suggested we get a new name [the merged system was temporarily named BHSH System]. So, people will get over it, and the name will be a vision of transformed health in the future.

 During the rst six months of 2022, the Beaumont side of the business reported a $100 million loss. How is that impacting inte gration e orts and how are you trying to rectify the nancials?

Coming together creates a lot of opportunities to build a strong organization statewide. We are well underway with our integration e orts and have accomplished a great deal in only nine months. Our nancials are already improving. Frankly, it takes time to move this forward and navigate the headwinds all hospitals are facing moving forward. One area we’ve made big investments is in our people. We want to make sure we keep people in our system and attract people into our organization. We’ve made market adjustments to wages and put in new partnerships with education institutions (Grand Valley State University and others). We’re also sharing best practices across the system and have recently made investment in surgical robots, our IT and digital areas to allow us to be more e cient.

 Quickly after the Beaumont nancials came out, Corewell announced 400 job cuts system wide in nonclinical positions. Can we expect more cuts?

In September, when we made that announcement, it was part of us accelerating our consolidation work. We limited those cuts in professional roles where there were redundancies.

We’re still continuing to hire people for the patient-facing roles. We’re making encouraging progress with the integration. We’ve done a lot of culture-shaping work, focusing on the delivery of care. And because we have

Priority (Corewell’s integrated health insurer), we are continuing to work on what we can do for value. Again, we’ve invested millions of dollars into our IT systems to make the system strong and provide seamless care. It’s really coming together to make it a high-quality system. We are now in ight, and we’re starting to see the bene ts coming forward.

 Beaumont has been losing top physician a liations for years, and we’ve been told it continues under Corewell. Is there anything being done to address the issue?

Speci cally in Southeast Michigan, it was really necessary to recruit a talented leader. I’m very proud that we recruited Dr. Ben Schwartz. He’s been in meetings to address issues and those conversations are going very well. There’s been a lot of conversation and action going on, especially since Dr. Schwartz joined us (on July 5). We strive to be the best place to work and be the place physicians want to practice at and want to return to practice at. I think in three to ve years, we will look at this as a moment in time where we began making it positive for people to practice in Southeast Michigan.

 The Beaumont headquarters in South eld seems an obvious casu alty of the integration. It’s a large building and the workforce there still isn’t back in the o ce full time. Are there any plans to get rid of the building?

We plan to always have a signi cant presence in this location (Southeast Michigan). Just last week, I attended a nursing orientation in South eld and there are a number of people who are coming in for collaborative education and I got to see the excitement people have for joining our organization. There is a lot going on in the building and it’s about collaboration and advancing us forward.

 There are clear cultural di er ences between the west side and the east side of the state. Has that been di cult to navigate during the integration?

We’re all Michiganders. I’ve found that we go into a room, come together to talk about the issues and come to a solution. We usually walk out with that solution. We did a survey early on and asked those questions about decision making and processes and, honestly, expected to see more di erences. There weren’t any major di erences. We all wanted the same thing. The survey said we were more alike than we were di erent. That’s been encouraging, and I’m excited about the future.

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

A view of downtown Grand Rapids from the upper windows of the former Sligh Furniture building. The property is about a mile south of the city center. | STURGEON BAY PARTNERS

One of the initial renderings for the Sligh Furniture mixed-use development, dated March 11, 2021. The project plans at the time called for 735 residential units, ground oor retail, a cafe and a ve-story parking garage. Developer Sturgeon Bay Partners is in the process of revising the concept design. | TOULOUKIAN TOULOUKIAN INC

William Beaumont Hospital in Royal Oak.

Sphinx president won’t stop until music C-suites are diversi ed

Afa Dworkin, president and artistic director of the Detroit-based Sphinx Organization, came to the U.S. at the age of 17. A professional violinist, she was early in her college career at the University of Michigan when she met Sphinx founder Aaron Dworkin in 1995. She fell in love with the organization’s mission — and him. She joined Sphinx as an intern and never left, moving through its ranks to president when her husband departed. Dworkin, 46, is leading the national nonpro t’s work to increase diversity in classical music, including a $1.5 million venture fund that’s making investments in diversity e orts and more recently, a plan for an undisclosed gift from philanthropist MacKenzie Scott

BY| SHERRI WELCH

 What kind of impact has Sphinx had in its rst 25 years?

The number of youth impacted so far by our programming is 150,000 over 25 years. Not including the early educational programming, we also have more than 1,000 alumni. We’ve invested more than $10 million into artist grants and scholarships to our alumni and members of the Sphinx artists family, and our overall digital imprint, which is about 60 million.

curriculum that we deliver online and at Sphinx Connect, the largest and longest standing convening that we run in Detroit. It’s not formally announced yet but will be in the next couple of weeks, Knight has renewed and slightly increased its commitment to the LEAD program. And that’s a great vote of con dence.

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

In the last several years, Sphinx launched a pipeline development program aimed at diversifying the corner o ce in the classical music eld. Where does that stand?

We launched that program four and a half years ago, and it was the rst e ort that did not focus on music, education or performance. It focused on administrative empowerment.

The (John S. and James L.) Knight Foundation found the idea compelling, and they gave us seed money, a $1.5 million pilot grant, to launch what we now refer to as Sphinx LEAD (Leaders in Excellence, Arts and Diversity.)

We launched a two-year fellowship program for 20 fellows a year. They get together four times a year for learning retreats, where they learn everything from how to compile or interpret budget documents to how to program a concert, do contract negotiations, public speaking and networking. We pair each leader with a coach, a mentor and ultimately, we help them gain positions in the C-suite level. Fifty people have come through the program. Today, there are six LEAD alumni who occupy C-suite positions in major orchestras, conservatories, music schools, who now come back routinely to Sphinx and help co-curate content for our year-round digital

Bike

From Michigan to Indiana to Illinois, bikers and pedestrians will soon be able to travel across state lines on a scenic, non-motorized greenway along the south shore of Lake Michigan.

e Marquette Greenway Trail Project will stretch 58 miles and connect Calumet Park on Chicago's southeast side to downtown New Bu alo in Michigan, Crain's Chicago Business reported. e project is funded in large part by a $17.8 million grant from the U.S. Department of Transportation to the Northwest Indiana Regional Planning Commission, in addition to millions of dollars in other federal, state, local and private grants.

Construction on the Illinois strip is already complete.

 Just before the pandemic, Sphinx created a venture fund. What sorts of investments has it made? We’ve made a million-and-a-halfdollar commitment to the sector. It’s essentially a re-granting e ort, and it’s in place because we know that the systemic sectorwide change that we’re trying to e ect cannot be done directly by Sphinx alone. Examples of some successful things that we’ve granted in the last couple of years include a national solo vocal competition that was launched by one of our alumni in partnership with the Manhattan School of Music, a conglomerate of 30 orchestras who partnered together to create commissions by Black and Brown composers and have committed to perform these new works during their main season and a national piano competition launched last year by the Cincinnati Symphony, Cincinnati College Conservatory of Music and an African American pianist. The Sphinx Venture Fund is an important e ort because it’s trying to encourage people to think big, big systemic change with kind of big high impact and large numbers.

 Sphinx is among the local charities bene ting from an unexpected donation from billionaire philanthropist Mackenzie Scott. Can you share what your plans are for that?

We have elected not to disclose the amount but the gift was used to create the Next Stage Fund, which is designed to invest in a special initiative each year for the next ve years to take an element of our work to the next stage or level. Among the rst projects is a series of recordings to document, preserve and disseminate music by Black and Latinx composers, performed by our premiere touring ensembles

 You said you improved your culinary prowess during the pandemic. What kind of prowess are we talking about?

My repertoire is expanding in terms of genres and types of culinary techniques that I’ve never tried because of course, I have more time at home. I have learned how to do a whole lot more things with vegetables. And in fact, during the pandemic, I’ve turned entirely vegetarian... During the pandemic, Aaron and I started a weekly newsletter to share recipes with our friends and family and paired them with a piece of music and also created an online menu for folks.

What we still practice even now, at least weekly, is we create a printed menu with a detailed description and a theme for each evening. And then Aaron pairs a piece of poetry or researches a fun fact, trivia that’s associated with a new dish.

I feel like it’s still a special time for the two of us every day no matter what. And the other thing is that it’s entertaining and educational.

Michigan

e Indiana section, which makes up the bulk of the trail, is almost fully funded with the exception of one milelong strip between Burns Harbor and Chesterton, for which proj-

ect managers hope to secure state funding later this year. Work is underway on the Indiana stretch and expected to be completed at the end of 2026 or the beginning of 2027.

Chicago

In Michigan, the project has secured $5.35 million of the additional $5.6 million needed for the 4-mile leg between the Michigan-Indiana border and New Bu alo. Volunteers are kicking o their nal fundraising stretch and asking for community donations to help acquire the last $250,000, starting with a fundraising event at Bentwood Tavern in New Bu alo on Nov. 3.

“So many years of hard work are nally coming to fruition, and we are looking forward to the community rallying around this last, important nancial e ort to complete the trail to New Bu alo," fundraising chair Gary Wood said. "Our dream is to one day have a non-motorized trail that goes all the way to the Mackinac Bridge.”

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Afa Dworkin president and artistic director Sphinx Organization

of energy savings each year? Now that will compress costs.

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the team at Auto-Cast enjoys a quieter, cleaner place to work and over $117,000* in energy

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