Crain's Detroit Business, November 6, 2023 by Crain's Detroit Business

CRAINSDETROIT.COM I NOVEMBER 6, 2023

How essential are hospital ranking lists? Health execs: They can be useful but flawed By Dustin Walsh

Matt Carr, president and CEO of Livonia-based Storch Products Co., has found success in diversifying its magnetic parts supply business in the steadier defense sector. | NIC ANTAYA

Doubling down on diversification

simple number rankings provide — “they’re third, they’re 11th” — Dr. Marschall Runge, CEO of can seem especially useful in trythe most-decorated health sys- ing to navigate what everyone adtem in the state, issued a plea to mits is an often complex and confusing system,” Runpatients, and journalists ge wrote. “Unfortunately, — watch your cholesthat complexity can lead terol, not hospital rankto serious problems in ings. offering simple answers The head of Ann Ar— while raising the larger bor’s Michigan Mediquestion of whether it is cine and dean of the better to try to measure University of Michigan every possible variable or Medical School laid bare that the glut of numeri- Dr. Marschall Runge just focus on the few that really matter.” cal lists that place one Runge called out two specific hospital, health system or insurance provider in front of another rankings, those tabulated by is at best confusing to patients publications Newsweek and U.S. and at worst a gamed methodolo- News & World Report — the latgy to make institutions better on ter of which consistently ranks UM-Ann Arbor as the top hospipaper than in practice. “Like it or not, the public sees tal in the state and among the rankings as authoritative mea- best in the country. sures of the work we do in our classrooms and hospitals. The See RANKINGS on Page 17

By Kurt Nagl

The automotive industry doesn’t know which way it’s going, and that makes the golden rule of survival for suppliers even more relevant: Don’t put all your parts in one basket. As the Detroit 3 automakers emerge from a costly United Auto Workers strike — an estimated more than $10.4 billion hit to carmakers, suppliers and workers in the sixth full week, per the latest Anderson Economic Group report — and automakers delay electric vehicle rollouts, suppliers are faced with launch volume projections they cannot trust from custom-

ers likely looking to counterbalance hefty new labor costs by driving down prices for parts. That has suppliers on the defense and in search of ways to hedge against the uncertainty. The best way to do that is to keep a diverse portfolio, said Dave Andrea, principal at Plante Moran. While diversification of customers has been a constant pressure since even before the industry’s Great Recession bankruptcy era of the mid-2000s, the transition to EVs adds urgency and complexity. “It’s going one level deeper, looking at it by platform, by internal combustion engine and electric vehicles because there’s

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so much uncertainty in terms of what market demand is going to be that you want to try to spread that out,” Andrea said. At power management giant Eaton Corp., whose vehicle division is based in Southfield, the electric mobility business is expected to nearly triple from $538 million in revenue last year to $1.5 billion by 2025, said Pete Denk, president, Mobility Group. Should those projections not pan out, the company has fuel systems and all sorts of other business units, from furniture to golf grips, to fall back on. See SUPPLIERS on Page 17

LARRY PEPLIN

Auto suppliers look for ways to hedge against industry uncertainty

DETROIT WON’T ESCAPE ‘DOOM LOOP’ But metro area’s commercial real estate market may fare better than others in occupancy spiral | PAGE 8

CONVERSATION Bamboo founder Amanda Lewan on expanding coworking business.

REAL ESTATE Property owner appeals demo order for Grosfield Building.

WEWORK WOES Co-working giant’s Detroit offices in limbo as bankruptcy looms.

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‘Sale options’ for Southland Center mall under consideration By Kirk Pinho

The Southland Center shopping mall in Taylor could be sold. Toronto-based owner Brookfield Properties and a special servicer, Trimont, “are discussing title and sale options,” according to commercial mortgage-backed securities loan commentary provided by New York City-based Trepp LLC, which tracks CMBS data. According to earlier commentary, Brookfield requested a threeyear loan maturity extension in June although it’s not known whether one was granted. Messages seeking comment were left with spokespeople for Brookfield and Trimont. Brookfield took out a $78.75 million loan from Barclay’s in 2012 and defaulted in July 2022, Crain’s reported at the time; the loan’s maturity date was then extended to July 2023 prior to previous servicer, Rialto Capital Advisors LLC, transferring servicing duties to Trimont. Its current balance is just less than $63 million, Trepp data show. The mall is 94% occupied, according to Trepp. Trepp data shows that last year, the mall pulled in $16.76 million in revenue with about $7.07 mil-

Sister Pie is located at Kercheval Avenue and Parker Street. | KIRK PINHO

Popular West Village bakery Sister Pie plans expansion ‘Sale options’ are being considered for the Southland Center shopping mall in Taylor as its owner struggles with its commercial mortgage-backed securities debt. | COSTAR GROUP

lion in expenses; net cash flow was $8.93 million. In 2021, there was $15.82 million in revenue and $6.65 million in expenses, and NCF of $8.4 million, and in 2020, there was $16.37 million in revenue and $6.48 million in expenses, with NCF of $9.13 million. Southland Center is 905,000 square feet and its largest tenant is JCPenney, which represents about 35% of the net rentable area. Other anchors include Best Buy, Cinemark and Macy’s. Brookfield acquired Southland in 2016 when it purchased New York City-based Rouse Properties Inc., the mall’s previous owner, in

an all-cash deal reportedly valued at $2.8 billion. Southland is one of four regional malls built by the J.L. Hudson’s department store company. Two of those malls are now in a state of redevelopment: Northland Center in Southfield, primarily as mixed-use residential, and Eastland Center in Harper Woods as industrial/warehouse space. The city of Westland — which named itself after the mall — has been exploring what to do with its aging shopping center, which Mayor Michael Londeau last winter described as “absolute garbage right now.”

By Kirk Pinho

The popular Sister Pie bakery in Detroit’s West Village neighborhood is planning an expansion. Located at Kercheval Avenue and Parker Street, Sister Pie is proposing to take over the remaining vacant space in the approximately 2,000-square-foot building. The bakery is currently in about 950 square feet with seating for only about 15 indoors, Crain’s reported in 2019 as Sister Pie was mulling a second location on Mack Avenue that ultimately was scrapped. Sister Pie will seek Historic District Commission approval of the proposed changes to its building during a Nov. 8 meeting. The pro-

posal includes restoration of the exterior facade, installing new stairs to the basement, new toilets and new office space. The building is owned by William Haska III, according to property records. Sister Pie owner Lisa Ludwinski had been in talks six years ago with Haska to purchase the building and expand, although it never materialized. Ludwinski declined comment. Sister Pie opened in 2015 after winning a $50,000 grant in a Hatch Detroit competition. Since opening, Ludwinski has released a cookbook, which the Sister Pie website says has sold over 40,000 copies since its 2018 release, and she has been nominated for James Beard awards.

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11/3/23 10:47 AM

WeWork’s Detroit offices in limbo as bankruptcy looms By Kirk Pinho

The Quality Roots store in Monroe. | QUALITY ROOTS

Michigan watches Ohio’s weed vote If OK’d, border stores expect delayed impact | By Dustin Walsh For Quality Roots in Monroe, out-of-state buyers, particularly those from Ohio, represent roughly 30% of the marijuana retailer’s sales. But with Ohio voters hitting the polls this week to decide if the state should allow for recreational marijuana sales, Quality Roots and the dozens of operators near the border could see a major decline in revenue. The only question remaining is when. “I don’t see the (out-of-state) sales relaxing,” Aric Klar, CEO of Quality Roots, told Crain’s. “It’s

going to take Ohio five to 10 years to build out its cannabis infrastructure to match Michigan. Prices are going to be high and inventory low for a long time, so I think consumers are still going to make that drive to Michigan for a long time to come.” Myles Baker, an attorney for the cannabis practice at Detroit-based law firm Dickinson Wright, believes Ohio will come on board much quicker. “It will be at least 18 months before the Michigan market feels it,” Baker said. “Ohio doesn’t have rules in place yet

for adult use, but if they can get the act together in a reasonable amount of time there’s no reason to think they can’t be competitive quickly.” Baker picked that time frame because according to the ballot measure Ohioans will vote on, the new law would go into effect 30 days after the vote and the first licenses must be issued within nine months after that. The issue of its competitiveness with Michigan, however, comes down to price and access. See CANNABIS on Page 16

WeWork Inc.’s remaining two Detroit locations are in flux as the company again teeters on the brink of collapse. The Wall Street Journal and others, citing anonymous sources, reported last week that the New York City-based co-working space giant (NYSE: WE) is preparing to file for Chapter 11 bankruptcy protection as soon as this week, looking to restructure operations and shed debt. The company cofounded by Adam Neumann currently has a pair of leases in buildings owned by Dan Gilbert’s Bedrock LLC real estate company: 54,700 square feet in the 317,000-square-foot 1001 Woodward office tower and 35,100 square feet in the 48,000-squarefoot building at 1449 Woodward Ave., according to CoStar Group Inc., a Washington, D.C.-based real estate information service. In Chapter 11 bankruptcy, WeWork could seek to reject or cancel those and other leases outright; reject leases and then seek to renegotiate more favorable terms; or continue them, said Douglas Bernstein, a bankruptcy specialist who is partner in the Bloomfield Hills office of the Plunkett Cooney PC law firm. If WeWork wants to continue a lease but is currently in default on it, WeWork would have to “cure the default and keep it current moving forward,” Bernstein said. If WeWork seeks to cancel a lease with time still remaining on it, the landlord would have an unsecured claim for the unpaid amount in bankruptcy court, Bernstein said. Emails were sent to WeWork and Bedrock seeking comment. Emails were also sent to consulting firm Deloitte LLP, which last year abandoned its 102,000-square-foot office in the Renaissance Center in favor of about 35,000 square feet of WeWork space in 1001 Woodward. WeWork’s footprint in Detroit is

WeWork Inc. has two Detroit locations, including the Dan Gilbert-owned 1001 Woodward office high-rise downtown. | COSTAR GROUP

small compared to hubs like New York City — where at one point it was the largest private tenant in the city with some 8.9 million square feet — and San Francisco. The company’s total footprint represents a tiny percentage of the overall downtown office market. Jeffrey Langbaum, senior REIT analyst for Bloomberg Intelligence, said office occupancy rates in cities like New York are likely to fall although demand for space won’t likely be impacted since “WeWork wasn’t very active leasing in the market” anyway, Langbaum said. During Neumann’s tenure he rapidly grew WeWork, fueled by billions in SoftBank money, and opened three locations in Detroit: The two downtown in Gilbert buildings and then doubling its square footage in the city by opening a third location in the TechTown neighborhood in a former Wayne State University building now owned by Peter Cummings and his Detroit-based The Platform LLC. The TechTown location at 6001 Cass Ave., that totaled 91,000 square feet, shuttered a year ago and WeWork said at the time that it would be offering members at that location space in its Woodward Avenue locations. Some took the offer, while others did not.

Garden Fresh co-founder’s plant-based venture grows By Jay Davis

The co-founder of a highly successful local food brand looks to have struck gold twice. David Zilko — a founding partner of Ferndale-based Garden Fresh Gourmet salsa and chips company — introduced his Skinny Butcher line of plant-based “chicken” entrees to the market in early 2022. Skinny Butcher offers frozen, packaged patties, nuggets and breasts. What sets Skinny Butcher apart from other plant-based food is its use of pea protein over soy along with a blend of spices that give the items

Skinny Butcher currently offers a line of plant-based chicken products. | SKINNY BUTCHER

the flavor of an animal-based product. Skinny Butcher products go from crispy to crispier with a double-breading process. “We knew we were coming

into a crowded market with how plant-based meat has blown up,” Zilko said. “We knew we had to do something to make us stand out so we did something com-

pletely different from everyone else and it’s worked so far.” Skinny Butcher has established a wide footprint in a short period of time. The brand is available at Costco’s Midwest locations as well as Gordon Food Service stores, Walmart, Safeway and H-E-B supermarkets in Texas. Locally, Skinny Butcher products are available at Hollywood Market stores and Western Market in Ferndale. The company works with four distributors, Zilko said, including Warren-based Lipari Foods, which distributes Skinny Butcher products to local inde-

pendent grocers. Zilko expects revenues for his Skinny Butcher line of plantbased chick’n products this year to balloon to between $15 million and $20 million. The brand, introduced in stores in September 2022, brought in about $7 million in revenue last year. Zilko plans to add “turkey” and “seafood” plant-based products to the lineup, along with a spicy “chick’n” option. Another line, Skinny Butcher Farms, will offer animal-based items similar to the plant-based options. See NUGGETS on Page 16 NOVEMBER 6, 2023 | CRAIN’S DETROIT BUSINESS | 3

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REAL ESTATE INSIDER

Moisides appeals Michigan Avenue building demolition

tion order and had a meethe owner of the ing with the city on Nov. 1 Grosfield Building to present a structural rein Detroit is trying port showing the building to spare it from the wreckcan be saved. ing ball. “We have owned the Recently, the city building around 15 months deemed the Christos and spent the first 6-8 Moisides-owned property months removing the on Michigan Avenue dan- Kirk Pinho building next door on gerous and ordered both the front building and back build- Michigan Avenue that was demo’d ing in the Central Southwest neigh- by emergency order before we owned it,” Moisides wrote. borhood razed. If the city changes course, it “The structures, located at 3365 Michigan Ave., were inspected and would mark another reversal of an found vacant and open to trespass emergency demo order of a promiwith (the) roof structure down and nent building in recent months. In wall collapsed, making the remain- September, there was a week-long ing walls structurally unsound,” Ar- saga around the Del Bene building thur Rushin, chief enforcement of- on Russell Street in Eastern Market. ficer for the Buildings, Safety The building partially collapsed Engineering, and Environmental and was almost immediately orDepartment, said in a statement. dered razed as a dangerous struc“There are crumbling and missing ture, but owner Scot Turnbull apbricks in multiple areas and it was pealed that and the city reversed its considered a public safety hazard course and allowed Turnbull to try and recommended for an emer- to save it. Just over a year ago, Moisides gency demolition.” Moisides said Oct. 31 that he is paid an estimated $1.775 million in appealing the emergency demoli- four separate transactions for mul-

The Grosfield Building in Detroit is owned by Christos Moisides. | KIRK PINHO

tiple parcels making up nearly the entire block on which the three-story late Victorian style Grosfield Building sits at Michigan Avenue and 23rd Street. One of the properties he bought, located at 3663 Michigan Ave., was damaged in a fire in June 2021 and was razed starting last year. Moisides told me in August 2022 that he has owned property in that area for several years and “was tired of seeing (the Grosfield Building), year after year, get worse and worse.” He said at the time there could be something like 20 residential units installed in the upper two floors of the Grosfield. Moisides wasn’t the only investor who sought to redevelop the Grosfield. In March 2018, Crain’s reported there was a $4 million plan to transform it into 20 loft-style con-

state designation for MichiThe Grosfield Building, the gan Avenue — picked up much which has a turret on of that block from a series of different owners in deals finalized its west side, dates in May and June 2022, according to Wayne County property reback to 1893. cords. dos with a ground-floor restaurant and retail space. In all, Crain’s reported, there were four buildings — the three on Michigan Avenue, including the Grosfield Building, plus one behind it — totaling about 27,000 square feet that were part of the plan. At one point, George Azar, the chef behind Flowers of Vietnam, was planning a Mexican restaurant in the property. However, that project never materialized as envisioned and new ownership — M12 Holdings LLC, with the name coming from

The Grosfield Building, which has a turret on its west side, dates back to 1893, according to an application filed with the U.S. Department of Interior for inclusion on the National Register of Historic Places in 2019. It was named a contributing structure to the Michigan Avenue Historic Commercial District in April 2020. The application says it was designed by Joseph Mills and built for Anthony Grosfield, a German immigrant who had businesses in retail, real estate development and sales and insurance over the years operating out of the building.

Detroit Public TV sells Wixom HQ By Kirk Pinho

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Detroit Public TV has sold its headquarters and 5 acres of land in Wixom to an automotive supplier. The Riley Broadcast Center at 1 Clover Court, west of Wixom Road and between Grand River Avenue to the south and I-96 to the north, sold to an affiliate of Taiwan-based TYC Brother Industrial Co. Ltd. for $11 million. Proceeds from the sale, which closed Oct. 11, will “fund a new, permanent home” for DPTV, a spokesperson said in an email. Sites in Detroit as well as elsewhere are among the options the DPTV board is reviewing for a new headquarters and production facility, the spokesperson said. “The needs of our facility and our community have evolved in the last 20 years,” Rich Homberg, CEO of DPTV, said in an emailed statement. “That is why we explored the sale of our building in Wixom, which ended successfully

The Detroit Public TV headquarters in Wixom has sold to an affiliate of a Taiwanese auto supplier. | COSTAR GROUP

and will provide us with the opportunity to move to a new facility, allowing our organization to serve the community for the next generation. During our time in temporary space and studios, there will be no disruption to our mission. We look forward to announcing our plans for the future once they are finalized.” The temporary DPTV space is at 48325 Alpha Drive in a 48,000-square-foot building in

the Alpha Tech Corporate Park in Wixom. The public TV and radio nonprofit has been using studio space at Lawrence Technological University in Southfield, the spokesperson said. A message was left with TYC Genera, the California-based affiliate of TYC Brother Industrial, which makes lighting components. The sale was brokered by Southfield-based Farbman Group. The Riley Broadcast Center, which is 93,500 square feet on 12.5 acres, hit the market for $11.75 million in the summer 2021. According to CoStar Group Inc., a Washington, D.C.-based real estate information service, DPTV paid $11.2 million for it in 2004, for a purchase price of $119.73 per square foot. It is the former home of Clover Technologies Inc., a network-integration company that filed for bankruptcy in 2003, Crain’s reported at the time.

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Black-owned office furniture firm expands to Detroit By Kirk Pinho

What may be Detroit and the state’s only Black-owned office and commercial furniture sales company is opening an office in the city with an industry veteran at the helm. Reggie Roland has spent a quarter-century in the industry and rose through the ranks at Novibased Interior Environments before resigning to start District by Design LLC, which signed a 6,100-square-foot lease at 119 State St. in Detroit’s Capitol Park neighborhood earlier this year. Roland said initial discussions about what would eventually become District by Design, which also recruited DJ Reid and an accounts manager to join, began a decade ago with Interior Environments CEO and owner Randy Balconi. Around that time, Interior Environments began doing “significantly more business in Detroit,” Roland said. And after opening offices in high-growth markets like Denver and Boise out west, Interior Environments’ executive team began thinking about additional ways to grow and scale. “About a year ago we started thinking about it and it went from (a question of ) ‘what if’ to ‘how to,’” Roland said.

District by Design Vice President DJ Reid (left), President Reggie Roland and Account Manager Heidi Ford. | PHOTO COURTESY OF CHRISTIAN NAJJAR

There are no formal ties between District by Design and Interior Environments, although there is a contractual relationship where District can opt to use Interior Environments specialists — designers, project managers and the like — it has not brought on in-house yet. Roland said District by Design focuses on helping clients achieve minority sourcing goals. The company has first-year revenue projections of $3 million, then $6 million to $8 million in the second year, and $10 million in the third, and will sell Muscatine, Iowa-based HNI Corp. furniture brands such as Allsteel and Gunlocke, among others.

District by Design has received city certification as a minority-owned business enterprise, or MBE, and will seek Michigan Minority Supplier Development Council certification as an MBE as well. That certification would give the company a competitive advantage as its business can count toward a company’s spending goals on minority businesses. Roland also said the company will pursue MBE certification from Wayne County. Former Detroit Pistons great Vinnie Johnson had an office furniture company, Southfield-based Airea Inc., but shuttered it two years ago so his Piston Group LLC

holding company could “focus on our core competency in manufacturing and our level of commitment to increase business opportunities within the automotive industry and other market sectors.” Dave Bloch, CEO of Tierra Verde, Fla.-based INDEAL, which represents more than 300 commercial interior dealers across North America, said his organization’s membership does not include any Black-owned office or commercial furniture dealers in Michigan, although he did say “there are a number across North America.” Deirdre Jimenez, CEO of the Grand Rapids-based Business + Institutional Furniture Manufacturers Association, said industry diversity is increasing. “The furniture industry, like other industries, recognizes the benefits of diversity. There are a growing number of companies that are women and/or minority owned and/or led,” Jimenez said. “Others are actively embarking on programs to recruit and develop diverse teams of professionals.” She added that many industry leaders are nearing retirement, opening up “a greater number of career opportunities in leadership positions.” District by Design is getting started as the office market still jitters from the effects of the

COVID-19 pandemic, during which many office users have not yet shaken the work-from-home trend. That has generally led to decreases in space usage. Roland said in spite of that challenge, there is still plenty of work to be had. “While there may not be a tremendous need for office, there’s a tremendous need for commercial and hospitality,” Roland said. “There’s a need for hospitality, the integration of space. A lot of companies are looking at their spaces and saying, ‘How do I attract my staff to come back to work three or four days a week?’” Earlier this year, several office and commercial furniture dealership companies told Crain’s that their revenues have started to exceed pre-pandemic levels, in part because of companies looking to overhaul their space as a way to attract workers back to the office on a more regular basis. Roland said District by Design will “walk the walk” on diversity issues. “We intend to be an advocate for diversity, a supporter of diversity and change agent in diversity and inclusion,” Roland said. “It’s our goal to ... lead by example. District by Design will work to raise the bar and bring others along the way of our journey.”

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EDITORIAL

Lions’ success also a touchdown for Detroit D etroit took a star turn on Monday night. It was great that the Detroit Lions beat the Las Vegas Raiders on a national prime-time stage. But even more encouraging to us was how gleaming the city itself looked outside Ford Field. The strategy and leadership of owner Sheila Ford Hamp, President and CEO Rod Wood, and general manager Brad Holmes have put a team on the field that Detroiters are rightfully excited about. And, most especially, the no-nonsense enthusiasm of head coach Dan Campbell is infectious far beyond the locker room. Pride, indeed. And that pride and excitement translate into dollars — for the Lions, certainly, but also for businesses for blocks and blocks around Ford Field. The enthusiasm also bodes well for the upcoming NFL Draft next April, being held in Detroit for the first time ever. That event, which has become enough of a todo that it can draw hundreds of thousands of people to a city, also boasts a TV audience of tens of millions of football fans.

Lions running back Jahmyr Gibbs celebrates in the stands with fans after scoring a touchdown on “Monday Night Football.” | AP

They’ll get a taste of what Detroit is today, and we’ve got plenty to show off. It’s now been 21 years since the Lions moved into Ford Field, which was built on and preserved parts of an old warehouse owned by the Hudson’s department store chain. The stadium unites old and new Detroit and is unlike anything else in the NFL — and it certainly amplifies the vol-

ume of 66,000 screaming fans. The decision to move the Lions to downtown Detroit to the new stadium after 26 years in Pontiac has paid huge dividends for the city and was one of the pivotal developments that has transformed Detroit’s central business district. (And we’d be remiss in not noting that it’s long overdue for the NFL to bring the Super

Bowl back to Ford Field, which shined on that enormous stage in 2006. The city is even more well-equipped today.) It’s only midseason and, as Lions diehards know all too well, things can change quickly and violently in the NFL. But the impact of the Lions’ success — they are 12-4 in their last 16 games going back to last season — and the energy it’s bringing to downtown Detroit are real. Fans of Detroit’s professional sports franchises have endured a long drought — it’s been more than 15 years now since the Red Wings’ 2008 Stanley Cup. The Lions’ success isn’t the only sign of life — the Tigers, Pistons and Red Wings all appear to be on the rise. That’s a good thing for more than just pride. It brings people and their dollars downtown, fueling jobs and growth in a virtuous circle that can keep building on itself. Detroit loves its teams. But we’d posit that a Lions Super Bowl appearance would be the biggest sports story imaginable for the city. Here’s hoping.

COMMENTARY

Health care can’t be condensed into a single ranking

authoritative measures of the mericans are obsessed work we do in our classrooms and with rankings. Want to hospitals. The simple number know the best place to rankings provide — “they’re third, work, live or play? What’s the top they’re 11th” — can seem especar, coffee or candy? There are cially useful in trying to navigate lists for all that and more. what everyone admits is an often These rankings are not just fun, complex and confusing system. they are useful. In our abundant Unfortunately, that complexity society, where most every prodcan lead to serious problems in ofuct search on Amazon turns up Marschall S. pages of products, making a Runge, M.D., fering simple answers — while raising the larger question of choice can be overwhelming. We Ph.D., is whether it is better to try to meaneed something — even if it is an executive vice sure every possible variable or just anonymous source with undeter- president for mined authority — to help us cut Medical Affairs focus on the few that really matter. The highest profile ranking through the thicket. By and large, and dean of the the experience is harmless: if we Medical School methods seek to be comprehensive, compiling and weighing get a bum steer about silver pol- for the many loosely related factors to ish or lightning cords, the dam- University of provide an overall ranking. This age is minimal. Live and learn. Michigan. He work is not for the timid: In exBut rankings can have more also serves import when they are used to on the board of plaining its hospital rankings, U.S. News issues a 166-page document make consequential choices, directors for that is more complex than any such as where to go to school or Eli Lilly and 166-page document from the Inreceive medical care. These lists, Co. ternal Revenue Service. And to a especially those issued by U.S. News & World Report and Newsweek, fre- large degree, choosing the factors and quently influence major life decisions. As choosing their weighting are both arbithe executive vice president for Medical trary. Newsweek’s methodology includes Affairs and dean of the Medical School for two surveys which are weighted to be the University of Michigan, I recognize 69.5% of a hospital’s final score. Why not how useful these measures can be to stu- 37.8% for three surveys? The question is sedents, patients and institutions that re- rious because any weighting automatically ceive high scores such as the ones I lead. shifts emphasis to interpretation of data In fact, we still pay to use the U.S. News rather than the data itself, in addition to “badge” in some of our marketing efforts hopelessly muddling what the final result because the rankings are widely accepted actually signifies. Equally serious are the many ways hospiby consumers. But I also believe they should be taken with several grains of salt. tals can improve their rankings without imLike it or not, the public sees rankings as proving patient care. They can spend more

money on marketing to influence survey results. They can also nudge the descriptions of how ill their patients are, because a hospital looks better when it saves a sicker patient. They can hire staff to coordinate all this. Yet, every minute that hospital leadership spends on gaming rankings is a minute not spent on making the hospital better. The good news is that other rankings, though less well known to the public, sidestep these issues by targeting specific measures that resist gaming. For example, those published by the Centers for Medicare & Medicaid Services and the Leapfrog Group, a nonprofit patient safety organization, focus more sharply on quality and safety. In healthspeak, “quality” means doing the simple things right every time which, in theory, is the foundation for doing the difficult things right. Another critical component is the expertise of your doctors. Earlier this summer, the medical website Expertscape released its own rankings, which are based on the most objective criteria of all, the value of contributions to the medical literature as assessed by publications by experts. Leading-edge knowledge may not be important when removing an appendix, but can be a critical factor in the most difficult cases in cancer and other serious conditions, especially rare ones. My belief is that targeted, understandable rankings that reduce the number of variables considered and are based solely on transparent, objective measurements — like those of CMS, the Leapfrog Group and Expertscape — provide the most meaningful information. Many would not agree. One factor is, if a

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

hospital or other institution is highly ranked, why not believe in that ranking methodology? And yet, many high-ranking universities, law schools, and medical schools — including the University of Michigan Medical School (ranked #13 this year) — no longer participate in U.S. News’ school rankings, citing concerns like those with hospital-ranking methods. How can an aggregated score, based on many different dimensions, possibly help students or others evaluate institutions with respect to their individual priorities? At bottom, it pretends all schools are the same and so can be measured in the same way, just as it pretends all students are the same. Health care is an even more complex enterprise — perhaps the most complex on earth. Why should we believe it can be reduced to one number? Perhaps the folks at U.S. News would even agree. In their latest rankings, they no longer numerically rank their Honor Roll hospitals, which could be their recognition that health care isn’t a competition. At the end of the day, ranking systems — not just for schools and books, but sports teams, cars, beauty products and most everything else — are not going away. At heart, they reveal a deep need to justify decision-making in a complicated world. Who, after all, has the time much less the expertise to learn all we should know before making even important decisions. But I would hope that patients will look at a broad variety of rankings and not just the one right there at the supermarket checkout — and to take them all with a grain of salt (which, should only be consumed in moderation).

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

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New Karmanos CEO talks expansion, cancer care By Dustin Walsh

The Barbara Ann Karmanos Cancer Institute is in growth mode. The Detroit-based clinic affiliated with McLaren Health Care has expanded in Farmington Hills and Toledo in recent years. It also plans a $450 million research center in Detroit with Wayne State University. The disease it is trying to treat and eradicate is also growing. A government-funded study of 17 National Cancer Institute registries, which Karmanos is one, published earlier this year found cases of early-onset cancers increased annually by 0.28% between 2010 and 2019 for patients under 50 years old. The rise was predominantly driven by cancers in women, not men, with gastrointestinal cancers seeing the largest rise. The need for novel treatments and increased access is paramount, and Karmanos hired Dr. Boris Pasche in August as its CEO to not only manage the organization’s growth but to build a team to develop rapidly these new treatments. Two months into the role, Pasche is generating a path forward. “If you look at my past history, indeed I have raised a lot of grant dollars; but I’ve also built programs,” Pasche told Crain’s. “I like to build programs and expand clinical activities as well as research activities. Karmanos is ripe for expansion given we are so well represented across Michigan … We have all the features you need from a strong cancer hospital. We’re already developing novel technologies and treatments and novel diagnostic approaches. We need more patients to benefit from the cutting-edge technologies, we need to bring more ideas from bench to bedside.” Pasche joined Karmanos from Atrium Health Wake Forest Baptist in Winston-Salem, N.C., where he served as the academic system’s endowed chair of cancer research, director of its comprehensive cancer center and chair of Wake Forest University School of Medicine’s department of cancer biology. There, he led the system’s research expansion, resulting in a 97% increase in the organization’s National Cancer Institute grant funding. He also recruited 72 new faculty members at Wake Forest. In a previous role as the chief of the division of hematology and oncology at the University of Alabama at Birmingham, Pasche recruited 19 new faculty and tripled its funding. He also founded the cancer genetics program at Northwestern University. In addition to his role running Karmanos, Pasche is now the chair of the department of oncology at Wayne State University School of Medicine. Pasche said Karmanos is one of the most robust Phase 1 clinical trial centers in the country,

but its next goal is to better integrate and connect care between its 16 locations across the state. “What you frequently see is a major hub that can deliver all the major cancer services and then satellites that can only deliver limited services,” Pasche said. Karmanos has highly specialized treatments at various locations, such as the $16 million Leksell Gamma Knife Icon, an advanced radiosurgery technology that treats patients who have very small brain tumors with radiation, in Farmington Hills and the McLaren Proton Therapy Center in Flint.

Pasche said all of its programs can be utilized for all patients within its system, about 12,000 annually, with the proper coordinated care plan. “We want to make sure we provide all the cancer-related services throughout the system,” he said. “I think by integrating the strength of Karmanos with the strength of McLaren with the ambition to deliver the same high-quality care throughout Michigan and Northern Ohio you would get at the mothership, you’ve got a winning strategy. It’s not aspirational, we have pathways.”

The Barbara Ann Karmanos Cancer Institute in Detroit is one of 54 National Cancer Institute-designated comprehensive cancer centers in the U.S. | BARBARA ANN KARMANOS CANCER INSTITUTE

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REAL ESTATE

An aerial view of downtown Detroit’s office buildings. | LARRY PEPLIN

Detroit won’t escape ‘doom loop’ But metro area’s commercial real estate market may fare better than others in occupancy spiral | By Kirk Pinho The office sector’s downward trajectory continues to cause havoc in metro Detroit’s commercial real estate market as some have started warning of a so-called “doom loop” with broad ramifications in larger cities across the country. What started as a measure to combat the spread of COVID-19 still is having negative ramifications for landlords four years after the virus first emerged. Some are predicting dire days ahead in commercial real estate, particularly office space. While Detroit and its suburbs may escape the full wrath of the doom loop, there may still be even more pain for the market ahead. “We’re going to be in this spiral until greed overcomes conservatism,” said Dennis Bernard, founder and president of Southfield-based Bernard Financial Group. “Think about 2010 and 2011. We saw people willing to buy office buildings and apartment complexes and industrial and retail, which everybody thought was

PNC Center, formerly National City Center and often still known by its original name, the Top of Troy.

dead, whether it was 20, 30, 40 or 50 cents on the dollar. They weren’t doing that to help the economy. They weren’t doing that because they wanted to be good citizens. They were doing it because of greed. There was money to be made.”

To put it one way, the doom loop is a version of Murphy’s law in action: Everything that can go wrong will, in fact, go wrong. The New York Times in February described the concept, in a profile of Columbia University professor Stijn Van Nieuwerburgh

— who is believed to have coined the term — as a cascading series of events and outcomes in which New York City ends up like “Detroit 2013,” a reference to the Motor City’s historic municipal bankruptcy filing in July that year. Van Nieuwerburgh told the Times an NYC doom loop scenario is “not inevitable” and that “there’s various degrees to how bad this can get. There’s a scenario in my mind where it’s not as bad as feared, if we make all the right policy decisions. There’s lots of other scenarios where we don’t,” Van Nieuwerburgh said in the story. Even if it’s not a worst-case scenario for the nation’s biggest city and its rival metropolises like San Francisco, Los Angeles and Seattle, some of its byproducts would be felt here in Southeast Michigan.

The creation of a spiral When office workers were sent home in the early days of the coronavirus outbreak in spring 2020, that triggered ripple effects

throughout Detroit and its suburbs, not to mention the rest of the country. Buildings that were previously full, soaking up the economic rebound post-Great Recession, became ghost towns and have not yet returned to pre-pandemic occupancies on a daily basis in office hubs like downtown Detroit, Southfield, Farmington Hills, Troy and elsewhere. Some buildings were already more than 20 percent vacant prior to the pandemic. Companies and office landlords, large and small, continue to grapple with hybrid work. And as office buildings empty, in whole or in part, their values decline, which also tends to negatively impact the values of buildings around them. Not only do those potentially have consequences for the coffers of the communities in which they sit in the form of things like less property and income tax revenue, but that also adds another layer of difficulty to refinancing them as their loans come due.

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A fact high amo deb diffi row ben givi sub loan B Wal mu com with tativ dep clud The and the cau tere crun in m mor ing. squ Ber “Th bac “Th doo “W crun cris H

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The Southfield Town Center. | COSTAR GROUP

And that’s just one complicating factor, when combined with much higher costs of borrowing, large amounts of commercial mortgage debt coming due becomes more difficult to refinance. Some borrowers have decided it’s more beneficial to give back the keys, giving lenders real estate worth substantially less than it was at loan origination. Banks across the country, the Wall Street Journal reported, are much more exposed to a softened commercial real estate market, with about $3.6 trillion, representative of about 20 percent of their deposits, tied up in the sector, including through indirect lending. The failures of Silicon Valley Bank and Signature Bank and others in the spring spooked customers and caused some to withdraw low-interest deposits, creating a cash crunch. Bank lending has dried up in many cases as has commercial mortgage-backed securities lending. Smaller banks all are “being squeezed the hardest right now,” Bernard said. “They’re the ones really cutting back as part of this,” Bernard said. “They’re the poster child of this doom cycle.” “We’ve created our own credit crunch, banking crisis, lending crisis,” he added. How the economy fares in the

near future will have an impact on how severe the doom loop effects are, said Tyler Wiggers, an assistant lecturer on finance and real estate at Miami University in Ohio. He is also director of industrial partnerships and engagement at The Center for Real Estate Finance and Investments at the university. He also worked for the Federal Reserve Board. “If the economy deteriorates or gets even close to how bad it was in 2009, I think there’ll be more losses than we had then,” Wiggers said. “If the economy plods along like it is or maybe even gets a little bit better, then I think there’s still going to be some losses” although not as bad.

Why Detroit may be OK The full “loop” — a sort of doomsday scenario — has not yet played out anywhere, and individual cities may experience various effects differently, the Washington Post reported. Some believe that Detroit is better situated to handle the commercial real estate downturn than larger cities, in part because of downtown’s concentrated ownership, in particular with Dan Gilbert. “That’s a very isolated market and he’s not a traditional owner, so I think that’s in better shape than most,” said Paul Choukourian, executive managing director in the Royal Oak office of Toronto-based brokerage house Colliers International Inc. “Cities like New York, San Francisco, Seattle, Portland, Chicago ... I think those cities are gonna have a very hard time right now.” However, there are still concerning numbers to contend with. For example, the Downtown Detroit Partnership says that Placer.ai data on foot traffic and data location, shows that the median daily total of office workers was 27,870 in 2022, compared to

70,629 in 2019. That does not include downtown residents who work from home. Some of downtown’s largest employers have lost several thousand workers, including Rocket Companies Inc., falling to 14,100 in 2022 compared to 18,000 in 2021, for example. General Motors Co. fell to just shy of 3,300, compared to nearly 4,700. CNBC reported in September that office occupancy rates in 10 American cities are just 50 percent

of what they were pre-pandemic, although that’s an increase from prior years. And according to CoStar Group Inc., a Washington, D.C.-based real estate information service, there have only been three quarters of positive office space absorption since the start of the pandemic, and the company forecasts there won’t be a single quarter with positive office absorption through 2028. The amount of

available office space for sublease now represents more than 8% of the total available space for lease, marking the first time the region has crossed that threshold since at least 2013. However, purely from a vacancy perspective, Detroit’s office market is performing better than the national average, and has been since just before the pandemic. In the first quarter of 2020, the vacancy rate was 9.1 percent, compared to 9.5 percent nationally. It is now 11.7 percent, compared to 13.3 percent nationally, CoStar says, and by the end of 2028, vacancy rates in metro Detroit are expected to hit 14.4 percent, compared to 17.3 percent nationally. As of late, there has been a slight uptick in deal activity the last couple months, Choukourian said, although that comes with a caveat. “People are typically staying the same size or slightly downsizing, but there’s actually activity and buildings are holding their own right now,” he said. “I don’t think we’re going to see quite the fallout (like) San Francisco or New York,” Choukourian said. “That being said, we’ve got a lot of fundamentals that are problematic. You’re going to have some declining occupancy levels, you’re going to have interest rate increases, which is going to affect refinances when those become due. Lenders are going to be harder because of the whole environment. We’re going to definitely see some challenging situations.”

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FOCUS REAL ESTATE

Hefty stacks of capital needed to get affordable housing projects off the ground

How

Affo ofte com

By Nick Manes

Amid a housing shortage in metro Detroit, around Michigan and the country in general, the question is often asked: Why is affordable housing in such short supply? The simple answer, according to industry experts, is that affordable housing — generally defined by the federal government as housing for which the occupant is paying no more than 30% of gross income for housing costs, including utilities — is subject to the same headwinds as the broader commercial real estate sector, and sometimes even more so. Think construction, appliances and maintenance. So affordable housing developments often need hefty stacks of capital to come to fruition. “All those expenses are just as present in affordable units as they are in market rate, and you’re working with controlled rent,” said Josh Ghena, senior vice president of equity business funding for Cinnaire, a Lansing-based affordable housing finance nonprofit. “And the amount of money coming in is less.”

Capital stacks The so-called capital stacks, the layers of financing needed to complete a housing development, tend to have far more mechanisms when the development is considered affordable, as opposed to a project in which all of the units will be rented at market rate. With a market rate apartment deal, the financing tends to be much “cleaner,” according to Ghena. Typically, capital for a market rate development will consist of equity by the developer and debt, generally from a bank, and sometimes private equity investment. By contrast, affordable apartment deals tend to have much more complexity and several more layers of financing. Federal Low Income Housing Tax Credits make for the most common mechanism used by affordable developers. A developer will apply for the credits, usually at the state level, and should they be approved, in most cases the credits will be sold to an investor in exchange for the equity capital and the investor will see a reduction in their corporate tax liability over a period of 10 years. On top of the LIHTC financing, developers — at least in Michigan — will often tap state and local grants and loans, as well as other tax abatements and tax incre-

Officials behind The Beauton broke ground in July to bring 29 units of new affordable housing to Detroit’s North End, thanks to a wide variety of capital and tax credits. | CITY OF DETROIT VIA FLICKR

ment financing. The layering of such financing often adds time and complexity to the project, and “every minute counts” in such deals, especially during volatile economic times such as the present, said Adam Ferguson, a principal at Southfield-based commercial real estate financing firm Bernard Financial Group. “The numbers you penciled (in) yesterday all of a sudden don’t work today,” Ferguson said.

“And so … it just takes so long for these projects to get off the ground, and then when you think you’re ready to go, something in the market happens.” Given that reality, Ferguson said his firm aims to “dual track” as much as possible, meaning that while developer clients are working to build their capital stack, mortgage originators like Bernard are working with financial institutions, all in the hope of saving “a week, a month or two

months.” Additionally, affordable housing projects, at least those built by for-profit developers, tend to see scant returns. Take for example, a renovation planned for a vacant building near Detroit’s Boston-Edison neighborhood using myriad financing mechanisms. The $8.4 million redevelopment into 42 mixed-income residential units reserved for those making between 50% and 120% of the area median income would see a return of around 5.4% after 20 years. By comparison, a typical investment in other forms of commercial real estate can see returns of roughly double that amount.

Complexities abound For their part, government officials tasked with administering the various financing mechanisms acknowledge the complexity of the situation. “We’re at a time where housing demand is high and getting housing developed for the current need in our state is difficult,” said Amy Hovey, executive director of the Michigan State Housing Development Authority, the state’s housing agency. “And while we have more and more funding

tools that we have access to, it’s complicated to make them all work together.” While difficult and often costly to produce, the need is great. Per figures from MSHDA, some 48% of renters and 18% of homeowners in Michigan paid more than 30% of their income on housing. Metro Detroit, meanwhile, is one of a handful of major metro areas where rents are still on the rise, despite falling nationally. Experts attribute the growth in rental rates to demand far outpacing supply. Officials with the city of Detroit, who have been involved in scores of affordable housing deals in recent years, note that LIHTC clearly isn’t enough to make developments pencil out. “Nationally, you can look at the sources for affordable housing and conclude there is not enough,” said Julie Schneider, director of the city of Detroit’s Housing and Revitalization Department. Schneider noted the city has used about $40 million in onetime federal money from the 2021 American Rescue Plan Act toward affordable housing initiatives. The state’s housing agency is also working to make additional

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* Fina timing timelin

Sourc

Birmingham’s latest mixed-use development, coming soon.

How financing stacks up

Affordable housing developments often need hefty capital stacks to come to fruition. For example:

The Beauton, a $7.3 million mixed-use building in the works, will bring 29 units of new affordable housing to Detroit. A variety of financing was required to make the project happen, including:

$2.45 million construction loan from Capital Impact Partners

$1.55 million loan from the Detroit Housing for the Future Fund

$1.50 million

CKR

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$1.35 million bridge loan

$743,000 tax abatement awarded by Detroit Economic Growth Corp.

$550,000 in preferred equity

$500,000 loan from Ebiara to CADS III Management

$100,000 developer of color pre-development matching grant from DHFF

$93,000 grant * Financing listed does not add up to total cost due to timing and changes to sources over the development timeline. Source: City of Detroit

funding available, Schneider and other city officials were quick to note, pointing to $150 million in supplemental funding the agency has received. Those dollars are needed as it comes at a time when the federal government is doing little to increase tax credit allocations, according to Schneider. Several sources also pointed to the recent legislative expansion in the state of TIF dollars for housing development as another financing mechanism that developers will be able to use.

Finding solutions

sidy. That is not the case now.

◗ Demand accounting audits that

don’t just cost certify construction costs but require forensic audits that actively seek out construction fraud and unnecessary construction markups. ◗ Address construction bonding fees that are supposed to be there to mitigate risk, when in fact the terms within the bonding agreements effectively eliminate their own risk. It’s an unnecessary cost if the risk is ultimately on the owner or developer anyway.

Add supply to drive down costs

So will government money alone solve the situation? While While such policy moves it may not hurt, experts say that could be of assistance, some excould move into a precarious sit- perts say the best solution is simuation. ply to build, baby, build. “If you take your community Minneapolis is one example development hat off and you say, where such a solution has ‘I’m just a taxpayer,’ I don’t want helped, as Bloomberg reported to see the United States in gener- in August. al — and the Midwest and MichThe Upper Midwest city in igan in particular — in a situa- May became the first major mettion where the entire segment of ropolitan area to see annual inhousing — or at least a huge flation fall below the Federal Rechunk of it — is predicated ex- serve’s target of 2%. Its 1.8% pace clusively on what happens in of price increases was the lowest Congress through public appro- of any region that month. priations,” said Eric Hanna, presThe Bloomberg report attriident and CEO of Michigan butes that milestone, at least in Community Capital, a Lan- part, to the city’s move five years sing-based affordable housing ago to eliminate zoning that aldeveloper and financial organi- lowed only single-family homes, zation. “That’s a very scary and since 2018 the city has inthought.” vested $320 million for rental asWhile funding is obviously im- sistance and subsidies. portant, the government, Hanna In doing so, Minnesota’s largsaid, could help greatly in terms est city has seen a boom in apartof getting more people into ment and condo development. skilled trades, which could help Per the Bloomberg report, the bring down costs. metro area now has some of the “I think those are really im- slowest rent growth in the counportant things to do in terms of try, and residents pay a smaller reversing population loss in the state in terms of rationalizing the cost for construction,” Hanna added. “And all of those things trickle into a — Amy Hovey, executive director, MSHDA more affordable product, and more participants chunk of their income toward in the market, which also creates housing costs relative to compamore affordability.” rable metro areas. Other developers in the afSo, adding supply is clearly a fordable housing space also tout large part of the equation to help a host of solutions. Amin Irving, drive down housing costs. Michthe founder, president and CEO igan Gov. Gretchen Whitmer has of Ginosko Development Co. in called for adding or renovating Novi, shared with Crain’s via 75,000 housing units over five email a host of policy prescrip- years. tions that he believes would be Hovey, the MSHDA director, helpful in bringing more afford- said the state is on its way toward able housing to market. meeting that goal, but the true A few of Irving’s ideas are be- need is far greater, and Michigan low: remains far from seeing such a ◗ Make cost efficiency (with a spike in new supply that prices standards of design floor) be the would trend downward. “The governor put a goal of most heavily weighted metric in awarding precious government 75,000 units over a five-year pesubsidies. Housing agencies riod and we are in line at the have continuously diluted in- state to meet that goal, and we’re centives for developers and con- excited about that. The tools are tractors to rein in their develop- working,” Hovey said. “But we ment costs. If every development need 190,000 units. And so while team is offered $1 million in gov- I think we’re going to surpass ernment subsidies, then the de- that 75,000 units — and I’m exvelopment team that can build cited and I’m proud of that — we (or rehab) the greatest number have a ways to go.” of units with that same $1 mil- — Bloomberg contributed to this report. lion should always win the sub-

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CRAIN'S LIST | NONRESIDENTIAL PROPERTY MANAGERS Ranked by square feet under management in metro Detroit TOTAL SQUARE FEET NONRESIDENTIAL PROPERTIES UNDER MANAGEMENT INSIDE METRO DETROIT OCT. 2023

TOTAL SQUARE FEET NONRESIDENTIAL PROPERTIES UNDER MANAGEMENT OUTSIDE METRO DETROIT OCT. 2023

TOTAL SQUARE FOOTAGE NONRESIDENTIAL PROPERTIES UNDER MANAGEMENT OCT. 2023

MAJOR PROPERTIES UNDER MANAGEMENT 2023

A.J. Weiner Dave MacDonald managing directors

41,500,000

35,000,000

76,500,000

2 ASHLEY CAPITAL LLC

Susan Harvey senior vice president

19,516,000

1,714,000

21,230,000

Crossroads Distribution Center North, Flint Commerce Center, Means Logistics Park

3 BEDROCK

Kofi Bonner, CEO; Ivy Greaner, COO

19,300,000

1,900,000

21,200,000

Susan Hinderliter, VP property management; Frederick Liesveld, executive managing director brokerage

18,638,967

7,240,000

25,878,967

Pinehurst Office Center, Travelers Towers, PNC Center, Amazon Distribution Center, United Jewish Federation Portfolio

Andrew Farbman, CEO; Andrew Gutman, president; Michael Kalil, COO; Chris Chesney, CFO

17,500,000

14,500,000

32,000,000

New Center One, The 5/3 Building, 27777 Inkster, Bingham Office Center, 25 Northwest Pointe, Oakland Commons, Sheffield Office Park, 100 N. LaSalle, 600 W. Jackson

Steve Gordon, president; John Hamburger, SVP; Mark Woods, COO; Tom Giguere, director of property management

11,184,579

1,444,281

12,628,860

Detroit Building Authority, Consolidated Equities Industrial Portfolio, Covenant Healthcare Portfolio, Lyon Towne Center

David Friedman co-founder, executive managing director, president and CEO

10,770,985

7,105,116

17,876,101

Rite-Aid Distribution Portfolio, 1.2M SF Pontiac MI & Liverpool, N.Y.; Distribution facility, 1.1M SF, Lansing; Galleria Officentre, Southfield - 4 Buildings - 1,011,202 SF; North Troy Corporate Park, Troy - 5 Buildings - 763,806 SF; West 11 Corporate Campus, Southfield - 4 Buildings 715,542 SF; Penn Center West, Robinson Twp., Pa. – 3 Buildings – 212,080 SF; 209 W. Jackson, Chicago, Ill. – 1 Office Building – 142,997 SF; Four Seagate, Toledo, Ohio – 1 Office Building – 250,955 SF; Lincolnwood Town Center, Lincolnwood, IL – 1 Retail Building - 422,587 SF; Pinnacle Logistics Park, Redford- 1 Industrial Building – 826,240 SF;

Paul Van Devender, managing director, Michigan market leader; John Brien and Sean Gearhart directors

9,899,103

7,300,000,000

7,309,899,103

Renaissance Center, Oakland Park Industrial, Aeroplex 1&2, Delta Crossing, Crystal Glen, Northfield, 888 Big Beaver, UPS, Sealy, Granite REIT, 900 Wilshire, 1050 Wilshire

Dale Watchowski, president and CEO; Paul Stodulski, CFO

6,376,967

1,625,213

8,002,180

150 West Jefferson, American Center, One Kennedy Square, Oakland Towne Square

Andrew Boyce, CFO/COO and principal; Larry Goss, Robert Katzman and Peter Burton principals

4,699,471

510,975

5,210,446

Robert Stillings III president

4,393,594

51,177

4,444,771

Al Shulin, president; Mason Capitani managing partner; Jason Capitani, managing partner

3,950,000

2701 & 2601 Cambridge Court, Auburn Hills; 901 Wilshire Drive, Troy; 37101 Corporate Drive, Farmington Hills; 40950 Woodward Ave., Bloomfield Hills; 5440 Corporate Drive, Troy; 6770 Dixie Highway, Clarkston; 31275 Corporate Drive, Farmington Hills; 30665 Northwestern Highway, Farmington Hills; 31275 Northwestern Highway, Farmington Hills; 32300 Northwestern Highway, Farmington Hills; 17900 23 Mile Road, Macomb Twp.

13 TRANSWESTERN

William Harvey IV executive vice president, city leader

3,646,735

230,000,000

233,646,735

Southfield Town Center, Timberlands II, Timberlands III, Timberlands IV, Arboretum West, 3000 University, Forest Park, 1301 W Long Lake Crossing, 1441 W Long Lake Crossing, Southfield Crossing I, 333 Republic, 777 Republic

14 KIRCO MANAGEMENT SERVICES LLC

A. Mathew Kiriluk president

3,107,334

1,424,563

4,531,897

Columbia Center, Baldwin Commons Shopping Mall, Shelby Creek Shopping Mall, West Bloomfield Medical Center, Ascension Rochester Medical Building, Henry Ford Medical Pavilion, MCRMC Shelby MOB, Oxford Bank HQ and branches, SAIC USA, etc.

15 POGODA MANAGEMENT CO.

Maurice Pogoda chairman and founder

2,600,000

1,875,000

4,475,000

National Storage Centers

16 OXFORD COMPANIES

Jeff Hauptman CEO

2,592,605

777 E. Eisenhower Parkway, Burlington Office Center, Concord Center

17 COLLIERS DETROIT

Paul Choukourian executive managing director

1,663,141

10,023,703

11,686,844

211 West Fort St., Wayne State University, Spirit Realty, Centerpointe Mall, Zeal Credit Union, Northpointe Bank, Booking.com building, Global Medical REIT

Richard Allman Brian Mullally principal and co-founders

1,455,000

130,000

1,585,000

Gateway Industrial Center, Detroit; Breakwater TC, Traverse City; Pastaio Royal Oak, Royal Oak; The Godfrey TC, Traverse City; Tradition Retail Center, Tradition, Fla.; Alexandrine Apartments, Detroit; Selden Apartments, Detroit

19 BOJI GROUP

Ron Boji, CEO; John Hindo, president

1,384,860

1,447,699

2,832,559

Binsfeld Building, Lansing; Boji Tower, Lansing; The Louie, Lansing; Henry Ford Health, Royal Oak; 220 Park Street, Birmingham

20 HAYMAN COMPANY

Andrew Hayman president

1,020,000

950,000

1,970,000

PentaCentre, Troy; Oakland Office Center, Birmingham; Chicago 9 Portfolio, Illinois

COMPANY NAME LOCATION CONTACT INFO

TOP LOCAL EXECUTIVE(S)

1 JONES LANG LASALLE AMERICAS INC. (JLL INC.) 226 E. Hudson, Suite 200, Royal Oak 48067 248-581-3300; jll.com

2575 S. Haggerty Road, Suite 500, Canton Township 48188 734-394-1900; ashleycapital.com 630 Woodward Ave., Detroit 48226 888-300-9833; bedrockdetroit.com

4 NEWMARK

27725 Stansbury Blvd., Suite 300, Farmington Hills 48334 248-350-9500; nmrk.com

5 FARBMAN GROUP/NAI FARBMAN

28400 Northwestern Highway, Fourth Floor, Southfield 48034 248-353-0500; farbman.com

6 SIGNATURE ASSOCIATES

One Towne Square, Suite 1200, Southfield 48076 248-948-9000; signatureassociates.com

7 FRIEDMAN REAL ESTATE

34975 W. 12 Mile Road, Farmington Hills 48331 248.324.2000; friedmanrealestate.com

8 CBRE INC.

2000 Town Center, Suite 2200, Southfield 48075 248-353-5400; cbre.com

9 REDICO

One Towne Square, Suite 1600, Southfield 48076 248-827-1700; redico.com

10 DOMINION REALTY SERVICES LLC

1 30100 Telegraph Road, Suite 366, Bingham Farms 48025 248-399-9999; dominionra.com

11 PROPERTY SERVICES GROUP INC.

550 Stephenson Highway; Suite 450, Troy 48083 248-637-9800; propserv.com

12 LIBERTY PROPERTY & ASSET MANAGEMENT

1111 W. Long Lake Road, Suite 350, Troy 48098 248-273-4200; libertypropertymgmt.com

2000 Town Center, Suite 1600, Southfield 48075 248-350-2222; transwestern.com

101 W. Big Beaver Road, Suite 200, Troy 48084 248-680-7180; kirco.com

32300 Northwestern Highway, Suite 110, Farmington Hills 48334 248-855-9676; pogodaco.com 777 E. Eisenhower Parkway, Suite 850, Ann Arbor 48108 734-747-6000; oxfordcompanies.com 2 Corporate Drive, Suite 300, Southfield 48076 248 540 1000; colliers.com/detroit

18 INNOVO PROPERTY MANAGEMENT LLC

12601 and 12701 Southfield Freeway, Detroit 48223 269-823-4939; innovodev.com

132 N Old Woodward Ave, Birmingham 48009 517-377-3000; bojigroup.com 29100 Northwestern Highway, Suite 410, Southfield 48034 248-879-7777; haymancompany.com

Researched by Sonya D. Hill: shill@crain.com | A property manager oversees all financial, administrative, contractual, maintenance and daily operations for the interior and exterior of properties. This list is an approximate compilation of the largest such companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Companies with headquarters in the Detroit area are listed with their total property under management. Companies outside the area are ranked by property managed by their Detroit offices only. This is not a complete list but the most comprehensive available. Unless otherwise noted, information was provided by the companies. NA = not available. NOTES: 1. Dominion Realty Services acquired Core Partners LLC in August 2018. 2. The property management arm of L. Mason Capitani Corfac International.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 12 | CRAIN’S DETROIT BUSINESS | NOVEMBER 6, 2023

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CRAIN'S LIST | MICHIGAN VETERAN-OWNED BUSINESSES Ranked by 2022 revenue COMPANY NAME LOCATION CONTACT INFO

MAJORITY OWNER(S)

REVENUE ($000,000) 2022/2021

PERCENT CHANGE

LOCAL EMPLOYEES JAN. 2023/2022

PERCENT VETERANOWNED

BRANCH OF SERVICE

YEARS SERVED

TYPE OF ORGANIZATION

1 WOLVERINE PACKING CO.

Jim Bonahoom president

$1,684.3

12.4%

800 NA

50.0%

Army

Wholesale meat packer and processor; wholesale meat, poultry and seafood distributor

2 BARRICK ENTERPRISES INC.

Robert Barrick president

$677.1

35.2%

11 10

100.0%

Army

Petroleum wholesaler and retailer

3 POPULUS GROUP

Bobby Herrera CEO

$606.3

-2.5%

173 174

51.0%

Army

HR services and staffing

John A. James, chairman; Lorron James, CEO; John E. James, president; Keri James, head of John A. James Foundation

$242.6

90.4%

395 273

50.0%

Army

Supply chain and logistics solutions

5 MIDWEST STEEL INC.

Gary Broad CEO

$240.0

73.9%

300 500

95.1%

Army

Structural-steel contractor

6 PETOSKEY PLASTICS INC.

Paul Keiswetter chairman and CEO

$194.0

6.1%

11 9

80.0%

Marines 4

Veteran-owned, environmentally focused recycler and film, bag, and resin manufacturer

7 CHEMICO LLC

Leon C. Richardson CEO, chairman, president

$187.4

13.5%

95 93

100.0%

Marines 7

Chemical manufacturing, chemical management

8 AVIS FORD INC.

Walter E. Douglas Sr. chairman

$184.3

34.5%

119 120

24.0%

Army

Automobile dealership

9 MJC COMPANIES

Michael A. Chirco founder and president

$174.9

44.7%

68 72

100.0%

Army

Residential, apartment, commercial construction, builder and developer

ONE TRANSPORTATION & 10 LOAD LOGISTICS

John K Elliott CEO

$172.0

16.2%

605 578

75.0%

Army

Transportation and logistics. Services including ground expedite, air charter, air freight, logistics management, truckload, and specialized curtain-side flatbeds

11 MCL JASCO INC.

Louis E. James president and CEO

$155.0

30%

172 168

100.0%

Army

Engineering services, program management in energy/sustainability and automotive leadership to our partners. Clients include automotive OEM's, utilities, and governmental entities.

Randy E. Hosler president Charles J. Hosler executive vice president

$105.2

41.5%

131 202

51.0%

Army

Mechanical contractor

13 COMMONEO LLC

Robert Jones CEO

$94.4 1

62.8%

NA NA

Air Force

Payroll service

14 TRILLAMED LLC

Frank Campanaro CEO

$77.6 e

4.1%

NA NA

91.0%

Army

Distribution of high tech medical equipment, MRO supplies and security/ IT components

15 ARROW STRATEGIES LLC

Jeffrey Styers CEO and president

$72.0 1

22%

NA 391

100.0%

Marines 1

Talent acquisition firm specializing in placement of professionals in the information technology, engineering, professional and health care services industries

16 MULTI-BANK SECURITIES INC.

David Maccagnone chairman and CEO

$70.2

-9.8%

60 58

54.9%

Marines 10

Institutional broker-dealer that specializes in the sales, trading and underwriting of fixed-income securities

17 DIVERSIFIED SYNERGIES LLC

George Crawley president

$67.1 1

6203.1%

NA NA

Air Force

Custom-engineered solutions to Fortune 500 pharmaceutical, food & beverage and consumer goods companies including kitting, display assembly, rework and fulfillment.

18 CMAC TRANSPORTATION LLC

David Christie CEO

$41.0

30.2%

300 275

52.0%

Air Force

Logistics, trucking and warehousing

19 ONSTAFF USA INC

Patrick Allkins CEO

$39.5 1

57.8%

NA NA

Navy

A recruiting, consulting and testing firm with professional technical and temporary divisions

& MODULAR COMPONENTS 20 AUTOMATION INC.

Richard Shore chairman of board

$30.8

38.3%

100 94

70.0%

Navy

Manufacturing conveyors, assembly systems, test systems and equipment, and modular framing and guarding

21 ELLIOTT TAPE INC.

Richard Elliott president and CEO

$30.2 1

14.8%

NA NA

Army

Automotive tape supplier

22 TRI-STAR STEEL INC.

Thomas Conti owner

$30.2 1

5.5%

NA NA

Navy

Steel service center

23 ALDEZ NORTH AMERICA

Jeffrey Copek president

$27.4

7.9%

17 17

100.0%

Army

Supplier of manufacturing support services, expendable and returnable packaging, steel racks

24 CONTRACT PROFESSIONALS INC. (CPI)

Steven York chairman and CEO

$26.8

NA NA

78.0%

Air Force

Service disabled veteran owned staffing company

25 IMPERIUM LOGISTICS LLC

A. Rocky Raczkowski president and founder

$26.3

-4.2%

7 NA

100.0%

Army

Industrial logistics, distribution, medical waste disposal and supply chain corporation.

2535 Rivard, Detroit 48207 313-259-7500; wolverinepacking.com 4338 Delemere Blvd., Royal Oak 48073 248-549-3737; barrickent.com 3001 West Big Beaver Road, Suite 400, Troy 48083 248-712-7900; populusgroup.com

4 JAMES GROUP

4335 W. Fort St., Detroit 48209 313-841-0070; jamesgroupintl.com

2525 E. Grand Blvd., Detroit 48211 313-873-2220; midweststeel.com 1 Petoskey St., Petoskey 49770 231-347-2602; petoskeyplastics.com 25200 Telegraph, Suite 120, Southfield 48033 248-723-3263; thechemicogroup.com 29200 Telegraph Road, Southfield 48034 248-355-7500; avisford.com 46600 Romeo Plank Road, Suite 5, Macomb 48044 586-263-1203; mjccompanies.com

13221 Inkster, Taylor 48180 734-947-9440; load1.com

7140 W. Fort St., Detroit 48209 313-841-5000; mcljasco.com

12 PROGRESSIVE MECHANICAL INC. 1080 N Crooks Road , Clawswon 48017 2483994200; progressivemech.com

50170 Schoenherr Road, Shelby Township, Utica 48315 248-413-0190; commoneo.net 30100 Telegraph, Suite 366, Bingham Farms 48025 248-433-0582; trillamed.com 27777 Franklin Road, Suite 1200, Southfield 48034 248-502-2500; arrowstrategies.com 1000 Town Center, Suite 2300, Southfield 48075 800-967-9045; mbssecurities.com 201 Waterman St., Detroit 48209 732-207-5799; diversifiedsynergies.com 20450 Sibley Road, Brownstown 48193 734-281-6610; cmactrans.com 5207 Portage Road, Portage 49002 269-385-8321; onstaffusa.com

10301 Enterprise Drive, Davisburg 48350 248-922-4740; amcautomation.com 1882 Pond Run, Auburn Hills 48326 248-475-2000; egitape.com 9281 Freeland St., Detroit 48228 313-834-6000; tristarsteel.com 42463 Garfield, Clinton Township 48038 586-530-5314; aldezna.com 4141 W. Walton Blvd., Waterford 48329 248-673-3800; cpijobs.com

700 E. Big Beaver Road, Suite F., Troy 48083 248-250-9410; goimperium.com

$1,499.0

$500.7

$621.7

$127.4 e

$138.0

$182.9

$165.2

$137.1

$120.9

$148.0

$119.2

$74.3

$58.0 1

$74.5 e

$59.0 1

$77.8

$1.1 1

$31.5

$25.0 1

$22.3

$26.3 1

$28.6 1

$25.4

$26.8

$27.5 e

Researched by Sonya D. Hill and National Veteran Business Development Council | This list of veteran-owned businesses is an approximate compilation of the largest businesses in Michigan. Crain's collaborated with the National

Veteran Business Development Council to compile the list. Unless otherwise noted, information was provided by the companies. It is not a complete listing but the most comprehensive available. NA = not available. NOTES: e. Crain's estimate. 1. From National Veteran Business Development Council.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data NOVEMBER 6, 2023 | CRAIN’S DETROIT BUSINESS | 13

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Sterling Bank eyes options after SEC fines By Anna Fifelski

Sterling Bank & Trust is still feeling the aftershocks of a fraud investigation that led to the bank paying $27 million in restitution, though it may be approaching the light at the end of the tunnel. In its third-quarter earnings press release last week, Tom O’Brien, CEO of the Southfield-based lender, said the results for Sterling Bank continue to “reflect the lingering impacts from the long-running government investigations.” However, O’Brien told Crain’s last week that Sterling Bank may finally be seeing an end to its struggles after years of investigation-related expenses. “I think we’re actually at the tail end of it,” O’Brien said. “The earnings have been impacted literally every quarter since I’ve been here, and probably maybe a quarter or so before I joined the bank.” The bank reported revenue of $16.4 million in the third quarter of 2023, down 14.6% from the same time period in 2022. Net interest income also de-

creased, from $19.5 million in the third quarter of 2022 to $16 million in the third quarter 2023 due to an increase in interest expense on its average balance of interest-bearing deposits, the bank reported. The bank’s earnings per share were reported at $0.01, falling below the 4-cent Wall Street expectation. Sterling Bank & Trust emerged from the Securities and Exchange Commission investigation in June. Between 2011 and 2019, the bank originated at least $5 billion in Advantage Loans, a lawsuit says, before the program was permanently suspended due to compliance issues. In 2020, the Southfield-based lender underwent a restructuring; more than 100 loan officers and other employees of the bank resigned or were fired, including several top executives, according to corporate disclosures. In September 2022, the bank agreed to a $6 million civil settlement tied to the defunct fraudulent loan program and, a month later, sued founder and dominant shareholder Scott Seligman, ac-

The Southfield headquarters of Sterling Bank & Trust. | COSTAR GROUP

cusing him of “improperly” enriching himself by more than $100 million. Seligman retaliated with a lawsuit of his own in November, seeking to have “significant” legal fees reimbursed by the bank’s holding company. In March 2023, Sterling Bank announced that it would agree to plead guilty to one count of securities fraud tied to a mortgage loan program and disclosures that bank executives made regarding Sterling’s 2017 initial public offering. In addition, the bank had to pay more than $27 million in restitution and “further enhance its compliance program and internal controls related to securities law compliance,” according to a news release from the bank.

Sterling Bank brought in O’Brien to serve as CEO in June 2020. O’Brien said the costs to the bank have been “a staggering millions and millions of dollars.” “We solved all the problems, in retrospect, what I would say was relatively quickly given the depth of the problem,” O’Brien said. “We had to do a total IT system platform conversion, we had to do total BSA anti-money laundering platform conversion, had to bring in all new IT people and it was a lot.” The goal for Sterling Bank is to create a model that will better serve its clients, O’Brien said. In July, O’Brien told Crain’s that a sale could be in the bank’s future. After the release of Sterling Bank’s third-quarter earnings, O’Brien

said moving the executive positions to California and keeping the administrative offices in Michigan was another likely possibility, to better serve its core California customers. “It’s kind of an odd construct for a bank our size to be headquartered in Michigan and the bulk of the business to be in the state of California, just from executive control and oversight,” O’Brien said. “If you look at some of the issues that dog the bank, in the last few years, it was, at least in my view, a lack of knowledge of the local markets we are in … To me, it’s a significant risk factor to have the key decision makers 2,300 miles away from the business that we’re doing.”

Community Housing Network founder set to retire, hand reins to COO By Sherri Welch

The money-laundering case involved a loan to the Big Boy chain that has caused problems for its owners. | CRAIN’S DETROIT BUSINESS

Clinic owner gets 7 years in fraud tied to Big Boy By Dustin Walsh

A Farmington Hills rehab clinic owner has been sentenced to more than seven years in federal prison for his role in defrauding the government and laundering the money through the Big Boy restaurant chain. Mohamed Kazkaz, 54, was sentenced late last month and was ordered to forfeit $5.3 million over the scheme. Kazkaz, who owns Centre HRW, allegedly bribed Ziad Khalel, a patient recruiter, to refer Medicare patients to his center even when medically unnecessary, according to a complaint by the U.S. Department of Justice. Often, the patients filled out Centre HRW sign-in sheets and Kazkaz billed Medicare even though no services were provided. Centre HRW ultimately billed Medicare $11 million, and the

agency paid out more than $5.3 million toward allegedly fraudulent claims. Both Kazkaz and Khalel were indicted in January. Dr. Mustafa Hares, 76, who performed surgeries at several hospitals throughout Southeast Michigan, was indicted in March for what prosecutors say was his role in the scheme, which they say included completing fraudulent patient charts for kickbacks from the substance abuse therapy facility. Kazkaz pleaded guilty to the fraud and money laundering charges. Khalel and Hares have both pleaded not guilty, with trials set to start in January. The feds allege Kazkaz transferred the proceeds of the scheme to different entities to conceal the wrongdoing, including issuing a cashier’s check of $1.45 million to “restaurant chain #1” in the form of a loan.

After 22 years, Community Housing Network’s founder, president and CEO Marc Craig is retiring and will hand oversight of the nonprofit to its next CEO over the coming year. COO and Vice President Kirsten Elliott will be promoted as part of the internal succession plan. She will be named president and CEO following Craig’s retirement in fall 2024. Craig, 69, will continue as CEO during the transition. “It’s been an incredible journey leading this team that helps people overcome challenges every day. With Kirsten’s leadership, I’m confident the organization will continue to grow, evolve and advocate for the members of society who need us the most,” he said in a release. Craig founded Community Housing Network in 2001 to leverage resources to increase affordable housing. Since then, it has leveraged more than $120 million to increase the availability of affordable housing. During the pandemic, CHN was the lead agency in Oakland County providing federally funded COVID Emergency Rental Assistance, funding for households facing eviction and other housing crises due to pandemic-related hardships and for landlords to help ensure they can maintain

Marc Craig

Kirsten Elliott

local rental housing stock. A finalist in Crain’s 2022 Best-Managed Nonprofit contest, CHN has grown to an organization with over 110 employees at offices in Oakland and Macomb counties and a $15 million annual budget, after contractions since the pandemic when it administered twice that much with added federal relief dollars. The organization develops affordable housing, provides homelessness prevention resources and is one of the largest providers of permanent supportive housing in Oakland and Macomb counties. Elliott, 52, joined CHN within months of its founding and has helped develop a strong leadership team, a comprehensive strategic plan and growth strategies for the organization, CHN said in a release. She established the nonprofit’s Housing Resource Center to connect individuals and families with affordable and accessible housing options and compre-

hensive supportive services such as referrals to behavioral health services. She also collaborated with local, state and federal entities to conceive and execute the development of several affordable housing communities in Michigan and managed funding and fundraising to acquire and rehabilitate homes for individuals in need. That funding led to the development of nearly 1,000 new affordable housing units across the state. Named a 2019 Notable Woman in Real Estate by Crain’s Detroit Business, Elliott has managed all aspects of real estate development, analyzed proposed legislation and ensured the voices of people in need are heard by advocating for funding increases at the local, state and federal levels. She holds a Bachelor of Fine Arts in Ceramics and Printmaking from Wayne State University and served as Oakland County Homeless Continuum of Care co-chair for over a dozen years. She has served on the boards of organizations including the Community Development Association of Michigan and the Furniture Bank of Southeastern Michigan. “We are so fortunate to have a leader with Kirsten’s knowledge, experience, and ability step in as president,” said CHN President Bill Robinson, in a release.

14 | CRAIN’S DETROIT BUSINESS | NOVEMBER 6, 2023

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11/2/23 3:45 PM

Breakers Covenant gets support from national fund By Sherri Welch

A century-old building in Detroit that started life as a synagogue and now houses a Black church is getting a quarter million dollar grant to restore it and reaffirm its place in the community. The National Fund for Sacred Places, a program of the Philadelphia-based Partners for Sacred Places and National Trust for Historic Preservation, has committed a $250,000 matching grant and technical assistance to Breakers Covenant Church International for the first phase of restoration work to its building. That part of the renovation is expected to cost $760,000. It’s the fourth Detroit church to receive funds. As with grants made to historic places of worship across the country, the support is aimed not only at preserving historic architecture but also helping strengthen the sustainability of the groups that own them by lifting up their value to the community as a whole. Located on Woodward Avenue near the city’s North End neighborhood, the 1922 building was the former home of Michigan’s first Jewish congregation, Temple Beth El. Its designer, Albert Kahn worshipped there himself, according to HistoricDetroit.org. “We are investing in Breakers Covenant because the building’s history and architecture (by Albert Kahn, no less!) is so important, and because the congregation hosts so much vital outreach to the community,” said A. Robert Jaeger, president of Partners for Sacred Places in an email to Crain’s. Jaeger developed a passion for Detroit’s historic churches and synagogues as a University of Michigan graduate student in the 1970s and went on to found the national nonprofit to help historic churches around the country survive.

With the support from the National Fund, Breakers Covenant is joining the ranks of three other historic, Detroit churches the national fund has supported with more than $550,000 in grants or commitments and technical assistance since 2018. The church has a $270,000 budget, and it hasn’t had the ability to even consider restoration projects in the past, Lead Pastor Aramis Hinds Sr. said. “We want to revitalize the space. It’s a beautiful place with amazing architecture,” he said. “From the outside in, getting the space back to its original condition or grander is going to be a benefit not only to our congregation but.. also to the city of Detroit and the community.”

Open to the community After acquiring the 55,000-squarefoot building in 2013, Breakers Covenant made the decision to use it as a community center that houses the church, Hinds said. The five-story building includes a 1,600-seat interior-dome sanctuary, banquet hall, commercial kitchen, sub-basement gymnasium (which was later converted into classrooms), showers and locker rooms, a 350-seat auditorium and 55 classrooms, offices and multi-purpose rooms. Breakers Covenant, a nondenominational church, holds services in the smaller auditorium. It formed a subsidiary, Bethel Community Transformation Center, to lease space in the building to other groups and to manage events and programs hosted in the former synagogue. Bethel Community leases space in the building to groups like the Isaac Agree Downtown Synagogue, which has held high holy day services in the larger auditorium for the last six years, Hinds said, and rents out its basement

Breakers Covenant Church International on Woodward Avenue has received $250 million for renovations. | COSTAR GROUP INC.

social hall and small auditorium to other groups. It also contracts with third-party groups to bring in healthy eating, aerobics, after-school and summer programming for youth to help build character, prepare them for life, help them determine career interests and prepare their resumes. Center staff also provides lighter, more creative and interactive programming for youth, including visual arts, performing arts and Spanish lessons. This past year, the center registered 175 kids — including youth from homeless services providers Cass Community Social Services and the Coalition on Temporary Shelter — for programs offered at the church center, Hinds said. The church gets revenue through a lease agreement with the center and provides tours of the historical building for a fee, Hinds said, in addition to some grant funding. Contributions from its congregation — about 100 for in-person services, down from about 150 a few years back — have remained fairly steady, Hinds said. “I believe we’re bringing in more revenue now than we were. The challenge is people coming back into the space after COVID and feeling comfortable doing that,” Hinds said. “Even if we don’t see them at church, people are giving...which has been a blessing for us.”

This year, the center began making enough money to require a 990. It’s operating on a budget of about $200,000 this year, Hinds said. “We have been able to develop a model that allows us to create opportunities and resources not only through the church but through our activities with the community center,” Hinds said.

Restorations The grant from the National Fund will help fund the first phase of restoration work at Breakers Covenant. A pro bono assessment of the building found the limestone on the facade of the building was damaged over the years, he said. “It’s at the point where the integrity of it is presenting dangers of potential(ly) falling stone.” Initial capital projects planned include work to secure the exterior of the building and secure any loose or shifting limestone and inside the building, to gut what was once a gymnasium and later turned into classrooms. The church has 18-24 months to raise the balance of the funding needed for the project, about $510,000, to secure the matching grant from the National Fund. “We are gutting that area out and we’re going to do phase one of restoring it back to a more recreational, multi-function space to work in conjunction with the programs with the community,” Hinds said.

“I’ve been told when funders see the work you are doing as worth investing in and you’re showing yourself being responsible handling funds, they feel comfortable being a part of helping it to pass.” Breakers Covenant will take part in training provided by the National Fund in November to help it with fundraising and navigating other technical supports offered by Partners for Sacred Places. “We’re going to be schooled. We understand as a church our expertise is limited,” Hinds said. All National Fund grantees are eligible to receive technical assistance from Partners for Sacred Places as well as planning grants of up to $10,000 to advance their projects, said Rachel Hildebrandt, director of the National Fund for Sacred Places. They meet quarterly with the Partners for Sacred Places and can receive pro bono support in one of several areas: Fundraising, communications, community engagement or economic impact studies to help strengthen their case for support. As for the other three Detroit churches the National Fund and Partners for Sacred Places has supported, first Congregational in Midtown has completed its restoration work, and St. Joseph near Eastern Market has nearly completed its projects, Jaeger said. The third, Christ Church on Jefferson, is in the planning stages of its project, he said.

Bloomfield Hills-based Mi Bank CEO resigns, president promoted By Anna Fifelski

Mi Bancorp, Inc. on Wednesday announced major leadership changes for the Bloomfield Hillsbased bank. Mi Bank Chairman and CEO Rob Farr, resigned from the organization and board to pursue a new opportunity in Traverse City, the bank said in a statement. Farr founded Mi Bank in 2019 to focus on financial services for mid-size and commercial businesses. The board appointed Matt Agnone as chairman and Jenny Meier as CEO. Meier has served as the president of Mi Bank since its opening and will continue to retain the ti-

tle. Prior to joining Mi Bank, she served as Chief Revenue Officer for the Bank of Birmingham until its merger with the Bank of Ann Arbor in 2017. “The Board would like to thank Rob for all his efforts and dedicated service to the Bank,” Agnone said in the press release. “We are excited to have Jenny lead Mi Bank and build on the progress we have made over the last 4 years. She has been a critical member of our executive management team and is an important part of the future success of the bank.” A spokesperson for Mi Bank said the separation of the chairman and CEO roles is “considered best practice” in the banking in-

Mi Bank, located at 3707 W Maple Road in Bloomfield Hills, has a new chairman of the board and a new CEO. | GOOGLE MAPS

dustry and was part of the succession plan as the bank grew. The

full-service branch in Bloomfield Hills has $220 million in assets.

The board appointed Agnone as chairman of both Mi Bancorp Inc. and Mi Bank. Agnone has been a director on the board since the bank’s inception and also serves as chair of the Audit Committee. Agnone is also a certified public accountant and the CFO and COO of a local family office in Southeast Michigan, according to the press release. In a LinkedIn post, Farr said he will “become involved with a new community bank in the Grand Traverse area.” Mi Bank declined to comment on where Farr would be continuing his career. Tom Dorr will continue to serve as the CFO and COO of Mi Bancorp Inc. and Mi Bank. NOVEMBER 6, 2023 | CRAIN’S DETROIT BUSINESS | 15

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NUGGETS

CANNABIS

Los Angeles-based Golden West Food Group, which acquired an undisclosed equity stake in Skinny Butcher in 2021, is the exclusive manufacturer of the Skinny Butcher line. Golden West operates out of a 350,000-square-foot facility in Los Angeles where it will also produce the Skinny Butcher Farms line. Having a manufacturer so far away can create some problems, Zilko acknowledged. Questions and concerns may not be handled as quickly as he’d like, but the relationship with Golden West is a great one, he said. “(Golden West’s) capabilities are endless, so they bring a lot to the table in that respect,” said Zilko, who is based in Birmingham. “That company has 1,600 employees, so not all of them are going to be assigned to Skinny Butcher. They’ve been good about assigning us a person to meet our concerns.” That partnership got Skinny Butcher some extra national exposure. Skinny Butcher was one of 11 items with “Stranger Things” branding that Walmart carried in spring 2022 prior to the release of the Netflix series’ most recent season. Packaging for Skinny Butcher’s nuggets featured the “Stranger Things” logo and an altered Skinny Butcher logo: a winking white hat-wearing butcher as usual but this time featuring the well-known nose bleed of one of the show’s main characters. “Golden West introduced us to some Netflix people and they liked what we were doing,” Zilko said. “Some people thought it was risky modifying our logo like that, but I thought it was cool, and it worked. We had the No. 1 plant-based item in their stores in June.” Skinny Butcher also has received backing from a major investor. Chicago-based Valor Siren Ventures — the early-stage food, food technology, retail and retail technology investment fund arm of Valor Equity Partners — made a $10 million investment in Skinny Butcher in the first quarter of 2022. Valor Siren Ventures has also invested in companies including animal-free dairy milk producer Tomorrow Farms. Zilko handles a lot of the marketing of the company to retailers and distributors, but he admits he couldn’t run the company alone. Two key cogs in the Skinny Butcher machine are Creative Director Mike Griffin and Social Media Manager Megan LaVigne. Griffin is a founding partner of Skinny Butcher, according to Zilko, and they have worked together since the days of Garden Fresh, of which Griffin was an equity partner. “(Griffin) is a brilliant creative director,” Zilko said. “I came up with the concept of Skinny Butcher, the name. (Griffin) has executed that to perfection.”

Michigan marijuana is cheap. An ounce of recreational marijuana flower averaged $100.14 an ounce in September, according to data from the Michigan Cannabis Regulatory Agency. But it wasn’t always this economical. When Michigan’s recreational market went live in December 2019, an ounce of flower averaged more than $516 before product and stores became abundant. That’s what retailers like Klar are hoping for — a slow, steady rollout in Ohio that maintains those high prices that could aid in driving traffic over state lines. It should be noted that traveling across state lines with Michigan marijuana remains illegal, though few prosecutors push those indictments. “We saw this in Illinois,” Klar said. “Consumers still drive over the border to get cheaper product. Most of the consumers from other states are still driving to Michigan today.” Consumers in Illinois, which made recreational weed legal in 2020, pay some of the highest marijuana prices in the country, according to a recent study by market analytics firm Headset. The prices, which are 89% higher than the national average, are thanks to Illinois’ limited license allotments that keep product inventories low and place the second-highest taxes on marijuana in the country. Ohio has already said it would place a 10% excise tax on recreational marijuana sales on top of its 5.75% sales tax, basically matching Michigan’s 10% excise tax on top of its 6% sales tax. And Ohio has a head start on the market. The state legalized medical marijuana sales in 2016, though no dispensaries opened until 2019. There are roughly 35 cultivators and 100 medical dispensaries already operating in Ohio. Those dispensaries and growers are first in line to get a recreational license, according to the ballot measure. However, an ounce of medical marijuana flower in Ohio averages at about $311, well above the average in Michigan at $112.24 an ounce. For prices to come down, the state will have to allocate more licenses so growers can grow more product and retailers can open

From Page 3

Megan LaVigne’s role at Skinny Butcher includes running the company’s social media as well as helping with marketing initiatives and product development. | SKINNY BUTCHER

LaVigne joined the team in December as Skinny Butcher’s chief brand ambassador after Zilko saw her in a promotional video for an August 2022 Hour Detroit event. The personal chef and photographer is essentially the public face of Skinny Butcher. “She’s been a great addition to the team,” Zilko said. “She’s got this natural charisma. She’s just really neat.” LaVigne’s role includes running all of the company’s social media and she helps with marketing initiatives and product development. LaVigne told Crain’s it’s been an honor to work with Zilko. “Not only to represent a company with a message that I love,” LaVigne said. “Everything the company stands for aligns with who I am as an individual.” The 60-year-old Zilko isn’t surprised by the success of the Skinny Butcher brand, and with good reason. He co-founded Garden Fresh Gourmet with the late Jack Aronson and his wife, Annette Aronson, in Ferndale, making refrigerated salsas, tortilla chips, hummus, dips and more snack foods. The group sold the company to Campbell Soup Co. in 2015 for $231 million. Campbell’s then sold Garden Fresh Gourmet in 2019, apparently spurning a competing bid that included Aronson and other investors. “It’s almost like we caught lightning in a bottle again,” Zilko said. “We were taking a chance entering into a crowded market then and it worked. Skinny Butcher is just another bold undertaking.”

Zilko, an author and a Bloomfield Hills resident, is also doing his part to give back. Skinny Butcher is a supporter of the No Kid Hungry initiative. Established in 2010, No Kid Hungry works to end child hunger in America by ensuring all children get the healthy food they need to thrive. Skinny Butcher has provided about 1 billion meals since its inception. One Skinny Butcher partner admires Zilko’s vision. Al Parse, director of client development for Oak Brook, Ill.based food distributor ADW Acosta, has a relationship with Zilko that dates back to the Garden Fresh days. Parse and Zilko developed a friendship over the last handful of years. It’s Zilko’s willingness to try new things that made Skinny Butcher a good client for ADW Acosta. “When I’m looking at potential clients, I’m looking at someone who has the mindset to create the next big thing,” Parse said. “What sets Skinny Butcher apart is that it’s the next best thing to real chicken. It cooks like the real thing, has the texture of the real thing. “We’ve had some issues with some retailers that aren’t as pro plant-based as others. They think it’s a fad. Most retailers are all in on it. It’s here to stay. In what magnitude, though, remains to be seen.” Zilko plans to stick around until all retailers are on board. “Just like when Jack and I started Garden Fresh, this is a lot of fun for me,” Zilko said. “There’s a lot of creativity that goes into this, which I enjoy. I don’t see myself retiring for a while.”

more stores to sell more product. The rules for whether Ohio will be an unlimited or limited licensure state are not established.

How far is too far? How meaningful the price difference will be for Ohio consumers is unknown. At what cost savings would a consumer from Dayton, Ohio, drive the 175 miles to Quality Roots in Monroe when legal recreational marijuana is available close to home? Klar believes consumers will continue to choose Michigan even as prices get more competitive. “Michigan has a deep cannabis culture,” Klar said. “We’re leading the way on new trends and new products over the past few years. We have excellent brand recognition. I don’t think Ohio will catch up to that quickly.” Doug Hellyar, president and COO of one of Michigan’s largest operations Troy-based Lume Cannabis Co., is in agreement with Klar about product differentiation but admits there is a time limit before the company’s three stores near the Ohio border — Monroe, Petersburg and Adrian — see sales declines. “It will take some amount of time before Michigan is impacted significantly by Ohio approving recreational,” he wrote in an email to Crain’s. “The current price difference between the two states is meaningful to shoppers. I expect Ohio customers will continue to shop in Michigan to buy at lower prices for an extended period of time. Ohio operators will need to prepare to run their businesses in a much lower retail price environment than the current levels. Once that occurs, Lume’s Michigan border stores will be impacted but we will continue to attract Ohio customers with premium product at value prices.” Until Ohio voters approve the ballot measure — which is currently seeing a 57% approval rating in polls — and at least the first recreational license is issued, Michigan’s border dispensaries are enjoying the extra publicity. “Sales are doing great right now,” Klar said. “Every time someone writes about Ohio legalization, they mention Monroe. Sure, sales will decrease eventually, but then our store turns into a regular community store focused on consumers in Monroe.”

Doug Hellyar, president and COO of one of Michigan’s largest operations Troy-based Lume Cannabis Co., said “It will take some amount of time before Michigan is impacted significantly by Ohio approving recreational. The current price difference between the two states is meaningful to shoppers.” | LUME CANNABIS CO.

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SUPPLIERS From Page 1

“Diversification over the next 10 years is so critical, I’d say, to the survival of suppliers,” Denk said. “So, if the combustion does go down, we’ll feel it, but it will bring it up on e-mobility, and if e-mobility is delayed, we’ll just keep on delivering our vehicle business that we’ve delivered for decades now. I don’t know how you make it through a transition time like this other than a strategy like that.” Suppliers have also been looking to Tesla Inc. for a ticket to the future. While the Detroit 3 were feuding over labor, the EV darling was churning out vehicles. That helped buoy business some at Livonia-based magnetic parts supplier Storch Products Co., whose orders were otherwise down due to the strike. Tesla and its tier-one equipment integrator continued taking Storch’s parts without disruption, said Matt Carr, president and CEO of the supplier. “They’re purchasing, we’re having machines that are heading their direction,” Carr said a couple of weeks ago before the UAW strikes ended. “We’ve been part of some programs that have been wonderful. They’re tooling up.” Storch has been on a mission to diversify its product offerings and customer base as the existential threat of EVs looms large. Like other auto suppliers, it has found success doing so in the defense sector as the business of war is steadier than the automobile business. “We’ve seen this technology that’s been born out of the needs of automotive now go into military,” Carr said. “That’s how we’re handling the slowdown because (automakers) are on their heels wondering, is EV really here to stay?” In a similar way, Craig Carrell, president of Albion-based Team 1 Plastics, has been working to wean his company off gas-powered cars. The tier-two supplier has gone from 80% fixed on internal combustion platforms to 60% in the past two years. While it does its biggest business on Ford pickups, its diversification efforts helped it manage through the strike without layoffs. “We do a lot of business with the Japanese, and we’ve seen some increases on those,” Carrell said. “It’s not enough to make up what we lost, but it’s a little bit of a bump.”

The Chinese factor Rapidly rising Chinese automakers pose a serious threat to the Detroit 3 and other automakers, as Ford CEO Jim Farley made clear earlier this year. BYD Auto Co. Ltd., Geely Holding Group Co. Ltd. and SAIC Motor Corp. Ltd. are some of the leaders of dozens of automakers that have cropped up in the Far East. The big auto suppliers have certainly taken notice as competition to get on Chinese platforms has ratcheted up — and

where suppliers place their bets is a good indication of where the market is heading. With Ford and General Motors rapidly losing market share in China, Chinese domestic OEMs are expected to account for 65% of the Chinese market by 2030, according to an analysis by consulting firm AlixPartners. “Now with Chinese brands making up 50% or more of sales in China, that becomes a big market, and so many suppliers want to expand their share of that market,” said Stephen Dyer, a former Ford vice president who heads up AlixPartners’ China business. Increasing penetration in local OEMs in China “is a key strategic imperative across the auto supplier universe right now,” Luke Junk, senior research analyst at Baird, told Crain’s in a recent interview. Chinese automakers still have a long way to go in expanding influence beyond their borders, especially to the U.S., but it may be just a matter of time. “The primary opportunity is still local OEMs in China for China,” Junk said. “Certainly, there’s recognition of the fact that some of the players in China are looking to push more aggressively outside of China. That’s less material today, but there is an opportunity going forward.” Lear Corp. highlighted recent China wins, including wiring awards from Geely and seating contracts with BYD, in its latest quarterly earnings report. The Southfield-based seating and e-systems supplier, which makes 20% of its revenue from GM and 14% from Ford, lost $170 million due to the UAW strike, just about a third of the $525 million it lost in the 2019 strike against GM. Regardless, it has paid the price for significant exposure to the Detroit automakers. “Customer diversification was a key part of our strategy, and we’re doing a really nice job of diversification across Geely…we talked about Land Rover, European OEs … just continue to accelerate our diversification across customers,” Lear CEO Ray Scott said on a call with investment analysts Oct. 26. Rival seating supplier Adient plc, based in Plymouth, is also growing its business with the Chinese. It has $4.6 billion of new business awards in the country in fiscal year 2023 and expects to be 60% weighted toward local Chinese automakers in the next three to five years. “Does that mean we’re abandoning all our traditional customers? No. But we’re focused on certain brands that we think can co-exist with the domestics that are developing their platforms,” CEO Doug Del Grosso told investment analysts this summer. Diversification, while essential, must also be done with balance, Andrea added. “As a supplier, your costs go up as you serve more and more customers," he said. "The supplier has to be cognizant to balance out the revenue opportunities to the additional costs.”

RANKINGS From Page 1

There are more than a dozen health care industry rankings, theoretically designed to hold systems accountable and inform patients on where best to receive care. But are there too many? Can a tertiary care, academic hospital really be compared to a rural community hospital in Northern Michigan? Do they even improve patient care? University of Michigan joined several other top medical schools in the country in withdrawing It’s complicated. participation in the U.S. News & World Report annual ranking program. | MICHIGAN MEDICINE “We all (in the industry) feel we have an overwhelming amount of the volumes of organizations that popularity contest” and often drive groups that are evaluating us and rank us, but look at the underlying patients to seek care at far flung loproviding commentary and mea- structure, process and outcomes cations. “In my former job at (Barbara Ann surement of our performance,” that are measured so we can do the said Dr. Justin Klamerus, chief right thing no matter who is judging.” Karmanos Cancer Institute), we clinical officer for Grand BlancFor health insurers, though, the found that when many patients think based health system McLaren rankings from U.S. News and J.D. cancer, they think of UM or other naHealth Care. “It definitely has the Power & Associates are of clear val- tional brands like MD Anderson Canpotential to confuse our families. ue to the organizations and cus- cer Center (Ohio) or Johns Hopkins We also recognize that the things tomers, said Margaret Anderson, (Maryland),” Klamerus said. “We that are measured are very im- senior vice president and chief have two NCI-designated cancer cenportant to our organizations. But sales and marketing officer for ters in the state and Karmanos was they are all using similar data, they Henry Ford Health’s integrated the other. But we found that people are just filtered and sorted differ- health insurer Health Alliance Plan. weren’t seeking care that was conveently and presented with their “It matters because there are 70 nient or the best site of care, but the own twist. It can be really difficult some odd (Medicare Advantage) brand that has the most recognition.” Cancer programs receive the NCI for anyone to assess the value.” plans that are offered in Michigan But the rankings do matter — right now,” Anderson said. “CMS designation from an extensive peer at least to the industry. uses a five-star rating that’s confus- review process that establishes an Despite Runge complaining ing to customers. U.S. News uses institution meets a strict guideline about how U.S. News’ methodol- the CMS data to showcase the orga- for innovation and extensive canogy is a 166-page document, the nizations based on quality and per- cer treatment and research. Therefore, rankings will likely system still pays to use the U.S. formance and member satisfacNews’ badge on its marketing tion. That’s how plans differentiate continue to be vilified by institutions, but also supported due to the materials, which Runge openly themselves.” admits because “the rankings are Anderson said the CMS’ ratings potential marketing power they widely accepted by consumers.” are in the bottom quartile for Medi- have over consumers. “But I would hope that patients Yet there is plenty of controversy care members seeking a plan, acwill look at a broad variety of ranksurrounding U.S. News’ rankings. cording to their internal data. UM Medical School, ranked 13th U.S. News named HAP’s Medi- ings and not just the one right there this year by the publication, no care Advantage plan as one of the at the supermarket checkout — and take them all with a grain of salt longer participates in those rank- best in the nation last week. ings. Neither does its law school, Klamerus said the U.S. News (which, should only be consumed nor many others across the nation. rankings of hospitals “tend to be a in moderation),” Runge wrote. In September, U.S. News received major blowback for its rankings of undergraduate instiAdvertising Section tutions thanks to a change in methodology that allegedly favored public institutions over private ones. Vanderbilt University, which To place your listing, contact fell from 13th to 18th in the list, posted a message by Chancellor Suzanne Janik at Daniel Diermeier saying the list had “many glaring flaws.” 313-446-0455 / sjanik@crain.com But it’s not as easy for the health care industry to opt out of these lists, apparently. Much of the information used to compile the lists in U.S. News and Newsweek, among others, comes from the Centers for Medicare and Medicaid Services and other POSITIONS AVAILABLE governmental agencies. Those agencies, by the way, issue many of their own rankings. CMS uses a “Star Rating” system for quality, safety and performance. There is also the highly respected ratings by Leapfrog, a nonprofit watchdog group that advocates for transparency in health care. Those rankings are released this week. “We certainly monitor rankings closely,” Klamerus said. “But maybe we’re not looking at the grade on the test as much as we’re valuing the work and commitment on the grade … because that’s what drives quality in care. Leapfrog is a process-driven organization and good projects come out of the rankings. We try not to get lost in

CLASSIFIEDS

JOB FRONT

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THE CONVERSATION

Bamboo founder Amanda Lewan on expanding co-working business Bamboo co-working space company founder and CEO Amanda Lewan is a busy woman. She is readying to open a third coworking space next year in Ann Arbor as Bamboo looks to branch out in various markets after 10 years in business. The 35-year-old entrepreneur also has another full-time job as mother to a toddler. In a conversation with Crain’s, Lewan touches on her company’s expansion, the co-working space industry’s current state and its future. | By Jay Davis You’re 10 years into owning and operating Bamboo. What comes to mind when you think about that? How time flies when you’re having fun. When we started, we were just young entrepreneurs who had no idea what we were doing, but we wanted to build a space in the community that was accessible. We were working on other startup company ideas, but Bamboo was the one that was gaining traction in the community. It took us a few years to realize that. It’s funny because one of our co-workers at the time said co-working wasn’t profitable. WeWork was taking off. There are different models to make it profitable. Ten years flew by. It’s almost impossible to remember the years before the pandemic. Why do you say that? The pandemic was a really difficult time. For small business operators it was a grind. It was really worst-case scenario for a couple of years. The main lessons we learned as an operator were to support each other. I feel like there are pre-COVID times and post-COVID times. I remember we had this big community event in our Detroit space with more than 100 people. Then we had to shut down a week later. Where do you see the co-working business going the next 10 years? I think it’s going to grow into more neighborhoods and smaller secondary markets to serve more people who are working from home and who want to work close to home. Analysts are predicting growth of 12%-15% this year because some companies are downsizing. Co-working spaces have always served small businesses. Now we’re seeing large companies do it because it’s more affordable and accessible. If you have 30 team members coming in a couple days a week you don’t need a 10,000-square-foot space. That’s the trend we’re seeing: more bigger companies utilizing the spaces. Usually they get a private office for 10 that might cost $4,000 a month, but that still ends up being a lot less when you account for the fees related to owning or leasing that big space. With the planned early 2024 opening of the Ann Arbor location, that will make two new locations in three years. Why were you able to expand so quickly after it took about

eight years to open the Royal Oak location in 2021? It took us quite a few years to gain that traction as a co-working space. In 2013, we started in a 2,000-square-foot space and borrowed a $5,000 loan to get started. We bootstrapped. We saved year over year. In 2017, we moved into the Julian C. Madison building (in Detroit) because we realized we needed more private offices, which is the No. 1 product in a co-working space. We were waiting until we could afford to grow. Now at 10 years, we’re doing well. We’re confident in our operating locations.

companies in the co-working space? WeWork is kind of stuck in a trend where their focus is on large downtown areas. Post COVID, a lot of demand moved to what you would call secondary markets. Most people work from home and want to go to spaces that are close to home. Some co-working

How do you think operating in a college town will differ from operating in Detroit or Royal Oak? That’s a super interesting question. We’re still having exploratory conversations with people in the community. I think a lot of students will come in, along with a lot of companies in Ann Arbor that have been operating in the city for years. I think a lot of Ann Arbor companies are looking to expand into Detroit, and I think a lot of Detroit companies are looking to take talent from (the University of Michigan). It’ll be a different experience. It’s a vibrant community with a strong small business community. We should fit in well. People love living in Ann Arbor. I know you’re an MSU alum. Have you spent any time in Ann Arbor? There’s some good spots downtown. For work, I’ve been going once or twice a week to build community. It’s been collaborative. Ann Arbor Spark worked with us for a while to help us find a location. It took a long time. I’m very excited. We’re right next to the Blind Pig. We’re down the street from Blank Slate, which is a super popular ice cream shop. On the visits, I’ve taken our team out for ice cream, just to hang out. Our team is spread out, but they’re all supportive of the move. I think some of our Detroit members will plan to expand and have some events in Ann Arbor. A lot of our members have clients and team members in the area. It’ll be interesting to see the collaborations. You’re expanding at a time when the co-working space business is slowing down a bit. What’s Bamboo doing that’s different from other

Amanda Lewan is founder and CEO of Bamboo.

companies are stuck in a place where the demand hasn’t returned or it shifted. Companies that have opened in markets that aren’t as large or that are overlooked do well. One thing Bamboo does well is build community. We have events every day, you get to connect with people and socialize. Especially as small business owners or working with a

startup, it’s better to go through those ups and downs with others. So many people find co-owners or investors at Bamboo. Finding that first person to write that first check can be a life-changing moment to push someone down a path toward something they love to do. Do you plan to expand Bamboo further? Yeah. We’re looking at opening a couple more locations. Once we get to four or five locations, we’ll be more sustainable and we can build a leadership team. We’re seeing a trend down south, out west, where there’s a lot of collaboration. It’s common for local operators to expand regionally. We’re looking at other cities with spaces that have been sitting empty since the pandemic started. It has to be a good space for co-working, though. We want to help existing communities grow. There are some great spaces in Michigan. Michigan is a great place to live. It’s got diversity, culture. We’d like to help keep the talent here. You recently became a mom for the first time. How has that changed you as a business owner? I have an 18-month-old daughter at home. I feel like it makes you aware of your time. When you’re a young entrepreneur you think you can work around the clock. I want my daughter to grow up in a world where women are business owners who follow their dreams, live the life they want and not hold back. We do full-time day care, and I felt guilty about it at first. But I want her to see she’s got parents who are working hard, taking risks and trying to effect positive change. Maybe that’ll set her down a similar path.

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Read all the conversations at CrainsDetroit.com/TheConversation 18 | CRAIN’S DETROIT BUSINESS | NOVEMBER 6, 2023

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