Crain's Detroit Business, November 20, 2023 by Crain's Detroit Business

CRAINSDETROIT.COM I NOVEMBER 20, 2023

Michigan got a flood of pandemic-era federal money. Here’s how it spent billions on hundreds of projects and programs | Begins on Page 8

Boston Market closes locally

Michigan’s $1B offer didn’t sway Stellantis Indiana offers less but wins EV battery plant

All 13 metro Detroit locations shuttered

By Kirk Pinho and Jay Davis

If you’re in a pinch for a meal on Thanksgiving, you won’t be able to turn to Boston Market. All 13 of the troubled Golden, Colo.-based chain’s remaining restaurants in southeast Michigan have closed unceremoniously in the last several months, in some instances without providing notice to the landlord, leaving building owners in a pinch. The chain had locations in Allen Park, Canton Township, Clinton Township, Dearborn,

Detroit, Grosse Pointe Woods, Livonia, Novi, Shelby Township, Southfield, Warren, Waterford Township and Westland. Some had been open as recently as October, perhaps with limited hours and service slinging things like rotisserie chicken, mashed potatoes and other food long branded as homestyle cooking — but no more, according to real estate brokers, municipal officials and others who verified the permanent closures. In some instances, the closures appeared abrupt.

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By Kurt Nagl The shuttered Boston Market restaurant on Highland Road west of Cass Lake Road in Waterford Township. | KIRK PINHO

The shuttered Grosse Pointe Woods location on Mack Avenue, when Crain’s visited, still had a “now hiring” sign in the window; at a Detroit strip mall location on Livernois Avenue, there was window signage proclaiming that it, in fact, was open when it was not. See CLOSURES on Page 17

Michigan economic development officials offered Stellantis NV four different sites and as much as $1 billion in direct incentives for a massive electric vehicle battery plant, but the automaker ultimately chose a less subsidy-rich deal in Indiana. The incentives, which would have been funded through the Strategic Outreach and Attraction Reserve fund, were offered to the automaker last November, six months after it announced

the first $2.5 billion battery plant with Samsung SDI in Kokomo, Ind. Michigan lost the second one to the same place a month ago when Stellantis announced a $3.2 billion plant would be collocated with the one under construction. Among the locations offered to Stellantis was the Marshall megasite, which was floated to the automaker before Ford Motor Co. claimed it for its own EV battery plant, according to records obtained from the Michigan Economic Development Corp. through a Freedom of Information Act request. The fate See BATTERY on Page 17

CONVERSATION Michigan’s new mobility chief is charged up about EV infrastructure.

HEALTH CARE What is up with the wait to see a primary care physician?

REAL ESTATE The strange case of the bankruptcy of a former Embassy Suites is dismissed.

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Construction resumes on redesigned RH project By Kirk Pinho

After a roughly yearlong pause, construction has resumed on the new downtown Birmingham building for RH, the company formerly known as Restoration Hardware (NYSE: RH). It was abruptly halted not because of hiccups like budget overruns or contractor squabbles, but instead a complete design overhaul requested by the Corte Madera, Calif.-based luxury home-furnishings retailer. The scope of those changes required yet another round of city approvals, like amending the project’s special land use permit as well as the site plan before work could resume again, said Nicholas Dupuis, Birmingham’s planning director. The additional work at the drawing board and then at the Planning Board and City Commission dais will give Birmingham a distinct four-story building at South Old Woodward and Brown that aesthetically nods at a local institution, Dupuis said. “They drew their inspiration from Cranbook,” Dupuis said. Even more than that, according to those working on the project, it’s the first such RH store designed this way, and will serve as the model for all future new-construction RH stores around the world.

A rendering of the 54,000-square-foot RH store project that has resumed construction in downtown Birmingham. | SAROKI ARCHITECTURE

The building includes things like tri-tone tan bricks from Denmark, floor to ceiling windows and other changes that the architect said during a meeting last year give it a “more edited look” and a “more modern design.” “This is going to be the new direction for RH,” Victor Saroki, president of the Birmingham-based Saroki Architecture firm, said during a December meeting of the Birmingham Planning Board in which they signed off on the final site plan — for a second time (the first came in the summer 2021). The redesign was so unexpected that construction had even gotten to where elevator shafts and stair-

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cases had been built when RH put the brakes on it. “Never have we had a project have that significant of a change that required a project to stop for a year for a complete redesign,” said Todd Sachse, CEO of Detroit-based Sachse Construction. The stoppage also surprised the public, which led to rumors that Sachse said included that the elevators and stairs had been installed in the wrong spots on the site and that RH had pulled out of the project — neither of which were true. (With the redesign, the building was rotated about 180 so the already-built elevator shafts and stairs had to be removed and are

being built on another portion of the site.) It’s not known precisely when the building will be finished and the store open, but multistory buildings of this size typically take about 18 months. Emails were sent to RH seeking additional details. It’s been a yearslong battle to bring the RH store to the swank shopping hub off in one of Oakland County’s most prestigious communities. In August 2019, Birmingham voters rejected a $57.4 million bond proposal to pay for a parking deck on a different downtown site, effectively killing what at the time was a $140 million mixed-use development that RH would have anchored at Old Woodward and Bates. Other components of that plan included 30 rental residential units, 25,000 square feet of office space and a total of about another 10,000 square feet of retail space across multiple buildings. In addition, there would have been 1,159 parking spaces and a 530-foot extension of Bates Street to the northeast. With that proposal dead, RH turned its attention to the current downtown site across from the Daxton Hotel. The property had been home to Capital Tile, Lutz Financial Services, Roche Bobois, Frank’s Shoe Service and Coldwell

Banker Weir Manuel. There, RH sought to build its 54,000-square-foot store, which is slated to have a restaurant on top, plus underground parking. The revived plan became public in March 2021. Several months later, RH had its site plan approval. It also needed rezoning and lot splits during the municipal approval process, Dupuis said. But with those secured, the buildings on the property then started coming down, leading to excavation and foundation pouring.

Corrections In a special section on Notable Leaders in DEI that ran on Nov. 13, a profile incorrectly stated why Artina Carter raised money. She raised $9.6 million to support healthy food access during the Flint Water Crisis. A profile on Kelli Ellworth Etchison inaccurately attributed some of her work. Ellworth Etchison worked with the DEI committee to create the mission and tagline. A profile about KimArie Yowell incorrectly described the Red Door Project. It is a mentorship program. A profile on Monica Wheat incorrectly listed her budget. It should have said she is one of the leads of a nine-city $80 million JP Morgan investment.

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Need a primary care visit? Be prepared to wait. By Dustin Walsh

A Whisker Litter-Robot | WHISKER

Litter-Robot startup renovating factory Whisker believes the appliance will change the lives of cat owners By Anna Fifelski

Callie and Todd take their jobs very seriously. As feline product testers for Auburn Hills-based startup Whisker, they have a plethora of litter robots to choose from all equipped with a variety of features intended to make the lives of cats — and their owners — easier. A Whisker Litter-Robot retails for between $549 and $699 for the base model with upgrades such as litter trap mats, ramps, cameras, an app that tracks a cat’s weight and litter box usage and more fancy features.

To accommodate all the technology that goes into creating a Litter-Robot and its rapidly growing team, Whisker is expanding its footprint in its facility in Auburn Hills by 38,000 square feet. The startup will begin renovations on the building in December with plans to open in March. Whisker has been operating out of just 12,000 square feet since purchasing the space in 2019 for $2 million; The COVID-19 pandemic put a halt on earlier renovation plans. In total, the company expects the renovations to cost around $1

million. President and CEO Jacob Zuppke, 35, recognizes the cost might be a point that turns customers away, but he also believes Whisker is selling an appliance that will change the lives of cat owners. “No one needed the dishwasher,” Zuppke said. “The mindset that we have is that Whisker is like an appliance 75 years ago — nobody needed it … And now you can’t really find even an apartment that doesn’t have a dishwasher anymore.” See WHISKER on Page 15

the 14th oldest state in the U.S. — with residents 85 and older the fastest-growing population group. In 2021, Gov. Gretchen Whitmer signed a bill to create a new department, Health and Aging Services, within the Michigan Department of Health and Human Services largely to work on health care access gaps. This aging population has led to a larger pool of patients with more complex issues, Miller said. The Ann Arbor system has seen patient increases of 2% year over year for many years, he said. At the same time, the state is currently 862 primary care physicians short of providing adequate care to the population, according to a study released earlier this year by health care think tank Robert Graham Center. And it’s only going to get worse as 557 family medicine resident positions were left unmatched this year, with medical residents

Scheduling a visit to a primary care doctor can lead to a whole new list of symptoms — anxiety, headaches or rage. Long wait times built up coming out of the pandemic as many patients delayed care and then decided to make up for lost time and schedule visits. Physicians warned of the dangers of delaying care then. But, now, wait times seemingly haven’t improved, extending to months in many cases for an in-person appointment. Many causes are to blame — an aging population, a primary care physician shortage and new technologies creating more access for patients, at least theoretically, while overloading already burned-out physicians. “There is a substantial mismatch between demand and availability (of appointments),” said Dr. David Miller, president of University of Michigan-Health in Ann Arbor. “We’re focused daily on ensuring new patient access, but there is unrelenting demand for our services. This (wait time) issue is happening locally, regionally and nationally.” — Dr. David Miller, president of University Miller said the health sys- of Michigan-Health in Ann Arbor tem hasn’t paused accepting new patients, but it has limited choosing other options. A medical availability to adult patients under resident is a medical school grad65 to protect open appointments uate completing post-graduate and reduce wait times for its cur- training. First-year residents are rent patient population. considered interns. Grand Blanc-based McLaren More patients, fewer doctors Health Care Corp. was able to fill only 18 of its family medicine resiThe demographic trend in the dencies this year. It’s the same state is exacerbating long wait across many systems in the state, times. Michigan already has 2 mil- particularly in rural areas. lion residents over 60 — about 25% of the population, making it See DOCTOR on Page 16

“There is a substantial mismatch between demand and availability (of appointments).”

YMCA with housing could be headed to Royal Oak By Sherri Welch

A new YMCA center with multi-story housing on the floors above it could be headed to downtown Royal Oak. The mixed-use YMCA center — something that already exists in cities including Toronto and Calgary — would be among the first in the U.S., said Helene Weir, president and CEO of the YMCA of Metropolitan Detroit. The nonprofit is considering a city-owned parking lot at 600 S. Main St., which has been the main stage area for the annual Arts, Beats & Eats festival and is adjacent to the location for the new Oakland Community College culinary school, as the site for its new branch.

The project is still in the early planning phase, but the YMCA envisions the construction of a three-story community center with on-site parking, an aquatic hall, gymnasium, multi-purpose rooms, fitness center and a licensed child care facility, per city documents. Floors four and above would be for housing, including affordable units. The Royal Oak City Commission on Nov. 13 unanimously approved on a one-year exclusivity agreement with the YMCA to give it time to create a development and purchase agreement and outline financing for the project. In a related move, the commission also approved the YMCA’s request for a $25,000 matching grant to help fund planning for the

project, something that would come from the $1.5 million in ARPA funding the city committed in February to the project, should it move forward, the city said. The early vision for the new center includes the possibility for shared ownership, Weir said. The YMCA would fund the fitness and community center portion of the building at an estimated cost of $27 million, and a yet-to-be-determined developer would fund the remaining cost tied to the housing. “We’ve had some conversations with several (developers),” but nothing is firm yet, and no final decisions have been made, Weir said. See YMCA on Page 16

The YMCA is considering a city-owned parking lot at 600 S. Main St., the main stage area for the annual Arts, Beats & Eats festival, adjacent to the location of the new Oakland Community College culinary school, as the site for its new branch. | BETH REEBER VALONE NOVEMBER 20, 2023 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE INSIDER

Bankruptcy case of former Embassy Suites dismissed

he Chapter 11 case involving the decrepit former Embassy Suites hotel in Southfield was dismissed last month in federal bankruptcy court. The owner of the empty 239room hotel, which is now officially called the Ramada by Wyndham Southfield, filed for bankruptcy protection just before the county was to foreclose on it unpaid propKirk Pinho for erty taxes. And Southfield Ventures LLC acquired the property through a quit-claim deed a mere eight hours before declaring itself bankrupt. Rick Barreca of Southfield Ventures, as well as his attorney, Robert Bassel, said the dismissal was welcomed because the ownership got what it was looking for through the bankruptcy filing: More time. Southfield Ventures’ five identified creditors included the city and county which are due unpaid property taxes and Remo Polselli with a $3 million loan. Polselli’s The Private Equity Fund, registered in Bloomfield

Hills, was the entity transferring the hotel to Southfield Ventures LLC just before the bankruptcy filing. “The filing of the bankruptcy allowed a breathing spell to Southfield Ventures to be able to get financing to be able to pay off those (bankruptcy) triggers, which were the city tax debt and the county tax debt,” Bassel said. Bassel said in court filings that Polselli is making a “protective advance” to pay unpaid property taxes. A spokesperson for the city of Southfield did not return an email seeking comment. A spokesperson for Oakland County Treasurer Robert Wittenberg said Southfield Ventures still owes more than $1.9 million in county taxes from 20192022. The city, one of the creditors in the case, argued that it should have been converted to a Chapter 7 bankruptcy, which would have resulted in a liquidation of the nine-story building to a new owner. Although a $15,000 installment payment was made in late August, more than $259,500 in city taxes are still owed, according to court filings. Barreca said he is entertaining

The former Embassy Suites hotel in Southfield has 239 rooms and has fallen into disrepair. | COSTAR GROUP

an offer from an undisclosed buyer to purchase the building, as well as attempting a redevelopment of it into roughly 125 condominiums himself. The Southfield Ventures entity is registered to attorney Mark Sadecki in Davisburg. It was incorporated on March 14, about two weeks before the bankruptcy filing. The Private Equity Fund is registered to Polselli, who was sentenced to more than two years in prison for federal tax violations in 2003. Polselli was released in 2004 after

completing a sentence for tax violations involving the Plaza Hotel in Southfield in the 1990s. Sadecki and Polselli have also been connected to the former Sugar Loaf resort in Leelanau County, a sore spot in the northwest lower peninsula along Lake Michigan as the property became blighted and fell behind on taxes. Demolition began on it in late 2021. It’s been more than five years since the Southfield hotel lost its Embassy Suites by Hilton brand-

ing. In April 2019, Crain’s reported that the hotel was expected to reopen as the independent Southfield Suites. The hotel’s owner at the time, a subsidiary of Indianapolis-based private equity real estate company Hotel Capital LLC, said there would be a new brand and management in the months that followed. A local group called Management Solution Holdings bought the property from Hotel Capital several months later.

Recreational pot tops alcohol in tax revenue By Dustin Walsh

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Recreational marijuana is bigger than beer, wine and liquor in Michigan. During the 2023 fiscal year, which ended on Sept. 30, the state of Michigan collected nearly $100 million more in recreational marijuana excise taxes than in fiscal year 2022, according to a House Fiscal Agency report released this month. The marijuana tax totaled $266.2 million, a 49.1% increase over the year prior, and 38% higher than the $192.6 million collected from the sales of beer, wine and liquor in the state during the fiscal year. The growing gap between beer, wine and liquor and recreational marijuana is representative of Michigan’s powerful marijuana consumer market, but also in how taxes are collected for each product. Recreational marijuana is taxed at a 10% excise tax at the wholesale and consumer level. Alcohol wholesales are responsible for $6.30 per 31-gallon barrel excise tax on beer and a $0.51 per gallon excise tax on wine and champagne. Michigan’s 6% sales tax is applied to all of the consumables, but isn’t

captured in the excise tax report. The state’s marijuana market has seen a meteoric rise since recreational shops first opened in December 2019. During fiscal year 2023, Michigan dispensaries sold nearly $2.8 billion worth of recreational marijuana, topping off at $270.63 million in August. The sharp increase in marijuana sales is paying dividends to communities that opt in to allow marijuana production and sales. From the taxes in fiscal year 2022, which included an additional $5.8 million in medical marijuana taxes, the state distributed $59.5 million to the 224 municipalities and counties participating in the sales of marijuana. But Michigan’s recreational marijuana taxes made up only a paltry 0.8% of the state’s $33.8 billion in tax revenue for the fiscal year. Income taxes continue to make up the bulk of the revenue at $12.3 billion, followed by $10.7 billion in sales tax, which does include marijuana. Tobacco continues to be the dominant nonsales tax consumables tax, raking in more than $722.2 million at a $2 tax per pack of cigarettes in fiscal 2023.

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EDITORIAL

Stellantis choice proves money isn’t everything

BLOOMBERG

hen a billion dollars isn’t enough, it’s time to take a hard look beyond the money. Earlier this year, when Michigan lost a bid for a massive Stellantis battery plant, economic development officials offered up four megasites with taxpayer incentives of up to $1 billion, as outlined by Crain’s reporter Kurt Nagl, who received details on the state’s bids through a Freedom of Information Act request. Many factors went into that decision, including proximity to other Stellantis operations. But as lawmakers debate the future of how to fund major business attraction efforts, it’s important to weigh other factors that play into such decisions. There are many: Location, site readiness, available talent, future prospects for the educational system and infrastructure, and the business-friendliness of the state in question. Taxpayer-funded incentives do matter; since every state offers them, they’re necessary, but just part of the package. Michigan has already staked out a reputation for generous incentives in the EV battery war, as reported in Crain’s Forum last month. Getting the rest of our house in order should be the next priority.

That involves working on factors outside of cash on the barrelhead: our schools, our workforce, our infrastructure. Our reputation as a place to do business matters, too. Automakers are rightly concerned about labor costs, especially in the wake of a generous UAW labor deal that’s still waiting on ratification. It costs more to do business in Michigan than it does in many parts of the U.S. Michigan Democrats’ move to eliminate right-to-work protections didn’t go far to convince employers

that the state is friendly to business. We would note that Indiana is in fact a rightto-work state. The UAW’s chaotic approach to its strike, which thankfully appears resolved, certainly doesn’t help Michigan’s reputation as a stable place to do business, since it’s home to more of the union’s workers than any other state, and automotive manufacturing is still our signature industry. A push in Lansing to revamp how Michigan’s signature business-attraction fund works has the potential to help or hurt.

Among the measures under discussion is one that would direct up to 20% of state grant funding to benefit the community around a project for uses such as workforce development and public improvements. That money could allow for spending on items that would be of benefit to the business considering the site and be used to address their concerns. Or it could turn into a massive complicating factor in a negotiation that slows down the process for companies looking to move quickly. The devil will be in the details. Indiana has steered economic development money and muscle into improving its cities in ways to make them more inviting to young people and has been rewarded with a growing population, Bridge Michigan outlined in a recent story. That growing population is also one key to recruiting businesses, which need workers and a growing economy. The recipe, of course, isn’t simple and is always a work in progress. But the bottom line is Michigan has taken a lead role in rolling out big incentives in the EV transition. Now it needs to look hard at how to become a leader in all the other factors that make a state a great place to do business.

COMMENTARY

Job announcements very different from economic trends

erning majority spent more on ichigan’s massive taxcorporate welfare. Democrats payer subsidies to autohave approved $4.1 billion in makers proved useless business subsidies so far in 2023. last month when Stellantis anHanding out big checks to big nounced that it would build its companies doesn’t sound like a new battery plant in Kokomo, Inleft-wing thing to do. The readiana. The company was offered sons are less partisan and more more than $1 billion in taxpayer an application of practical polimoney, plus other favors, three tics. Jobs are popular, and polititimes more than Indiana’s $361.5 James M. million offer, according to Crain’s Hohman is the cians want to do something about jobs. Detroit Business. Lawmakers director of Politics is filled with appearought to reconsider their selec- fiscal policy at ances. Job announcements are tive business subsidy programs the Mackinac even better than actual econombecause they are clearly not Center for ic trends because they tie an working. Public Policy, elected official to examples of The goal of economic develop- a free-market jobs. It creates the illusion that ment programs shouldn’t be to research and they’re improving the economy, win headlines and plant an- educational even when their policies are putnouncements like this. It ought institute in ting people out of work. to be to grow the economy. Midland. But job announcements aren’t Headlines might indicate something in the broader economy, but they jobs. People shouldn’t fall for the claim typically mean that state lawmakers are that one company’s announcements willing to hand out special favors to cre- matter to the state’s economic picture. ate the appearance of economic growth. When Whitmer says she’s secured 16,000 Business subsidies waste tons of money jobs, it means that she’s awarded special without improving state economic per- favors to companies who think that they may add jobs in these projects in the fuformance. Legislators are not reconsidering busi- ture. People should know that companies ness handouts; they’re doubling down on have a terrible record of turning job anthem. After Gov. Gretchen Whitmer won nouncements into actual jobs. In a 2019 press release, Whitmer took re-election and Democrats gained majorities in both chambers of the state Legis- credit for giving special assistance to an lature, their largest priorities were not automaker for a factory in Detroit. “This progressive taxation or increased spend- is a historic day for Michigan after we seing on social programs. Instead, the gov- cured the largest automotive assembly

plant deal in the country in the last decade — with 6,433 new jobs and $4.5 billion in private investment from (Fiat Chrysler America),” she said. This sounds like a big increase in jobs that ought to be clearly noticeable in the state’s economic performance. But it’s not. Administrators use creative accounting to try to make these deals appear bigger than they are. Since making this announcement, state officials report that there are 6,290 jobs at the factory that received state assistance. The state didn’t say how many jobs the company shed in its other facilities around the state or whether this affected the rest of auto employment in the state. When state administrators give credit to this company for creating jobs in the state, shouldn’t they be reporting on how many jobs this company has in the state? Apparently not. Other data shed light on employment trends. According to the Bureau of Labor Statistics, auto and auto part manufacturing jobs in Michigan have decreased by 5,300 jobs since 2019, when Whitmer made the announcement. Automotive employment in the rest of the country increased by 25,500 jobs. Even with taxpayer subsidies to every auto and auto part company that asks for state money, Michigan’s auto industry fell behind. Yet the state keeps giving taxpayer money to automakers. As longtime De-

Writing big checks to big companies is not the way to get ahead.

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. 6 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

troit Free Press reporter Dawson Bell observed, “It’s not like the auto industry ever wanted something from the state government and didn’t get it.” Michigan’s economic progress is stunted even when looking beyond the auto industry. Employment in the state is up by 44,000 since the pandemic began, a 0.9% gain. That’s below the nation’s 1.6% increase in employment. The number of people with jobs in Utah, Florida, Arizona, and Idaho is up more than 7% over this period. Unlike Michigan, these states are not known for writing the biggest checks to the biggest companies, yet they are the national leaders for growth. Maybe proponents of corporate welfare believe the state would have fallen even further behind without offering automak-

ers billions of state tax dollars. They are not trying to make that case, however. They offer one-sided accounting and try to put the best spin on favoritism. It is clear that writing big checks to big companies — which Michigan does more than every other state — is not the way to get ahead. But as we can see from Whitmer and the legislature, special deals fill a political demand even when Michigan’s economy is clearly missing out on the growth that is happening in the rest of the country.

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.

Diversified Members Credit Union appoints new CEO She’s the first Black woman named to the role in the credit union’s history By Anna Fifelski

Diversified Members Credit Union in Detroit has a new CEO — and she’s the first Black woman CEO in the credit union’s 94-year history. DMCU named Sati Smith as the credit union’s leader on Nov. 1, succeeding Kathie Trembath, who had been the CEO of DMCU since 2004. The Detroit-based credit union has around $500 million in assets and employs nearly 100 team members at its four locations in Detroit, Clawson and Novi. Despite being Sati Smith a leader in the credit union space, Smith said she never envisioned herself working for a credit union. First, she was just looking to earn her GED. Smith, 53, was born and raised in Detroit and is a product of the Detroit Public School system, she said. She dropped out of high school her junior year and later obtained her GED. At 23 years old, she was a single mother and on welfare, working to earn a degree at Highland Park Community College. When she was 26, Smith said Trembath offered her a job at Ohio-headquartered Kemba Financial Credit Union. “They knew my father because he was a member, but also, that’s just the way that she is — if somebody has a need and she can help, she will help,” Smith said. “She

Now taking over for Trembath as the CEO of DMCU, Smith’s goal is to focus on serving small businesses. The credit union serves approximately 30,000 members and Smith said she plans to “place emphasis” on their small business resources. Trembath will stay at DMCU as a consultant and to aid in the transition of leadership for several months. Prior to being promoted to CEO, Smith also served as DM-

CU’s chief operating officer. DMCU also announced that Mark Evenson has been appointed as the credit union’s new chief financial officer. Evenson, a graduate of Eastern Michigan University and Walsh College of Accountancy, previously served as chief financial officer for Cornerstone Community Financial in Auburn Hills and brings more than 18 years of experience to his new role.

Diversified Members Credit Union is based in Detroit. | KIRK PINHO

“I started over again, as a teller here when I had made progress there.” — Sati Smith, CEO, DMCU pretty much gave me a chance. Once I got in there she said, ‘Learn everything that you can.’” That’s how Smith began her career in the credit union industry, she said. Later, Smith went to Wayne County Community College, then she earned a bachelor’s degree in social work from Wayne State University. Smith also has a master’s degree in counseling from Ashland Theological University and is licensed as a minister by The Fishermen Ministry. Smith said she has long considered Trembath to be her mentor. Trembath left in 2004 to go to DMCU. Smith decided to follow the former CEO to the new credit union soon after, though it came with its own challenges. “It was a very different experience coming from a small organization to a larger one,” Smith said. “I started over again, as a teller here when I had made progress there, and I even took a pay cut to come here.”

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PANDEMIC RELIEF FUNDS

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Michigan got billions in COVID relief funding. Where is it all going? A flood of pandemic-era federal money prompts a flurry of spending on hundreds of state projects and programs | By David Eggert Six and a half billion dollars. An enormous tranche of COVID-19 relief funds, almost $648 for every one of Michigan’s 10 million-plus residents, was sent to state government in 2021 to respond to the once-in-a-century pandemic. And unlike with other rounds of pandemic aid that flowed from Washington — rental relief and food assistance, higher unemployment benefits, coronavirus testing and vaccine administration — Lansing had a fair amount of discretion over how to use it. Today, all of it is spoken for. Gov. Gretchen Whitmer and lawmakers allotted the funding in a dozen budget bills over a twoyear stretch, with the last dollars appropriated in July.

Track the state’s spending for schools, projects Want to really drill down into how Michigan is spending its billions? The state has launched an online dashboard. It breaks down funds into categories such as “state strategic goals,” shows which departments got money and details individual projects that are plotted on a map. Searches can be filtered by census tract, legislative district or congressional district. The tool, which is updated quarterly, follows how much of the money has been appropriated, the total that has been obligated and how much has been spent. Another dashboard has data about Michigan’s spending of all COVID-19-related funding. And the Michigan Department of Education also has a dashboard tracking the separate billions in federal money for districts and charter schools. To explore each one, go to crainsdetroit.com/dashboards.

Where is the money going? To so many places that Michigan may be at risk of being unable to fully address any single challenge of the

many it is facing — like infrastructure, pollution, education and more. Still, some clear priorities have emerged that are making a SPONSORS

8 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

difference while it will take time to know the impact of other spending, according to a Crain’s analysis of the laws and a state tracking tool. The single biggest winner: water infrastructure. It accounts for $1.7 billion, more than a quarter, of the $6.5 billion the state has disbursed, and it will have a longterm effect. Other major beneficiaries are parks and trails, which are getting $473 million. Some aid is more emergency-based, driven by the need to directly address fallout from the coronavirus outbreak. Around $800 million, or 12%, is helping hospitals and long-term care facilities with COVID-caused financial losses, sky-high contract labor costs, recruitment and retention,

and other issues. About $121 million in grants went to businesses; another $50 million is going to nonprofits. The state partially offset a pandemic-induced loss of tax revenue by using $883 million to cover payroll costs in the Department of Corrections. One of Whitmer’s signature first-term initiatives, Michigan Reconnect tuition-free community college scholarships for people 25 and older, has been temporarily expanded to 21- to 24-year-olds thanks to the federal funds. All $6.5 billion now must be obligated, or formally committed, by the end of 2024 and spent by the close of 2026. See MONEY on Page 10

COMMENTARY | PANDEMIC RELIEF FUNDS

Schools will soon face tough funding decisions UNSPLASH/KENNY ELIASON

further behind than their more well-off peers based on recent state assessments. Most of the unspent funds are concentrated among a handful of districts that received the largest per-pupil allocations. According to the most recent state data, 16 of the state’s 800-plus districts have at least $10 million of their ARPA allocation remaining to spend. Collectively, this small subset of districts accounts for more than 40% of the total unspent funds statewide. This list includes several large districts in southeast Michigan, such as Detroit, Pontiac, Dearborn and Southfield, as well as urban districts in Flint, Grand Rapids, Lansing and Muskegon. Twelve of the 16 districts have at least 50% of their ARPA allocation still to spend, with the amounts of unspent funds ranging from $1,700 per-pupil (Lansing) to $25,000 per-pupil (Flint). All well above the $1,000 per-pupil statewide figure. There is no escaping the math — district budget right-sizing is on the horizon. This

will surely involve painful budget cuts to popular programs and services that have been initiated with these one-time dollars. Schools that received substantial sums of aid were able to afford extended tutoring, additional summer programming, new mental health services, along with other services. Because school budgets largely pay for labor, districts will have few choices but to reduce staff. Nearly half of the relief aid spent to date has gone to salaries and benefits, helping to swell school employment levels to new heights. While a few districts have begun right-sizing by shedding positions from this year’s budget, most are pushing the hard decisions to tomorrow. Doing so, however, makes the inevitable funding cliff even more steep. With academic recovery still ongoing, especially for those students hardest hit by the pandemic, many school leaders face a delicate balancing act preparing their budgets for the 2024-25 school year.

LORENZO CONTI

school budgets have seen subchools across Michigan are stantial spending increases that about to face another they would not otherwise be able COVID-related disruption as to afford with their regular ongobillions of dollars in federal pandeming revenue. ic aid runs out in less than a year. Funds from 2021’s American But unlike the unprecedented inRescue Plan Act, the last and largterruptions to in-person learning est aid package, came with a usethat occurred without warning as the it-or-lose-it fall 2024 deadline. novel coronavirus spread across the That means the current 2023-24 globe in early 2020 and sent students Craig Thiel is home for months, school leaders research director school year is the last full year for school districts to spend down have had time to plan and prepare of Citizens for the upcoming fiscal disruption. Research Council what remains. Beginning September 2024, district budgets will have For many school districts, however, of Michigan. to do without the federal largesse. adjusting budgets will require a deliCollectively, schools have $1.5 billion in cate balancing act to ensure their students’ academic recovery is not side-tracked by the ARPA funds yet to spend, an average of $1,000 per student statewide or 11% of the loss of the one-time relief dollars. Since late 2020, almost $5.2 billion has current $9,600 per-pupil foundation allowbeen provided directly to districts under ance. Several districts, however, have much two federal relief packages to help schools larger per-student amounts remaining, navigate the pandemic. That massive sum is which means they will have even steeper nearly three times the amount of federal aid funding cliffs next year when the federal aid schools received in the wake of the Great is gone. The impacts from the loss of federal relief Recession and is triple the amount of ongoing federal funds they receive annually. As a aid will be most acute for those school disresult, many school districts have been tricts educating our neediest students. That flush with cash the last few years, using the is because the federal aid was primarily disfederal relief aid to respond to student’s ac- tributed to districts based on the number of ademic and health needs by adding staff, poor students — the same students that sufincreasing salaries, expanding programs fered the greatest learning impacts from the and improving facilities. With this aid, pandemic and today find themselves even

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PANDEMIC RELIEF FUNDS

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Former state budget director Chris Harkins, who was a key player in negotiations between the Democratic governor and the Legislature, said the state was “really purposeful” with the State Fiscal Recovery Fund dollars and tried to make one-time, “transformational” investments in an equitable manner. It was a primarily bipartisan effort since Republicans controlled the Legislature until Democrats took over this year. “It was probably a one-time thing in our history of the state. I don’t think we’ll ever see those types of dollars again,” said Sen. Jon Bumstead, a North Muskegon Republican who sponsored a spending measure that doled out $2 billion in SFRF funds. “But we all thought if we’re going to spend ARPA dollars, let’s spend it where it’s going to make a difference. I think it has made a difference.” As of Oct. 31, $4.3 billion had been obligated; $2.4 billion had been expended. The budget office is working to ensure that if allocated funding is in danger of going unspent and being returned to D.C., “we can try to either redeploy those dollars or find another use before the end of 2024,” Harkins said. Here is a look at some key ways Michigan is using the windfall.

Water Of the $1.7 billion for water-related initiatives, $1 billion went to the drinking water and clean water state revolving funds. They provide low-interest loans to municipalities for upgrades to water treatment and wastewater plants and the replacement of deteriorating mains and old lead service lines. Demand is “off the charts” for the financing, said Paul McDon-

New water lines are installed at a home in Benton Harbor. | AP IMAGES

ald, who directs the finance division at the state Department of Environment, Great Lakes and Energy. There was $1.8 billion worth of requests alone for the Drinking Water State Revolving Fund. The program had loaned $1.5 billion in its 25-year history. The COVID funding, McDonald said, enabled the state to significantly boost grants to local governments so they did not need a loan or they took a smaller one, saving customers from higher bills to cover project costs. EGLE also was able to lend to more applicants. The state closed roughly 200 loans via that account and the

Clean Water State Revolving Fund in the last two years, more than the previous four years combined. “Infrastructure only lasts so long. So a billion dollars for communities that would normally have to raise rates or continue rates at a higher level to recapture money has a significant impact,” he said. In some cases, “significantly overburdened” communities with high poverty rates or low property tax bases got 100% grants. “Overburdened” municipalities received 50% grants and 50% loans. The accounts are being bolstered with Bipartisan Infrastructure Law funding, too. “We’re able to meet more and

Par

The pump gallery is pictured at Conners Creek Pump Station in Detroit. | NIC ANTAYA

Billions earmarked for local governments and schools By David Eggert

Michigan got tens of billions in federal funding to respond to and recover from the COVID-19 pandemic. The state had little or no control over much of it — “pass-through” funds like more generous unemployment benefits, for instance, or assistance to buy masks, conduct coronavirus testing and administer vaccines. Within the infusion of aid, however, is a subset known as State Fiscal and Local Recovery Funds. The funding was approved as part of the American Rescue Plan that Congress and President Joe Biden enacted in 2021. And it offers recipients — the state government and municipalities — flexibility on how it is spent. Michigan received $6.5 billion. Some 1,800 local governments across the state got $4.4 billion. In 2022, the U.S. Treasury De10 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

COVID relief funds for schools Separate from ARPA funds that went to states, schools and school districts received more than $5 billion. Districts spend their own money, then are reimbursed from federal funds administered by the Michigan Department of Education. As of Nov. 10, $5.6 billion had been allocated, $4 billion reimbursed and $1.6 million remains. Budgeted amount by category Salaries/benefits 43.9% Purchased services 31.0% Supplies/materials 13.1% Capital outlay 8.2% Other 3.7%

Total budgeted by use Instructional/learning loss 33.8% Continuity of services 33.4% Unbudgeted 22.6% Facilities/capital outlay 6.0% Mental health/support services 2.3% Other 2.0%

Source: Michigan Department of Education

partment finalized a rule specifying four broad ways the money

could be used, including to: ◗ Replace revenue lost due to the

pandemic, to provide government services up to the amount of revenue lost. ◗ Respond to the pandemic’s far-reaching public health and negative economic impacts, helping households, small businesses, nonprofits, impacted industries, nonprofits and the public sector. ◗ Provide premium pay for essential workers. ◗ Invest in water, sewer and broadband infrastructure. Later that year, Congress revised the program to give more discretion. Under an interim rule, the funding also can be spent on: ◗ Emergency relief from natural disasters or their negative economic impacts. ◗ Road, bridge, transit and bus projects. ◗ Housing-related projects that are eligible activities under the Community Development Block Grant and Indian Community Development Block Grant programs. They

include efforts to reduce and prevent vacant properties, including acquisition, clearance and remediation, rehabilitation and reconstruction, and homeownership assistance. State Fiscal and Local Recovery Funds aid cannot go to pension funds or directly or indirectly offset a tax cut. It must be obligated, or committed, by the close of 2024 and spent by the end of 2026. Separately, Michigan’s 800-plus school districts and charter schools got more than $5 billion in flexible funding from the federal Elementary and Secondary School Emergency Relief Fund. ESSER cash came in three waves, the last of which must be obligated before October 2024. It can be used in a variety of ways, including to address lost instructional time and the pandemic’s effects on students’ mental and emotional well-being. At least 20% of the third tranche must address learning loss.

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PANDEMIC RELIEF FUNDS more customers and communities than we would ever be able to reach,” McDonald said. Legislators also earmarked hundreds of millions of flexible coronavirus relief aid directly to local water projects. That includes: ◗ $75 million for Detroit to replace lead service lines. ◗ $72 million for Macomb County to do work that will reduce combined sewage discharges and overflows by 30% and 20%, build a new pump station to increase capacity and protect basements from flooding, and prevent sinkhole disasters like one in 2016. ◗ $66 million for the Michigan Department of Transportation to install 110 to 150 backup generators at Metro Detroit highway pump stations to mitigate flooding. ◗ $45 million for lead line replacements in Benton Harbor. ◗ A $25 million sewer infrastructure grant for the Great Lakes Water Authority, which provides wastewater service to nearly 30% of the state. “I think the money’s actually been very well spent. The problem is it’s not nearly enough because the need is so great,” Bumstead said.

Michigan fiscal recovery funds The American Rescue Plan Act, passed in 2021, and other COVID recovery-related funds designated federal money to states for projects and programs. State lawmakers determined allocations for that money into seven broad strategic goal areas. Appropriated money is the total amount to be allocated to a goal. Committed funds are those specified to projects as part of a contract. Spent is the expenditure of money as of September 2023. The state will update spending totals quarterly. The state has allocated $7.1 billion, committed $4.3 billion and spent $2.4 billion so far. Appropriated Committed Spent PUBLIC SAFETY $1.3 billion $1.2 billion The gardens and conservatory at Belle Isle | LAUREN ABDEL-RAZZAQ

HEALTH CARE OUTCOMES $1.1 billion $983 million $409.1 million Investments: Immediate public health needs caused by the pandemic, as well as rebuilding the health care industry afterward. Recipients include a new psychiatric hospital and grants to hospitals and long-term care facilities.

Parks Rendering of a proposed waterfront feature for a new Flint state park | DNR

Other big recipients are parks and trails, which are important not only for quality of life but also tourism and a push to sell Michigan as a permanent destination for young workers. Visitor numbers remain above pre-pandemic levels. Some $220 million was allotted to tackle a decadeslong backlog of infrastructure issues within the state parks system: aging bathrooms and showers, leaky roofs, sewer and water lines, roads, parking lots, electrical systems. An additional $30 million was set aside to create a new state park in Flint. It will be the 104th state park and the first in Genesee County, the only county without land managed by the Michigan Department of Natural Resources. Belle Isle Park in Detroit, which became a state park nearly a decade ago after the city declared bankruptcy, got $23 million. Renovations are underway or planned at the conservatory, aquarium, fountain and other sites. People “want and expect to have clean, safe park spaces and an atmosphere they can enjoy,” said Ron Olson, the department’s parks and recreation chief. He called the spending “probably the biggest one-time investment in the state park system since ever. It’s a big deal.” The $243 million for repairs and improvements is 16-fold the $15 million annual budget for infrastructure work. The vast majority of state parks funding for operations and maintenance is from user fees, which limited officials’ ability to infuse a lot of money into infrastructure until the COVID money arrived. “It gives us a big catchup,” Olson said, noting the parks system is 104 years old. “Part two of this of course is paying attention to pre-

$1.2 billion Investments: Community violence interventions and programs that build relationships between police and communities. Recipients include public safety departments’ payroll due to revenue loss, the Police Athletic League and community policing grants.

ventative maintenance. We’re trying to work on different strategies for that because once the money is spent, we don’t want to start going backwards again.” Another $200 million is designated for local parks and trail infrastructure. There is $60 million to help Detroit build the Joe Louis Greenway, a 27.5-mile recreational loop that will connect 23 city neighborhoods as well as Highland Park, Hamtramck and Dearborn. Downtown Grand Rapids Inc. received $55 million to close gaps in a riverfront trail system and build a 23-mile trail along the Grand River in Kent County. Some $65 million was set aside to modernize local parks and develop new local public recreation opportunities.

Fiscal cliffs? Bob Schneider, senior research associate for the Citizens Research Council of Michigan and a state budget expert, said most of the $6.5 billion has “been programmed in one-time ways.” While the state tapped coronavirus funds to pay corrections workers amid an initial revenue loss, for instance, it now is back to using general funds as it had before. “I don’t think we’re really facing too many cliffs or reckonings” at the state level, he said, referring to how governments can be forced to make cuts if they use temporary federal funds for ongoing expenditures. Michigan school districts, which separately got almost $5.2 billion in pandemic-related relief, could face challenges, especially in high-poverty communities that received more money. The state’s child care industry was stabilized

with federal subsidies for two years until the payments expired this fall. Some of the 6,400 providers dealing with that funding cliff may close their doors. The state was in much stronger fiscal shape than expected when the $6.5 billion infusion was made a year into the outbreak. Other federal lifelines — stimulus checks and extra, longer unemployment benefits — led to a surge in tax revenues. That afforded officials an opportunity to be more deliberate, albeit while still facing a deadline to get discretionary funds out the door. “You would want to make sure you’re spending it on one-timetype needs, one-time things or at least catchup-type things like water infrastructure and not ongoing programs where you’re going to face the cliff,” Schneider said. “Again, at the state level, they’ve done a pretty decent job doing that.” Two major items include building a new state psychiatric hospital complex in Northville Township and a new state public health and environmental lab in Lansing. As with other projects, they are facing higher construction costs. A supplemental spending bill heading to Whitmer authorizes $376 million for the hospital complex that will replace two existing hospitals, up from $325 million projected 16 months ago. The lab’s budget rises to $326 million from $260 million. Though inflation is eating into buying power, the tranche is still massive. It equals half the state’s yearly general fund revenue. “It goes really far,” Harkins said. “When executed correctly, the state should see benefit from these dollars really for decades.”

WORKFORCE & ECONOMIC DEVELOPMENT $1.5 billion $764.7 million $592 million Investments: Skills, training and child care programs for families, as well as support for businesses. Recipients include health care worker recruitment and retention, unemployment funds and programs such as Pure Michigan. ENVIRONMENTAL SUSTAINABILITY $1.3 billion $600.4 million $42.2 million Investments: Water infrastructure and other initiatives to promote environmental sustainability. Recipients include lead service line replacement in Benton Harbor and Detroit, and the state’s drinking water and clean water revolving funds. INFRASTRUCTURE $825.5 million $437.6 million $50.9 million Investments: Building and repairing local and state park infrastructure, as well as addressing flooding issues on state highways. Recipients include state park maintenance and improvements, pump station generators and community revitalization grants. EDUCATION $555.5 million $170.1 million $66.3 million Investments: Funding for students, teachers and after-school programs. Recipients include the Great Start Readiness Program expansion, Grow Your Own, teacher recruitment and after-school programs, and mental health assistance. GOVERNMENT ACCOUNTABILITY $35 million $29 million $10.3 million Source: State of Michigan Budget Office

NOVEMBER 20, 2023 | CRAIN’S DETROIT BUSINESS | 11

PANDEMIC RELIEF FUNDS | COMMENTARY

COVID relief funds are reshaping Michigan’s future

the state, including lead service resident Joe Biden’s Ameriline removal, because everyone can Rescue Plan gave states deserves access to safe drinking the tools to make transformawater. tional change coming out of the ◗ Investing in our kids: Unfortupandemic. Here in Michigan, we’ve leveraged these funds to nately, the pandemic disrupted make a real difference in the lives learning for students across the of Michiganders and spark generastate and we’re tackling this chaltional investments in our econolenge head on by implementing my. These funds allowed us to Jen Flood is free preschool for all 4-year-olds; make historical investments in Michigan’s funding before and after school healthcare, kids, small businesses budget director. programs; increasing mental and communities across the state. health programming in schools; In 2021, Gov. Gretchen Whitmer con- and investing in teacher recruitment. vened a group of leaders from business, ◗ Raising wages and supporting small philanthropy, education, healthcare, labor businesses: Through ARP investments, we and more to create a vision for transforma- were able to expand the successful Michitional investment. These leaders identified gan Reconnect program to provide a tuiprinciples to ensure ARP dollars were in- tion-free pathway to a degree or skills certifvested sustainably, effectively and equita- icate. Reconnect also helps employers find bly. Proposals from this group were shared the talent they need in our growing and with the public and the legislature, and over changing economy. the past two years have been appropriated ◗ Affordable housing: We invested hunby Republicans and Democrats in the Legis- dreds of millions into affordable housing, as lature. Michigan families and small busi- well as energy efficiency programs to lower nesses are already seeing the benefits, and utility bills. will continue to witness the countless ways ◗ State parks: With bipartisan support, we these once-in-a-lifetime funds have been leveraged nearly $250 million to tackle the harnessed to transform Michigan’s future. backlog of infrastructure needs at our state ◗ Clean and safe drinking water: We inparks to upgrade camping facilities, revested nearly $1.4 billion to rebuild our strooms, parking lots and more, ensuring water and sewer infrastructure throughout visitors can take advantage of the world-

12 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

Nearly $1.4 billion in American Rescue Plan money was used to rebuild water and sewer infrastructure. In 2021, volunteers distributed bottled water to Benton Harbor residents when elevated levels of lead were found in the tap water in the southwestern Michigan city. | BLOOMBERG

class outdoor recreation opportunities Michigan has to offer. ◗ Public safety: As a former prosecutor, protecting public safety is a top priority for Gov. Whitmer and that’s why we’re investing in community violence interventions and funding programs that build relationships between local communities and the police who serve and protect. ◗ Finally, the roads: On top of the investments mentioned above, Michigan has received billions in federal funds to fix roads and bridges across the state. We’re competing to bring home every possible dollar through the Infrastructure Investment and Jobs Act, Inflation Reduction Act, CHIPS Act, and more. We must bring our roads, bridges, and water infrastructure up to a

state of good repair, while laying the foundation for a next-generation economy built on clean manufacturing, electric-powered transportation and zero-carbon energy. Those investments will create the middle class of the 21st century while preserving our lands and waters for generations to come. These federal opportunities represent a once-in-a-generation opportunity to make lasting investments in Michigan’s future. Michigan’s share of COVID funds have been appropriated in a fiscally responsible and transparent manner. Anyone can visit the Fiscal Recovery Funds Dashboard or review the 2023 Annual Recovery Plan Report to learn more about the state’s use of these funds and the difference they’re making in communities across Michigan.

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COMMENTARY | PANDEMIC RELIEF FUNDS

Historic ARPA funding is improving lives in Michigan

partner, has tracked all ichigan is on ARPA funding nationtrack to spend wide through a pubnearly $11 billic-facing dashboard. lion in state and local Brookings found that the American Rescue Plan most thorough and equiAct funds, money that ty-oriented approaches has made Michigan a funded by ARPA leverbetter and more equitaaged pre-existing “big ble place to live, work ideas.” For example, Deand raise a family. But Tim Daly (left) is a program troit’s Joe Louis Greenour work to maximize director at The Joyce Foundation and implement this and and leads the Foundation’s public way project was funded largely because of severfuture investment con- affairs initiatives in the Great al ingredients for suctinues. Lakes Region. Amrit Mehra is a cess: planning that preCongress enacted public affairs consultant at The dated the pandemic, ARPA in 2021, providing Joyce Foundation. leveraging of public-pribillions to state, local and tribal governments to stimulate a ro- vate-nonprofit funds and an inclusive and bust, equitable recovery from the sustainable project design. This is unsurprising. Policymakers were COVID-19 pandemic. Before and after the enactment of the ARPA, the Joyce Founda- asked to respond quickly to economic untion invested $8 million across 40 grants certainty in an environment filled with alongside our philanthropic partners to regulatory and political uncertainty, makbuild capacity, drive inclusive economic ing planning for new projects nearly imgrowth and help ensure the Great Lakes possible. But the implication is clear: region captured its fair share of this communities that continuously invest in planning for these opportunities gain a once-in-a-generation federal funding. Along the way, government, community, tremendous advantage in drawing down business, philanthropy and others learned new federal dollars. Second, the value of collaboration important lessons that should inform our work — lessons that should be applied now among federal, state and local policymakers, is paramount. But additional support as other federal resources are available. First, we must continue developing new is still needed to expand the capacity ideas and planning for the future. The needed for effective intergovernmental Brookings Institution, a Joyce grantee collaboration.

In partnership with the Charles Stewart Mott and Masco Foundations, Joyce helped the Michigan Municipal League Foundation launch a new navigator program for local communities to receive technical assistance to access water infrastructure funding. More than 75 Michigan communities have been served by the navigator; two-thirds are underserved communities and more than 60% with populations of 10,000 or less. This highlights the urgent demand for support among some of the state’s most vulnerable communities to realize the full benefit of these funding programs. Finally, centering equity and ensuring accountability when implementing federally funded projects should be a priority. The Council on Michigan Foundations’ Statewide Equity Fund affirmed that philanthropy plays an important role in facilitating resources to achieve these goals. This $2 million pilot project helped steer ARPA and other federal dollars toward equity-centered approaches to advance economic prosperity in five Michigan communities. This included working with the Community Foundation of Greater Flint to create an inclusive grantmaking process that led to the distribution of nearly $60 million in ARPA funds in Flint. This equity-orientated approach helps ensure in-

vestments are reaching target populations over the long term. While the pandemic is largely behind us, a sizable portion of Michigan’s ARPA funds must still be used. Data released by the U.S. Department of Treasury through June 2023 showed, for example, that the state must still budget $400 million in ARPA funds by 2024 and spend a majority of its $6.5 billion allocation by 2026. Now, other federal funding programs are being leveraged in Michigan including the CHIPS and Science Act, Inflation Reduction Act, and Infrastructure Investment and Jobs Act. Together, these laws

Brookings found that the most thorough and equity-oriented approaches funded by ARP leveraged pre-existing “big ideas.” are pouring more than $3 trillion in new economic development into Michigan and nationwide. Collaborative efforts by philanthropy and others have built a strong foundation to ensure Michigan receives its fair share of these federal investments; applying these lessons will ensure that these funds are maximized to transform our communities through multi-sector collaboration, equity and sustainability.

NOVEMBER 20, 2023 | CRAIN’S DETROIT BUSINESS | 13

Updated bank rules seek to minimize redlining effects By Anna Fifelski

Banks across the country and in Michigan will be facing tougher guidelines when it comes to discrimination due to a new rule passed last month. With the Oct. 24 update to the Community Reinvestment Act, people of low-to-moderate income who may have been passed over on loans will have a fairer chance of obtaining loans for mortgages, automotive payments and more. The goal of the CRA was to combat redlining. It was passed in 1977 and was last updated in 2005. Redlining is a discriminatory practice where lenders avoid offering mortgages and loans in areas based on the race or national origins of people who live there, according to the Justice Department. The agency announced this month that an initiative to combat redlining had secured more than $100 million in relief for communities harmed by discriminatory lending practices. Jeremy Kress, an assistant professor of business law at the University of Michigan’s Ross School of Business, said he believes the update to the CRA is not only overdue, but necessary to ensure fair banking practices. “For a long time, the agencies

A Comerica Bank spokesperson said the bank aims to exceed the guidelines of the newly updated Community Reinvestment Act and allow for broader lending to low-and-middle income people. | NICK MANES

have been trying to really accomplish two main goals,” said Kress, who is also co-faculty director of the University of Michigan’s Center on Finance, Law & Policy. “Number one is to strengthen the Community Reinvestment Act to raise the standards that banks are held to, in an effort to bring down the proportion of unbanked individuals and to ensure that small businesses can access the credit that they need to expand. And the second goal is to modernize the CRA because banking looks a lot different today than it looked in 1977. It looks even a lot different today than it did in 2005, which was the last time the CRA regulations were updated.”

Banking is a more mobile practice than it used to be. Banks don’t need to be located in a single area to reach customers. Former CRA regulations applied to banks with physical branches and they were regulated based on the geographic area surrounding their locations. New regulations require banks with a predominant online banking platform to meet the credit needs of low and moderate income borrowers across the country, Kress said. “If you were a bank that only had a physical presence in Michigan, you could lend to only high-income borrowers in Missouri and you could still be in compliance with the Community

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Reinvestment Act because you didn’t have a physical presence in Missouri,” Kress said. As times have changed, so too have the needs of consumers, said Michael Hsu, Consumer Financial Protection Bureau controller of the currency. “Robust implementation of this new CRA rule will strengthen trust in the banking system,” Hsu said. “Since the 2008 financial crisis, banks have worked hard to reestablish trust with consumers and communities. While there is still work to do, the industry’s performance during the pandemic, in particular banks’ facilitation of PPP loans, gave many consumers and small businesses a renewed sense that their bank understands and will be there for them. Strong support for this modernized and strengthened CRA will reinforce that sentiment and further bolster trust in the banking system.”

What it means Data show that many nonwhite communities remain underserved almost half a century after the passage of the CRA. For example, Black borrowers in low- and moderate-income areas in most major U.S. cities receive disproportionately fewer loans. In a bid to address that, the rule includes a revised test to measure a bank’s closed-end mortgages, automobile loans, small business and small farm loans. It also streamlines the criteria. The federal government redlined Detroit and the surrounding suburbs on June 1, 1939, specifically targeted residents of color, deeming their neighborhoods as “hazardous” to investment because they had residents of color or were even near residents of color or those who were foreign-born, according to research from Michigan State University Assistant Professor Craig Wesley Carpenter. “The suburbs were more likely to use and enforce racially restrictive deeds, covenants, and zoning, which thus led to more ‘green’ grades and the associated housing subsidization in the suburbs and to white people,” Carpenter wrote in his report. “Housing subsidization and investment was eliminated in most Detroit City neighborhoods, to Black families, and to diverse neighborhoods. Resultantly, Detroit became and remains one of the most racially segregated cities in the United States and the racial wealth and housing gap remains one of the largest in the United States.” Thus far, the CRA has been limited in what it has done to combat this redlining. According to a 2021 letter from David Whitaker, the director of the city of Detroit’s Legislative Policy Division, the median household income for Detroit is $30,000 a year, with 35% of the population living in poverty. In the city of Livonia, the median household income was $80,000 and 5.5% of the population was living in poverty, according to 2019 U.S. Census Bureau data. Median income for the city of Warren

was approximately $50,000 and 17.5% of the population was living in poverty, Census data said. This means there is greater need in metro Detroit for more and higher loans. In a statement to Crain’s, a Comerica Bank spokesperson said the company aims to exceed the guidelines of the CRA. “We continually strive to meet and exceed the guidelines set forth by the Community Reinvestment Act,” the statement read. “Uplifting our residents, families, neighborhoods and small businesses, especially low- and moderate-income borrowers and communities, through initiatives focused on economic development, financial education, technical assistance, and community development lending and investing drives our commitment to the communities which we serve.”

The consequences It’s unknown if the changes to the CRA rule will go far enough to make an impact. Dennis Kelleher, who leads the Washington-based Better Markets group that often advocates for tougher rules, said the CRA reforms are well-intentioned but unlikely to work. “It will likely continue to miss classic cases of redlining and enable banks to continue getting high if not perfect CRA ratings while continuing to reduce lending to low- and moderate-income communities,” Kelleher said. A point of contention in the CRA overhaul has been provisions in the new rule that expand so-called “assessment areas” to focus more on lending activity beyond their physical presence in communities. Critics of the rule say the impact will be muted by the shift in retail lending to nonbanks. According to the Board of Governors of the Federal Reserve System, most guidelines set by the final rule will be applicable beginning Jan. 1, 2026, and all others will be implemented Jan. 1, 2027. “This rule tries to be more transparent about what benchmarks banks have to meet in order to achieve a particular rating on the CRA,” Kress said. Banks with poor lending scores may be prevented from doing mergers and other actions as determined by regulators. However, the updated CRA does impact credit unions and other nonbank financial institutions like insurance firms, venture capitalists and more. The Michigan Department of Insurance and Financial Services regulates credit unions in Michigan and the National Credit Union Administration is responsible for chartering and regulating federal credit unions. Nonbank lenders account for 60% of all mortgage originations, including 75% of all government and government agency mortgages, according to research by the Washington-based Urban Institute. Bloomberg News contributed to this report.

WHISKER From Page 3

Zuppke joined Whisker in 2015 as an individual contributor marketer and worked several roles before becoming president and CEO in 2021. The price of Litter-Robot, Zuppke said, “allows the business to stand on its own two feet.” All parts of a Litter-Robot can be replaced and updated, which allows for customers to keep their base models for decades and allows Whisker to stand behind their products.” Alexandra Hartman, of Beverly Hills, said she and her wife purchased the Litter-Robot for their cat, Tuna, two years ago in order to keep the area around the litter box more tidy. “I was actually just very over it,” Hartman said. “I felt like no products really made things easier and cleaner. To be honest, I was a little apprehensive to get a new product just because we’ve gone through so many of them, but when we did decide to make that switch, it was instant as far as how easy it was to set up and how much easier it made our lives.” Hartman said she also likes the Litter-Robot because it eliminated her concern of developing toxoplasmosis, a parasitic infection that the CDC warns can be transmitted to people when they clean a cat’s litter box. It can be particularly dangerous for pregnant women. Hartman and her wife recently had a child. David Wechsler, of West Bloomfield, also cited the risk of toxoplasmosis as a reason his family switched to the Litter-Robot. “I live a very busy life and I work a lot and I have a pregnant wife at home and a toddler,” Wechsler said. “The last thing I need to think

MARKET

Whisker founder Brad Baxter with office cat product tester Callie. | WHISKER

about is my cat stepping on its own poop.” Wechsler also uses the Whisker Feeder-Robot for his dog, which is also connected to the Whisker app. On it, he can adjust what time his dog gets fed and the amount of food it dispenses.

Litter-ally ‘a great idea’ Originally from Wisconsin, Whisker Founder Brad Baxter, 57, moved to Michigan to work for Ford Motor Co. in the late 1980s. When he split from his girlfriend and he was left with their cats, he started thinking seriously about pet products. He founded Whisker in 1999 as Automated Pet Care Products Incorporated and the brand has continued to evolve since then. In 2015 the company shortened the name to Auto Pets and finally rebranded to Whisker in 2021. “It could have been anything, it

just happened to be a litter box because that’s the problem I was facing at that particular point in time,” Baxter said. “And it turned out to be a great idea, a great path to take. It took a while to get traction but we eventually did it.” The product works by sensing when a cat enters the space-agelooking litter compartment. When the cat leaves, the sensor tells the inner cylinder to spin, sifting out any waste into a sealed drawer for later disposal. The company also makes a robotic pet feeder that measures and serves dry food on a time schedule for cats and dogs. Whisker made $20 million in sales in 2017. It sold its millionth robot in January. The company has also grown to meet demand. For example, there were 40 employees in 2017 and now it has 575 employees across the U.S. and plans to hire 20 new engineers upon completion of the

4 Pdevelopment sites listed for sale LACE

By Kirk Pinho

HEALTH BENEFITS

Real estate developer Peter Cummings has torpedoed two previously announced mixed-use development projects proposed for hundreds of residential units around Eastern Market and in the Milwaukee Junction neighborhood. On Nov. 10, Detroit-based brokerage firm O’Connor Real Estate listed four development sites totaling nearly 9.5 acres for sale for undisclosed asking prices. COMMERCIAL That signals the PROPERTY end for Cummings’ Detroit-based The Platform LLC’s plans to redevelop the 4.34-acre former Joe Muer restaurant site between Gratiot Avenue and St. Aubin next to the Dequindre Cut, as well as a second phase of the Baltimore Station project in the Milwaukee Junction neighborhood at East Baltimore and John R Road on nearly 1 acre of land. In addition to those two properties hitting the market, O’Connor has also listed the 1.1-acre site of a former Big Boy restaurant at East Jefferson Avenue and East Grand Boulevard in the Islandview neighborhood across from Belle Isle. The site, which had been contemplated for a new development, had previously been

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

JOB FRONT

REAL ESTATE

JOB FRONT

engineering lab in March 2024. “We are very adamant and intentional now that we’re trying to build a lot of our team here as much as we can,” Zuppke said. “With our intentional new hiring, we’re trying to do as much as we can in Detroit. One, because we’re here and two, we believe that we can build a better community of technology professionals, marketers and just the whole company when we’re under one roof together.” Whisker also has a 226,000-square-foot campus in Juneau, Wis., where the Litter-Robots are assembled. Baxter bought the Wisconsin location in 2009 because it was centrally located near the company’s suppliers, Zuppke said, and he anticipates that they will need to expand further in the future. However, throughout all these expansions, Whisker has never accepted venture capital to fund its enterprise.

Whisker is entirely designed and assembled in the United States and by joining forces with Chicago-based Pondera Holdings LLC in 2018, the company has been able to keep from adding capital to their balance sheet. Zuppke said Whisker has been profitable for 18 years in a row. Whisker did not share the company’s annual sales and revenue. “It is upon me to make sure that I deliver for the people that choose to join Whisker and that’s not something I take lightly,” Zuppke said. “So we made sure that we operate from a comfortable level of profitability where we can continue to fund our innovation pipeline, continue to find customers and, for those that already have the product, provide great customer service. And overall our operations being here in America are all very important to us and something that we really stand behind but something that we take a lot of pride in.” Whisker introduced the Litter-Robot to 50 PetSmart stores in Michigan throughout 2023 and will be in around 200 locations by the end of January 2024. The business also partnered with Best Buy and will introduce the Litter-Robot to stores throughout Michigan next year. Whisker also partnered with Best Friends Animal Society, a Utah-headquartered nonprofit dedicated to ending the euthanization of shelter animals. For every Best Friends bundle purchased on the Whisker website, the company donates 1% of the sale to Best Friends Animal Society. “We believe that we’ve created an appliance category that didn’t exist before,” Zuppke said. “And our goal is to continue doubling down on that and creating awareness of what can be with a Litter-Robot and how your life can evolve.”

POSITIONS AVAILABLE Clockwise from top left: The Riverfront Towers multifamily complex (left) and the new apartment tower being built on the former Joe Louis Arena site; the site that used to house Joe Muer’s restaurant; the site at East Baltimore and John R that was going to be the second phase of the Baltimore Station project; and the site of a former Big Boy restaurant at East Jefferson Avenue and East Grand Boulevard. | COSTAR GROUP PHOTOS

listed in November 2021. The fourth site is 3.1 acres sandwiched between the new apartment building under construction on the former Joe Louis Arena property and Riverfront Towers on the west Detroit riverfront. There have been no recent development plans for the site. The land listings also follow the listing by Bethesda, Md.-based Walker & Dunlop Inc. earlier this year of The Platform’s recently constructed 231-unit apartment build-

ing in the New Center area. The $60 million Boulevard apartment building at West Grand Boulevard and Third Avenue next to the Fisher Building opened in 2019. Combined, the listings represent the latest possible major shakeup in the company’s real estate portfolio. Three of the four sites listed at varying points had recent mixeduse housing projects envisioned, with the exception of the west riverfront site. NOVEMBER 20, 2023 | CRAIN’S DETROIT BUSINESS | 15

DOCTOR

virtual care than we ever had.” Williams said the historic practice of seeing a patient every three, six or 12 months is changing. Many patients with stable chronic conditions can be seen less frequently, at least in person. “We’re starting to figure out that we don’t need to see every patient with hypertension every three months,” Williams said. “We are deciding to see people according to their needs. Maybe that’s not what they want, but it works for what they need. If you’re 58 with stable hypertension, maybe you can see the doctor once a year and see a nurse practitioner in the interim. That helps open up a spot for primary care for someone with higher acuity needs.” Williams’ office is using the multidisciplinary approach, relying more heavily on nonphysician staff to aid in treatment. His office employs four physicians and two NPs. The state Legislature is working to expand the role of physician assistants and NPs by giving them more authority in treating patients.

House Bill 5115 was referred to committee last month. The bill would give PAs the ability to delegate certain tasks to medical assistants and others without having to consult a physician. While that would seemingly free up physicians’ time, many are against expanding the scope of their subordinates. “If passed, this bill would put patient safety at risk by allowing nonphysicians the ability to manage other members of the health care team,” Dr. Jessica Heselschwerdt, advocacy committee chair at the nonprofit Michigan Academy of Family Physicians, said in a statement last month. “Physicians receive extensive training and clinical experience, but eliminating them from this layer of oversight would remove a level of safety for patients.”

Another way systems are trying to alleviate the bottleneck is by expanding how patients can see physicians.

UM-Health is opening more primary care offices on Saturdays, for instance. McLaren established walk-in primary care clinics in Petoskey in an attempt to circumvent office visit wait times, said Grant. “In the absence of availability, we intentionally went after primary care walk-in clinics,” Grant said. “We set up several sites. While we want to maintain long-term patient-provider relationships, we want better access too. This allows folks in those more rural communities to get into a doctor right away without having to rely on an emergency room.” United Physicians also operates two urgent care centers, largely for the same reason, to avoid pushing patients waiting for an appointment to an emergency department, Williams said. UM-Health and McLaren are also relying more heavily on their patient portals to stay engaged with patients without having to see them for in-person visits. “The patient portal has opened up access and allows us to handle certain patient communications without resulting in an in-office visit,” Miller said. “But there are two sides of that coin. We have to look at the complexity and volume of work for our primary care providers and make sure we’re balancing their well-being as well.” With the appointment bottleneck, patients then turn to the patient portal where they can send communications to their providers. This, in turn, is forcing providers to spend more and more of their time responding to those communications, while also managing a full patient load. “We are taking a comprehensive look at electronic messages,” Miller said. “There’s a volume of information flowing to the providers, and we need to look and see if other members of the team can answer or review the messages before they get to the provider. There’s an active engagement from us to reduce the burden of messages to the providers. Burnout is a real problem and even with the constraints on staffing, we have to listen to our providers.”

built. Many of those buildings are at the end of their lifespan. With the multi-generations that we serve and the people who utilize our facilities, we need relevant spaces and places that welcome and support a variety of needs and desires,” von Staden told Crain’s in an email. “We see this project as being an example of strengthening the fabric of our communities by weaving together a variety of programs that our neighborhoods depend on and need. Integrating the program of a YMCA into a larger mixed-use development means that costs can be aggregated over the whole development, ongoing maintenance costs can be shared over time, and all members of the community can benefit from the integration of such a civic amenity.”

additional debt.” The organization has been working to pay down $12 million in remaining debt tied to the opening of three new facilities in the region in the early 2000s and find stable financial ground for years. Weir joined the Detroit-based YMCA in 2019 to help turn around the financially struggling organization and membership declines that began after the 2008-09 recession. She will depart the organization in the coming weeks, handing oversight to incoming YMCA veteran Parrish Underwood. Membership declines worsened during the pandemic when the YMCA lost another 50% of its members. Over the past five years, Weir reorganized the senior leadership team and the overall staff structure, closed three YMCA branches and updated seven facilities. Just more than two-thirds of a $10 million gift from philanthropist MacKenzie Scott also helped the organization weather pandem-

ic-spurred revenue losses tied to membership declines, Weir said, noting the YMCA still has $3 million in reserve. Weir and her team are in the last leg of a $15 million campaign to fund facility upgrades and community initiatives. The effort has raised $14.3 million so far. The YMCA is back up to 80% of the memberships it had in the region before the pandemic hit, but Weir projects it will see about a $1 million loss this year as it continues to recover. It’s operating on a $24 million budget funded by paid memberships, program fees for classes such as swimming lessons and philanthropy. The new site in downtown Royal Oak could help bring in new members and revenue while also meeting needs in the community, Weir said. “New facilities are a part of getting us to a better place financially,” she said. “I think a new facility will help us attract new people to our facility.”

From Page 3

Ascension was able to fill only seven of its 10 family medicine residencies through its Genesys Hospital in Grand Blanc; MyMichigan could fill only one of its six open family medicine residencies through its flagship hospital in Midland. Chad Grant, executive vice president and COO of McLaren, said fewer residents are only part of the problem. “All of us in the state of Michigan have struggled to retain our residents,” Grant said. “We have a large training program of about 500 residents with 125 graduating each year. We target them early and have had some success, but if we all did a better job of keeping them in the state, we’d have better success.”

Pay gap problems The reason for the exodus is simple, said Dr. Mike Williams, CEO of provider group United Physicians. “Primary care doctors have been underfunded for many years,” Williams said. “The pay gap is tremendous, which is why only one out of every 10 internal (medicine) residents is choosing primary care. Most opt to go to specialty care where the reimbursement is higher.” The mean wage for a family physician in Michigan in 2022 was $185,420, according to U.S. Bureau of Labor Statistics data. Specialty physicians earn far more in the state. General internal medicine physicians earned a mean of $222,150 in 2022 and obstetricians and gynecologists earned a mean of $203,800. Dermatologists in Michigan earned a mean salary of $342,770. Cardiologists remain the highest-paid specialty physician in the state with a mean salary of $406,270 in 2022. Michigan family medicine physicians also earn far less than their peers in neighboring states. Family physicians in Indiana earned a mean of $231,990 and in Ohio,

YMCA From Page 3

A new YMCA site in Royal Oak has been in consideration since before the COVID-19 pandemic began in early 2020, Weir said. The South Oakland Family YMCA on West 11 Mile Road, roughly a mile from the Main Street parking lot, is more than 50 years old and nearing the end of its lifespan as a YMCA branch. The center has about 6,000 members. “For many years there’s been an interest in the city of Royal Oak to have a new health and wellness facility. That was expressed to us by the mayor in 2019,” Weir said. Those conversations were back-burnered during the pandemic but in August 2021, the City Commission approved a memorandum of understanding to look at ways it could partner with the YMCA on a new community center in the city. After looking at several sites over the past year, the YMCA finally settled on the Main Street site, Deputy City 16 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

Dr. Michael Williams, right, president and CEO of United Physicians, reviews documents with Clinical Manager Elizabeth Hanson at their office in the WellPointe Medical Center in Rochester Hills. | QUINN BANKS

they earn $213,050, according to the federal data. The difference is largely driven by private payers, such as Blue Cross Blue Shield of Michigan, which maintains a dominant 66% of the market share, according to data from the Kaiser Family Foundation. “We need to be paying primary care more so we can entice more people to pursue this as a career,” Williams said. “Otherwise this access issue is going to get worse.”

A stint of hope? To abate the bottleneck, providers and systems are taking a number of approaches, including relying more heavily on digital access for patients and bringing in more nonphysician providers to give care. But those create their own bottlenecks. “We have a several-year plan to change the panel size (the number of patients each physician sees),” Miller said. “We’re working to open up more access by adjusting return visits and providing more Manager Todd Fenton said. The YMCA provides community programming for residents of Royal Oak and surrounding cities, he said. “We definitely have heard from our residents both in internal community programming and the value the YMCA as a nonprofit brings to the city,” Fenton said. There’s also demand for housing, in general, in Royal Oak and for affordable housing in particular, something that’s a strategic priority for the city, he said. “It’s very early in the conceptual stage, (but) it appears this could be a win-win for the city and the YMCA. We’re full steam ahead to see if we can make a project work with the YMCA here in Royal Oak.” Gail Bernard von Staden, vice chair of the YMCA of Metropolitan Detroit and principal of von Staden Architect LLC, said the site would provide a chance for the nonprofit to become part of the fabric of the neighborhood. “The world has changed a great deal since most of our YMCAs were

Finances For its part, the YMCA will plan on doing a capital campaign to fund its portion of the building debt, Weir said. “We will not be taking on an

Expanding options

BATTERY

plant. Indiana economic development officials pointed to its relationship building in South Korea as key to its success in winning the Stellan-

tis-Samsung SDI projects, which are expected to create 2,800 jobs. Indiana’s development agency opened an office in Seoul in July to pitch the state to battery makers in South Korea, which are pouring billions of dollars into plants in the U.S. The regulatory climate and overall business conditions were a factor in the companies choosing Indiana over Michigan for its initial investment, too. Michigan has won several largescale EV battery plants, including the most recent LG Energy Solution-Toyota project calling for a $3 billion investment in Holland. Two plants lauded as economic development triumphs, however, have hit speed bumps. China-based Gotion’s planned $2.4 billion factory near Big Rapids has been a lightning rod for controversy, just as Ford’s partnership with Chinese battery giant CATL has stirred trouble in Marshall. Ford spokesman T.R. Reid told Crain’s that it has not yet made a decision about the investment there. The new contract deal between Stellantis and the UAW includes $18.9 billion in new investments at plants around the country, including $1.5 billion in its Detroit assembly plant and $1.4 billion in Sterling Heights Assembly, according to a CNBC report. It also calls for a new $3.2 billion JV battery plant in Belvidere, Ill., to open in 2028. Asked if Stellantis has plans for other EV investments, Tinson said, “We’re not offering any further comment on future plans.”

months after acquiring Boston Market in 2020, Restaurant Business reported. There are no Corner Bakery locations in Michigan. The aggrieved includes everyone from former employees missing paychecks to landlords with missing rent. New Jersey shut down all of Pandya’s restaurants there due to unpaid employee wages. The Denver Post in May reported that the company’s headquarters was seized over nearly $330,000 in unpaid sales and payroll taxes. By that time, Boston Market had just three remaining locations in its longtime home state. Nation’s Restaurant News reported that there were just three or four corporate employees remaining in the Golden, Colo. office as of late 2020. That’s not all: Some restaurants had resorted to turning to local grocery stores for food products when vendors stopped supplying them, one former employee told Nation’s Restaurant News. Corner Bakery filed for bankruptcy in February, citing assets and debts both of $10 million to $50 million, in Delaware. It was sold in bankruptcy for $15 million to a Sonic and Applebee’s restaurant franchisee, SSCP Management, according to QSR Magazine. Prior to his ownership of Boston Market and Corner Bakery, Pandya faced lawsuits for unpaid bills from Pizza Hut, Checker’s and other chains he was involved with totaling millions of dollars. Investors also claimed he pocketed

their money, Restaurant Business reported. In 2017 he floated a proposal he claimed was a $2 billion-plus investment to bring professional cricket to the U.S. with large stadiums across the country, but that proposal fizzled. Boston Market restaurant, originally called Boston Chicken Inc., was founded in suburban Boston in the 1980s. It is no stranger to financial difficulty, having filed for bankruptcy in 1998 after rapid growth to some 1,200 restaurants around the country. McDonald’s paid $173.5 million for the chain in 2000 as it came out of bankruptcy, and then in 2007 sold it to Sun Capital Partners for an unknown amount. Sun then sold it to Pandya in April 2020. Pandya started making waves not long after his purchase, making pronouncements about rapid store growth and even getting into the chicken sandwich wars and starting a late-night food menu with things like bowls and sliders, a departure from its traditional menu, Nation’s Restaurant News reported in October 2020. A Hail Mary with that business strategy shift wasn’t enough. “There’s kind of two sides to the Boston Market coin,” Bistolarides, of Encore Real Estate, said. “A lot of people haven’t realized they’ve all closed in the last six months. And then there’s the other people who probably thought they haven’t even been around for the past five years because they’ve kind of been on a slow decline for a long time now.”

From Page 1

of that site — Michigan’s most prized piece of mega development-ready land — is now in question after Ford said it was halting its project. Other sites offered to Stellantis, which has its North American base in Auburn Hills, included the megasites near Lansing and Flint, which the state has worked to ready for large-scale development. The last was a site in Van Buren Township; although the MEDC document does not specify location, it is believed to be near Willow Run Airport just north of Ecorse Road in Wayne County. It became clear that Michigan would not win the project in the summer, when Stellantis announced it would again partner with Samsung SDI for the new plant, according to a source with knowledge of the deal. Its tie-up with the South Korean battery powerhouse meant Kokomo was the obvious landing spot. Stellantis spokeswoman Jodi Tinson said Michigan was considered for the project but declined to comment further. The following direct incentives were offered to the automaker, based on which site the project would locate: ◗ Lansing area megasite: $325 million Critical Industry Program grant; $550 million Strategic Site Readiness Program grant ◗ Marshall megasite: $325 million Critical Industry Program

Twin battery plants are being developed by Stellantis and Samsung SDI in Kokomo, Ind. | ALAMY

grant; $550 million Strategic Site Readiness Program grant ◗ Mundy Township megasite: $510 million Critical Industry Program grant; $550 million Strategic Site Readiness Program grant ◗ Van Buren Township site: $510 million Critical Industry Program grant; $550 million Strategic Site Readiness Program grant Additionally, at each site, Stellantis would have qualified for at least $633.7 million in real property tax savings, a $73.8 million state essential services assessment abatement and a real property tax abatement of at least $30.6 million. The company was also offered Michigan Works! “tailored talent solutions” valued around $4 million. Indiana offered far less in cash

The megasite in Eagle Township near Lansing, called the Michigan Manufacturing Innovation Campus, spans more than 1,600 acres between I-96 to the north and Abrams Municipal Airport in Grand Ledge on the other end. | MICHIGAN ECONOMIC DEVELOPMENT CORP.

incentives. The Indiana Economic Development Corp. gave about $175 million of incentives for the newly announced plant, while it offered $186.5 million for the first

CLOSURES From Page 1

The chain — no stranger to financial woes during its nearly 40 years in business — appears to be buckling under its owner Jignesh “Jay” Pandya, whose Rohan Group of Companies took over in 2020, various restaurant trade publications have reported this year. Repeated requests for interviews have been sent to Boston Market in the last several weeks with no response. Whatever happens with the company, experts see value in the properties it occupied and therefore, they shouldn’t stay vacant for too long. Gabe Schuchman, founder and managing director of Bingham Farms-based real estate development and investment firm Alrig USA, called the locations “A-plus” on heavily trafficked main arteries throughout the region. And with construction costs steadily increasing, using “second generation” space — many already with drive-thru windows — rather than building new is cost-effective and prudent for new users, he said. Deno Bistolarides, a retail real estate expert who is managing partner and co-founder of West Bloomfield Township-based brokerage house Encore Real Estate Investment Services, said the inline stores in strip malls will get filled but will likely be more difficult to lease up than standalone ones, with myriad food users

A former Boston Market location in Clinton Township near Metro Parkway and Gratiot Avenue. | LAURÉN ABDEL-RAZZAQ

drawn by drive-thrus and good traffic volumes. “I think a lot of retailers are chomping at the bit to jump on those potential locations,” Bistolarides said.

Exiting the market Earlier this month, Rosemont, Ill.-based U.S. Foods Inc., a food distribution company, sought several default judgments in federal court against Boston Market Corp., Pandya’s Engage Brands LLC (an affiliate of his suburban Philadelphia-based Rohan Group of Companies) and Pandya himself for at least $16.48 million in interest stemming from a produce contract. The complaint, filed in

July, says that for many years, U.S. Foods has been a vendor to Boston Market, but in 2022 the restaurant “began to fall significantly behind in its payment obligations.” That’s perhaps the largest of the cases, although in a series of stories, Restaurant Business magazine in September portrayed Pandya as an owner who has gotten a reputation of skipping bills and, despite grand claims and plans, whose entire financial operation was run by “a single employee using QuickBooks.” Hundreds of lawsuits, primarily over debts, have been filed against Boston Market and another of Pandya’s restaurant chains, Dallas-based Corner Bakery Cafe, which Pandya bought just a few

NOVEMBER 20, 2023 | CRAIN’S DETROIT BUSINESS | 17

THE CONVERSATION

EV charging infrastructure among new mobility chief’s top priorities Long before she got her Mustang Mach-E, Justine Johnson relied on the bus to get around. For Johnson, named chief mobility officer for the state of Michigan in August, transportation has always been intertwined with success. That idea took on a new level of importance when she moved to the Motor City. After bouncing between the coasts, the Los Angeles native landed in Detroit, where she aims to blend her economic development and automotive backgrounds to help Michiganders on the move. This conversation has been condensed and lightly edited for clarity. | By Kurt Nagl Where are you from? I am from L.A., born and raised. I spent K-12 in Los Angeles, went to college for undergrad in Virginia, popped back over to California again to go to grad school, then went to New York City and spent a number of years there. And then made it back to Los Angeles again. Now the Midwest is home, so apparently, I’m someone who loves to be by bodies of water.

Justine Johnson is chief mobility officer, Michigan Office of Future Mobility and Electrification.

Do you have Detroit roots? I didn’t have direct roots, per se, but I always tell folks I’m no stranger to Michigan. I worked in the automotive sector for a number of years, but I was remotely located in Los Angeles at the time. Working at Ford close to about four years, I would often come to Michigan, probably about six times a year or so, working on a number of different projects. So, I would say that Michigan was never a foreign place for me. Did you always want to work in the mobility space? I honestly feel like it’s been this through line in my life. . . .I will say for me personally, one, born and raised in Los Angeles, Calif., to a single parent, and our mode of transportation in my very early, formative years was riding the public bus. A lot of my mother’s close friends to this day are people she met on the bus, and that level of social capital starts to show up, especially when you think about shared mobility in a city that is a car-dependent city. Later on, my mom gets a car, and then I started to take a school bus, and so my school bus journey was about 26 miles from home to school, and 26 miles here, not a big deal. But 26 miles in congestion in Los Angeles, Calif., is a very different conversation. . . .We’re a single-family household, and so when a child misses a school bus, a parent has to make a decision: How does that child get to school now? I probably had a very close to perfect attendance because my mom was like, don’t miss that bus because you’re going mess up my paycheck. And that’s just the reality. When we think about transportation, there are so many other areas that transportation touches on, especially around economic development, housing,

“We’re really thinking about strengthening our mobility industry and workforce, but also really thinking about safe, reliable and accessible transportation infrastructure…” education and more. If you had to point to one priority in your role, what would it be? We’re really thinking about strengthening our mobility industry and workforce, but also really thinking about safe, reliable and accessible transportation infrastructure, as well as on the innovation and policy side. . . .As someone who is an EV owner as well, oftentimes I hear people talk about the challenges potentially around adopting EVs or maybe why they’re afraid to do so. I think it’s really about us having a true conversation around infrastructure. It’s exciting that the state has a goal around more charging infrastructure over the next several years. And so for me, ensuring that we are providing the public

Read all the conversations at CrainsDetroit.com/TheConversation 18 | CRAIN’S DETROIT BUSINESS | NOVEMBER 20, 2023

with reliable and accessible public charging infrastructure is so important, and I’m going to continue to push that … I’d also say another big part of this work that’s important to me is around Make it in Michigan, which is really focusing on people, places and projects … I live in Detroit, but I will say, the state of Michigan is my priority. So how might we think about opportunities that give us a regional approach to connectivity? And how do we really invest in those places to really ensure that people have a space to live, work and thrive, and so that’s something that’s really important to me. What kind of EV do you drive? I own a Mach-E. Her name is Grace. I shipped her from Los Angeles. She actually made it

here before I did. I recently had a road trip north and went to Traverse City. I was meeting with folks there, so I drove Grace. I made it there, and I made it back, and charging was pretty seamless for me. But it also made me think about all of the pieces that will support a pleasurable experience when we’re talking about charging vehicles — simple things, right? It’s kind of like going back to the basics. Is there access to trash cans, and is the area well-lit, is there wayfinding signage and is there a place for people to stretch their legs? All of this stuff is important to this ecosystem. . . .But if I’m not with Grace, usually I’m trying to test out what my public transportation experience has been like, utilizing shared bikes. I’m tapping into all of it. I try to experience all of it, and that journey starts from the time I leave my door. You indicated that from a young age, you came to associate freedom of mobility with success. How does that idea shape your work? I look at mobility and transportation systems as critical connections. And you often hear a lot of times within transportation planning that we’re planning for critical mass. While I think that is important, I do think when we start to really focus on where are the gaps and how can we remove barriers within our transportation ecosystem altogether — I think when we’re very intentional about that, that’s really important. But I think connections, meaning how might we start to have a conversation around even topics like mobility wallets, right, and mobility wallets not only being a seamless transition for people to get onto public transportation and to shared mobility, but also how might mobility wallets be this link to connect people who are under-banked with resources and tools to be banked? I think there are so many connections like that. When we talk about connections to housing, how can we think about land use in a way that supports existing transportation and also the future of transportation? I think about how might we start to orient our cities around a variety of different modes.

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BUILDING TOMORROW’S WORKFORCE More Michigan employers using Registered Apprenticeships to fill critical labor gaps, cultivate talent and forge career pathways SPONSORED BY:

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Stephanie Beckhorn, deputy director of employment and training for LEO, discusses how Registered Apprenticeships are an important part of the state’s strategy to build a skilled workforce. Panelists pictured (from left): Lee Graham, Beckhorn, LEO Director Susan Corbin, Chong-Anna Canfora and Bill Rayl. | DOUG COOMBE FOR CRAIN’S CONTENT STUDIO

By Mickey Lyons for Crain’s Content Studio

s the evolving economy demands flexibility from both employees and employers, more Michigan organizations are turning their focus to Registered Apprenticeships. The “earn while you learn” model of apprenticeship is an old and proven one. Especially in southeast Michigan, many automobile manufacturers have long held apprenticeships as one of their most successful job recruitment models. Now other industries are taking notice, and those that had not traditionally offered the model are recognizing the unique value that Registered Apprenticeships offer. In 2021, about 18,600 Michiganders were Registered Apprentices, with a higher program completion rate than ever before, according to the U.S. Department of Labor. Of those, 81.9% were in the traditional trades of construction and manufacturing. More recently, however, nontraditional Registered Apprenticeship Programs have skyrocketed in industries 2 | November 20, 2023

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like health care, social assistance and education. Since 2018, more than 25% of Michigan’s new Registered Apprentices have been in these nontraditional fields. Apprenticeships are proving to be a win-win for both employers and trainees in Michigan. Registered Apprentices learn a valuable trade or skill, earn wages while they train, finish the program with skills certifications and have more favorable career pathways. For employers, Registered Apprenticeship Programs bring a loyal, highly skilled workforce with lower turnover rates and higher productivity. Registered Apprenticeships, by definition, pay for on-the-job training. The programs are certified by the U.S. Department of Labor and last anywhere from one to six years. Nearly 20,000 apprentices in Michigan have access to more than 1,200 programs. In 2021, Michigan had the nation’s fourth highest number of active apprentices, behind only California, Texas and Ohio. Michigan’s Department of Labor and Economic Opportunity (LEO)

recently gathered a group of leaders from a variety of industries and organizations to talk with Crain’s Content Studio about why these programs are so successful, and how more employers can take advantage of the opportunities to continue to grow Registered Apprenticeships in Michigan.

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Registered Apprenticeship Programs in Michigan Stephanie Beckhorn, deputy director of employment and training for LEO, says the state of Michigan can “box above its weight class” because LEO works closely with partners in the manufacturing, construction, and health care industries, as well as regional Michigan Works! offices, educators and trade organizations. Since 2019, LEO has brought in $90 million in state and federal funding to support the expansion of Registered Apprenticeship Programs. Investing in a Registered Apprentice pays off for employers’ bottom lines, Beckhorn says. Federal statistics show that 90% of apprentices who complete a Registered Apprenticeship retain employment with their organization.

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SPONSORED CONTENT “From an employer’s perspective, for every dollar they invest in a Registered Apprenticeship, they get back $1.47,” says Beckhorn. Outcomes of the program include improved productivity, higher quality work and reduced turnover. That can be music to an employer’s ears, as the cost to replace an employee can range from half to twice the position’s annual salary, according to the U.S. Bureau of Labor Statistics. One $60,000 position could cost from $30,000 to $120,000 to replace — a cost that can add up quickly across a workforce. A Registered Apprenticeship Program not only creates a robust training model to ensure new apprentices gain needed skills, it fosters a relationship that means apprentices stay with their employers longer than those hired from other sources, Beckhorn says. High employee turnover has another cost: Loss of institutional knowledge and skills. This becomes even more critical as a workforce ages and retires, the panelists say.

Registered Apprenticeship Programs can help prevent knowledge drain, because apprentices learn on the job, says Bill Rayl, executive director of workforce solutions for the Michigan Manufacturing Association. He encourages employers to use the program as a pipeline for preserving and passing on that invaluable knowledge before it’s gone. “If you don’t transfer that knowledge to somebody else, what does that cost you?” Rayl asks. “There’s not enough money in the world to get that knowledge back.” Awareness and Advocacy The history of successful Registered Apprenticeships in traditional trades like construction and manufacturing in Michigan has laid the foundation for the programs in other industries, says LEO Director Susan Corbin. “In Michigan, we have a long history that people understand,” she says. “They understand the value of the Registered Apprenticeship model. They understand the value to the participant in an apprenticeship, and the strong skills that an employee has once they’ve completed an apprenticeship program.”

Panelists Susan Corbin Director of the Michigan Department of Labor and Economic Opportunity

Stephanie Beckhorn Deputy director, Employment and Training, Michigan Department of Labor and Economic Opportunity

Natasha Allen Director of strategic initiatives, Michigan Works! Association

Marcia Black-Watson Director of the Michigan Energy Workforce Development Consortium

Chong-Anna Canfora Executive director at Michigan Workforce Development Institute

Jenny Geno Saginaw ISD’s executive director of career and technical education

Lee Graham Executive director LaborManagement Education Committee, Operating Engineers 324, and Michigan Apprenticeship Steering Committee, Inc. chairperson

Ruthanne Sudderth Senior vice president and chief strategy officer, Michigan Health & Hospital Association

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Bill Rayl

Registered Apprenticeship is a ‘golden model’ for careers that involve STEM training, says Lee Graham, chairperson of the Michigan Apprenticeship Steering Committee, Inc.

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BUILDING TOMORROW’S WORKFORCE That doesn’t mean that LEO is resting on its laurels. The state of Michigan has a “Sixty by 30” initiative to ensure that 60% of Michigan’s adult population holds a post-secondary degree or certificate by 2030, an increase from about 50.5% today. Registered Apprenticeships are one key to reaching that goal.

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Health care — an industry facing national and statewide staffing shortages for medical technicians, assistants and registered nurses — is taking note of the opportunity. Michigan hospitals currently are seeking to hire about 8,500 registered nurses, according to the Michigan Health & Hospital Association. In November last year, the state approved the first Registered Apprenticeship Program for RNs, a partnership between West Shore Community College in Scottville, Corewell Health Ludington Hospital, Michigan Works! West

Registered Apprenticeship helps to encourage diversity and remove barriers for marginalized groups, says ChongAnna Canfora, executive director at the Michigan Workforce Development Institute.

Central and LEO. The combination of on-the-job training and the college’s nursing program will get new nurses and able to care for patients in less time.

“We started focusing resources on workforce development, as we saw a lot of the shortages that our members were experiencing,” says Ruthanne Sudderth, senior vice president and

Registered Apprentices do a little bit of everything

are all current employees of school districts, some already working as teachers’ assistants. Their long years of experience working directly with children in the district can often be applied as credit towards their Registered Apprenticeship.

eekeepers. Wine makers. Brewers. Drone operators. Teachers. Nurse assistants. Pharmacy techs. Even 911 dispatchers. These are just a few of the more than 1,200 Registered Apprenticeships available to Michigan residents. Since 1937, Michigan’s Registered Apprenticeship Programs have filled vital skills gaps and created a smoother pipeline of trained workers in many careers. Traditional industries like manufacturing and construction have long had apprenticeships, but now, more fields are seeing the value,

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including some that are facing serious labor shortages. “If you dream it, we can probably build it with a Registered Apprenticeship,” says Stephanie Beckhorn, deputy director of employment and training at the Michigan Department of Labor and Economic Opportunity (LEO). In Saginaw County, a teacher Registered Apprenticeship Program was launched, which is working to address the state’s critical teaching shortage. Starting this year, 27 teacher apprentices are working their way through the program. They

In Ludington, the state’s first nursing Registered Apprentice Program, is a partnership between Corewell Health Ludington Hospital and West Shore Community College. Combining classroom instruction and practical training with a nurse mentor, the program allows nurse trainees to receive hands-on laboratory, classroom and patient care training. Ruthanne Sudderth, senior vice president and chief strategy officer at the Michigan Health and Hospital Association, recognizes that the

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SPONSORED CONTENT chief strategy officer of the Michigan Health and Hospital Association. “What we’re focused on is continuing to raise awareness among the hospitals and the health systems that Registered Apprenticeship is a viable and successful pathway to building their talent pipeline.” A large component of the success of Michigan’s Registered Apprenticeship Programs lies in bridging the gap between what employers need and training opportunities. Employers are taking part in designing programs that fill critical talent pipelines. Trade organizations, like the Michigan Manufacturing Association or Operating Engineers, are working with the state and other organizations to make the most of Registered Apprenticeship Programs. Lee Graham chairs the Michigan Apprenticeship Steering Committee, Inc., and is also executive director of the Operating Engineers 324

Labor-Management Education Committee, a labor organization representing construction skilled trades professionals. He says that Registered Apprenticeship as career training and advancement “has been the golden model for a long time” in advanced manufacturing and construction. Now, with so many jobs requiring STEM applications, that model can be expanded to fit other careers. “There are a lot of good mentors out there, making sure the apprentice succeeds,” he says. “Employers, labor organizations, educators, workforce development professionals — if you’re an apprentice, you’ve got a lot of amazing people that want to see you succeed in the field you choose.” With state and federal funding available, as well as some nonprofit grants in the mix, there are plenty of funding opportunities that even smaller employers can take advantage of to host an apprentice.

Some employers, however, worry that the hosting an apprentice will be too cumbersome. Natasha Allen, director of strategic initiatives for the Michigan Works! Association, notes that often employers are already doing a lot of what’s needed for a Registered Apprenticeship, without even realizing it. To smooth out the process, Michigan Works! agencies have apprenticeship success coordinators working in 16 regions across the state. Coordinators can help sift through paperwork and provide resources to navigate the requirements to officially recognize and register an apprenticeship. They also help with providing talent, Allen says. Because they are embedded in the communities and frequently work with career coaches for jobseekers, coordinators are in an ideal position to recommend just the right person for an employer looking to fill a gap.

program is essential to the state’s future, especially as the population ages. “The Registered Apprenticeship model has really provided our member hospitals with the opportunity to develop a talent pipeline system for the long term,” she says. “Because this is a long-term problem: not only is our population aging, but the people who are taking care of people in hospitals are retiring. We need to rebuild our workforce as our nurses and clinicians and other employees retire.” Career-seekers and employers can learn more about how to host an apprentice or become an apprentice at www.michigan.gov/apprenticeships.

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BUILDING TOMORROW’S WORKFORCE “Because we work with career and technical education programs,” she says, “apprenticeship success coordinators can say to employers, ‘this program leads right into what you already are doing.’ It takes a team to do this.” Funding for Registered Apprenticeship Programs, says Allen, is often a matter of “braiding together” different strands of support. It’s the job of the apprenticeship success coordinators to know which funds are available and how they can be applied to ease the burden on employers, while finding the right apprentices for them. In addition to the $90 million that LEO has brought in since 2019, the Workforce Innovation and Opportunity Act of 2014 provides funding to connect jobseekers with career coaches, training and apprenticeships. “We have youth funding. We have barrier reduction funding. We have all of these different funding sources that employers don’t need to know the names of,” Allen says. “We’ve got that. We’ll put it together. You just let us know what your need is, and we’re here to help.” Pathways to Career Success Chong-Anna Canfora, executive director at the Michigan Workforce Development Institute through the Michigan AFL-CIO, approaches her work with students and jobseekers with a similar attitude of cooperation and coordination. “Strong partnerships play such a big role,” she says.

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The energy industry uses Registered Apprenticeships to introduce a younger workforce to career possibilities, says Marcia Black-Watson, director of the Michigan Energy Workforce Development Consortium.

Development Consortium, says her organization also is working to unravel the complex network of opportunities for workers, post-high-school. It takes effort for students to be able to see the clear career pathway, she says. “A lot of times these pathways don’t even look like pathways, they look like spiderwebs.” Her group links up high school students and adult workers looking for new career options with employers in the energy industry to connect them with different employment opportunities.

Many of the jobseekers face significant challenges to beginning an apprenticeship program. “We have students that have transportation issues; they have childcare issues; they have issues of being unbanked,” she says. As part of the pre-apprenticeship stage, Canfora pulls together resources for these workers to set them on the road to successful apprenticeships.

At LEO, Corbin clarifies these career pathways to potential apprentices. Unlike decades before, Registered Apprenticeships in Michigan broaden a prospect’s career options, rather than laying out one single career track. “Completing an apprenticeship does not preclude you from doing everything else. In fact, with most apprenticeships, you’re completing an apprenticeship with a number of equivalent community college credits. So, you can go on and get your community college degree, or you can go on and get your four-year degree.”

Marcia Black-Watson, director of the Michigan Energy Workforce

Rayl of the Michigan Manufacturers Association says today’s apprenticeship

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options offer more variety in terms of time to completion and career progression. An apprentice’s options for program length, he says, range from entry level through one-year and twoyear apprenticeships, or even longer for management tracks. Registered Apprentices who complete their certification program earn significantly higher wages than the average Michigan worker. Wages for Registered Apprentices one year after they have completed their program averaged $33.69 per hour for the occupations measured by LEO; the average Michigan worker makes $21.73 per hour. The Next Generation Employers in many industries want to engage young people early to show them which career pathways are even possible, so state agencies and trade organizations are working hard to reach students — and parents — where they are. “We have to get in front of our kids earlier to expose them to these opportunities in all industries,” says Sudderth of the Michigan Health & Hospital Association. “If we can do that and build that education in and help

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SPONSORED CONTENT them see those pathways over 10 years, instead of over two or three, we will be set up for better success.”

With Registered Apprenticeships, “they get paid. We have loyal employee. It’s a win-win-win,” says Sudderth.

Jenny Geno, executive director of career and technical education for Saginaw Intermediate School District, agrees. In her role, she reaches out directly to community members, especially parents, to explain the benefits of Registered Apprenticeships. She finds that many parents are extremely responsive “as soon as you start telling those parents how much money their children are going to make.”

Encouraging a diverse pool of apprentices is paying off. In 2021, 13.4 percent of new apprentices were people of color. Women Registered Apprentices, one year after completing their apprenticeship, had a 94.2 percent employment rate.

Her Career Readiness Teams act as career navigators, talking about apprenticeship opportunities at hundreds of community events. The team members talk to parents and highschool age students at school and job fairs, at YWCAs and large community churches. Filling the Gaps Pre-apprenticeship programs help fill the skills and knowledge gaps that might occur in underserved populations and offer a way for employers to diversify their staff. Michigan Workforce Development Institute’s Canfora focuses on removing structural barriers for people from marginalized backgrounds and underserved communities. “Building that on-ramp” to success for pre-apprentices and apprentices, she says, builds a diverse workforce that is representative of the community and provides strong job opportunities for all. “There are so many barriers that (Registered Apprenticeship) can help take away for people,” Sudderth says. “As we are trying to diversify our workforce in health care, we need to be able to bring people in that need different kinds of assistance — maybe they need childcare, maybe they need transportation. What can we do to support their path, to support their journey through their training and education?”

Michigan had the second-largest group of new women apprentices in the country in 2021. Canfora does a lot of what she calls “myth busting” in her job. “One of the things that is an exciting educational opportunity is that women can really start envisioning themselves in these roles,” she says, “the technology has evolved so much. You no longer have to have the ability to lift hundreds of pounds over your head or anything like that.” Canfora applauds the power of oldschool family networks, reimagined for a new industry. An old saying in unions used to be that job pipelines came through BUDS: brothers, uncles, dads, who would pass on information.

Why should your organization choose to host a Registered Apprentice? Here’s a look at the benefits for employers. Registered Apprenticeship: • Starts a rapid transfer of knowledge from current to future high-value workers. • Provides flexible, customized trainings to ensure workers develop the right skills. • Promotes loyalty, as about 90% of Registered Apprentices stay with the employer after completion. • Expands access to state and federal resources for talent development. • Fosters a diverse and inclusive workplace. • Attracts veteran talent by being a GI Bill-approved education pathway. • Improves your bottom line and boosts your organization’s profitability. Learn more To find out how your organization can participate, visit www.michigan.gov/apprenticeship.

“Now more than ever that includes the SAM network. Sisters, aunts, mothers,” Canfora says, “We are present in the educational space. We are raising these children. We are helping shape their dreams.” Veterans have also proven a valuable part of Michigan’s Registered Apprenticeship Programs. Across the 16 Michigan Works! agencies, there are approximately 50 veterans who support other veterans in career transitioning and setting up Registered Apprenticeships. “If you want to talk about a group that employers would be interested in, veterans are ideal as apprentices and employees,” LEO’s Stephanie Beckhorn. “They’re loyal, they show teamwork, they show up, they work. And they come with skills and abilities that can be built on.” EXECUTIVE INSIGHTS

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