Crain's Detroit Business, Dec. 6, 2021

THE CONVERSATION: How Shawn Wilson is looking to make social services ‘thrilling.’ PAGE 22

CRAIN’S LIST: The largest banks in Michigan. PAGE 16

CRAINSDETROIT.COM I DECEMBER 6, 2021

ELECTRIC MOTOR CITY

An employee at American Battery Solutions’ Orion Township plant conducts battery tests.

EV boom spawns a new supply base in Southeast Michigan

COURTESY OF ABS/JASON LOUDERMILK PHOTOGRAPHY

BY KURT NAGL

The multibillion-dollar commitments of automakers and their suppliers to an electric vehicle future has spurred a battery-powered gold rush in Southeast Michigan.

Vehicles with a battery core as opposed to an internal combustion engine require a new kind of supply base and pose a unique set of challenges, from combustibility and safety issues to longevity and range concerns.

The supplier with a solution stands to cash in on the industry’s new direction. Many are hoping to seize on the opportunity by expanding their scope of business and placing big bets on products and services.

Automakers are poised to spend more than $300 billion to shift production to EVs over the next five years, according to consulting firm AlixPartners LP. General Motors Co., Ford Motor Co. and Stellantis NV have said they aim for up to 50 percent of new See BATTERY on Page 21

Crypto cares: Charities turn to digital currency Nonprofits join platform that helps facilitate blockchain donations Cryptocurrency is still an unknown for many charities, but a growing number in Michigan are looking to get in on donations made through the digital currencies.

As of late November, 13 nonprofits in the state had joined The Giving Block, a platform that provides secure processing of crypto donations and donor tracking capabili-

ties, according to the Washington, D.C.-based company.

Among them is Ronald McDonald House Charities Detroit, which signed on for a $2,500 membership in early November. Within three weeks, it received its first two cryptocurrency gifts totaling $500 from two undisclosed donors with ties to the charity’s board.

Though Ronald McDonald House doesn’t typically made a big fundraising push on Giving Tues-

day given the large number of nonprofit asks that day, it hopes crypto gifts will give it an edge — not just on the annual day of giving the Tuesday after Thanksgiving but well into the future.

“There are a lot of people who are skeptical, including me,” Executive Director Jen Litomisky said.

“But we got another $500 we never expected to get.”

GETTY IMAGES

BY SHERRI WELCH

See CRYPTO on Page 18

NEWSPAPER

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NEED TO KNOW

FOOD AND DRINK

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  SENATE PASSES $3.3B FOR WATER INFRASTRUCTURE THE NEWS: The Michigan Senate on unanimously approved $3.3 billion in water infrastructure spending to replace lead pipes and repair aging dams while also sending money to a Detroit-area system that has struggled with flooding blamed on climate change. It includes about $2.4 billion in federal funding — $1.4 billion from the infrastructure law enacted last month and nearly $1 billion from the pandemic rescue law passed in March.

WHY IT MATTERS: Water infrastructure has been in the spotlight in Michigan since the Flint water crisis, and those worries have been exacerbated by fears of a similar crisis in Benton harbor. The House will next consider the massive influx of aid, likely in the new year.

 UAW MEMBERS VOTE TO ELECT THEIR OWN LEADERS THE NEWS: UAW members voted to give themselves a direct role in choosing the union’s leaders, according to a preliminary tally released late Wednesday. The vote would cast aside a delegate system that came to be viewed as an enabler for corruption involving two ex-presidents and other former top union officials.

WHY IT MATTERS: Proponents of the direct election system, including for-

mer U.S. Attorney Matthew Schneider, have argued it could help prevent the type of corruption uncovered by federal prosecutors.

 MICHIGAN DROPS FEDERAL LINE 5 LAWSUIT THE NEWS: Michigan Gov. Gretchen Whitmer abandoned a lawsuit aimed at shutting down an oil pipeline that runs through part of the Great Lakes but said the state would continue pursuing a separate case with the same goal.

WHY IT MATTERS: The move further complicates a lengthy dispute over the 68-year-old pipeline, raising the possibility of simultaneous federal and state court cases alongside political negotiations involving Michigan, the Biden administration and the Canadian government.

 RAIMONDO HINTS AT UNION ‘STRING’ IN CHIPS ACT THE NEWS: The Biden administration’s push for Congress to pass legislation by year’s end that would incentivize semiconductor manufacturers to

build new plants in the U.S. amid a global supply shortage could come with strings attached for union representation in the workforce. During a visit at a United Auto Workers union hall in Taylor, U.S. Commerce Secretary Gina Raimondo did not rule out the possibility of her department making unionized labor a “string” attached to billions of dollars in federal grants in the CHIPS Act. WHY IT MATTERS: The CHIPS Act pending in the U.S. House includes $52 billion in subsidies for the research, development and manufacturing of microchips used in everything from Whirlpool washing machines Chevy pickups.

 CAR INSURER HAGERTY GOES PUBLIC VIA SPAC

Kellogg makes a deal with striking workers  Kellogg Co. and the union representing about 1,400 of its cereal-plant workers said they reached a tentative labor agreement, potentially ending a strike that began nearly two months ago.

The agreement between Battle Creek-based Kellogg and the members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union “includes an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all,” Kellogg said on a website.

The union plans to hold a vote on Sunday.

“The workers have won a lot,” said Rebecca Givan, an associate professor of labor studies and employment relations in the School of Management and Labor Relations at Rutgers University. “It certainly shows the success of going on strike.”

A finalized deal would end an acrimonious stretch between the sides, after workers at four plants walked out and the company resumed operations with temporary employees and salaried staff. The strike is one of a number of high-profile actions by unions at a time of renewed clout for organized labor in the U.S.

THE NEWS: Specialty automotive insurer Hagerty Group LLC went public Friday on the New York Stock Exchange via merger with a shell company. Hagerty, which focuses its insurance offerings on the “global automotive enthusiast market,” merged with Aldel Financial Inc. (NYSE: ADF), a special purpose acquisition corporation led by investor Rob Kauffman.

WHY IT MATTERS: The company is one of only a few in northern Michigan traded on stock exchanges. The deal leaves the founding Hagerty family with 52 percent control of the new publicly traded company.

Kellogg Co. workers demonstrate in front of the cereal plant in Battle Creek in October. | REY DEL RIO/GETTY VIA BLOOMBERG

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MERGERS & ACQUISITIONS

SMALL BUSINESS

What’s ahead for ‘turbocharged’ M&A market Data suggests could carry well into 2022

BY NICK MANES

GETTY IMAGES/ISTOCKPHOTO

ON BLAST

“Red hot.” “Turbo-charged.”

Those are just some of the adjectives that professionals in the mergers and acquisitions space are using to describe the current market.

That can be great news for those looking to sell businesses, as valuations for companies remain high.

Data also suggests that the conditions could carry well into next year, and many M&A practitioners say their pipeline for work remains strong.

But also on the horizon is the likelihood that some element of distressed M&A — acquiring troubled companies — that is also likely to return in the coming months, after a years-long absence, given the drying up of federal stimulus funds.

“We’re in one of the hottest M&A markets of my career,” said Tom Vaughn, a corporate finance and M&A attorney in the Detroit office of the Dykema law firm.

Indeed, the Detroit-based firm just released its 17th annual M&A outlook survey and 75 percent of respondents said they expect the M&A market to “strengthen” over the next 12 months. Ninety percent said they expect an increase in the amount private M&A over the next 12 months.

“In the year to come, it looks like nothing — not the latest surge in COVID-19 cases, the Biden administration’s legislative agenda or economic uncertainties — will be able to break the stride of M&A dealmakers,” reads the Dykema M&A report.

What can small businesses do when customer complaints go too far?

BY JAY DAVIS

The phrase “the customer is always right” is as old as business itself.

Today, though, some consumers are taking that to heart in a very public way.

Customers have always complained, but now they have a megaphone. They take their gripes to Twitter, Facebook, Instagram and other social media platforms and review websites like Yelp to voice their displeasure, going as far as advising other current or potential customers away from a particular business.

Unlike major retailers that have resources and reach to fight back, however, small businesses can be crippled by a case of customer rage.

Owners may not have the budget or know-how to fight the claims — and dealing with accusations and fallout can take their focus off running their business. Proprietors also may have to shift money in their budgets to spend on lawyers to deal with complaints.

Brian Allor, owner of Commerce Township-based Allor Outdoor Services, took a complainant to small claims court after the customer posted derogatory reviews on the business’ Facebook page and Google. Allor said the parties had made a deal for a personal item through Facebook Marketplace, but the buyer didn’t like how things played out, so he brought Allor’s business into it.

“The deal we made had nothing to

do with my company,” said Allor, who has owned his business since 2005.

Allor sued for $6,000 and won the case, but not the full amount sought.

And the judge said he couldn’t force removal of the disparaging posts as Facebook and Google are public forums and have their own policies.

Allor’s lawyer sent the disgruntled customer a note threatening a $25,000 civil court case. The posts were then removed.

“That was the end of it,” said Allor, who paid $300 for the lawyer to draft and send the note. “I was just really upset because he brought my business into something personal.”

See RAGE on Page 20

Allor Outdoor Services owner Brian Allor has been a part of a number of customer rage incidents.

See M&A on Page 19

HEALTH CARE

Battle brews at Capitol over pharmacy benefit manager bill

BY CHAD LIVENGOOD

A legislative effort to rein in the business practices of companies that manage prescription benefits would ban the practice of steering customers to certain pharmacies in a bid to level the playing field for independent pharmacists.

House Bill 4348 has sparked a fullscale lobbying war in Lansing between powerful interest groups because of its potentially far-reaching impact on the cost and management of prescription drugs for virtually all employer-provided health insurance plans.

The legislation would establish Michigan’s first comprehensive regulatory structure for pharmacy benefit managers and prohibit practices that advocates say allow PBMs to underpay pharmacists for the true cost of

State Rep. Julie Calley, an Ionia County Republican, is sponsoring House Bill 4348, designed to rein in business practices of companies that manage prescription benefits. | DALE G. YOUNG FOR CRAIN’S DETROIT BUSINESS

medicine and overcharge health care consumers.

Insurers such as Blue Cross Blue Shield of Michigan and a coalition representing big self-funded employers such as General Motors Co. and the United Auto Workers have lined up against the legislation, arguing it will drive up prescription drug prices and health care premiums.

Pharmacies ranging from momand-pop operators in rural and urban areas of the state to chain pharmacies such as Meijer Inc. are advocating for passage of the legislation, which is pending in a Senate committee and could still see action before year’s end. The National Federation of Independent Business and the Michigan Health and Hospital Association have come out in favor of the legislation.

The PBM legislation is a top priority

of House Speaker Jason Wentworth and its passage in the Michigan Senate could be linked to the House voting on Senate bills, including Senate Majority Leader Mike Shirkey’s overhaul of the Medicaid mental health system.

Under the bill, PBMs such as CVS Caremark could no longer limit customers to getting prescriptions filled exclusively at CVS pharmacies, a practice known as steering that independent pharmacists say puts them at a constant disadvantage with chain operators.

PBMs also would be banned from requiring patients to use a specific company’s version of a prescription drug, a practice that lets the pharmacy benefit management company capture a rebate from the drug manufacturer for steering the sale.

See PHARMACY on Page 19

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REAL ESTATE INSIDER

The troubled Corktown apartment building without an owner Last month, residents of Victor Attar Court were spared a rushed relocation after the Corktown apartment building’s heat and water services were Kirk restored. It was a PINHO sigh of relief just before a long holiday weekend, but the saga of the 19,500-square-foot, four-story building doesn’t end there.

The question remains: Who actually owns it?

A legal battle has quietly been ongoing in court for the last two-plus years, pitting two of Detroit’s more colorful — and in some circles, controversial — real estate investors against one another, both claiming ownership rights.

That is, until someone actually had to pay to fix the building.

Emre Uralli, one purported owner, spoke at length about his fight for the building, peppering a nearly hourlong interview last week with expletives and name-calling.

The other purported ownership group, Joe Barbat and Randy Yono, declined comment through a spokesperson, as did a pair of Southfield-based Jaffe, Raitt, Heuer & Weiss PC attorneys representing them in their legal proceedings.

When it came time to put money into the building with more than two dozen apartments at 1324-1336 Porter St., it took threats of a criminal misdemeanor to get basic services restored.

What we know This much is clear.

Uralli, a Florida investor who made millions cashing in on Detroit’s depressed commercial real estate market in the last decade, paid about $1.3 million for the Victor Attar Court apartments in March 2018 through his 1324 Porter Street Trust after the previous owner of the building, Victor Attar Limited Dividend Housing Association LP, defaulted on three Michigan State Housing Development Authority mortgages.

Uralli, who also owns The Detroit Club building at 712 Cass Ave., says after purchasing the property, there

An ownership dispute has left the Victor Attar Court apartments building in Detroit’s Corktown neighborhood in limbo. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

“I said I am very concerned we need to get in there immediately, but he doesn’t call me back whatsoever,” Uralli said.

When that happened, Uralli said he requested to shorten the redemption period in court, a move that was granted with a default judgment on April 8, 2018.

And triggered the battle that was to come.

Court battle

It’s been years of wrangling since, across a variety of courts.

A Nov. 17 ruling from Wayne County Circuit Court granting partial summary disposition, and therefore redemption rights to Victor Attar LDHA LP, says that the district “THE BUILDING WAS ALREADY IN court “denied (Victor Attar DISREPAIR, BUT THERE IS A BIG LDHA LP’s) reDISCREPANCY WITH THE CITY SAYING IT’S quest to adjourn the matALL OUR FAULT.” ter and entered — Emre Uralli, investor a default judgment against was a six-month period during which (Victor Attar LDHA LP), despite the the previous owner could redeem it. fact it appeared in court.”

The ruling says after that default However, after buying it at a sheriff’s auction, Uralli said he visited the was issued, Victor Attar LDHA LP apbuilding and encountered Barry pealed to the Wayne County Circuit Mitchell, the property manager who Court, which remanded the issue is listed on Victor Attar LDHA LP in- back to the district court instructing corporation documents. Mitchell, it to “set aside the default.” Uralli’s Uralli says, explained that there was trust then appealed to the Court of an issue with the fire suppression Appeals, but that was denied July 11, 2019, according to the summary dissystem on the fourth floor.

According to MSHDA, Michigan position order.

Three months later on Oct. 3, 2019, foreclosure law allows the purchaser of a property at a mortgage auction to the district court “noted irregularities inspect both the inside and outside in (1324 Porter Street Trust’s) efforts of the property but, if that right is to obtain title to the property by ad“unreasonably refused,” the buyer vancing or shortening the redemp“can seek to evict and terminate the tion period,” which “deprived (Victor redemption period.”

Attar LDHA LP) of its redemption

rights.” The redemption period of six months was tolled, meaning essentially that the clock stopped ticking.

Then on Nov. 27, 2019, Victor Attar LDHA LP sought to redeem the property with a cashier’s check for close to $1.5 million — $1,498,357.93, to be exact, or the $1,311.984.63 bid and 610 days of interest at $305.53 per day — but the Register of Deeds “lacked a date certain and demanded a court order to process the redemption.”

Uralli claims that the ruling contains errors of fact and that he plans to appeal the summary disposition.

Looking back Michigan business incorporation documents show that Victor Attar LDHA LP was established in 1994.

The general partner was Porter Street Partners Inc., registered in Detroit to the late William Hawkins, and the limited partner was Bethel AME Non-Profit Housing Corp., registered to Norman Osborne, also in Detroit.

In 2013, Mitchell, who was not listed on any incorporation documents prior, filed documents with the state listing himself as president of Porter Street Partners and adding Lion-Lorraine Apartments LLC as a new limited partner in Victor Attar LDHA LP. Porter Street Partners was registered to Hawkins in 1994, and then its next filing in 2007 listed Mitchell as its president. Lion-Lorraine is registered in Troy to Mitchell.

Mitchell resigned as resident agent of Victor Attar LDHA LP in August 2019 and a month later, documents filed with the state show the appointment of GRSY Holdings LLC, registered to Yono in West Bloomfield Township, as the general partner of Victor Attar LDHA LP, and Victor Houze LLC, registered in Bloomfield Hills to Jessica Mathis, general coun-

sel and COO of Barbat’s West Bloomfield-based Barbat Holdings LLC, as limited partner.

Mitchell did not return a request for comment Tuesday.

Future of the apartments Katie Bach, MSHDA communications director, said Victor Attar LDHA LP had $2.9 million across three MSHDA mortgages originated in 1995 that, at the time they were foreclosed, had a total outstanding balance of $1.3 million, which included interest, late charges and the principal. The limited partnership “was already several months behind on payment,” however, when the last payment was received in October 2017.

MSHDA attempted to buy the mortgages but was outbid, Bach said.

“That meant we were immediately out of the deal and it became a market rate project,” Bach said. “There was still a three-year tenant protection period but we’re already through that at this point. When we lost rights to the property, we also lost a chance to have a say in how it is redeveloped.”

Effectively, that means that whether Uralli or whether Barbat and Yono assume ownership of the property, they can convert it into market-rate units charging far above what the tenants are paying now.

Dan Austin, senior account executive for Detroit-based public relations firm Van Dyke Horn, who handles some communications issues for the city, said that a previous $1 million HOME loan from the city on the project was “technically extinguished” when MSHDA foreclosed on the property.

However, if Victor Attar LDHA LP is able to redeem the property, the $1

million loan becomes active again, Austin said.

What now for the tenants?

Last week, Jessica Parker, the city’s Buildings, Safety Engineering and Environmental Department chief enforcement officer, said 1324 Porter Street Trust had water restored to Victor Attar Court within a day of BSEED inspectors talking with ownership about the situation on Nov. 18.

The weekend following that, heat was restored in most of the units and the five that didn’t have heat had space heaters in the interim.

“There’s some repairs that need to be made to the radiators in those units, but we are not going to relocate those tenants as of right now today,” Parker said on Nov. 22, when there was a 5 p.m. deadline to restore the services.

She said 22 tickets totaling $13,142 in fines were accumulated.

Parker said BSEED was first made aware of the building’s heat and water issues on Nov. 15 and sent an inspector out the next day, Nov. 16.

She said that residents had been without those services for somewhere between three and seven days prior to BSEED learning of the issues.

Uralli, however, said the city has long been aware of the building’s troubles.

“The building was already in disrepair, but there is a big discrepancy with the city saying it’s all our fault,” Uralli said. “I just forked out thousands of dollars because they are threatening me with misdemeanors. (I spent) tens of thousands to fix the plumbing and heat ... the city was fully aware of the condition of the building.”

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

4 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

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REAL ESTATE

Gilbert adds Cadillac Tower skyscraper to downtown portfolio Largely vacant 40-story office building said to have sold for about $36 million

BY KIRK PINHO

Dan Gilbert has returned to a familiar playbook and purchased the Cadillac Tower skyscraper on Cadillac Square downtown.

After amassing a Detroit real estate portfolio by acquiring down-ontheir-luck mid- and high-rise buildings on the cheap in Detroit’s central core early last decade like the First National Building, Dime Building (now Chrysler House), 1001 Woodward and Chase Tower, among others, Gilbert completed the purchase of the largely vacant 40-story office building at 65 Cadillac Square on Tuesday.

The purchase price was not disclosed, although a source familiar with the matter said it was approximately $36 million.

The purchase also marks what is arguably his most significant downtown real estate acquisition since the March 2015 purchase of what was, at the time, One Detroit Center and its parking garage for $100 million.

The Rocket Companies Inc. (NYSE: RKT) billionaire’s significant real estate acquisitions in the last year or so have been outside the city core, spending no less than $28.5 million on the Stroh family portfolio of east Detroit riverfront property earlier this year, as well as $38.5 million on the former Sakthi Automotive Group USA Inc. property in southwest Detroit in September 2020. His last major high-rise purchase was the 390,000-square-foot Buhl Building and its parking deck on Griswold Street as part of a $38.5 million deal in December 2017.

Kofi Bonner, CEO of Gilbert’s Detroit-based Bedrock LLC real estate development, ownership, management and leasing company, said in a statement: “I’ve long thought that under the right circumstances, given the strategic location of the Cadillac Tower within the downtown core and adjacent to our Monroe site, it would make sense for this property to become part of Bedrock’s continued commitment to making downtown a premier destination.”

Prior owner Zaid Elia, developer and restaurateur, paid just $24 million for the sparsely occupied

Cadillac Tower, built in 1927 by John Barlum and designed by Bonnah & Chaffee, has had a turbulent ownership history this century.

In 2003, it was purchased by New York City-based Northern Group Inc. for $15.4 million. Then in 2009, the company lost control of it under order from a federal judge after a $17.5 million loan on the building went into default, and a financial overseer from Farbman Group was appointed, Crain’s reported.

Cadillac Tower was just one of five buildings Northern Group bought between 2003 and 2007 and let slip into foreclosure. In all, $95 million in unpaid loans were left behind.

Prior to Elia, Brooklyn-based Capital Invest Alliance was the building’s previous owner.

According to Historic Detroit, which tracks Detroit buildings and architecture history, Cadillac Tower doesn’t have windows on its western side facing Campus Martius Park because the Cadillac Square Building that had been next door meant that “there was no point in having windows looking into another structure’s windows.”

It sits next to where Gilbert ultimately plans a mixed-use development referred to as the Monroe Blocks, although a groundbreaking ceremony three years ago on what was then an $830 million project had not resulted in any construction starting.

It has intermittently been used as a drive-in movie theater and outdoor athletics facility in the interim.

The 425,000-square-foot Cadillac Tower is at 65 Cadillac Square. | COSTAR GROUP INC.

spur future development in the surrounding central business district of Detroit and benefit the Elia Group’s other downtown projects.”

Elia said three years ago when he bought it that he has had studies done on a potential hotel/apartment redevelopment and it could accommodate up to 305 hotel rooms, a restaurant, lounge, banquet space and 160-180 apartments.

Within four months of buying the building, however, Elia put it up for sale.

Real estate experts have said Cadillac Tower makes more sense for hotel or apartments, or both, “I’VE LONG THOUGHT THAT UNDER THE than ofRIGHT CIRCUMSTANCES... IT WOULD MAKE rather fice space because of the SENSE FOR THIS PROPERTY TO BECOME small floorPART OF BEDROCK’S CONTINUED plates, although that was COMMITMENT TO MAKING DOWNTOWN A prior to the PREMIER DESTINATION.” COVID-19 pandemic blud— Kofi Bonner, CEO, Bedrock LLC geoned the 425,000-square-foot building, or hospitality industry. At 40 stories but with only about 425,000 square feet, about $56.47 per square foot.

Elia, the founder and CEO of Bir- that puts the floors at only about mingham-based The Elia Group, said 10,600 square feet each. That’s smaller than many prominent office users in a statement: “When we acquired Cadillac Tow- prefer because larger floorplates of er, we knew it would play an import- 20,000 square feet or more allow ant role in the future trajectory of them to take large blocks of space downtown Detroit due to its rich his- without being spread out across tory and prominent location adja- many floors.

In addition, there is also no hotel cent to Campus Martius Park. We are proud to have successfully navigated or large chunks of residential space this project through a challenging that close to Campus Martius, leadglobal pandemic, while still deliver- ing to the long-held speculation that ing a phenomenal investment return Cadillac Tower is an ideal redevelop... The redevelopment of Cadillac ment into those uses under the right Tower by Bedrock will continue to ownership group.

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

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ENVIRONMENT

City shuts down operations at site of riverfront collapse Owner faces fines after second incident in two years attributed to improper storage

BY ANNALISE FRANK AND KURT NAGL

Detroit police and the city’s building and environmental department shut down commercial operations at the Revere Dock site Thursday for violating a cease-and-desist order the city issued in the wake of a riverfront collapse there Nov. 26.

The city’s Buildings, Safety Engineering and Environmental Department is also issuing $4,000 in fines to the site owner, Revere Dock LLC, BSEED Director David Bell said in a statement Thursday.

This is the second riverfront collapse in two years attributed to improper storage of limestone gravel by Detroit Bulk Storage as a tenant at the site owned by Revere Dock in southwest Detroit.

BSEED sent a letter Wednesday to Revere Dock and Detroit Bulk Storage telling them they needed to halt “all commercial operations” immediately and provide details on the status of the collapse and plans for repairs.

Crain’s received pictures taken just after noon Thursday showing a ship delivering more material to the site and inquired with the city about its operations in the wake of the ceaseand-desist order.

The Michigan Department of Environment, Great Lakes and Energy has been overseeing the environmental cleanup where adjacent land pushed into the river and referred comment on Thursday’s violation to the city.

Steve Erickson, president of Erickson’s Inc., the company that owns Revere Dock as a subsidiary, declined to comment to Crain’s on Monday when the Nov. 26 incident was first reported. A follow-up request for comment Thursday was not returned.

The order written by Bell declares the property “unfit for human occupancy” and says it must remain vacant “until my further direction.”

It also says the department has concluded the collapse was caused by improper storage of gravel at the site. This echoes the findings the

A ship is shown delivering material to the Revere Dock site in southwest Detroit, despite a cease-and-desist order sent by the city of Detroit in the wake of a riverfront collapse Friday. | GREGG WARD

state made public Nov. 29, as well as the city’s preliminary review.

The limestone was stored “much closer” to the seawall than the more than 200-foot limit stipulated in the companies’ outdoor storage permits with the city, Bell wrote. EGLE officials estimated it was 50-75 feet from the edge of the water.

“These repeated failures and collapses pose serious concerns about the use of the property and indicate the property poses an immediate threat to public health, safety and welfare,” Bell wrote in the order.

Revere Dock and Detroit Bulk Storage also need to submit an engineering report showing the cause, repair plans, seawall integrity and preventative measures; remove material from the site that isn’t stored in an approved fashion; and submit a geotechnical report after the repairs.

“We are currently exploring all legal remedies with the Law Department to address this business and

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the collapse issue,” Bell said in a statement Thursday.

City Council member Raquel Castañeda-López, whose district includes the site, said Thursday that she wants the city to not just shut down current operations but also terminate Detroit Bulk Storage’s license so it can no longer operate in Detroit.

She called the companies’ “transgressions” in this collapse and last collapse “egregious.”

Second spill On Nov. 26, the large pile of gravel that was stored improperly close to the seawall in southwest Detroit created pressure that pushed soil from an adjacent site owned by the U.S. Army Corps of Engineers into a boat slip.

Results of water sample tests taken around the spill were expected late last week.

The first collapse in 2019 created a wave of backlash, with criticism that neither the government nor the companies acted quickly enough in responding to and cleaning up the spill. An EGLE representative has said that this time around Revere Dock has acted promptly in its response.

Revere Dock contractor PM Environmental reported the incident Nov. 26 soon after it occurred and the company’s contractors later installed barriers to help stop the spill from spreading.

PM Environmental was also supposed to submit a plan for monitoring sediment in the water to EGLE by the end of last week, according to EGLE emails.

Stirring up contention Detroit Bulk Storage, the company at the center of this second dock collapse on the Detroit River, has a long history of stirring up contention over its riverfront operations.

In 2013, the company came under fire for piling up petroleum coke powder along the Detroit Riverfront on property owned by the Moroun

family that was being leased by Norfolk Southern near the Ambassador Bridge. The following year, the Michigan Department of Environmental Quality (now EGLE) determined that Detroit Bulk Storage didn’t have sufficient dust control measures to prevent air pollution from pet coke.

More recent trouble stems from the company’s storage and transportation of gravel on riverfront property leased from a subsidiary of Grand Rapids-based Erickson’s Inc. Detroit Bulk Storage no longer leases any property tied to Moroun companies, said Esther Jentzen, director of public affairs for Detroit International Bridge Co. and the Moroun family of companies.

“Through an acquisition, we inherited them as a tenant for a brief period on the riverfront,” Jentzen said in an email. “They had a lease with Norfolk Southern that was assigned to us when we closed on a transaction. There was a provision in the lease that allowed us to give notice to terminate and Detroit Bulk Storage vacated on the terms of that notice.”

The company’s storage practices came under scrutiny after the first collapse, Nov. 26, 2019.

Detroit Bulk Storage owner Noel Frye told the Windsor Star a week after the 2019 collapse: “To me it’s an incident that happens all along the Great Lakes when you store gravel.

It’s part of how things go.”

Crain’s made multiple attempts last week to reach Frye and Detroit Bulk Storage for comment.

Detroit Bulk Storage was sued in December 2019 for allegedly trespassing on the property of Waterfront Petroleum Terminal Co., a neighboring fueling and storage business.

According to the lawsuit filed in U.S. District Court for the Eastern District of Michigan, in August 2019, Detroit Bulk Storage began leasing from Erickson’s Crane Co. about 500 feet of dock frontage property, the Revere Dock Facility, located directly upriver from Waterfront Petroleum’s property.

Waterfront Petroleum’s lawsuit

contends that Detroit Bulk Storage encroached on its property by servicing 650- to 1,000-foot-long vessels, exceeding the length of its dock and jutting into the property of Waterfront Petroleum, which said it sent cease-and-desist letters to no avail.

“The use of Waterfront’s dock space by DBS interferes with and interrupts Waterfront’s business operations which not only are fluid, but are also a substantial benefit to the public interest, because Waterfront provides fuel to vessels in maritime commerce along the Great Lakes,” the lawsuit said.

It also points to the Nov. 26, 2019, incident as further proof of “disregard for the rights” of its neighboring landowners and “irresponsible operations.”

Detroit Bulk Storage denied claims

by Waterfront Petroleum and asked the case to be dismissed. It also said the 2019 dock collapse was caused by Waterfront Petroleum’s “prior dredging, excavation, and docking activities” and filed a counter claim against the company in February 2020.

The counter claim alleges that Waterfront Petroleum suffered a dock failure in 2016, failed to stabilize the property and dredged in front of the Revere Dock space, all of which contributed to its collapse in 2019.

“DBS has projected millions of dollars of monetary damages and losses because of the many negligent, unlawful and wrongful activities of WPTC,” according to the claim.

The lawsuit is ongoing, according to the court docket. Crain’s sought comment from attorneys representing both sides in the case. The lead attorney representing Detroit Bulk Storage, Adam Zwicker of Detroit-based Gallagher Sharp LLP, declined to comment. Waterfront Petroleum’s attorney Philip Brickman, of Louisiana-based Degan, Blanchard & Nash, did not respond to a request for comment Wednesday.

In January 2020, the city of Detroit sued Detroit Bulk Storage and the Erickson-owned Revere Dock LLC for illegally storing limestone on the property, which contributed to the dock collapse. The complaint was settled in November 2020 after Detroit Bulk Storage agreed to pay the city a $15,000 penalty and Revere Dock paid $63,000 in blight fines.

Revere Dock was also fined $60,000 by the state over the 2019 spill as compensation for the cost of investigation and enforcement activities, and for violating the Water Resources Protection and Inland Lakes and Streams section of the Natural Resources and Environmental Protection Act. The state and Revere Dock entered an administrative consent agreement over remediation and redevelopment of the site, and the company has since moved into a restoration plan with cleanup and completed installation of a new seawall.

That new seawall was not damaged in the most recent collapse and remained intact, according to state officials and Revere Dock’s environmental contractor, PM Environmental.

Contact: afrank@crain.com; (313) 446-0416; @annalise_frank Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

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REDEVELOPMENT

After opposition, Detroit turns down asphalt plant proposal Pontiac-based company had plans to build on site of former Farmer Jack headquarters

BY ANNALISE FRANK

The city of Detroit turned down a Pontiac company’s proposal to build an asphalt mixing facility last week after receiving a flood of opposition letters.

Detroit’s Buildings, Safety Engineering and Environmental Department got 200 emails against and three letters in favor of Asphalt Specialists Inc.’s plan to buy 24 acres by I-96 and the Southfield Freeway on the city’s west side for a plant where it would make, store and transport asphalt, according to a letter from department Director David Bell.

The company had to request conditional use of the land to make asphalt at the site, as its zoning was geared toward warehousing. Asphalt Specialists can still appeal BSEED’s denial with the Board of Zoning Appeals before Dec. 14.

The privately owned, vacant site at 12155 Southfield Service Drive, part of a larger 43-acre property where the former Farmer Jack supermarket chain headquarters stood, was chosen for its proximity to freeways and another Asphalt Specialists location, Bruce Israel, vice president of Asphalt Specialists, told Crain’s before the decision was announced.

A request for comment made with an Asphalt Specialists representative Wednesday was not immediately returned.

Asphalt Specialists had designed the proposed plant to minimize potential harm, given tours to nearby residents, received letters of support from the Southfield Plymouth Community Association and held 15 community meetings over around six months, Israel told Crain’s. The company also hired Detroit-based Compass Strategies, a media and community engagement company, to help.

“We were very sensitive to the fact that the residents would be concerned, so that’s why we literally spent months educating them,” Israel said last week. “... So in that regard, we worked to design what we consider to be the most environmentally sound asphalt mixing plant in the

Asphalt Specialists proposed an asphalt mixing plant in Detroit, on the site where the old Farmer Jack headquarters stood. | COURTESY OF ASPHALT SPECIALISTS

state. We’ve gone through painstaking development and plans from an environmental perspective to help deal with any recapturing of any odor or smoke.”

However, concerns remained over the plant’s impact on a community that already faced environmental burdens from the nearby freeways, a Department of Public Works yard and Waste Management facility.

The asphalt-mixing plant would have been bordered by the highway to the north, the DPW and Waste Management sites to the east, a rail line to the west and, to its south, a residential area.

Kathryn Savoie, Detroit community health director for the Ann Ar-

bor-based Ecology Center, told Crain’s last week she was “alarmed” to hear the facility was planned in such close proximity to homes.

“I think we all support the need to fix the damn roads, but we can’t do that by creating additional environmental harm in the community,” Savoie said.

Tuesday’s decision shows what “community support and resiliency” looks like, said Eradajere Oleita, Detroit organizer for the Michigan Environmental Justice Coalition and part of the push against the plant.

“That, for me, is just a really, really big thing to see that community voice was listened to,” Oleita said.

She said despite Asphalt Special-

ists providing data on emissions, residents saw that it “doesn’t seem right” and questioned “how will it not harm us,” especially considering the history of environmental injustices in Detroit.

BSEED made its decision after its environmental affairs division and the Wayne County Department of Public Health environmental services group recommended denying the plan. A public hearing also took place Nov. 3 to garner input.

“General concerns articulated by residents in the opposition emails include: proximity of the asphalt facility to the neighborhood, lack of residential screening being proposed by the applicant, potential negative

noise impact from heavy truck traffic, potential residential property value decline, and the adverse impact of particulate matter emitting from the silos upon the residential neighborhood,” Bell wrote in the letter describing the denial.

Further, the city’s Planning and Development Department told BSEED that it did not see the mixing plant as fitting with designated land use for the area and that its operations could “aggravate any pre-existing physical, social or economic deterioration of the adjacent residential neighborhood.”

Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

COURTS

Real estate fraudster Gjonaj begins federal prison sentence Former exec gets 53 months for $26M Ponzi-like scheme he used to fund gambling habit

BY KIRK PINHO

Viktor Gjonaj’s federal prison sentence for wire fraud has started with his arrival last week at Morgantown Federal Correctional Institution in West Virginia. Gjonaj, who was sentenced in September to 53 months for his $26 million-plus Ponzi-like scheme, arrived at the minimum-security prison on Tuesday, Donald Murphy, a spokesperson for the Federal Bureau of Prisons, said in a Wednesday morning email to Crain’s.

During Gjonaj’s sentencing in late September, a recommendation was made that he serve his time there.

Steve Fishman, Gjonaj’s defense attorney, said Wednesday that recommendation was made because Gjonaj’s crime was nonviolent, it was a

first-time offense and resulted in a comparatively short prison sentence.

CNBC, in a 2012 report, rated it as one of the “best places to go to prison.”

Gjonaj Among its former inmates is Happy Asker, the founder of Farmington Hills-based Happy’s Pizza Inc., who was sentenced to more than four years in prison for tax evasion and was released in 2018, according to the Federal Bureau of Prisons. Others, including Richard Hatch, the winner of the first season of “Survivor,” and Eric Spoutz, a Detroit-based art

dealer who was convicted of selling at least $1.45 million in fake artwork, have served time in the facility, which houses about 1,300 primarily nonviolent offenders.

The CNBC story said the prison has things like “foosball, pingpong and bumper pool tables” and allows inmates to get higher education from Fairmont State University, about 30 minutes from Morgantown. A 2011 story in the Cleveland Plain Dealer describes the Morgantown FCI campus as one with “a pond, bocce ball courts and a chapel.”

Gjonaj, 44, was a commercial real estate executive who founded the now-defunct Imperium Group LLC real estate company. He admitted to convincing investors to give him

money to invest in fraudulent commercial real estate deals and, instead of investing the money, used to it fuel a Daily 3 and Daily 4 gambling habit that at times amounted to up to $1 million per week.

The saga, details of which started to trickle out more than two years ago, involved the implosion of his company, a wild incident in an Ann Arbor hotel, lottery terminals rumored to be dedicated to feeding his near constant play, addiction and long-rampant speculation of Gjonaj’s whereabouts as lawsuits mounted seeking millions in lost investor money and he was nowhere to be found.

The former commercial real estate executive was accused in January of bilking at least two dozen in-

vestors in 66 sham real estate deals of $26.4 million, with none of the deals ever materializing as he used the funds to play the Michigan Lottery.

He won no less than $28 million playing at various Michigan Lottery retailers around Southeast Michigan, but primarily centered in Macomb County, where he lived.

After Gjonaj completes his sentence, he’ll be required to enter drug, alcohol and mental health programs.

He has agreed to a forfeiture of approximately $19 million, which is the amount he gained after paying investors from his lottery winnings.

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

DECEMBER 6, 2021 | CRAIN’S DETROIT BUSINESS | 7

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COMMENTARY

Hamtramck needs funding to replace lead water lines

BY KATHLEEN ANGERER

H

House Appropriations Committee Chairman Thomas Albert, R-Lowell, talks with House Speaker Jason Wentworth, R-Farwell, Thursday on the floor of the Michigan House of Representatives. | DALE G. YOUNG FOR

Kathleen Angerer is city manager for Hamtramck and a former state representative.

CRAIN’S DETROIT BUSINESS

COMMENTARY

Legislature sits on $300M in COVID funds for schools

I

n March, Congress earmarked $300 million in its $1.9 trillion COVID stimulus bill known as the American Rescue Plan to fund the reopening of public schools in Michigan after last year’s pandemic-induced shutdowns.

The funds were meant to give public schools money to buy COVID-19 testing supplies, hire medical professionals and respond to potential spread of the virus within the schools as a means of minimizing quarantines and keeping doors open in the event of a fall surge.

More than eight months later, and two months into the fall surge, the Republican-controlled Michigan Legislature hasn’t appropriated any of this money for COVID testing, despite multiple requests by Democratic Gov. Gretchen Whitmer’s administration.

The reasons for this foot-dragging by lawmakers are confounding.

NEARLY FOUR House AppropriaMONTHS INTO tions Committee Chairman Thomas AlTHIS SCHOOL bert, R-Lowell, said YEAR, AND IT’S last week that lawALREADY BEEN A makers are being “methodical” about ROLLER COASTER spending the billions of dollars Michigan FOR STUDENTS got from the federal AND TEACHERS. stimulus bill.

“We’ve been making sure we don’t just write a blank check and give it to the governor,” Albert told reporters.

But that’s not what the governor keeps asking for.

She’s trying to give school districts the tools they need to test and quickly isolate COVID-positive students and staff. Some students in urban and suburban areas of Michigan didn’t even see the inside of a classroom

Chad

LIVENGOOD

last year.

There’s a July 31 deadline to spend the $300 million for COVID testing in schools, State Budget Director Christopher Harkins said.

“It’s because it’s intended to be focused on opening schools this school year, keeping kids in educational settings where they’re not moving back and forth from home to school to home — keeping kids in a productive learning environment,” Harkins said in an interview with Crain’s. “That’s the purpose of this money — it’s intended for this school year.”

Nearly four months into this school year, and it’s already been a roller coaster for students and teachers juggling coronavirus outbreaks.

One student tests positive for COVID, all of the students he or she was in contact with get sent home for quarantines. Some have to wait up to seven days and get a negative PCR test in order to return to school.

Parents, grandparents, aunts and neighbors pitch in to watch the quarantined child.

If they develop symptoms, the quarantine lasts up to two weeks. The principal of my child’s elementary school in Macomb County sends a notice to parents every other day about new cases of COVID in the school.

The disruption to the economy cannot even be measured — adding to the worst labor shortage in memory — as parents and guardians take time off to tend to a child whose exposure may or may not turn into an infection.

See LIVENGOOD on Page 9

amtramck is a very unique community. The 2020 Census revealed that our population is among the fastest-growing in Michigan. We are the most diverse city in Michigan, with a wide range of cultures from all around the world represented among our people. 41.4 percent of our population was born outside the United States; 69.4 percent of residents speak a language other than En-

glish at home.

We are unfortunately also a community where many residents struggle with poverty.

According to 2019 data from the United States Census Bureau, 46.5 percent of Hamtramckans are considered to be in poverty. The median household income is $27,166; statewide, the median is $57,144.

Lead water lines have been in the news repeatedly in recently in a number of Michigan cities, especially older communities like Hamtramck which were developed during the industrial booms of the early 20th century. Hamtramck was incorporated in 1922, and the majority of our housing stock was constructed in the 1910s and 1920s. Over 90 percent of our homes were built before 1980.

Lead water service lines were the norm for much of this period, which can present a very serious health concern today.

Lead presents its most serious risks to children, and Hamtramck is also a city of families as 31.9 percent of the Hamtramck population is under the age of 18 and 8.8 percent are under the age of 5 — an age group particularly vulnerable to the harmful impacts of lead on health and development. All families, regard-

LETTER TO THE EDITOR

Insurance tactics punish accident victims TO THE EDITOR: I am writing in regards to Chad Livengood’s excellent piece in Crain’s Detroit Business on Nov. 23, “Judge boots lawyers in hardball insurance case.” It is sadly not surprising at all that insurance companies are using RICO as a tactic to try to drive care providers out of business.

But make no mistake — that is exactly what they are doing and this is part of a nationwide campaign so the insurers can spend less on auto accident claims and therefore increase profits. I salute Chad Livengood for shining a light on this widespread “scorched-earth tactic.”

Allstate, State Farm, and other insurance companies have been using the federal RICO law (“Racketeer Influenced and Corrupt Organizations Act”), which was enacted for the purpose of fighting organized crime, to improperly target and coerce medical providers who treat seriously injured car accident victims, such as

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.

8 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

less of their background and the language they speak, are expressing increased concern for the health and safety of their children.

Here in Hamtramck, annual routine testing revealed for a second time in recent years elevated lead levels in the water in multiple houses with antiquated lead service lines. The city of Hamtramck responded quickly, and has held water and water filter distribution of over 3,000 filters. Additional filters are available every Tuesday and Thursday for pick up at City Hall. We have been replacing the antiquated service lines for the last few years, yet there is so much more we can do together.

Filters can make tap water safe for families to drink and use, but they do not solve the underlying problem. Hamtramck residents are rightly alarmed. They have heard about the Flint water crisis, and they see Benton Harbor in the news. They are afraid their tap water is unsafe for themselves and their families, that Hamtramck — their home — may be the “next Benton Harbor.” They are distressed, too, knowing that Hamtramck does not have the tens of millions of dollars in resources to fix the problem and expedite the replacement of lead service lines on our own.

It is for this reason that I am calling on county, state, and federal partners for immediate help with funding assistance. It can cost up to $10,500 per line to replace the lead lines that remain in Hamtramck and protect our residents. While Hamtramck has received some funding assistance, the remaining cost of over $50 million will have to be paid from our rapidly depleting water and sewer fund.

The time is now for swift action by our elected officials. With additional funds available at all levels of government, it is time to distribute those funds to older cities, so that all of our Michigan families, including those like Hamtramckans who live in poverty, can safely consume drinking water in their homes. It’s time to quit talking about the problem and start doing the right thing to solve the issue once and for all.

the survivors of serious traumatic brain injury.

This nationwide effort to target doctors is not new. Certain types of injuries, such as traumatic brain injuries, are very expensive to treat. Insurance companies don’t like this, and they are using RICO lawsuits to attempt to drive these treaters out of business. For years, auto insurers have used the 3 D’s of “Delay, Deny and Defend.” But as Mr. Livengood reports, we are now seeing a fourth D: “Drive,” as in deliberately and intentionally drive the doctors who provide certain types of expensive care out of business.

Tragically, this abuse of the RICO law punishes the innocent crash victims by making it harder for them to obtain and benefit from the specialized medical care they need to rebuild their health and their lives — but that is exactly why the insurance companies are doing it.

Steven M. Gursten Attorney, Michigan Auto Law Farmington Hills

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.

LIVENGOOD

From Page 8

Parents spend time and treasure hunting for the quickest COVID test they can, which has become seemingly harder, despite all of the experience we have with this virus.

The whole purpose of this federal funding was to build a test-and-respond infrastructure for public schools to keep operating in the midst of the next surge in cases.

Just like hospitals and auto assembly plants, the continual operation of public schools is essential to Michigan’s economy.

This federal funding could be used by schools to pay for daily rapid testing of teachers, bus drivers, other personnel, students and even parents — the whole ecosystem that encompasses Michigan’s 1.6 million school-age children.

There’s no telling how many students have missed school this fall because they came down with COVID symptoms that turned out to be a common cold.

This testing infrastructure is crucial to our ability to live with this virus — a long-stated goal of Republican leadership in the Legislature.

Congress appropriated this money in March, just before the third surge in April, with the intent of getting ahead of future waves of illness. In the spring and summer, the Whitmer administration made multiple requests for lawmakers to appropriate the $300 million for school COVID testing, Harkins said.

On July 20, then-State Budget Director Dave Massaron put it in writing, noting in a letter to lawmakers that the “implementation timelines and disbursement deadlines” for the funds — a reference to the fast-approaching school year.

“It has been an ask from the administration for several months,” said Harkins, who succeeded Massaron as state budget director in October after previously running the Senate Fiscal Agency.

The federal funds expire July 31, 2022, meaning it’s use it or lose it for this school year, Harkins said.

But when it comes to this pandemic, Republicans lawmakers have consistently lacked any sort of urgency for a virus that has killed an average of 38 Michigan residents a day for past 20 months.

The House and Senate each worked one full day in session in the month of August — and preparing for the next surge in COVID cases was not on the Legislature’s agenda.

One reason why GOP leaders may not want to appropriate the school-testing funds is they simply don’t want to find more COVID in Michigan schools.

The problem with the test-less-getless-COVID mentality is it doesn’t actually work. Not when there are still 4 million unvaccinated residents and no scientifically proven mitigation measures in places, such as mandatory masking and indoor capacity limits, to reduce the spread of the airborne pathogen.

On Wednesday, Michigan’s rolling seven-day average number of new daily cases climbed to 8,409, the highest level yet during the pandemic. The average daily testing positivity rate over the past week is 19.6 percent. The number of COVID-positive adults occupying hospital beds in Michigan (4,269) has never been higher.

On Monday, the state health department reported 711 new cases of COVID-19 associated with outbreaks

THIS TESTING INFRASTRUCTURE IS CRUCIAL TO OUR ABILITY TO LIVE WITH THIS VIRUS. of three or more cases in school buildings spread across 31 counties.

On Tuesday, when asked about appropriating federal funds for expanded COVID testing, Albert told Capitol reporters, “there’s no emergency right now when it comes to the (federal) funds.”

Scores of school districts across Michigan went into remote learning shutdown mode last month as new COVID cases and hospitalizations soared to their highest levels yet.

But lawmakers see no sense of urgency, even as some public health experts estimate this surge of

COVID cases could stretch on for much of the winter.

On the Friday before Thanksgiving, while lawmakers were on their annual deer-hunting recess, the governor’s budget director renewed the administration’s request for the Legislature to approve this $300 million. So far, it hasn’t made it into the appropriations bills lawmakers are moving before they break for the holidays.

Harkins said he can’t speak to his previous counsel to lawmakers when he worked for Senate Republicans before joining the Democratic governor’s administration.

But Harkins said lawmakers are overwhelmed by the influx of federal stimulus, which totals some $10 billion — and counting — over the past two years.

“I think it’s overwhelming for all of

LETTER TO THE EDITOR

us — the amount of federal resources that are available to us,” Harkins said.

“So, understandably, there is some pushback on appropriating everything without proper examination.”

Harkins notes that lawmakers have had more than eight months to study how the American Rescue Plan dollars can be used, particularly for immediate needs such as the continuity of K-12 school operations.

“Now is the time we need to be focusing on negotiating these ARP dollars,” Harkins said.

The time for the Legislature to lead on the reopening of schools has long since passed.

Now it’s just a question as to whether lawmakers want to play a role in helping schools stay open.

Speaking the truth TO THE EDITOR: I’m writing to express my appreciation for the words of wisdom and extensive professional experiences that were shared by Vernice Davis Anthony in her recent commentary “Stop the attacks on public health workers.”

We would all be well served by taking her informed perspectives to heart (and mind) and let them guide our future actions for the benefit of communities across Michigan. Thank you, Vernice, for reminding us of what, in 2021, should be firmly recognized and accepted as truths.

Roger L. Myers, President & CEO, Presbyterian Villages of Michigan Southfield

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS

Recognize them in Crain’s

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DECEMBER 6, 2021 | CRAIN’S DETROIT BUSINESS | 9

IN THIS PACKAGE WINNER: United Way embedded DEI in all levels of operation. THIS PAGE  FINALIST: GreenPath meets BIPOC customers where they are. PAGE 12

BEST-MANAGED NONPROFITS

 FINALIST: Judson Center puts DEI

in forefront for future. PAGE 12  FINALIST: New Detroit teaches DEI policies to industries. PAGE 13  FINALIST: TechTown sets goals for BIPOC hiring, vendors. PAGE 13

NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

WINNER

Executive Director, People and Culture Lara Keathley (left); Chief People, Equity, and Engagement Officer Tonya Adair; Senior Director, Diversity, Equity, and Inclusion Andre Ebron; Vice President, Strategy and Transformation Brandon Lee; President and Chief Executive Officer Darienne Hudson; Vice President, Community Impact Eric Davis; Executive Director, Communications, Advocacy, Labor and Marketing Kyle DuBuc; Chief Financial Officer Steve Schwartz and Vice President, Fund Development Shelly Watts at United Way for Southeastern Michigan in Detroit.

United Way embedded DEI in all levels of operation BY SHERRI WELCH The strategic plan United Way for

Southeastern Michigan finalized the week before the pandemic shutdowns in Michigan included renewed intentionality to diversify its board and staff.

But with the reckoning spurred by the deaths of Ahmaud Arbery, Breonna Taylor, and George Floyd over the next two and a half months and the disproportionate number of people of color dying from COVID in the early months of the pandemic, United Way knew it had to do more.

Over the past 18 months, the nonprofit has embedded diversity, equity and inclusion in its organizational culture, structure and grantmaking processes. It’s taking the practical strategies to grantees and corporate funders, holding its grantmaking up to DEI tests and funding DEI efforts at smaller nonprofits. And it’s taken conversations about equity and inclusion out into the community with the 21-day Equity Challenge that engaged 5,000 residents this past spring through monthly town hall conversations on equity in the community.

See UNITED WAY on Page 14

Crain’s 2021 best-managed nonprofit program underscores DEI efforts Crain’s Best-Managed Nonprofit program honors the best in leadership and financial stewardship in Southeast Michigan’s nonprofit community. Winners undergo a financial review by the nonprofit practice group at Plante Moran PLLC and are selected after initial scoring and in-person interviews by a panel of nonprofit experts.

This year’s contest asked nonprofits to share how they are addressing diversity, equity and inclusion in their organizations.

They offered practical takeaways, from setting specific goals to diversify boards, staff and vendors to providing town halls for conversations that ensure the voices of all employees are heard, to sharing their efforts with other nonprofits and corporations and

taking action to ensure there is equity in the services they provide in the community.

The DEI best practices they are putting in place aren’t just something other nonprofits can learn from, the judges in the contest said. They are a blueprint for-profit and government organizations can follow, as well.

The Crain’s Detroit Business 2021 Best-Managed Nonprofit is United Way of Southeastern Michigan. They, and the four finalists, are profiled on Pages 10,12 and 13.

The winners of this year’s Best-Managed Nonprofit Contest will share how they are putting staff at the center of their DEI efforts and engaging all levels of the organization, from front-line employees to board members, during a January 2022 webinar.

Program judges  Allandra Bulger, executive director, Co.act Detroit  Gary Dembs, president, Non-Profit Personnel Network  Kelley Kuhn, vice president and chief strategy officer, Michigan Nonprofit Association  Gerald Lindman, assistant professor, nonprofit leadership, Michigan State University  Richard Martin, principal, Caleb LLC  Financial review was provided by the nonprofit practice group of Plante & Moran PLLC, led by partner John Bebes.

10 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

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FOCUS | BEST-MANAGED NONPROFITS FINALIST

FIN

N

GreenPath meets BIPOC customers where they are

BY SHERRI WELCH

GreenPath Financial Wellness is making moves both inside of its organization and in how it serves its clients as it seeks to be a more equitable and inclusive organization.

The focus isn’t new for the Farmington Hills-based, national credit counseling agency. It began diversity training with staff and regular lunchand-learn sessions, organized by a staff committee, in 2014.

Last year brought the realization, however, that GreenPath needed to do much more, President and CEO Kristin Holt said.

It began hosting staff town halls with its 480 employees across the country to provide a forum for them to process their feelings, have a safe place to be heard and to listen to one another.

The nationally publicized murders of Black citizens last year “appeared to be a trend to someone who wasn’t as close to it,” Holt said. “But to others, it had always been part of their life.”

Those conversations also provided a guide for how GreenPath should respond internally and externally with clients.

It created a 10-person steering committee with staff from across its operations to lead DEI efforts and report on them, ensuring those efforts remain a focus into the future. The group helped develop DEI strategies that are now a part of the nonprofit’s strategic plan.

They include goals to ensure a respectful, inclusive workplace for all, remove

Top row, Chief Financial Officer Richard Hollis (left), Executive Vice President of Strategy Rick Bialobrzeski, President and CEO Kristen Holt and bottom row, Assistant Secretary Rebecca Morelli (left), Chief People Officer Susan Murphy, Chief Marketing Officer Donna Doleman Dickerson at GreenPath Financial Wellness HQ in Farmington Hills. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

implicit organizational bias and better meet the financial wellness needs of underrepresented communities.

GreenPath is increasing the diversity of its staff by expanding its recruitment efforts in Black-led media and other forums and measuring staff diversity across race and gender. It’s expanded DEI and empathy training

and related learning opportunities as well as upgraded its systems to collect data on the race of its clients for all services it offers. That’s important because it will enable GreenPath to measure its impact and make changes where needed, Holt said.

“Our services might work well for someone who is white and middle

class, but may not work the same for someone who speaks Spanish,” she said.

Among other efforts, GreenPath also hosted focus groups with Black and Hispanic audiences in Detroit and San Antonio to better understand their needs. One insight it gained is that Black communities do not trust

BY S

financial counseling and debt relief providers, mostly due to confusion and misconceptions about the services the nonprofit offers and the unscrupulous practices of debt settlement companies and payday lenders.

The nonprofit named a staff member with a background in community organizing in Detroit to a new role to help survey Detroit communities and develop targeted financial education to them as a pilot for a national rollout. Last spring, it launched a digital financial education program to focus on the needs of the Black community and help people build and track their credit scores, Holt said.

Operating on a $48 million budget, GreenPath has expanded its marketing efforts and is sharing on its website and social media more stories of diverse clients who have overcome financial issues.

GreenPath’s DEI efforts — laid out in a white paper it commissioned to help guide others — have attracted $1.75 million in funding from national finance companies including San Antonio-based United Services Automobile Association, Wells Fargo & Co. and Capital One Financial Corp.

Part of the funding is being used to measure engagement and the impact its services are having with minority populations here and in San Antonio on things like payment of student loans and other debt and financial stress levels for clients.

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

FINALIST

Judson Center puts DEI in forefront for future

BY SHERRI WELCH

Judson Center began looking closely at diversity, equity and inclusion in its operations by doing something any organization can do, President and CEO Lenora Hardy-Foster said.

It listened to its employees.

With a staff of nearly 400 employees, the Farmington Hills-based nonprofit provides foster care and adoption, behavioral and primary health care services, addiction treatment, autism services and vocational services for adults with disabilities across five counties in Southeast Michigan.

It turned to a staff-led committee of 14 employees, 10 of them in front-line positions, who worked with consultants to develop a staff survey to get “boots on the ground” feedback on what it was and wasn’t doing well when it comes to DEI. Among other questions, the fall 2020 survey asked staff if people of color were represented at all levels in the organization, if they were comfortable talking about their personal cultural experiences and if management demonstrated commitment to meeting the needs of employees with disabilities.

The task force found three common things that staff wanted: DEI training, more acknowledgment of various cultures from management and equitable representation of people of color in management.

In response, Judson launched a 10part DEI curriculum in April for all

Chief Operating Officer Susan Salhaney (left), Chief Strategy Officer Khadija Walker-Fobbs, President and CEO Lenora Hardy-Foster, Chief Information Officer Gary Mallia and Senior Director of Human Resources Kenya Martin at Judson Center in Farmington Hills. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

staff with webinars that cover topics like implicit and unconscious bias, perceptions and privilege, poverty and the disadvantaged and disability awareness. As of mid-November, it had hosted the first five tracks of staff DEI training, with several board members also attending. It plans to continue the conversation beyond the

training by bringing in DEI speakers.

“It has to become part of DNA that we are respecting employees no matter what their differences are, that we are treating people equitably, and that everyone’s voice is being heard.”

Judson developed internal and external statements that speak to its commitment to DEI and a culture cal-

endar, identifying and recognizing holidays celebrated by the various cultures among its staff members, and acknowledging things like LGBTQ and autism awareness in the months they are celebrated. Hardy-Foster also acknowledges those as part of her weekly CEO message to staff.

The nonprofit, which is operating

FIN on a $31 million budget for fiscal year 2022, is now in the process of establishing a DEI resource library that will offer podcasts and books to help management and employees learn more about various cultures and ethnicities.

To get a data-based picture of where it stood in terms of equitable racial representation in the organization, Judson ran the numbers: Sixty-two percent of its employees are white, 29 percent are African American and the remaining 8 percent are either two or more races, Asian, Hispanic or Native American.

Over a third of its employees are people of color, but just seven — or 18 percent — of its 39 board members are. Less than a third are women.

While roughly a third of its 16 department managers are people of color, all but one of its departmental directors are white.

To help improve equitable representation at all levels, Judson Center plans to launch in early 2022 a program to match senior managers with staff interested in moving up and advertise open positions in newspapers serving minority communities.

“What we’re doing could be replicated (by) any business,” Hardy-Foster said.

“You have to be intentional about it and you have to remain committed. If you don’t do that, it won’t happen.… It has to live in the forefront.”

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

12 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

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FOCUS | BEST-MANAGED NONPROFITS FINALIST

New Detroit teaches DEI policies to industries

BY SHERRI WELCH

Stepping up advocacy

New Detroit was in the midst of developing plans for industry-specific, cultural sensitivity trainings when the pandemic-related disparities and nationally publicized deaths of George Floyd and other Black men and women spurred demand for them last year.

Individuals and organizations alike contacted New Detroit for guidance on how they should respond.

“Big questions were, ‘What can I do?’ ‘How should I be looking at my role in the organization...(and) my organization’s role in the moment?’” said New Detroit’s President and CEO Michael Rafferty.

The organization had just come through cost-cutting and securing $600,000 in new grants to respond to revenue losses that had decreased its budget to just over $1 million for 2020 and left it with a staff of only five employees.

It raised $130,000 or more to increase its staff capacity and launch initial cultural sensitivity training pilots with local health systems and retail and hospitality employees.

With an $80,000 grant from the Community Foundation for Southeastern Michigan, it brought in a COO in March and a director of services and programs in November 2020 to help design and launch the new diversity, equity and inclusion training.

“We saw that communities of color were being affected disproportionately as a result of the pandemic. We also realized all sorts of systems were examining how they needed to think

Having the voice of a trusted organization like the Brookings Institution would strengthen the integrity of any recommendations New Detroit made, Rafferty said. It secured a $50,000 grant from Rocket Community Fund to contract with the Washington, D.C.-based organization and Detroit-based JFM Consulting Group to conduct joint research on how to achieve racial equity through COVID recovery across multiple categories like education and the economy.

Released in March 2021, the report, “Examining and Addressing COVID Disparities in Detroit” includes data on racial inequities and disparities, and interviews with experts and residents on how to close those gaps, Rafferty said. It’s informing policymakers, industry leaders and community leaders on how to advocate for equity in COVID recovery.

New Detroit also submitted numerous op-eds last year to advocate for the importance of labeling racism a public health crisis.

And in November it teamed up with Lakeshore Ethnic Diversity Alliance to host a virtual town hall conversation on critical race theory. The event attracted 430 attendees, 20 from out of state, Rafferty said.

To launch the cultural sensitivity trainings and advocate for DEI policy over the past 18 months, “a lot of what we did was partnering,” he said.

Senior Program Manager Marshalle Favors (left), Senior Executive Assistant and Office Manager Vanessa Johnson, President and CEO Michael Rafferty and Chief Operating Officer Jodee Fishman Raines at New Detroit in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

differently, from real estate to health care,” Rafferty said.

“When you start to think differently about all those moving parts reinventing themselves, you have opportunity to build equity into their design.”

This summer and fall, New Detroit piloted an anti-racism curriculum for health care board members, man-

agement and employees with Authority Health, Henry Ford Health System and McLaren Health.

It also built out and piloted another daylong, DEI training for hospitality and retail management and employees serving customers from 20 organizations convened by the Downtown Detroit Partnership, Rafferty said.

“As we were trying to figure out how to put that out to an industry that was struggling as a result of the pandemic, DDP was able to subsidize (the costs of the training) and pull in restaurants and retail,” he said.

“The objective is to make retail and hospitality welcoming to all races and all cultures.”

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

FINALIST

TechTown sets goals for BIPOC hiring, vendors

BY SHERRI WELCH

TechTown Detroit was evaluating its organizational culture years before George Floyd’s death and the subsequent social justice movement that brought issues of race and equity front and center for the world.

“The fact that we’d been looking at this for four years... prepared us for the increased focus and attention last year,” said CEO Ned Staebler.

“We were ready and poised to respond to our employees’ and clients’ concerns.”

TechTown hired its first diversity and inclusion entrepreneur-in-residence in 2017 to put more intentionality behind those efforts both internally and in dealings with vendors.

It contracted a third-party evaluation of its organizational culture in 2018-2019, which identified areas internally and externally that it needed to strengthen. Staff members, management and board members provided feedback.

In response, TechTown, which is operating on a budget of $8.4 million, rolled out DEI training for its staff and tasked each of its departments with including equity-specific goals in their action plans and developed internal commitments to ensuring equitable opportunities for professional development.

It committed to expanded DEI education opportunities for staff, the

Chief Operating Officer Kelly Kozlowski (left), Director of Economic Development Fundraising Danielle Manley, Collaborative Workspace Director Kimberly Watts, President and CEO Ned Staebler, Director of Finance Andrew Melton, Director of Marketing and Communications Kimberly Palter and Small Business Services Director Amanda Saab at TechTown in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

development of data equity values and the creation of five-year equity goals.

It’s since put 20 employees through a Data Equity Framework training to

ensure that its data equity work would be well-informed.

As its developed specific equity plans and even a strategic plan for the organization, it’s included staff at

all levels in the processes.

This summer, TechTown adopted five-year equity goals running through 2025 in the areas of board development, staffing and spending.

Goals include increasing representation on the board and among TechTown’s vendors to predominantly Black, indigenous and people of color, given that they make up around 90 percent of Detroit’s residents, according to 2020 U.S. Census data.

For example, the organization will look to fill three-quarters of its board seats with BIPOC members by 2025, with half filled by Black directors and 51 percent held by Detroit residents.

It has also set a goal to award 75 percent of its vendor business to Black-owned businesses, 60 percent to Detroit-based businesses and 50-percent to women-owned businesses.

“We should be representative of the city we serve...of the people we serve,” said Staebler, who is white.

“Having relevant representation at every level of our organization, where people can actually see themselves in our organization and our leadership, makes us more efficient in our mission to end cycles of intergenerational poverty and to generate community wealth.”

Staebler urges other small organizations to invest in internal staff development: “TechTown’s work benefited from people sharing a baseline understanding of experiences, concepts and learning.”

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

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FOCUS | BEST-MANAGED NONPROFITS

UNITED WAY

Making it official

From Page 10

United Way began making concerted efforts to “Being a people-first organizadiversify its board tion is all part of our mission,” said and, where apPresident and CEO Darienne Hudson. “We have to pay attention to propriate, its equity and inclusion. staff. It increased “It has to be part of our DNA if the number of we’re going to serve ... the people of people of color, our community.” women, faithHudson based and nonprofit leaders on its board, while Early efforts also adding representatives from In spring 2020, United Way be- Macomb County to ensure it better gan doing virtual “huddles” as a represented the people it served.

It adopted a bylaw change made way for its leaders and staff alike to come together to process the trau- by United Way Worldwide in July ma everyone was experiencing at 2020, adding DEI training as a requirement for its board members as the time, Hudson said.

By June, four staff leaders part of the annual board retreat. In emerged in conversations with March it conducted the first of those about 30 other employees. They be- trainings with the Michigan Roundcame the early face of United Way’s table on Diversity and Inclusion, facilitated by four board members and internal DEI efforts.

Working with United Way leader- the four staff leaders of the DEI comship, the group helped the organi- mittee.

In September, the organization zation develop an understanding of internal cultural challenges brought back the Michigan Roundthrough staff surveys and candid table to team up with DEI leaders at conversations, facilitated monthly United Way on training for employlearning sessions with external ees during its staff retreat.

“Any time you are stepping into speakers on topics like racial history and gender identity, made rec- this work which is highly sensitive … ommendations on grantmaking it’s important that you have execuand other processes and norms, tive champions who understand and launched activities for staff like and support this work,” Hudson a DEI book club that are ongoing. It said. “It’s also important you have a also helped to build a foundation budget aligned (and) some infrafor the 21-day Equity Challenge in structure with staffing.”

In fall 2020, United Way appointMay and June.

“Following the national reckon- ed its chief impact officer as chief ing on racial inequity and racially people, equity and engagement officer, ensuring DEI efforts are moni“FOLLOWING THE NATIONAL RECKONING tored at a high level in the organization.

ON RACIAL INEQUITY AND RACIALLY To handle the MOTIVATED VIOLENCE IN 2020, AND IN THE day-to-day focus on the organizaWAKE OF THE MURDER OF GEORGE FLOYD, DEI, tion, which is operWE BEGAN TO ASK, ‘WHAT MORE CAN WE ating on a $54 million budget for fiscal DO?’ ...”

2022, in March hired community activist, — Darienne Hudson, president and CEO, United Way for Southeastern Michigan motivational speaker and DEI trainer motivated violence in 2020, and in Andre Ebron, former dean of culture the wake of the murder of George and climate for Detroit Public Floyd, we began to ask, ‘What more Schools Community District, as secan we do?’ and to examine how to nior director for equity and inclusubstantively incorporate (DEI) sion.

Ebron hired two others to work into our organizational practices and culture, as well as what specific with him, and the team is now leadimmediate and long-term action ing DEI efforts around internal culwe could take to contribute to sus- ture, helping shape policies and detainable change in our region,” veloping strategies to bring an equity mindset to United Way’s grant fundHudson said.

ing and community impact work.

Ebron is working very closely with the four staff leaders of the DEI employee committee created last year to ensure the organization doesn’t lose any momentum, Hudson said.

The moves have added up to direct investment of more than $3 million in DEI efforts and infrastructure over the past 18 months, beyond millions of dollars in pass-through grants for vaccination, testing and other supports in communities of color, United Way said.

“This isn’t a fad; this has to be the way we do business,” said Hudson.

Equitable grantmaking In the spring, United Way began working with Detroit Future City to develop a blueprint for equitable grantmaking that gives voice to grassroots organizations and ensures smaller organizations that haven’t received a lot of grants and resources have opportunities to secure them.

“It’s a how to advertise, bring people to the table, some rubric for how you give out grants and how you hold yourself accountable as an organization to do that, to be equitable in grantmaking,” Hudson said.

It’s also evaluating if the organization is granting to BIPOC-led organizations and those led by people of color. “If you answer and you haven’t met those benchmarks, you have to go back and re-evaluate how you are giving grants,” she said.

Last year, through local and national partnerships, United Way funded and supported programs and initiatives aimed at serving communities of color. It teamed up with Rocket Mortgage, the city of Detroit and Microsoft Corp. on the Connect 313 digital inclusion effort, providing over $200,000 and administering the effort to ensure all Detroiters have access to internet service, devices to get online, technical support and digital resources for improved learning, employment and well-being.

It also distributed millions of dollars in funding to targeted efforts underway at Black-led organizations, 10 local churches and other nonprofits to provide COVID testing, vaccination, personal protection equipment and other needed services to Black communities.

Looking outward For its first large-scale, outward-facing DEI effort, this spring United Way of Southeastern Michi-

gan replicated the 21-day challenge were all involved in the 21-day chalits affiliate, Washtenaw County Unit- lenge. ed Way, launched, Hudson said.

The conversations require enviInitially, its DEI committee of em- ronments built on trust and vulneraployees led the work before Ebron, bility, she said. and the newly established DEI de“These are deeply rooted relationpartment picked up the effort. ships and spaces where people want It raised $71,000 to fund the effort to learn for the sake of their organiand worked with roughly 65 leaders zations, their own families and their from local municipalities, corpora- communities,” she said. tions, nonprofits and legislators to Hudson is quick to point out all of create a streamlined experience for those conversations are mutually participants, to promote the equity beneficial. challenge and encourage their em“This has really been reciprocal. ployees, volunteers and constituents It’s a two-way street,” Hudson said.

“We share best practice, but we are to actively participate.

Through daily education emails, also learning best practice from othsocial media conversations, and ers.” weekly conversations facilitated by community leaders in the DEI space, Striving for racial equity participants were invited to grow their individual understanding of In the summer of 2021, United different experiences and points of Way created a Racial Equity Fund view, while fostering a shared under- work group comprised of a diverse standing of the inequities that im- cross section of community leaders pact daily life across our region and to help it develop the framework for how individuals can take that with a new fund that will provide operatthem in their daily actions and inter- ing grants to community organizaactions. Conversations focused on tions led by Black and indigenous issues of race, environmental justice leaders and people of color for projand issues in the LGBTQ communi- ects aimed at eliminating racial disty, among other topics.

“I HOPE THAT THE MORE PEOPLE SEE THAT It’s continuing that conver- THERE ARE MORE NONPROFITS MOVING IN sation on equi- THIS DIRECTION OF BRINGING ty once a month as part FORTHRIGHT AND VERY PRODUCTIVE of virtual “town (TALKS) ABOUT THE WORK THEY DO IN DEI, halls” focused on issues such THAT MORE AND MORE NONPROFITS WILL as Black mater- FOLLOW DOWN THIS PATH.” nal health care, d i s a b i l i t i e s , — Darienne Hudson, president and CEO, United Way for Southeastern Michigan and transgender individuals and specific cultural parities in the community. populations such as Chaldean, HisThe application process for the panic or Latinx cultures to raise fund opened in mid-November awareness and increase understand- seeded with $500,000 from philaning of various groups of people who thropist MacKenzie Scott’s $25 milmake up the community. lion gift to United Way. The challenge is something UnitRecipients will be announced at ed Way will hold annually, Hudson the end of December for grants runsaid. ning through 2022.

“It starts with us as individuals,” “I hope that the more people see she said. that there are more nonprofits movQuarterly meetings with 60 or ing in this direction of bringing more grantees have provided a fo- forthright and very productive (talks) rum to discuss DEI issues facing the about the work they do in DEI, that community, including disparities in more and more nonprofits will foltransportation, health care and food low down this path,” Hudson said. service, Hudson said, and best prac- Some DEI topics are seen as controtices in addressing them. versial and taboo, she said.

The monthly meetings of the Unit“I think it’s important that large ed Way campaign cabinet are also organizations like ours are really takproviding an opportunity to share ing the lead.” how United Way is approaching DEI with corporate funders, Hudson Contact: swelch@crain.com said, noting the cabinet members (313) 446-1694; @SherriWelch

NONPROFITS

Michigan Nonprofit Association names new CEO “AS A WHITE WOMAN NOW LEADING MNA, I AM COMMITTED TO HOLDING MYSELF AND OUR ORGANIZATION ACCOUNTABLE TO OUR VALUES OF DIVERSITY, EQUITY, INCLUSION AND JUSTICE.”

BY SHERRI WELCH

The Michigan Nonprofit Association has named Vice President Kelley Kuhn as its next president and CEO, effective Jan. 1.

Kuhn, who is also chief strategy officer for MNA, was chosen following a national search that attracted more than 160 applicants from across the U.S. She succeeds Donna Murray-Brown, who has led the organization for nine years and is stepping down at year’s end to relocate to Kentucky with her husband.

Kuhn, 44, joined MNA in 2008. She

— Kelley Kuhn

has been on its executive team since 2012 and served as interim president and CEO of the association during the first quarter 2013.

Before joining the Michigan Nonprofit Association, Kuhn was execu-

tive director of the Jackson Nonprofit Support Center and provided executive services to the Jackson County Community Foundation and the Jackson Chamber of Commerce.

Kuhn said Tuesday that she has a

long and deep passion for championing the work of nonprofits.

“I firmly believe that nonprofits are trusted resources critical to the health and vitality of Michigan’s communities,” she told Crain’s in an email. “As a white woman now leading MNA, I am committed to holding myself and our organization accountable to our values of diversity, equity, inclusion and justice.”

Kuhn’s knowledge, skills and abilities were unsurpassed as a search committee of MNA board members reviewed candidates, board Chair Scott Schropp, managing director of

global wealth management at The Illes Schropp Group, said in a news release. “Moreover, her demonstrated leadership in supporting diversity, equity, inclusion and justice for all Michigan residents is in keeping with our future efforts,” he said.

Kuhn’s “thoughtful leadership, coupled with her heart for doing good in communities across the state, will ensure the strength and capacity of the MNA for years to come,” Murray-Brown said in the release.

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

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NONPROFITS

Wilson Foundation pledges $100M to arts organizations Investment to provide operating support to Southeast Michigan groups over next decade

BY SHERRI WELCH

How the pledge works

The Ralph C. Wilson Jr. Foundation is investing $100 million over the next decade to ensure permanent operating support for arts and culture organizations in Southeast Michigan.

As part of that, it’s creating a nearly $60 million permanent endowment that will provide operating grants to 11 major arts groups and to small and mid-sized groups forever, beginning in 2022.

The foundation will make the same investment in Western New York, where it also focuses grants to honor the wishes of its late namesake, Grosse Pointe businessman Ralph C. Wilson Jr., who once owned the Buffalo Bills.

In Michigan, more than half of the commitment will go toward a permanent endowment at the Community Foundation for Southeast Michigan that’s expected to fund a total of $3 million in permanent annual operating grants to support 11 of the region’s largest arts and culture institutions.

The endowment will also provide $500,000 in annual grants to be awarded to small and midsized arts groups in the region and additional grants to fund administration of the fund and programs aimed at increasing inclusion and equity in the region’s arts and culture sector, in collaboration with CultureSource.

To jumpstart the annual support to arts groups while it builds the endowment, the Wilson Foundation plans to provide $3.75 million in operating grants each year during the time it is building the endowment for a total investment of $33.75 million.

Rounding out the larger commitment, the foundation is also making a $5 million grant to Motown Museum to support its $50 million campaign to expand the museum’s footprint and programs.

Though the Wilson Foundation does not typically support the arts, it views the organizations as economic drivers, foundation President and CEO David Egner said.

“There’s a tremendous opportunity to leverage more dollars into operations” with the permanent operating support, he said.

“That’s what this is focused on. It’s not focused on programming capital or debt reduction.”

Seven of the large arts grantees are in a cluster in greater downtown Detroit, he said.

“The thought (was) that when you cluster institutions, you actually create a greater output of economic proportion.”

Two others, The Henry Ford and Detroit Zoo, attract more than a million people each year, he said. And the remaining two, the Holocaust Center and Arab American Museum, are dealing with the issue of inclusion and equity and community identity in a way that others don’t.

“We are building upon years of substantial investment by critical public funding streams and philanthropic funders that have helped these institutions become the cultural treasures and economic drivers they are today,” he said.

The Wilson Foundation will make an initial grant of $15 million toward

The Ralph C. Wilson Jr. Foundation has commited $100 million to provide annual operating support to Southeast Michigan arts and culture groups over the next decade. It will create a $60 million, permanent endowment during that time to benefit the groups and jumpstart the permanent support it will provide with $3.75 million in grants each year during that period.

Small and midsized nonprofits chosen each year will share in $500,000 in operating grants. Eleven major arts and culture organizations will receive a set amount of operating funding every year, beginning in 2022. Those groups and the annual amount they will receive are:  Arab American National Museum, $100,000  Charles H. Wright Museum of African American History, $300,000  Detroit Historical Society, $200,000  Detroit Institute of Arts, $700,000  Detroit Symphony Orchestra, $700,000 Motown Museum is one of several cultural institutions in metro Detroit receiving the Wilson Foundation’s endowment pledge. | GETTY IMAGES

Egner

Boyle

Noland

the endowment this year and subsequent grants over the next nine years to bring the total investment in the endowment to about $60 million, Egner said.

At the end of the investment period, if the annualized investment target the Community Foundation has realized in the last 20 years holds, the permanent arts endowment will grow to between $80 million and $85 million, he said.

How the Wilson foundation arrived at the annual grant amounts for the major arts groups was “more art than science,” Egner said.

The amounts of operating grants to each varies.

“Because the arts have such a breadth and variety, there’s no formula,” he said.

Working with a national consultant and its board of directors, the foundation looked at every variable it could, including budget size, attendance, financial health, current capital build investments and economic impact.

“We looked at all the data and essentially took our best guess on the $3 million budget,” he said.

For the Detroit Symphony Orchestra and Detroit Institute of Arts, the $700,000 they will each receive in annual operating grants is the equivalent of giving them each a $14 million endowment, Boyle said.

“The funds are dedicated to those institutions and forever.”

The grants will provide unrestricted funds that can be used for general operating needs, something nonprofits seek to help fund core organizational structure and capacity and fill other needs, rather than

Brown

funding directed to specific programs or services.

“While many donors like restricting gifts for specific use, often for something highly tangible that the donor can see and that makes them feel good, it creates significant constraints for organizations needing flexibility to respond to urgent opportunities or make real-time data-driven pivots,” CultureSource Executive Director Omari Rush said.

As part of the grant commitments, each organization will develop and track annual metrics and benchmarks that support their goals and strategic plans, working with the Community Foundation and national consultants.

Eight of the 11 large groups that will get annual operating grants are already building permanent endowments at the Community Foundation, Community Foundation President Mariam Noland said, adding that the other three could be building them elsewhere.

If the institutions want to leverage the Wilson commitments, “we’d like to see others come in and match it or funders decide to follow suit,” Egner said.

The operating grants “aren’t going to solve all ills,” said Jim Boyle, vice president, programs and communications for the Wilson Foundation.

“We really hope other people ... contribute either at the endowment level or the operation level.”

“These institutions are critical to driving healthy, regional economies,” he said.

While many organizations in the region have been working to raise endowment, they are still under-en-

 Detroit Zoological Society, $150,000

dowed compared with their counterparts in other regions, said Noland, who has spent more than three decades working to help local nonprofits build permanent endowment to ensure sustainable funding.

A 2018 study by Crain’s Detroit Business confirmed Detroit’s top cultural institutions were far behind on permanent endowments compared with peers around the country and had, at that point, tens and even hundreds of millions of dollars to go, in some cases, to bring their endowments up to par with similar organizations nationally.

“What Wilson has done with $100 million and an equal amount in Buffalo, is a tremendous commitment to the future of these organizations,” Noland said.

As organizations such as the Michigan Opera Theatre are tasked with rebuilding audiences and revenue in the wake of the pandemic, “the flexible structure of this significant infusion of support enables MOT to invest in key infrastructure such as administrative staffing and operating

 Holocaust Memorial Center, $100,000  Michigan Opera Theatre, $200,000  Michigan Science Center, $200,000  Motown Museum, $200,000  The Henry Ford, $150,000

the Detroit Opera House as a community venue, areas often challenged to secure unrestricted and renewable support,” President and CEO Wayne Brown said in an email.

“Building endowment during the grant period will also diversify MOT’s income portfolio and benefit the organization’s future sustainability as it seeks to serve future generations in Detroit,” he said.

MOT currently holds an endowment of more than $2 million, and the Community Foundation holds more than $3 million in assets for its benefit, Brown said, noting it will look to leverage the Wilson support with other funders.

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

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CRAIN'S LIST | MICHIGAN BANKS Ranked by 2021 Michigan deposits inside market COMPANY NAME ADDRESS PHONE; WEBSITE

TOP EXECUTIVE(S)

MICHIGAN DEPOSITS INSIDE MARKET ($000,000) JUNE 2021/2020

NUMBER OF MICHIGAN OFFICES INSIDE MARKET 2021

DEPOSITS OUTSIDE MARKET ($000,000) 2021

NUMBER OF OFFICES OUTSIDE MARKET 2021

1

J.P. MORGAN CHASE & CO.

John Carter Chase Michigan market president

$74,620.4

195

$1,936,723.6

4,730

2

HUNTINGTON BANCSHARES 1

Sandra Pierce senior executive VP, private client group and regional banking director and chair of Michigan

$40,819.5

465

$106,723.6

825

3

COMERICA BANK

Michael Ritchie president, Michigan market

$39,010.4

188

$37,480.6

242

4

BANK OF AMERICA

Matthew Elliott Michigan market president and region executive

$30,661.1

84

$1,840,551.7

4,131

5

PNC BANK

Ric DeVore president for Detroit and Southeastern Michigan

$23,361.2

154

$345,217.1

1,984

6

FIFTH THIRD BANK EASTERN MICHIGAN

David Girodat regional president, executive VP, Eastern Michigan

$21,861.5

182

$146,939.9

928

7

FLAGSTAR BANCORP INC. 2

Alessandro DiNello president, CEO and director

$17,578.9

114

$2,218.2

45

8

CITIZENS BANK

James Malz Midwest regional executive

$6,836.8

76

$146,573.6

897

9

INDEPENDENT BANK CORP.

William Kessel president, CEO and director

$3,928.8

64

$0.0

0

10

MERCANTILE BANK CORP.

Robert Kaminski Jr. president, CEO and director

$3,676.3

39

$0.0

0

11

MACATAWA BANK CORP.

Ronald Haan president, CEO and director

$2,607.7

29

$0.0

0

12

KEYBANK N.A.

David Mannarino market president, commercial bank sales leader

$2,190.1

21

$146,743.7

1,014

13

ARBOR BANCORP (BANK OF ANN ARBOR)

Tim Marshall president and CEO

$2,176.4

8

$0.0

0

14

NORTHPOINTE BANCSHARES INC.

Charles Williams president and CEO

$2,106.3

1

$0.0

0

15

LEVEL ONE BANCORP INC. 3

Patrick Fehring Jr. chairman, president and CEO

$2,058.3

17

$0.0

0

16

FIRST NATIONAL BANCSHARES INC. (FIRST NATIONAL BANK OF AMERICA)

Ken Foote CEO

$2,009.0

3

$0.0

0

17

CHOICEONE FINANCIAL SERVICES INC.

Kelly Potes CEO and director

$1,882.3

31

$0.0

0

18

OLD NATIONAL BANK

Alex Strati Michigan region CEO

$1,794.4

19

$16,174.1

147

19

CIBC BANK

Victor Dodig president and CEO Michael Capatides president and CEO, CIBC Bank USA and senior executive VP and group head, U.S. region

$1,775.9

1

$33,949.6

24

20

ISABELLA BANK CORP.

Jae Evans president, CEO and director

$1,664.9

30

$0.0

0

21

FIRST MERCHANTS BANK

Michael Rechin 4 president and CEO

$1,400.0

17

$10,899.5

94

FENTURA FINANCIAL INC.(THE STATE BANK) 5

Ronald Justice president, CEO and director

$1,126.8

17

$0.0

0

23

HORIZON BANK

Craig Dwight CEO and chairman

$1,091.3

15

$3,819.3

61

24

MACKINAC FINANCIAL CORP. (MBANK)

Paul Tobias chairman and CEO

$1,067.8

23

$245.2

7

25

SOUTHERN MICHIGAN BANCORP INC.

John Castle chairman and CEO

$953.5

16

$0.0

0

22

611 Woodward Ave., Detroit 48226 313-256-8500; www.jpmorganchase.com 801 W. Big Beaver Road, Suite 500, Troy 48084-4724 248-244-3541; www.huntington.com

411 W. Lafayette, Detroit 48226 248-371-5000; www.comerica.com 2600 W. Big Beaver Road, Troy 48084 800-643-9600; www.bankofamerica.com 755 W. Big Beaver Road, Troy 48084 800-243-7274; www.pnc.com One Woodward, Detroit 48226 313-230-9001; www.53.com

5151 Corporate Drive, Troy 48098 248-312-2000; flagstar.com

27777 Franklin Road, Southfield 48034 248-226-7998; www.charterone.com 4200 East Beltline, Grand Rapids 49525 616-527-5820; independentbank.com 310 Leonard St. NW, Grand Rapids 49504 616-406-3000; mercbank.com 10753 Macatawa Drive, Holland 49424 616-820-1444; macatawabank.com 100 S. Main, P.O. Box 8612, Ann Arbor 48107 800-539-2968; www.keybank.com 125 S. Fifth Ave., Ann Arbor 48104 734-662-1600; bankofannarbor.com

3333 Deposit Drive NE, Grand Rapids 49546 616-940-9400; www.northpointe.com 32991 Hamilton Court, Farmington Hills 48334 248-737-0300; levelonebank.com

241 E. Saginaw, East Lansing 48823 800-968-3626; www.fnba.com 109 E. Division, Sparta 49345 616-887-7366; choiceone.com

2723 S. State St., Ann Arbor 48104 734-887-2600; www.oldnational.com 34901 Woodward Ave., Ste. 200, Birmingham 48009 248-566-4700; us.cibc.com/en/home.html

401 N. Main, Mt. Pleasant 48858 989-772-9471; isabellabank.com 10 Washington St., Monroe 48161 800-205-3464; www.firstmerchants.com 175 North Leroy St., Fenton 48430 810-629-2263; fentura.com

200 E. Big Beaver Road, Troy 48083 248-781-2584; www.horizonbank.com 130 S. Cedar St., Manistique 49854 888-343-8147; bankmbank.com

51 W. Pearl St., P.O. Box 309, Coldwater 49036 517-279-5500; smb-t.com

$63,500.7

$19,670.4

$35,491.6

$29,285.4

$21,220.3

$21,631.5

$17,183.7

$6,372.4

$3,560.6

$3,271.7

$2,125.1

$2,091.9

$1,691.0

$1,518.3

$1,833.5

$1,740.9

$1,332.2

$1,602.7

$1,633.3

$1,441.2

$1,248.8

$1,022.0

$927.1

$1,014.3

$768.2

SOURCE: FDIC | This list ranks banks and bank holding companies with a presence in Michigan. Figures are from the FDIC's deposit market reports, which are based on the branch/office deposits for all FDIC-insured institutions as of June 30. It is not

a complete listing but the most comprehensive available. Companies are listed with the address and top executive of their main metro Detroit office. Actual figures may vary. NA = not available NOTES: 1. Formerly Huntington National Bank. Rebranded as Huntington Bancshares after TCF Financial Corp. merger closed with in June 2021. 2. Flagstar has an agreement to be acquired by New York Community Bancorp. in a $2.6 billion deal. 3. It was announced on Nov. 4 that Level One Bancorp Inc. had signed an agreement to be acquired by Muncie, Ind.-based First Merchants Corp. 4. To retire effective Dec. 31. Will be succeeded by current COO and CFO, Mark Hardwick. 5. Fentura Financial Inc. owns a controlling interest in The State Bank.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 16 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

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12/3/2021 7:21:51 AM

REAL ESTATE

Developer working on Black-owned business campus in Detroit

BY KIRK PINHO

A plan for a large Black-owned business campus in Detroit took a step forward this week and prominent business leaders pushing the plan were identified.

The Detroit Brownfield Redevelopment Authority board voted on Wednesday afternoon to allow the Detroit Economic Growth Corp. to enter into a letter of intent, development agreement and land transfer agreement with Latimer Ashley Development Co. LLC to develop 400,000 to 480,000 square feet of new industrial/ warehouse space across about 30 acres and 160 parcels in the area generally bounded by I-94, McGraw, Warren and Parkdale. The group has agreed to pay just more than $3.1 million for the land.

In addition, some of the potential investors in the project, which would start construction in the fourth quarter 2022, were identified by DEGC staff during the Wednesday meeting.

They include Dennis Archer Jr., CEO of Detroit-based Ignition Media Group and founder and president of Archer Corporate Services; Carla Walker-Miller, founder and CEO of Detroit-based Walker-Miller Energy Services; and Ronald Hall Jr., president and CEO of Detroit-based Bridgewater Interiors; and others, according to DEGC staff.

Archer said he is “involved in early stage discussions but not enough to comment at this point.” An assistant for

A Black-owned business campus is proposed for about 30 acres of property near McGraw and Junction in Detroit. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Walker-Miller said she was unavailable for comment prior to press time, and an email was sent to Hall seeking comment. An email was also sent to Hiram Jackson, CEO of Detroit-based Real Times Media and publisher of the Michigan Chronicle, who represents Latimer Ashley Development, seeking comment.

“It is important to note that the individual investors have not been finalized and may change,” a spokesperson for the DEGC said in an email.

A letter of intent Crain’s obtained earlier this week from the DEGC., which staffs the DBRA, through a Free-

dom of Information Act request describes the proposed building as “an African-American-owned business campus (with light industrial, warehouse and distribution operations).”

The other developer of the project is the Canton Township office of New York City-based industrial/warehouse developer Ashley Capital, which has several large projects in development in the region.

According to a copy of a letter of intent, the roughly 160 properties are owned by either the city, the Economic Development Corp. or the Detroit Land Bank Authority; then transferred

to the Brownfield Redevelopment Authority; and then to Latimer Ashley or an affiliate. A $1.5 million credit would pay for things like utility relocation.

There are several other private owners within the footprint of the proposed building that would have to sell their land to Latimer Ashley for the project to move forward; the Brownfield Redevelopment Authority’s sale of the properties is contingent upon acquisition of those privately owned parcels, and the authority would not be on the hook to help acquire those properties.

Also in order for the deal to close, the property would need to be rezoned from residential to industrial.

An earlier request to rezone the property from residential to industrial was never approved, although it’s not yet known what happened with that 2019 request. Whether the project would have an impact on nearby Atkinson Park is also not known.

Crain’s has asked the DEGC for information on those.

The documents also say that the DEGC would help Latimer Ashley with incentives, including things like a property tax abatement and a brownfield package. Things like New Markets tax credits and/or an Opportunity Zone structure are also being considered, the documents say.

There are an estimated 450 jobs anticipated at the site, the documents say.

The site is immediately east of a large building for ThyssenKrupp AG

along I-94 and sits near users like Coca-Cola, Oasis Trucking Centers, UPS and DTE Energy Corp., according to marketing materials by Farmington Hills-based Friedman Real Estate, which owns property in the footprint but is not believed to be involved in the Latimer Ashley effort.

While there is no Latimer Ashley Development Co. LLC currently registered with the Michigan Department of Licensing and Regulatory Affairs, there is a Latimer Ashland Capital Development Co. LLC with an address nearby at 2627 Clark St. That organization is registered to Karl Bell, who leads entrepreneur William Pickard’s GAA New Ventures LLC, which is a real estate and job creation subsidiary of Pickard’s GAA Manufacturing and Supply Chain Management.

A spokesperson said Pickard is not involved in the Latimer Ashley project.

According to a third-quarter industrial market report from the local office of New York City-based brokerage firm Newmark, there is 7.6 million square feet of new space under construction in metro Detroit, up from 6.7 million square feet in the second quarter and 5.1 million square feet in the third quarter 2020.

Of that 7.6 million square feet under construction, 86 percent, or 6.6 million square feet, is bulk warehouse and distribution space.

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

DECEMBER 6, 2021 | CRAIN’S DETROIT BUSINESS | 17

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12/3/2021 3:15:12 PM

CRYPTO

Charities going crypto Michigan nonprofits that have joined The Giving Block platform as of late November include:

From Page 1

More people are tinkering in digital currency and will see unexpected increases if their cryptocurrency booms, she said. “That’s one more way to give to charity,” she said.

The Giving Block declined to disclose how much Michigan charities have raised on the site in the past year, but it’s seeing significant growth overall in donations and charity members.

In September, the platform said it’s on pace to process more than $100 million in cryptocurrency donations in 2021. It’s projecting it will process 10 times that amount, or $1 billion, in crypto donations in 2022.

The number of nonprofit subscribers on the platform has risen from 100 at the beginning of the year to nearly 900 as of Nov. 29, Ben Pousty, head of growth for The Giving Block, said in an email.

The Giving Block is one of the top two organizations accepting and distributing cryptocurrency donations, said Leon LaBrecque, executive vice president, chief growth officer of Troy-based Sequoia Financial Group.

Boston-based Fidelity Charitable, the largest grantmaker in the country, is the other. Last year, philanthropists with donor-advised funds administered by Fidelity recommended a record $9.1 billion in grants to 170,000 charities.

Fidelity had received more than $274 million in cryptocurrency contributions by mid-November, up from $69 million in 2017, Pousty said in an email Monday.

 Great Lakes Center for the Arts, Bay Harbor  Ronald McDonald House Charities Detroit, Detroit American Autoimmune Related Diseases Association, Clinton Township  Kids Food Basket, Grand Rapids  Bissell Pet Foundation, Grand Rapids  Ruth Ellis Center, Highland Park  Jackson Interfaith Shelter, Jackson  Regal Charitable, Kentwood  Roman Catholic Diocese of Marquette, Marquette  Michigan Donor Family Council, Plymouth  Gamers Outreach, Saline  Helping Hand For Relief and Development Inc., Southfield “There are a lot of people who are skeptical, including me,” Ronald McDonald House of Detroit Executive Director Jen Litomisky said of cryptocurrency donations, “But we got another $500 we never expected to get.” | PHOTOS BY NIC ANTAYA/SPECIAL TO CRAIN’S DETROIT BUSINESS

 Williams Syndrome Association, Troy SOURCE: THE GIVING BLOCK

Younger investors are driving much of the cryptocurrency activity, according to experts.

Whether nonprofits encourage crypto donations through a donor-advised fund or have their own crypto wallet to receive donations, “the wave appears to be starting on crypto donations,” said LaBrecque, who serves as a financial adviser to Ronald McDonald House.

“Crypto is another form of asset donation charities should be looking at.”

From left, volunteers Sarah May of Beverly Hills, Sandie Solo of Northville and Barb Mansfield of Northville decorate for the holidays at Ronald McDonald House of Detroit.

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Cryptocurrency is a digital form of currency designed to be used to pay for goods and services. There are many different types, with Bitcoin being the first and most well known.

These currencies do not exist in a physical form and are instead stored in a computerized database — known as a ledger — using strong cryptography to secure transactions, control the creation of “coins” and verify ownership. Unlike money issued by a central bank, cryptocurrency is considered decentralized and as such, it is managed across the world generally through a blockchain, which allows for transactions to be completed.

Cryptocurrency is considered property for federal tax purposes, LaBrecque said, meaning capital gains or losses are assessed when crypto is exchanged for real currency.

By donating cryptocurrency to a nonprofit, donors can take a tax deduction for the fair market value of the crypto. They can also avoid any capital gains tax they would have incurred if they had sold it and then made a donation. In some cases, donating cryptocurrency can increase the value of a gift by as much as 30 percent by eliminating the capital gains tax, The Giving Block says on its website.

Ronald McDonald House, which is operating on a $1.5 million budget, opted for the lower $2,500 membership level on The Giving Block rather than a $5,000 membership that includes enhanced marketing of the

organization.

Donors can search for the nonprofit on The Giving Block platform or go through the charity’s website and click on a crypto donation button. In the latter, crypto gifts transfer from the charity’s electronic gift platform to The Giving Block, which immediately converts them into cash.

Though charities can opt to hold cryptocurrency, “part of our policy is that we would not hold it or invest it,” given the risk that its value could drop, Litomisky said.

Along with the gifts, Ronald McDonald House gets the names and contact information for donors. “I definitely think we will reach out to them in the future and start cultivating them in a different way,” she said.

New currency, new donors Plymouth-based Michigan Donor Family Council, a nonprofit that advocates for organ, eye and tissue donation and supports recipients, also signed up for The Giving Block recently.

“My husband and I have eight children. All of our kids are very conscientious of volunteering. They have been pushing us heavily (to) modernize the nonprofit,” President and CEO Patricia Jo Herndon said.

The couple’s young adult children are diversifying, buying bitcoin rather than putting everything into a 401(k) and buying stock, CFO Walt Herndon said.

Raising donations through cryptocurrency could also take some of the

pressure off other fundraising efforts while allowing the charity to increase its impact in the community, he said.

It takes a lot of effort for the volunteer-run charity to put events together and secure sponsors for events, like a dueling piano fundraiser the council hosted at The Inn at St. John’s in September with 250 people.

“You can only do so many of these events a year,” Walt Herndon said.

The council is looking to cryptocurrency donations to help it do more in the community, the couple said.

The small nonprofit, which operates on a $50,000 budget, got its first crypto donation of $250 from a relative on Nov. 22.

“I think it’s going to increase over time, and our investment of $2,500 (for The Giving Block membership), we’ll get much more in return as far as donations,” Patricia Jo Herndon said, noting other nonprofits in the organ donation community are also considering crypto platforms as part of their larger fundraising plans.

Sommer Brock, president of the Association of Fundraising Professionals, Greater Detroit Chapter, and vice president of development at the Pontiac Community Foundation, said she’s not heard much about cryptocurrency donations from other nonprofits but is looking at it as the foundation establishes gift policies.

“My concern (or) hesitancy with this form of giving is the stability of the value,” she said in an email. “I imagine when this does gain traction it will be much like stock transfers: organizations cash out on the stock immediately.”

Cryptocurrency is very volatile, given that its value can change within minutes, acknowledged Gary Dembs, CEO of the Non-Profit Personnel Network and a fundraising consultant to Ronald McDonald House.

“But once someone decides to move it up from crypto to U.S. currency, that’s the gift,” he said, and its value is fixed.

“When you look at how much nonprofits spend on direct mail and special events, the monetization of crypto could replace event money and direct mail money or supplement it with very little cost,” while also attracting new donors, Dembs said.

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

18 | CRAIN’S DETROIT BUSINESS | DECEMBER 6, 2021

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12/3/2021 12:34:32 PM

M&A

prise to anyone that we’re seeing inflation in the context of … the purchase prices of businesses.

There’s simply too much capital out there chasing yield.”

Madland with the Huron Capital PE firm, however, largely dismissed the notion that there’s a direct connection between the consumer inflation that’s ongoing and increased prices being paid for business acquisitions.

The drivers for inflation in the broader economy are different than what’s driving rising prices that financial buyers like Huron Capital are paying for companies, she argued.

Those calculations are usually based on a multiple of the target company’s earnings or revenue.

“The math is still working for valuations where they are,” said Madland. “Are there certain sectors that I think are overvalued? Yes. But those are for fundamentally different reasons than the whole market being overvalued.”

From Page 3

Millions and billions of reasons to sell For examples of the red-hot market, one need look no further than recent headlines.

Legendary Michigan brewery Bell’s Brewery Inc. in Kalamazoo County earlier this month became the latest craft brewery to cash in, with founder Larry Bell selling the company for an undisclosed price to Lion Little World Beverages, an Australian brewing conglomerate which also owns Fort Collins, Colo.-based New Belgium Brewing Co. In early November, Farmington Hills-based Level One Bancorp. Inc. joined the ongoing trend of banking consolidation, as it announced a plan to sell to an Indiana bank, First Merchants Corp., in a deal valued at over $323 million.

Dealmaking has also been plentiful among companies with far less name recognition.

All told, M&A activity hit a global record in the third quarter of this year with total deal value of $1.52 trillion, according to a late-September Reuters report, which cited data from Refintiv. The total deal value was a 38 percent boost over the same quarter in 2020.

M&A executives are quick to note that each deal is different but also point out that there are a handful of common threads.

“It’s a very rich and robust market,” said Rajesh Kothari, managing direc-

Kothari

Madland

tor at Southfield-based investment banking firm Cascade Partners LLC. “There’s a lot of capital, interest rates are down. You had a little bit of pentup demand to start the year. And then you throw on top of it a potential tax hike, and it’s a bonanza.”

The Dykema report shows that roughly a quarter of respondents cited one of three major drivers for the wave of M&A activity: general U.S. economic conditions, availability of capital or financial markets.

Just 7 percent cited potential changes to U.S. tax law.

For many veteran business owners who went through the tumult following the 9/11 terrorist attacks in the early 2000s, and then slogged through the Great Recession, the COVID-19 pandemic was simply a final straw.

“I’m done,” has been a familiar refrain from sellers, according to Heather Madland, a partner heading up business development at Detroit private equity firm Huron Capital.

The good news for such owners is that buyers are out there, particularly in the PE sector.

And they have money to spend. A lot of it.

Globally, an S&P Global Market In-

Wybo

Calderone

telligence report from August showed that private equity funds hold nearly $2.3 trillion in capital committed by investors but not yet spent, commonly called “dry powder,” and funds are obligated to put that money to work for their investors.

More than $500 billion of that is held by just 25 private investment firms.

Given the large amount of private money chasing deals — along with the duty of PE funds to put investor dollars to work — Vaughn with the Dykema law firm said he could see a scenario in which the U.S. economy enters a recession, but the M&A market remains strong due to the sheer amount of private equity capital that must be deployed for transactions.

Some M&A experts aren’t sure that’s a good thing.

“There’s too much capital out there,” said Alex Calderone, president of Calderone Advisory Group LLC, a Birmingham-based restructuring firm for distressed companies.

“If you look at what happens when there’s too much capital, one of the consequences is inflation,” said Calderone. “And we’re seeing the price of gas go up, we’re seeing food inflation. So it shouldn’t come as a sur-

Distress ahead?

Perhaps one bright spot of the COVID-19 pandemic has been the trillions in government spending used to support the U.S. economy and businesses as the virus has continued raging, presenting further uncertain conditions.

With scant evidence that the federal government plans to pass any further virus-related stimulus, M&A executives working in the restructuring and distressed side of the business expect their workloads to pick up in the new year.

PHARMACY

pay them — and then pockets the rest.

“Paying one pharmacy a different amount or paying your own pharmacy a different amount than what you’re paying other pharmacies, we’re trying to prohibit that,” said Gross, executive director of the Michigan Independent Pharmacy Association.

From Page 3

“We’re trying to impact the pay-toplay environment,” said state Rep. Julie Calley, an Ionia County Republican sponsoring the bill. “Under the bill, (manufacturers) could not offer a rebate for something that has a generic equivalent.”

‘Most egregious’ underpayments

HB4348 would set a minimum reimbursement floor for PBMs to pay pharmacies using the national average drug acquisition cost (NADAC) for a drug at the time that it is dispensed.

Opponents say the NADAC prices — created through a national survey of pharmacists — don’t include what some big pharmacy chains that have more purchasing power charge, inflating the cost.

The Economic Alliance of Michigan, a business-labor coalition whose members include GM, Ford Motor Co., Stellantis, the UAW, Teamsters, Michigan AFL-CIO, is opposed to the bill, largely on the grounds of using the NADAC index to set prices for prescription drugs in state law.

“Government-mandated price increase for prescription drugs — it’s amazing the things people can get talked into voting for,” said Bret Jackson, president of the Economic Alliance of Michigan.

The Pharmaceutical Care Management Association, the trade group for PBMs, said in a statement to Crain’s that the legislation — as written — would drive up the cost of prescription drugs in Michigan by “nearly $7 billion over the next decade.”

“It’s unfortunate, especially for patients, that special interest groups supporting this bill, like the indepen-

Meijer, the Walker-based supermarket giant, is one of the larger Michigan companies lobbying for lawmakers to rein in PBMs. During a Senate committee hearing in June, executives at Meijer laid out in detail for senators how PBMs underpay pharmacies.

In 2020, Meijer pharmacies took a loss on 763,000 individual prescriptions due to lower-than-cost reimbursements from PBMs, resulting in a loss of nearly $11 million, said John Beauch, vice president of pharmacy at Meijer.

“This is an average loss of $14 per prescription,” Beauch told senators.

“And this statistic only speaks to the cost of drugs. It does not touch the cost to operate a pharmacy.”

Pharmacies have the option of appealing a reimbursement decision to the PBM. But when they do, the PBM “acts as the judge and jury” in the appeals process, Beauch said.

From 2016 to 2019, Meijer appealed 8,500 reimbursements to Express Scripts, CVS Caremark and OptumRx for the “most egregious” cases of underpayment, Beauch said.

Fewer than 4 percent of those appeals were granted by the three largest PBMs, Beauch said.

“Pharmacies are not asking for a handout or a profit,” he said. “They’re simply trying to break even.”

The resulting cost pressures from

JOHN MOORE/GETTY IMAGES

Battle over drug prices

dent pharmacy lobby, put their profits before patients’ health,” PCMA said in the statement.

No data was provided by the PCMA substantiating that multibillion-dollar price tag claim and analyses of the bills by the nonpartisan Senate and House fiscal agencies are silent on the potential impact to the cost of prescription drug benefits.

Aetna Inc., the parent company of CVS Caremark; the Michigan Chamber of Commerce; the Michigan Manufacturers Association; and health insurer Cigna oppose the PBM legislation.

Calley’s bill, as written, also seeks to ban a PBM practice known in the industry as clawbacks, in which pharmacies get audited — sometimes years after the fact — by the PBM, which in turn dock pharmacists for the entire cost of a prescription if the pills prescribed don’t match what was charged.

“What our pharmacists are deal-

ing with now is months later they get audited and penalized and they don’t know their bottom line easily for a year or more,” Calley said. “And the uncertainty with which they’re operating and the frequency with which they’re actually losing money on prescriptions is not sustainable.”

John Gross, the owner of five independent pharmacies in Genesee and Clare counties (Wentworth’s district), said the audit and clawback powers of PBMs are detrimental to the stability of his business.

“It makes it a tough go when all of a sudden you don’t have income coming in ... because they’ve gone back and reversed and rebilled claims for an particular part of time,” Gross said. “It’s a practice that they do.”

The bill also would prohibit a practice known as spread pricing in which the PBM reimburses a pharmacist for less than the reimbursement a health insurance companies

“Distressed M&A has basically been nonexistent (for years) and is actually starting to pick up a little bit,” said Steven Wybo, a senior managing director in the Birmingham office of restructuring firm Riveron Consulting LLC, previously known as Conway MacKenzie.

The “massive volatility” that’s impacting automotive suppliers specifically, as well as other companies — from a lack of semiconductors to rising wages and materials costs — coupled with the drying up of government stimulus, is all but assured to lead to companies with troubled balance sheets being forced to sell, he said.

“I think this margin compression and this inflation, much of which is probably permanent for awhile, is causing more distress than we saw during COVID, and certainly before COVID when the economy was doing great,” said Wybo. “So you’re going to see a lot more, in my opinion, distressed M&A into 2022 in the middle market.”

Calderone, also on the restructuring side of M&A, said he’s also expecting a significant uptick in business in the coming months, for many of the same reasons mentioned by Wybo.

“My livelihood, to some degree, is dependent on some amount of distress in the markets,” he said. “We’re coming off of 18 months of just fiction. I’ll use the analogy akin to a child riding a bike: the training wheels are going to come off.”

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes reimbursement battles with PBMs caused Meijer pharmacies to eliminate its programs that provided free prescriptions for cholesterol-controlling drug atorvastatin and the diabetes-managing drug metformin, Beauch said.

Meijer also has reduced hours in some locations, stopped operating 24-hour pharmacies to cut costs, scrapped $9 million in annual prescription drug coupons and got rid of free antibiotics it gives out to customers in need, Beauch said.

“These changes led to over 420,000 fewer free prescription filled in Michigan during 2020 — eliminating in savings for Michigan patients,” he said.

National attention The fight over the PBM legislation has drawn the attention of national conservative political groups, including the Washington, D.C.-based Council for Citizens Against Government Waste and Americans for Tax Reform.

“It is a protectionist bill that would increase the already excessive government interference in health care markets in order to benefit small ‘community’ pharmacists at the expense of patients and the insurance system,” ATR President Grover Norquist wrote in a Dec. 1 letter to members of the Senate Health Policy and Human Services Committee.

Jackson said his group favors creating a regulatory structure for PBMs, just not the price-control mandates.

“There’s a lot in this bill that’s very good,” he said. “If it was just limited to regulating PBMs and making a competitive marketplace, we would support that. But there’s a lot of other stuff that got thrown in that we don’t like.”

Crain’s Senior Reporter Dustin Walsh contributed to this report.

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RAGE

owner. Even if it’s false, the internet is a big place. You never know who’s going to believe the bad things people say about you.”

From Page 3

Mediation sometimes necessary Royal Oak-based corporate attorney Bill Burdett, with national law firm Howard & Howard, said the hope is that cooler heads prevail before any litigation is necessary. Customers may not be aware the claims they’re making in a Facebook post, for example, could be libelous.

“The hope for the small business would be that the customer issues a retraction and that everyone can go on with their lives without ever intersecting again,” Burdett said. “Consumers can use as big a soapbox as they want, but they have to do it truthfully. I think there are times people try to extract some benefit from it.

“A lot of online communities have mechanisms that if someone goes to an extreme with either provably false statements, there are measures that can be taken.”

Another of Allor’s customers, Novi resident Christine Roux, called Allor upset about a sprinkler dispute, according to Allor. The one-year warranty had expired by the time Roux contacted the company for repairs earlier this year. Allor located an invoice that detailed the length of the warranty and presented it to Roux, who acknowledged the warranty’s expiration but insisted Allor perform the repair work at no charge.

Roux, who posts on Yelp as Christine V., wrote a review on Yelp in July that said Allor and his staff were “lazy” and that they did “sloppy work,” but it did not note the terms of the warranty.

Roux said she posted the review as a way to help other potential Allor Outdoor Services clients, not as a way to jeopardize Allor’s livelihood.

“I rely heavily on reviews when I decide to do business with someone,” Roux told Crain’s. “I’m a person who, if a company is great at something, I’ll cheer for them and post a great review.

If you look at my Yelp profile, my other reviews are really positive.

“You might not gather someone is a dishonest person from an initial meeting. The work looked great. (Allor’s) character showed throughout the process and I think people need transparency on these types of issues.”

Allor reached out to Yelp for help, but the poor review didn’t meet its guidelines for removal. The same was true for Google reviews.

‘Businesses have power, too’

Canine to Five owner Liz Blondy | ROBAR PR

“There’s no recourse a business owner has aside from the threat of a lawsuit,” he said.

One of Burdett’s clients recently faced such an issue.

Liz Blondy, owner of the Detroit-based Canine to Five franchise, awoke on Nov. 20 to find a disgruntled customer had paid to have digital billboard ads placed around Southeast Michigan urging people not to do business with her.

An angry customer previously posted on Yelp, Facebook and Nextdoor claiming Blondy’s staff at the Canine to Five location in Midtown Detroit caused her pet to lose a tooth in April.

That customer presented Blondy with a $1,000 veterinarian bill that Blondy refused to pay, which led to the customer seeking a different avenue to get her attention.

Blondy, who employs more than 100 people, said she’s paid several vet bills within reason over the 15 years she’s been in business. She did not believe this customer was owed that.

The billboard ads, run by Farmington Hills-based International Outdoor Billboard, were removed Nov. 22 after Burdett requested they be taken down, pointing out that as the publisher of a potentially defamatory statement it could be held liable. Requests for comment from the billboard company were not returned. Burdett said the initial irate customer denied any involvement with the billboard ads being placed.

The customer’s negative reviews on Yelp detailing her side of the incident were responded to by a Canine to Five staff member, but they have not been removed. The customer did not respond to Crain’s requests for comment.

“I’m a business owner and this person is essentially trying to ruin my reputation,” Blondy said. “We do everything by the book. On (Nov. 22), we had the state humane society come out to inspect our facility. With any small business, anybody can now say what they want about the business or the

Crisis PR management can be key if a business is to keep its current clientèle and not lose out on future business, according to Matt Friedman, co-founder of the public relations firm Tanner Friedman.

Friedman has assisted clients with similar issues. The top priority for the business is continuity, he said, and business owners should not let an outside voice persuade their customers. “... talk to them from the inside and explain what they need to hear from the trusted voice, rather than the tempting one,” Friedman said. “Consumers have more power than ever.

Bad news travels fast, and consumers feel emboldened. They can channel their anger publicly easier than ever.

“But businesses have power, too.

They have an audience. They have reach. If they’re run well, they’ve established trust and real relationships with their customers. It’s those customer relationships that need to be energized when someone tries to harm a business’ reputation because of an isolated incident, difference of opinion, or whatever qualifies as a bad opinion.”

Blondy’s business remained open throughout the ordeal and she told Crain’s she was not aware of any cancellations because of the backlash.

Allor said he hasn’t seen a loss of business from any of the negative reviews and posts about his company.

The only way to know if the posts hurt your business, Allor said, is if a potential or current customer says the post directly discouraged them.

“How do you put a value on how much money you potentially lose for a social media post? You don’t know who sees it,” he said. “You don’t know if there are people who were going to hire you but didn’t because of the post.

There’s no way to tell.”

Gauging each situation is vital.

Friedman said most business owners are unsure of how to handle fits of customer rage because they haven’t experienced it before.

“Sometimes what looks like a real danger is just a hassle,” he said. “Sometimes what feels like a nuisance can be a real threat.”

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

Burdett

Friedman

How to defuse a negative situation Following are steps small business owners can take to protect their business and reputation in the face of negative reviews: Respond: Ignoring a bad review won’t make it go away. Responding to the customer can result in better ratings and improve your business’ online reputation. Don’t take it personally: It can be tempting to defend your business — and get personal in the process. Replies should be useful, readable and courteous because it’s difficult to win an argument with an unsatisfied customer. Address comments personally: You might be angry about a bad review, but your response should be professional and authentic.

Apologize to the customer and thank them for taking the time to highlight issues with your business. That can help transform a negative review into a positive one. Also, make sure you use the reviewer’s name and recap their specific complaint. Customizing responses will show that your business genuinely appreciates customer feedback. Reach out to all customers: In the event a bad review turns into a confrontation, business owners should explain the situation to their customer base to reassure them that the incident is an isolated one. Seek counsel: If the bad reviews include what you believe is defamatory material, seek legal advice. The possibility of litigation is usually enough to get the complaining customer to retract or remove the statements.

SOURCES: SMALL BUSINESS ASSOCIATION AND TANNER FRIEDMAN

HEALTH CARE

Livonia insulin management startup secures $17 million in funding

BY DUSTIN WALSH

Hygieia Inc., an insulin management medical device company based in Livonia, has closed on a $17 million funding round.

The Series B funding round was led

by Israel-based venture Firstime Ventures and joined by existing investors, the company announced in a press release Thursday.

The additional funding will be used to expand into more endocrinology practices and provide better access to its automated insulin dose monitoring app, called the d-Nav, to patients with Type-2 diabetes. The insulin-management app is the first in the nation that allows people with any form of diabetes to measure individual doses. The app also issues recommendations and can connect to any glucose meter.

The d-Nav system, which is about

Hygieia has closed on an initial $17 million Series B investment round, and plans to use the funding to expand partnerships with endocrinology practices and expand access to its d-Nav insulin dose automation technology for people with type 2 diabetes. |HYGIEIA

the size of a cellphone, uses cloudbased software to analyze blood sugar levels, or HbA1c. With the help of health care professionals and primary care doctors, it can recommend to patients how much insulin they need based on body chemistry.

More than 5 million doses of insulin have been administered using the app, the company said.

Hygieia is launching a pilot program with Clalit, a health system in Israel, this month and plans to have more programs and partnerships in 10 states in the next two years.

“This funding is a key vote of confidence in our technology, signaling a seismic shift in the way patients and their physicians can better manage insulin therapy,” Eran Bashan, CEO and co-founder of Hygieia, said in the press release. “We have already partnered with the leading endocrinology prac-

tices in Southeast Michigan, and this new funding will help us develop similar partnerships throughout Michigan and beyond.”

The d-Nav Service has been in use for more than eight years in Northern Ireland. It is also available to Blue Cross Blue S hield of Michigan members with Type-2 diabetes.

In 2018, Hygieia conducted a pilot study to test d-Nav with about 200 Blue Cross diabetic patients, and the results showed great clinical improvement and lower costs. Savings averaged $6,000 per patient per year.

In addition, 97 percent of patients also reduced their blood sugar, or HbA1c, glucose levels to under 9 percent. D-Nav received full U.S. Federal Drug Administration approval in 2019.

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

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BATTERY

From Page 1

car sales to be EVs by 2030.

“You can always look at any disruption as an opportunity, and now is really a good time for a small supplier startup and also nontraditional companies usually outside the supply chain to enter into the game,” said Tingting Yan, professor of global supply chain management at Wayne State University. “All the OEMs and big tier ones, they are forced to think about how they need to restructure their existing supply base.”

Among the EV opportunists is Wei Wu, an entrepreneur who built a $100 million-a-year business and is banking on battery chemistry for the next chapter of growth.

His company, Ann Arbor-based Pacific Industrial Development Corp., started in 1992 as an importer of rare earth metals from China. It has grown into a major manufacturer of catalyst chemicals for the automotive and petrochemical industries.

Its next pursuit is solving one of the EV’s most worrisome problems: the potential for batteries to overheat and burst into flames. “Those are really critical things — to solve that safety issue and maintain the cost and also increase the battery cycle life,” Wu said.

GM’s EV production has been plagued by the issue. Other auto-

“YOU CAN ALWAYS LOOK AT ANY DISRUPTION AS AN OPPORTUNITY.” — Tingting Yan, professor, global supply chain management, Wayne State University

makers including Volkswagen, Ford and BMW have dealt with similar problems.

A common cause of fires in lithium-ion batteries is when material from the battery’s two main parts, the cathode and anode, come into contact. Pacific Industrial is developing a ceramic-like, flame retardant material, whose composition is kept secret for competitive reasons, that is applied to the thin film separating the two, theoretically preventing that from happening.

Wu is confident in its application.

Pacific Industrial this month opened a $2 million advanced battery materials lab in Ann Arbor, where a half-dozen Ph.D.-level employees are focused on developing the material. It could be the ticket to millions of dollars in new revenue — potentially $200 million in the next couple of years, Wu said, given the rapidly growing market.

The global market size for EV batteries is expected to grow from $27.3 billion this year to $155 billion in 2028, according to market research firm Fortune Business Insights.

“There’s a lot of players in those market segments,” Wu said of battery cell and pack supply. “In our area, this is still a niche market. It’s not very crowded.”

Wu’s battery material business is in the R&D phase and not generating significant revenue, but the company is engaged in joint development agreements and collaborations with local OEMs and startups.

The company has several patents pending and expects the material to go to market within two years.

“People haven’t put a lot of effort in this area, and we think we are one

American Battery Solutions does prototype testing for electric vehicle batteries at its plant in Orion Township.

| COURTESY OF ABS/JASON

LOUDERMILK PHOTOGRAPHY

Wu

Ann Arbor-based Pacific Industrial Development Corp. started in 1992 as an importer of rare earth metals from China. It has grown into a major manufacturer of catalyst chemicals for the automotive and petrochemical industries. | PACIFIC INDUSTRIAL DEVELOPMENT

Dhar

of the leading players, actually,” Wu said.

American Battery Solutions, one of the new players in battery manufacturing, is seeing big growth and return on investment. The Orion Township-based battery maker started in 2019 with 12 employees and has expanded to 200 employees with an expected revenue of $50 million next year.

CEO Subhash Dhar is projecting $500 million in sales by 2025 and $1 billion by 2028 because, according to him, the market is ripe for the taking.

“It’s not a crowded space at all,” Dhar said. “There are a lot of people trying to get into this space but there’s not a whole lot of competition because to be in this space, you need three elements. You need the component supply agreement with suppliers, you need customers and you need the know-how to connect the two.”

Funding is another major factor.

ABS is owned by principal investment fund KCK Group, which has invested $200 million in the company to date.

Most of the company’s sales are from battery supply deals for buses, delivery trucks and industrial equipment. Another prong of business is stationary grid-connected battery solutions, such as battery storage facilities for utility companies.

ABS declined to name its customers, citing nondisclosure agreements, but said it has around 15 clients with long-term deals.

Dhar said the company’s 120,000-square-foot plant in Michigan is focused on prototype production and testing, while its 180,000-squarefoot plant in Ohio handles mass production. He said full-scale production of battery packs for buses and trucks is scheduled to start in the third quarter of 2022. He anticipates hiring another 100 employees in Michigan in that time frame.

Entrepreneurs are also finding new ways to plug into the EV boom.

The Biden administration’s recently signed infrastructure package included $6 billion for companies in the EV space. That’s helped sparked development in areas from new battery technology to charging solutions.

The EV charger market is expected to grow from $17.6 billion this year to $112 billion by 2028, according to Fortune Business Insights.

William McCoy left careers in the real estate and automotive dealership industries in hopes of carving out a piece of the EV charging pie.

McCoy moved to Michigan from Washington, D.C., two years ago with his wife Marissa McCoy, assistant general manager at Heidebreicht Chevrolet in Washington Township in Macomb County.

“I had a passion for EVs, but I also realized the infrastructure wasn’t there,” he said. “Instead of me trying to create an EV charger, I decided to tackle the hardest issue, which is installation.”

The McCoys invested around $9,000 to start Current Dealers LLC, an electrical contractor and service provider for EV chargers. In the past six months, the company’s handful of employees have installed more than 100 residential chargers and made sales of around $250,000. McCoy said it is targeting dealerships and grocery chains for larger growth and is expecting upward of $10 million in revenue next year.

“This need for EV chargers came about because dealers ended up in a situation where OEMs are saying, look you got to get yourself ready and prepared,” McCoy said.

Investing in EVs is not without risk and should be done in a measured fashion, especially for big automakers, which still get most of their money from the sales of traditional engine cars, Yan said. At the same time, playing it safe isn’t a winning strategy.

“It’s very risky,” she said. “Whenever you’re doing innovation, that means you invest a lot and you get a little out of it.”

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

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THE CONVERSATION

Shawn Wilson wants to make social services thrilling BOYS & GIRLS CLUBS OF SOUTHEASTERN MICHIGAN: Shawn Wilson, president and CEO of BGCSM has turned around the organization’s finances and retooled its mission. The 47-year-old came to the nonprofit three years ago after serving as a grantmaker at the Ford Motor Co. Fund and helping singer/songwriter Usher start his youth leadership nonprofit in Atlanta — and bring it around the globe.

Wilson is an admitted “thrill seeker” and is pulling together an investor group that includes Big Sean to bring an Atlanta-based, invitation-only club to Detroit. | BY SHERRI WELCH  When you arrived at Boys & Girls Clubs, it was struggling financially.

How is it doing now?

We were $1 million in debt, closing clubs and losing members. The last three years we’ve been able to eliminate our debt. We’ve grown the budget from roughly $3 million and anticipate ending at $10 million this year. More importantly, we’ve re-imagined the mission and vision of the organization.

At the end of the day, we are still about youth, but we are now addressing the root cause of issues our youth are facing in the community, which is poverty or lack of economic mobility opportunities for them and their families. We’re addressing those, putting them on a pathway to economic mobility, which then addresses things like high school graduation, at-risk behaviors, the prison pipelines. With all of those things, the root cause is poverty. The shift really came from the community and their voice on what they needed. We define economic mobility as our youth being career-, startup- and homeownerready. The new programs we’ve started over the last three years are all geared towards those things.  As part of that, you’re cultivating young entrepreneurs, right?

Exactly. They are able to work with other startups to start their own businesses. They’ve been able to launch their own clothing lines, their own collections, produce multiple fashion shows that feature their work. They’ve learned how to go out and sell their products at popups and markets.

One of the first collections launched was a social justice collection that has done over $20,000 to date online and in the Detroit is the New Black store. Our youth also did a collection with Footlocker and they designed a shoe with Ruthie Davis, a renowned fashion designer, that drops in March.

Yet another group designed a limited edition water bottle sold inside the Moosejaw store in Detroit. At 14 or 15 years old, their resumes when they come through this program rival that of someone coming out of college. We have added additional industry clubs in data science, risk management,

(actor) Hill Harper, Big Sean or Usher.

A lot of times, people get caught up in celebrities. But the common bond, common interest is we’re all trying to do something impactful for the community.

I was introduced to Sean when I first moved to Detroit through a mutual friend at Roc Nation, Jay-Z’s label. Some of those folks — Ludacris, Hill, Big Sean — were a part of a virtual club takeover we held in April 2020. We knew youth were scared, that they were struggling from a social and emotional standpoint. At the same time, BGCSM had just taken a $2 million hit because we had to cancel all our events. These guys were amazing to show up and lend their influence, their social impact, but more importantly, to talk with the kids, play games with them. For them to lean in and just support the youth, that was powerful. It’s not about the celebrity for me; it’s about the impact. Like minds and like hearts tend to just want to work together.

sports and entertainment. Ultimately, our goal is by 2025, we have launched 14 industry clubs training 3,500 youth annually from the region.  Are you also taking clubs into new cities?

We’ve been working with the mayors of Eastpointe and Mt. Clemens to bring this economic mobility model to those cities. Over the last year, we’ve been leading visioning sessions to make sure there is a need, that the communities want us in and can help us drive how we enter those communities. We’ve been doing pop-up programming. For example, we did Detroit Pistons pop-up basketball and STEAM camps this summer. About 500 youth participated. We’re eyeing 2022 to open clubs in those two cities. These would bring clubs back to Macomb County, after an earlier closure of a Shelby Township club. We want to provide workforce development, entrepreneurship. All of those things are really critical.  How did you wind up working with Usher? How was it working with him?

I had a consulting firm helping high-net worth individuals with their social impact strategies. The CPA of one my clients introduced me to Usher’s business manager. It was fantastic. The organization is having amazing impact on a global level. I was able to work with youth all over the world over 10 years, from the Philippines to the slums of Kenya, Hong Kong, Europe and of course the biggest footprint here in the U.S.  You met other celebrities, too, right?

And you’ve been able to leverage those relationships to help BGCSM? One of my favorite “brushes with fame” memories was during my time as president and CEO of Usher’s New Look. We (Usher and I) had a chance to campaign around the country for then Sen. (Barack) Obama and ride in his motorcade during a campaign stop in Atlanta. A lot of the relationships have continued over the years, whether with

Shawn Wilson, president and CEO, Boys and Girls Clubs of Southeastern Michigan

 What else do you do for fun?

I’m a thrill seeker. I love trying new adventures, whether sky diving, scuba, surfing. These things allow you to be present in that moment, which is great from a stress-reduction standpoint. Also coaching my son’s football team. For that two hours I’m on the field, I’m not thinking about work. I’m only thinking about these 10-year-olds and how we’re going to move down the field.

I also organized an investor group that includes Big Sean to bring the Gathering Spot to Detroit. The Gathering Spot is based in Atlanta and recently expanded to DC and LA. It’s a private club that is really targeted to building communities and bringing those who aren’t always invited into the traditional private club environments together: creatives, entrepreneurs, people of color, females. It’s invitation-only and has such a uniquely curated membership base. It is less expensive than some other private clubs. It’s really this multi-level, multi-dynamic curated space.

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RUMBLINGS

Former Gold Cash Gold building getting new tenant THE ORIGINAL IMA NOODLES in Corktown is moving to a new, larger location just up the street — the former home of a defunct but familiar restaurant.

The restaurant is moving from 2015 Michigan Ave. to the former Gold Cash Gold space at 2100 Michigan Ave., owner Mike Ransom told Crain’s on Tuesday. The move comes after the lease at the original location expired. Ransom has a 15-

Ima Noodles will move to the space formerly occupied by Gold Cash Gold at 2100 Michigan Ave.

year lease on the new space; he did not disclose financial terms of the deal.

The new location will open in the first quarter of 2022, he said.

Moving to the former pawn shop occupied by Gold Cash Gold, which closed in early 2020, gives Ima Noodles 3,800 square feet of space.

The new space has seating for 7075 guests and a bar with seating for 20 more. Ransom said the new space

allows for a full bar and expanded menu. The current space is 900 square feet, with an additional 1,500 square feet for outdoor seating.

All 38 employees at the original location will move with the restaurant and additional staff may be added, Ransom said.

Ransom established Ima Noodles in 2016 and added locations in Madison Heights in 2018 and Midtown in 2019.

Chairman Keith E. Crain Vice Chairman Mary Kay Crain CEO KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except no issues on 1/4/21, 7/5/21 nor 12/27/21, combined issues on 5/24/21 and 5/31/21, 11/15/21 and 11/22/21, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices.

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