Crain's Detroit Business, December 9, 2024

RenCen teardown: Legislative fight — on a tight deadline

$1.6 billion project seeks $250 million in tax money as Legislature nears end of term

By David Eggert, Kirk Pinho and Kurt Nagl

LANSING — General Motors Co. and Bedrock LLC’s $1.6 billion plan to partially tear down the iconic Renaissance Center, modernize it and ease public access to what would be an expanded riverfront area is contingent on taxpayers covering around 15%, or $250 million, of the cost.

A “significant amount” of that public assistance would come from the state, Bedrock CEO Kofi Bonner told Crain’s. “Bedrock’s not going forward singly on this project without the funding that we’re seeking from the public sources,” he said.

The timing of the companies’ announce-

ANALYSIS

ment was not a coincidence, falling a week before the closely divided, Democratic-led Legislature returned for the final three weeks of a two-year term — and before Republicans take charge of the House in January. The RenCen proposal comes to the fore

See

on Page 18

RenCen redevelopment hangs on lawmakers’ buy-in

By Dustin Walsh

Since emerging from its historic bankruptcy in late 2014, Detroit has seen a meteoric rise in development. But the billions in new and redeveloped buildings have come with huge price tags supported by taxpayer dollars.

The latest redevelopment on the docket is the famed Renaissance Center, which General Motors Co. plans to abandon as its headquarters starting next year. And the automaker's soon-to-be-landlord, Dan Gilbert’s Bedrock LLC real estate compa-

ny, is already hanging the proposed $1.6 billion RenCen project on whether or not it receives roughly $250 million in public funding.

Detroit Mayor Mike Duggan and other community leaders promptly endorsed the plan, but it is also getting pushback in some quarters of the Legislature.

House Speaker-elect Matt Hall, R-Richland Township, pointed out last week that GM made billions in profit and recently laid off 1,000 workers, largely in Warren.

See FATE on Page 20

Gardner White CEO forges path for growth

By Jay Davis

Gardner White Furniture Company Inc. CEO Rachel Stewart had one of the best seats in the house during Detroit's Thanksgiving Day parade.

Stewart, who took over the leadership of her family's Warren-based business early this year, is a champion of Gardner White's presenting sponsorship of the historic parade. This was the fifth year for Gardner White, which took over the sponsorship from Art Van Furniture Inc., which supported the parade for 30 years before it went out of business. Gardner White recently extended its sponsorship through at least 2031.

“Because it’s the best parade. This isn’t a regional parade. It’s No. 1 in the country every year,” said Stewart, who was among the floats and cars on the route. “I love the parade. It’s such a big part of the city and of the culture of the city. It’s cool to see when you’re downtown and there’s about a million people. It’s always amazing how diverse it is because you never see a group that diverse

See CEO on Page 21

Building

CONVERSATION

Executive keeps up the pace in business and during a marathon. PAGE

A conceptual rendering from General Motors Co. and Dan Gilbert’s Bedrock LLC shows their plan for the Renaissance Center, which includes demolishing two towers and creating an entertainment district on riverfront land to the east. | BEDROCK/GENSLER/ROSSETTI

General Motors will be leaving the Renaissance Center in 2025 for new headquarters office space in the Hudson’s Detroit building. DEAN STORM/CRAIN COMMUNICATIONS

RENCEN

Gardner White CEO Rachel Stewart and her husband Brian ride in the 2023 America’s Thanksgiving Parade. Gardner White has served as presenting sponsor of the parade since 2020. | CRAIN’S DETROIT BUSINESS

Family sells Holiday Market in Royal Oak after 70 years

By Jay Davis

A longstanding, popular locally owned market has been sold to one family from another.

Gourmet grocery store Holiday Market has new owners.

Owners, operators and siblings

Tom Violante Jr. and Gina Mangold, and Mangold’s husband Craig, have sold the business to brothers Johnny and Matthew Shouneyia, according to a news release. The grocer leaves the hands of the Violante family after 70 years in business.

The Shouneyia brothers take over ownership of the 60,000-squarefoot grocery store at 1203 S. Main St. in Royal Oak. The deal also includes Holiday Market Select at 1740 W. Maple Road in Birmingham.

The ownership transition will take place over the next few weeks. No changes are planned for store operations, the release states. The Shouneyia brothers plan to keep all employees on staff. The new owners also plan to continue running the Mirepoix cooking school, which was founded in 2008.

Violante Jr. and Mangold have run the store for 25 years. Holiday Market celebrated 70 years in business on Oct. 19, five days after store founder Thomas Violante died at the age of 95. The senior Thomas Violante founded Holiday Market in 1954 with his wife Janet.

Violante Jr. in a statement said he and Mangold stayed committed to preserving their father’s core values and maintaining the legacy he built. Violante Jr. said Holiday Market is in good hands.

“Johnny and Matthew believe in the same values that have been guiding our operations since day one,” Violante Jr. said, “and with their care for their employees and the community, and their proven experience as grocers, the future of Holiday Market is bright and we look forward to what is ahead.”

The Shouneyia brothers have a

history in the grocery business. They own and operate Value Center Marketplace stores in Clinton Township and Madison Heights, and Johnny Pomodoro’s in Farmington Hills. The Shouneyia brothers last year bought Holiday Market Canton from another Violante sibling, Lisa Pardington, and her husband John. That transaction led to the deal for the two other Holiday Market stores.

Matthew Shouneyia in a statement said he and Johnny plan to carry on the family traditions of Holiday Market.

“We know how important it is for the families who shop in our stores to have a familiar place to come back to again and again,” Matthew Shouneyia said. “And the same experience people have in Royal Oak or Birmingham today is what they can expect tomorrow and in the years to come.”

Holiday Market has grown from its start as a 2,500-square-foot store. In addition to standard grocery items, Holiday Market offers baked goods, artisanal cheeses, imported wine, ready-to-eat items, a butcher counter, deli and more.

Holiday Market in Royal Oak and Holiday Market Select in Birmingham are under new ownership. The Violante family, who founded the market in 1954, have sold the business.

CORRECTIONS

A profile on Rob Casalou in the Nov. 25 special section on Notable Board Leaders incorrectly listed the company. It is Trinity Health –Southeast Regions.

Wendy Batiste-Johnson’s board title is vice chair of governance at the Community Foundation of Southeast Michigan. She is also a board member serving on executive and strategic planning committees.

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Atwater founder has plans for Velvet peanut butter

By Jay Davis

A Detroit businessman is bringing a nearly 90-year-old company home.

Mark Rieth has acquired Velvet Peanut Butter, which started in the 1930s and was produced in Detroit for about 50 years with its “fresh, pure, delicious” tagline. Production stopped in the mid1980s. Then Atlanta, Ga.-based Eric Bruce bought and revived the company in 2008. Rieth bought the company from Bruce with a goal of bringing production back to Detroit.

“I love peanut butter,” Rieth told Crain’s on Nov. 25. “What I love to do is take on nostalgia brands. I ate Velvet Peanut Butter as a kid. I’m all about nostalgia.”

Rieth told Crain’s that the deal has been in the works for about four months. Terms of the deal were not disclosed due to an agreement signed by Rieth.

Velvet Peanut Butter is manufactured in Georgia, which produces more than 45% of the peanuts in the U.S.

Under Rieth, the company will follow the original Velvet Peanut Butter recipes including creamy and crunchy options. Additional flavors will be added, he said.

Rieth said Velvet Peanut Butter production could return to Detroit in about 18 months. He’s actively looking for a facility in Detroit. The company has 10-12 employees and Velvet outsources packaging. Rieth said his plan is to create

more jobs when production returns to Detroit. Hiring is underway for sales and marketing staff.

“We’ll definitely create more jobs. That’s part of the whole mission of bringing production back to Detroit,” Rieth said. “I’m all about employing Detroiters. We’ll continue to co-pack the peanut

butter until we find the right opportunity to bring everything back home.”

Rieth adds Velvet Peanut Butter to a portfolio that includes beverage maker Detroit Liquid Ventures and Lansing Brewing Co. Rieth founded Atwater Brewery in 1997 and sold the company in 2020.

Pontiac General Hospital files for bankruptcy for the third time

By Dustin Walsh

Days after laying off most of its staff, the troubled Pontiac General Hospital has filed for bankruptcy protection for the third time.

The for-profit hospital, which is officially named Oakland Physicians Medical Center LLC, had its Medicare reimbursement stripped

by the feds Nov. 24 for a variety of noncompliance in nursing, medical staff, patient rights and other issues. Neither the U.S. Centers for Medicare and Medicaid Services nor Pontiac General have elaborated on the violations.

In response to CMS terminating its reimbursement, Pontiac General plans to lay off 248 employees in

waves over the next month, including mental health technicians.

The Chapter 11 bankruptcy filing, filed in U.S. Bankruptcy Court in Detroit last month, provides little detail into Pontiac General’s financial position, but the filing lists only $1 million to $10 million

Rieth plans to put Velvet Peanut Butter on more shelves. Locally, Velvet is available at some Meijer stores in Michigan and other grocery stores in metro Detroit.

“The goal is to engage with the local grocery stores,” Rieth said.

Automaker insourcing sparks litigation among suppliers

By Kurt Nagl

Under intense pressure to make electric vehicles profitable, some automakers have opted to bring more production in-house, leading to friction and in some cases litigation within the supply chain.

EV maker Rivian is locked in a legal fight over the issue with Bosch, the world’s largest auto parts producer — but they are not the only ones.

And Ford Motor Co.’s “sudden” decision to insource driveline production for the Mustang Mach-E — meaning do the manufacturing itself — led to a lawsuit filed earlier this year. The case, which was dismissed and then appealed, was initiated by tier-two supplier VCST Industrial Products against Ford supplier BorgWarner Inc. for an alleged $28 million in damages.

Ford CEO Jim Farley said in late 2022 that insourcing would be crucial for keeping jobs under its own roof as the industry shifts to EVs, which are produced with far fewer parts than gas-powered cars. Insourcing — in combination with EV volumes in general falling dramatically below expectations — has been a sore spot for parts producers. And the

pressure is not likely to ease.

“The suppliers are moving with their customer, and that puts tremendous financial strain on companies,” said Glenn Stevens, executive director of MichAuto, a statewide auto advocacy organization. “How do I design and engineer a vehicle more quickly? How do I consolidate parts and how do I make platforms more flexible and take costs out? Vertical integration and insourcing are part of that.”

The stress that electrification has put on the supply chain runs deep and has sparked disputes among dozens of companies, according to lawyers and industry watchers. Disagreements rarely wind up in court. But for complaints over canceled programs, as is the case in the VCST v. BorgWarner and Bosch v. Rivian cases, damages can be significant, especially for a smaller supplier.

BorgWarner and VCST, through an attorney, declined to comment on the case.

A Ford spokeswoman said: “We cannot comment on another company’s lawsuit or Ford supply chain sourcing as it relates to this topic.”

Velvet Peanut Butter got its start in Detroit in 1934.

Mark Rieth

Pontiac General Hospital has a long history of operational failures and financial struggles.

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Home of Detroit’s only Whole Foods is up for sale

One of Peter Cummings’ signature development projects in Detroit is now on the market; the latest in a string of properties the prominent developer is looking to unload.

tracks highest in the state in terms of visits per square foot, per data the brokerage rm compiled from Placer.ai.

rankings, developed by Shook Research, are based on in-person and telephone due diligence meetings and a ranking algorithm for advisors who have a minimum of seven years of experience. Other factors include client retention, industry experience, compliance records, firm nominations, assets under management, revenue generated for their firms, and other factors. See zhangfinancial.com/disclosure for full ranking criteria.

ere is no asking price for the retail space at e Ellington, which is anchored by the only Whole Foods Inc. grocery store in the city.

Kirk Pinho

In all, the property includes about 34,400 square feet of retail space, about 21,500 square feet of which are occupied by Whole Foods. e property also includes the lease of 254 of 954 spaces in the adjacent parking structure, which expires in 2102.

Marketing materials by Mid-America Real Estate’s Bloomeld o ce, which has the listing, say the Whole Foods location

Net operating income for the property is $970,000-plus per year, per the listing.

In a statement, Cummings’ e Platform LLC real estate company called the development “a catalyst for Midtown” when it was developed, with the Whole Foods opening just a month or so before the city declared for Chapter 9 municipal bankruptcy protection.

“It has been an amazing transformation of Midtown since hundreds of people from across the city of Detroit gathered to break bread in celebration of the opening of Whole Foods in June 2013,” Cummings, executive chair and

CEO of e Platform, said in a statement.

Cummings and e Platform have been unloading various properties in the last year or so, primarily vacant development sites across the city it decided to no longer pursue. e statement says e Platform has been doing that to focus its e orts on the Fisher Building with Michigan State University and the 161-unit Piquette Flats development, slated to get its rst workforce housing units occupied this month. e Platform is in the process of selling the former Joe Muer Seafood restaurant site across from Eastern Market, has sold an old Big Boy restaurant property at East Je erson and East Grand boulevards in Islandview, and a large chunk of land between Riverfront Towers and the old Joe Louis Arena site.

GM to take four oors, double of ce footprint at Hudson’s Detroit

By Kirk Pinho

Yes, General Motors Co. and Dan Gilbert’s Bedrock LLC real estate company plan to tear down the 300 and 400 towers of the Renaissance Center in Detroit.

But we also learned that the automaker plans to lease a larger footprint than was previously known, taking roughly half of the o ce space in Gilbert’s Hudson’s Detroit development on Woodward Avenue just north of Campus Martius Park.

While we knew GM would lease at least just shy of 100,000 square feet, we didn’t have a precise footprint until Nov. 25, when a spokesperson for the automaker said it would take four oors in the new development at Woodward and Grand River avenues.

In general, that would mean GM — at least for now — would lease approximately 200,000 square feet, which is essentially

half the o ce space in the new development on Woodward. e new project replaces the former J.L. Hudson’s department store tower that was imploded in the late 1990s.

GM is expected to begin moving into its new o ce space as early as the end of 2025, according to a GM spokesperson.

Of course, GM’s space at the Hudson’s Detroit building will be a small fraction of what it had in the RenCen, the majority of which it owned following a purchase in the mid-1990s. e automaker has been shifting much of its workforce to its Global Technical Center at 12 Mile and Mound roads in Warren for the last several years.

Under the vision detailed Nov. 25, the 300 and 400 towers at the Renaissance Center would be razed. One of the remaining towers would be renovated as spruced-up o ce space, while the other would be converted

into 300-400 residential units. e 73-story hotel skyscraper — the state’s tallest building — would preserve about 850 hotel rooms of the 1,300 rooms currently there while converting the remaining oors of hotel space to high-end residential units.  e overall RenCen redevelopment project is expected to cost about $1.6 billion, with at least $250 million of that coming from public funding. Redevelopment of the land to the east of the RenCen footprint is not included in that redevelopment cost. at project, expected to consist of sports and entertainment space, would be built separately.

Under the new RenCen plan, the complex is expected to be owned by a joint venture between GM and Bedrock, although the precise structure of that arrangement is not known.

Stay tuned for more. is story isn’t going away anytime soon.

The Whole Foods Inc. grocery store in Detroit’s Midtown neighborhood | COSTAR

Cannabis giant shuts down Michigan grow operation

By Dustin Walsh

One of the country’s largest cannabis operators is abandoning its Michigan grow operations.

Chicago-based PharmaCann told employees Dec. 2 it would shutter its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying o 222.

Todd Lince, president of Teamsters Local Union No. 337, conrmed the news to Crain’s. e Teamsters had just organized the PharmaCann-owned operations in early November.

“ ey told us they just can’t be competitive in Michigan …” Lince said. “We knew they were having nancial troubles. But this doesn’t have anything to do with us organizing; we didn’t even have a contract yet.”

Lince said the employees will be terminated by the end of January and the union will work with PharmaCann to get the employees a severance package.

e employees include roughly 170 represented by the union and temporary workers employed by Denver-based cannabis sta ng rm Vangst, according to a Worker Adjustment and Retraining Noti -

cation Act of 1988 led with the state of Michigan.

Representatives from PharmaCann and its attorneys did not respond to several requests for comment. It’s also unclear whether the closure of its cultivation and dispensary in Warren will lead to closures of its two other Michigan LivWell dispensaries in Cheboygan and Sault Ste. Marie.

e PharmaCann closure plan comes only weeks after competitor Fluresh LLC announced it was closing down its $46 million, 105,000-square-foot grow facility in Adrian at the end of November.

e company, doing business as Tend.Harvest.Cultivate, couldn’t make the economics of the operation work as the average price for an ounce of marijuana ower plummeted 21% year to date to just $73.99 in October.

“It cost me more to grow in Adrian than I could sell on the market,” CEO Brandon Kanitz told Crain’s. “ e site is not pro table.”

Fluresh and PharmaCann’s LivWell are victims of the state’s low prices, which are a consequence of market oversupply.

ere were 3.56 million active plants being grown in Michigan in

October, down from 3.77 million in September; but still up 73% year over year. e decline in active plants last month is likely due to the in ux of product from “Croptober,” where operators harvest their seasonal outdoor grows for the market.

Illicit market marijuana in ltrating the regulated market also plays a roll in decreasing prices as well.

PharmaCann, however, is just the latest multi-state operator — it operates in six states including New York, Illinois, Maryland, Massachusetts, Ohio and Pennsylvania — to abandon maturing state markets due to nancial pressures.

Last year, for instance, New York-based Curaleaf began shuttering its dispensary operations in California, Oregon and Colorado. It eventually shuttered its Michigan operations months later at the end of last year.

MSOs prefer to target more newly legal states that have high consumer prices due to more demand than supply, raking in much higher margins than in markets like Michigan.

PharmaCann is also likely look-

ing to clean up its books after ling in August to launch an initial public o ering.

Canadian competitor Cronos Group Inc. took a 10.5% stake in PharmaCann in June for $110.4 million, valuing PharmaCann at $1.1 billion, according to a Reuters report.

For Michigan, PharmaCann’s exit is likely good news as it removes more supply from the market — at least temporarily.  e Warren cultivation building at 21590 Hoover Road is owned by mega-cannabis REIT Innovative Industrial Properties, who will

move to place another operator in the facility.

Earlier this year, Evart-based Lume Cannabis Co. took over the lease for the 56,000-square-foot Harvest Park facility at 10070 Harvest Park in Dimondale formerly operated by then-troubled Skymint. Innovative Industrial also owned that building.

Two industry sources, who asked to remain anonymous, con rmed to Crain’s that they have been contacted by Innovative Industrial about the PharmaCann cultivation building in Warren.

PharmaCann’s LivWell headquarters and dispensary at 14210 E. 11 Mile Road in Warren. | AMY BARCZY

EDITORIAL

With RenCen at a crossroads, now is

the time to act

Avision for the future of Detroit’s Renaissance Center office complex has emerged. It’s bold and intriguing and, yes, it comes with a price tag.

General Motors Co. and mortgage mogul Dan Gilbert’s Bedrock real estate company outlined a vision that would demolish two towers and refurbish the other three into a mix of residential, hotel and office space, as first reported by Crain’s.

The plan includes a request for $250 million in public subsidies, potentially in the form of transformational brownfield money of the kind that some of Gilbert’s other downtown projects have received.

The request for subsidies has already been met with some vocal opposition. But we would urge a full accounting of the costs and benefits of all possible outcomes.

Bottom line: The city has a public and civic interest in its signature towers continuing to define the skyline along the Detroit River.

But the state of the market for office space is such that the 5.5-million-squarefoot RenCen doesn’t have a viable future in its current configuration.

COMMENTARY

There are huge costs in image and pride to a complete demolition of the RenCen, which GM has said would be on the table absent public help on the renovation project. A total demo would be one of the largest ever, for any building, in the world.

The fight that would ensue would be a public repudiation of the progress Detroit has made in undoing perceptions that it is a failed city in terminal decline.

The price of simply allowing GM to abandon the towers is too high as well. As the city has seen Michigan Central Station reclaimed and made progress on demolishing the Packard Plant, the city can ill afford to have its most recognizable and prominent building fall to abandonment as those other landmarks did. GM says it won’t abandon the towers, but hulking buildings with broken windows are a symbol you’ll never shed and not worth risking.

The reality is that the best outcome is going to require some public subsidy. Transformational projects in Detroit and across the state now count on a percentage of subsidy, and certainly the case can be made that an invigorated RenCen that

A conceptual rendering from General Motors Co. and Dan Gilbert’s Bedrock LLC shows their plan for the Renaissance Center, which includes demolishing two towers and creating an entertainment district. |

BEDROCK/GENSLER/ROSSETTI

activates the riverfront is a public benefit. It would behoove Bedrock and GM to outline more specifically what the benefits are that go with the costs. The promise of a Navy Pier-style entertainment district is intriguing but vague, and isn’t included in the price tag of the initial plan, giving critics ammunition to say it’s just another pretty rendering that will never happen. With the information available, it’s too

easy for opponents to paint any taxpayer subsidy as paying GM to demolish a building it doesn’t want.

GM will begin to move out of the RenCen in 2025, and other businesses are already making plans to follow. The time to act to put in motion the RenCen’s redevelopment is now, while the attention and momentum for the complex — and Detroit’s progress — are front and center.

It’s easy to throw stones at taxpayer incentives for massive projects like this, and certainly, Bedrock and GM are using the leverage they have during the lame-duck legislative session. But the future of a key portion of Detroit’s riverfront is important enough and the costs of inaction great enough that that some taxpayer help is needed. This isn’t a pie-in-the-sky vision. It is being run by a developer with a track record that has transformed downtown Detroit. It’s a good bet that the city will get something better than it has now.

It’s appropriate to view all such proposals with a critical eye, but the state has spent huge sums on projects that are far less crucial to the city’s identity and future.

Great Migration offers lessons for rebuilding middle class

At the turn of the 20th century, my grandparents and many other African Americans of their generation embarked on a journey that would forever change their lives and open new possibilities for their future generations. At the same time, a different demographic of Latinos charted a course to the same destination for opportunities Detroit afforded by being ground zero of the American industrial revolution.

This Great Migrations of African Americans and Latinos to Detroit endures as a remarkable story about resilience and entrepreneurial spirit that lives in people like me.

Douglas Graham is partner/ consultant with Silver Oak Capital Advisors in New York City. The Detroit native was a Crain’s 40 Under 40 honoree in 1994 when he was with Detroit Renaissance Inc.

My own grandparents fled Jim Crow laws in the American South and opened a pair of grocery stores in a once-thriving African American community known as Detroit’s Black Bottom. This opportunity provided my grandparents with a solidly middle-class foundation for their family. In a nearby community formerly known as La Bagley, nearly 4,000 Latinos forged a working-class neighborhood immortalized in Diego Rivera’s iconic murals displayed in the Detroit Institute of Arts. The ascendency of these communities was arrested when eminent domain was used to build I-375, I-96 and Fisher freeways through neighborhoods that previously hummed with economic activity. My grandfather lost his grocery stores and

urged my father to become a doctor to avoid such similar risks of forfeiture. La Bagley, now known as Detroit’s Mexicantown, still struggles with constant pollution from a nearby freeway.

The Great Migration is now history, but the lessons learned from a study of its pioneers can accelerate Detroit’s future growth and help the city reach its full potential. These lessons include the benefits of developing new middle-class neighborhoods for longstanding residents and new pioneers who will help write the city’s next chapter.

In short, Detroit needs a new Marshall Plan to rebuild the city’s middle class through innovation and ownership — a local version of the economic development plan for rebuilding Europe’s economy after World War II.

The new Marshall Plan for Detroit must be more than a slogan. It requires concrete action on multiple fronts — economic inclusion, education, and entrepreneurship that builds on the city’s emerging technology and innovation sectors. This plan would augment the three proposed Innovation Hubs currently being developed.

First, Detroit must foster economic inclusion by ensuring that its innovation economy is accessible to everyone. This means aggressive “skilled and non-skilled” partnerships between tech companies,

vocational schools and universities to train Detroit’s workforce.

This means expanding apprenticeships, internships, and job training in fields like artificial intelligence, environmental/ clean energy, and autonomous vehicles. Programs like Detroit at Work that connect residents to jobs and training, must scale up dramatically, to create a pipeline from classrooms to high-paying careers.

In addition, we must build pathways to entrepreneurial success for Detroit’s own innovators. The entrepreneurial spirit that built this city hasn’t disappeared; it simply needs to be reignited. Small business incubators and accelerators, such as TechTown Detroit and Invest Detroit, are already helping entrepreneurs start businesses.

Detroit’s entrepreneurial ecosystem needs more support, especially in immigrant and women-owned businesses that have historically had limited access to capital.

By encouraging local entrepreneurship, Detroit can create a middle class rooted in ownership. This is not just about creating jobs — it’s about creating wealth. When Detroiters own their businesses, their homes, and their futures, the entire city rises.

A Marshall Plan for Detroit’s middle class must also focus on rebuilding the city’s infrastructure — not just roads and bridges, but the digital infrastructure that will connect Detroiters to the global economy. High-speed internet is a necessity, and offering affordable broadband throughout the city will empower more residents to participate in the innovation economy

through an online business or remote work. Over the last 70 years, Detroit’s middle class rapidly contracted as its population shrank from more than a million residents to fewer than 700,000. The exodus of middle-class residents over these decades diminished the city’s tax base and eroded it’s educational system. A revitalized middle class supported by Detroit’s Marshall Plan is needed to reverse these trends.

A Marshall Plan must also prioritize affordable housing with neighborhoods where working families can thrive alongside new professionals moving to the city.   Detroit Mayor Mike Duggan has proposed a PILOT Fast Track program providing property tax cuts for developers to build housing units with 15-year commitments to affordable rents. This is an excellent start, but the city needs more support for homebuyers who are committed to rebuilding Detroit’s neighborhoods and participating in its economic development.

There is a moral imperative and a strong economic incentive to rebuild Detroit’s middle class is clear. A strong middle class fuels consumption, stabilizes communities, and creates a virtuous cycle of prosperity that benefits everyone.

New trailblazers who are following my grandfather’s example in the Great Migration are ready for a new Marshall Plan to help rebuild Detroit’s middle class. The city has a rare opportunity to reinvent itself yet again, with a durable economy that works for all. These next steps will require leadership, vision, and a willingness to learn from Detroit’s history.

Detroit Diesel plans $285M expansion at Redford plant

By Kurt Nagl

Detroit Diesel Corp. is planning to electrify more of its Redford Township factory with a $285 million investment including EV battery prototyping and pack assembly.

e company, whose traditional business is tied to diesel-guzzling big rigs and buses, is looking to modernize existing operations while tooling up to manufacture electric components for medium- and heavy-duty electric trucks, according to two sources familiar with the plan.

e investment would come with 436 new hourly and salary jobs, on top of 2,000 retained, at its sprawling plant near the Detroit border.

e company, owned by Daimler Truck North America LLC, is asking the state for a $27.7 million Critical Industry Program performance-based grant, as well as a 15-year 100% SESA tax exemption worth $3.2 million.

e Michigan Strategic Fund board is expected to consider the project at its Dec. 10 meeting.

Crain’s reached out to the Michigan Economic Development Corp. for comment.

e company did not immediately respond to a request for comment Dec. 5.

Detroit Diesel — now branded as Demand Detroit on its website — produces axles, engines and transmissions for Western Star and Freightliner trucks as well as omas Built buses.

e company traces back to 1938 when General Motors formed its diesel division. In 1998, a joint venture between Penske Corp. and GM created Detroit Diesel. DaimlerChrysler acquired it in 2000, and it is now a unit of Daimler Truck AG.

Detroit Diesel in 2021 announced a $20 million investment to make e-powertrain components at its plant. e company produces electric chargers for truck eets in addition to electric axles, according to its website. Freightliner and Detroit Diesel rolled out production of the electric Class 8 eCascadia in North America in 2022.

It’s a tough time to be in the electrification business. Light duty EV vehicles have sold far less in North America than anticipated, prompting Detroit automakers and others to change production plans and rein in plant capacity. For heavy-duty vehicles, one of the primary challenges is adequate range.

Despite the headwinds,

companies are still investing in electrification, and to some extent hydrogen, with an eye on a zero emissions future, eventually. While Michigan officials are taking flack for taxpayer-backed EV plants that have yet to live up to promises, capturing EV investments remains a priority, as the Detroit Diesel project indicates.

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Detroit Diesel’s sprawling complex in Redford Township. | DETROIT DIESEL

NOT YOUR GRANDPA’S BANK: Michigan credit unions rebrand in play for younger members

By Anna Fifelski

Vibe Credit Union is nearly 90 years old, but with its bright colors and fun slogans, you’d never know it.

In 2013, Telecom Credit Union rebranded to a new name, meant to transition the credit union to a more contemporary image.

“It doesn’t sound like your typical credit union name. It’s so short and easy to remember, so it’s perfect,” said Jennifer Bleau, chief brand and growth officer for Vibe. “It makes us unique and different, because it’s not a traditional name … it has a modern and clean look and feel.”

Vibe Credit Union began as a credit union for Michigan Bell Telephone Company employees in 1936, but now operates under a state charter with 75,000 members and $1.4 billion assets under management.

In order to stand out among the competition and attract younger members, credit unions are taking on new names.

Of the 184 credit unions in Michigan, names vary from university-affiliated credit unions, like the East Lansing-headquartered Michigan State University Federal Credit Union; or different iterations that lay claim to the credit union’s home base, like

Lake Michigan Credit Union or West Michigan Credit Union.

Others, like Vibe, are venturing away from the traditional naming structure. But the Novi-headquartered credit union isn’t the first local credit union to rebrand with a shorter and snappier name.

The shift toward more unique names stems from a desire to modernize credit unions for younger

audiences, said Dan Santonocito, co-founder and managing partner of Basso Marketing Agency. Santonocito and Greg Basso founded Rochester-headquartered Basso Marketing Agency in 2003, and it works with more than 1,000 companies and organizations across the country to develop marketing strategies, with a focus on the financial sector.

Michigan First Credit Union, One Detroit Credit Union, The State Bank and Bankjoy are a few of the company’s local clients.

“I think the younger generation is looking for the technology behind the credit union — they want to make sure that mobile banking is first and foremost,” Santonocito said. “So (credit unions) are looking to kind of shorten their names

and lose these old school names, because they want to seem more modern and technically savvy.”

According to a study by the Filene Research Institute, a credit union and consumer finance think tank in Madison, Wis., from May 2024, the average age of a credit union member is 52 years old. Less than 20% of Americans under the age of 40 use a credit union.

A Vibe Credit Union location on Nine Mile Road in Ferndale ANNA FIFELSKI

A Zeal Credit Union location on Middlebelt Road in Livonia. The credit union was founded in 1952 as the Co-op Services Credit Union, and changed its name to Zeal in 2016. | COSTAR GROUP INC.

Other moves from credit unions to appeal to potential members include bright colors and adding a mascot, like Lansing-headquartered LAFCU.

Pronounced “laugh-cue,” LAFCU kept its name as homage to its origin when it became a state-chartered institution in 2017. It has 74,000 members and around $1 billion in assets under management.

“We lean right into the ‘laugh’ (aspect),” said Kelli Ellsworth-Etchison, the credit union’s chief marketing and diversity o cer.

e credit union has a mascot, La -e the Cow, which Ellsworth-Etchison said helps it stand apart from other credit unions.

La -e is often featured at LAFCU’s programs tailored to kids.

LAFCU was founded in 1936 by employees of Oldsmobile, who were interested in pooling theirnances to purchase a cow. It operated under the name Oldsmakers Credit Union until 1955, when it expanded its charter to serve automaker employees under the name Lansing Automakers Federal Credit Union.

Ellsworth-Etchison said that LAFCU was able to lean into the uniqueness of the name, because the credit union had been going by the acronym for so long, and never considered an alternative name when it rebranded in 2017.

Only non-locals tend to question LAFCU’s name, Ellsworth-Etchison said, which is a testament to

the organization’s brand awareness in the Michigan market.

But for some credit unions, the shift to appear more modern is a double-edged sword. With a snazzy new name and fun colors, credit unions may appear newer and therefore less reliable.

“It’s easier to market when you do have those longer names that have the words ‘credit union’ in

their name,” Santonocito said. “ at’s because the organizations are more searchable online and promote the nancial product or service front and center.”

Andy Kempf, CEO of 4Front Credit Union in Traverse City, thinks it’s quite the opposite. Credit unions with more traditional names — often stemming from an acronym — could be limiting

themselves in terms of attracting new members.

“(Younger potential members) think credit unions are hyper-niche, so by having a di erent name, it gives us much more of a feel that we are out there and more accessible than something that is focused on a select group of folks,” Kempf said.

4Front Credit Union was born in

2015 as the equal merger between Members Credit Union, founded in Traverse City in 1954 as Governmental Employees Credit Union, and Bay Winds Credit Union, founded in Charlevoix in 1957 as Saint Mary Catholic Credit Union. It has 105,000 members and $1.1 billion in assets under management.

When the merged institutions were weighing name options, Kempf said the credit union wanted to stand apart from the competition with the numeral and a more modern feel.

“What we didn’t want to be was a ‘main street bank,’ or have the old stodgy bank or credit union-type name,” Kempf said. “Knowing that we’re stepping into a new environment, especially in that digital space, we need to be something that’s going to attract folks and make them understand that we’re di erent from your grandpa’s bank.”

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Laff-e the Cow is the mascot for LAFCU. | LAFCU

Andy Kempf, CEO of 4Front Credit Union in Traverse City. | 4FRONT CREDIT UNION

New Michigan Central fund to pay startups to train workers

By Anna Fifelski

Michigan Central is launching a new workforce training fund targeting startups and early-stage companies, the organization announced Dec. 5.

e new Michigan Central Talent Innovation Training Fund is a partnership with Detroit at Work, a program operated by the Detroit Employment Solutions Corp., and the state of Michigan.

e training fund will make available more than $1.5 million of training investment for early-stage technology and mobility-focused companies in Detroit. Eligible startups would be awarded $7,500 per person to cover specialized training costs for critical roles.

e $7,500 award amount was determined to be the average cost of many workforce development training programs in the local market, Myka Burley, associate director of skills at Michigan Central, told Crain’s in an email.

e fund aims to reskill and upskill 160 Detroiters during the rst cycle of the program. e program currently has enough funding for one year, and a renewal is dependent on raising capital to fund additional cycles.

Applications for the program are open until Feb. 15, and eligible companies must identify clear talent

needs and provide job descriptions in their applications, and outline how the training will lead to industry-relevant skills. Companies must also commit to creating full-time jobs with health bene ts, paid leave and a minimum post-training wage of $20 per hour and $16 per hour for part-time employment during training.

“ e fund is speci cally designed to create family-sustaining jobs for Detroit residents. us, companies

who receive grant dollars through this program must train Detroit residents, whether they are new hires or existing sta ,” Burley said. ere is no limit to the amount of funding a startup can receive, though the goal of the initiative is to ensure that the startups can continue to employ new workers long term.

e $1.5 million fund is provided through a grant from the state’s Department of Labor and Economic

Opportunity, and is part of Michigan Central’s public-private partnership with the state of Michigan.

Michigan Central is the shorthand name for the Michigan Central Center for Mobility and Society, a nonpro t founded by Ford Motor Co. to help program the technology and cultural spaces at the redeveloped train station and neighboring book depository building in Corktown.

“Together, we are creating a competitive and innovative envi-

ronment that improves the quality of life for people who live, work and do business in our state,” said Susan Corbin, Michigan Department of Labor and Economic Opportunity director, in the release. “We are empowering Michiganders to build meaningful careers and supporting our state’s workforce through equitable access, career advancement and career readiness, and this innovation fund also helps businesses build a skilled workforce.”

Through the power of listening, perspective, and connected purpose, we work with you to achieve your unique goals. We walk beside you, navigating challenges and opportunities so you can focus on what you do best. We are your business success partner.

Newlab at Michigan Central and Michigan Central Station, as seen in early 2024, in Detroit’s Corktown neighborhood. DEAN STORM/CRAIN COMMUNICATIONS

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Women small business owners start fellowship

Aim is to gain support and mentorship

By Elizabeth Schanz

As a small business owner, Allison McDonough tackles many tasks that are in and out of her comfort zone.

Nine years ago, McDonough combined her background in marketing and passion for dogs to establish Fido & Stitch LLC, a Grand Rapids specialty pet products and services business. Since then, McDonough has grown her business, adding two other West Michigan locations in Rockford and Jenison. She has 17 employees across the stores and hit $1.2 million in revenue last year.

Still, after owning a business for nearly a decade, McDonough sought out support in areas of the business where she didn’t feel as strong as she’d like.

Enter the inaugural Women’s Entrepreneurial Fellowship, a program launched last month by the Small Business Association of Michigan Foundation to support second-stage, women-owned businesses through mentorship, business resources and cohort connections.

“Being a business owner, especially a small business owner, you wear many hats, and I can’t be good at everything,” McDonough said. “I’m great at marketing. I’m great at leadership and management, and great at strategy. … I’m looking forward to learning more about the topics that I’m not as passionate about and not as versed in.”

The foundation, an arm of the Small Business Association of Michigan, officially kicked off its eight-month fellowship Nov. 18. The inaugural class of 11 women-owned businesses across Michigan will have access to various support systems to advance their business, reach goals and navigate challenges.

The fellowship will consist of a one-on-one mentorship program with established business leaders, monthly learning sessions, net-

working opportunities, guidance on growth resources, in addition to financial assistance in obtaining business certifications, SBAM President and CEO Brian Calley said.

To qualify for the fellowship, businesses were required to have been in operation for at least two years, generate a minimum of $500,000 in annual revenue and have at least one employee in addition to the owner.

The program aims to create renewed confidence and strong support systems in which participants can form long-term connections, Calley said. “Those peer-to-peer relationships are very powerful, and that’s what I’m most excited about,” he said.

Taryn Sulkes, president and CEO of Detroit-based construction contractor Eagle Specialties LLC, said she wasn’t sure if she would have the bandwidth to add the fellowship program to her plate, but felt the opportunity was “just too good to pass up.”

Under Sulkes’ leadership, Eagle Specialities has contracted with several major Detroit construction projects, including the Gordie Howe International Bridge and the Michigan Central redevelop-

ment. The company’s year-to-date revenue is estimated at $750,000. Sulkes is also involved with business support organizations, serving as the president of the Sault Tribe Business Alliance for the Sault Ste. Marie Tribe of Chippewa Indians, as well as a member of the National Association of Women Business Owners Greater Detroit chapter and the Detroit chapter of the National Association of Women in Construction.

“I am looking forward to having a mentor that can talk with me and understand experiences that we’re going through,” Sulkes said of the SBAM Foundation fellowship.

“I’m looking forward to talking to my mentor and gaining more insight for the financial planning and instruments that they have available, and also the marketing and sales resources.”

Heather Houtman founded Holland-based travel agency Winsome Travel Design in 2018. As the owner of a primarily virtual business with a small staff of two independent contractors, Houtman said she was looking to join the fellowship as a chance to learn from other business owners.

While she applied for the fellowship thinking, “There’s no way in

The following businesses are part of the inaugural class of the Women’s Entrepreneurial Fellowship:

w Eagle Specialties LLC, Detroit

w Elderly Instruments, Lansing

w Fido & Stitch LLC, Grand Rapids

w Groovy Donuts LLC, Williamston

w Jungle Jane Promotions, Lansing

w marshall Holding Company Inc., Detroit

w Neuco Furniture & Upholstery, Traverse City

w Pioneer machine and Technology Inc., madison Heights

w The Betty Brigade, Ann Arbor

w Winsome Travel Design LLC, Holland

w Wolverine Pickleball LLC, Ann Arbor

the world that they’re going to pick my small business,” Houtman was chosen to be part of the inaugural class.

Houtman said she looks forward to the program’s financial strategy resources, planning tools that will help her find a work-life balance and connecting with other women going through the same struggles and successes she experiences.

“Just feeling that there are other businesses that are struggling, like mine, that also felt very positive,”

Houtman said. “It’s like you’re not really on your own little island, you have support, whether you know it or not.”

SBAM officials note that women-owned businesses make up more than 43% of the state’s 902,131 small businesses, which is higher than the national average.

The Women’s Entrepreneurial Fellowship is a small part of the broader $75 million Small Business Smart Zones and Business Accelerators initiative that was approved by the Michigan Legislature using federal American Rescue Plan Act funds.

With the appropriation, the Michigan Economic Development Corp. established the Small Business Support Hubs program in June 2023. MEDC awarded 27 organizations that were designated as “on-the-ground support hubs” for small businesses, Calley said. SBAM is one of them.

“(SBAM is) the only one that is exclusively focused on second-stage businesses. In other words, most of the other hubs are more focused on early-stage or startup businesses, and ours are for well-established businesses that are ready to grow to the next level,” Calley said.

From this fund, SBAM received $3.4 million designated over two and a half years to support the organization’s programming, including the Women’s Entrepreneurial Fellowship.

The Women’s Entrepreneurial Fellowship program also is recruiting its next cohort. Although the women’s fellowship is still in its early stages, Calley expects the program could increase its cohort size to 20-25 entrepreneurs.

Additionally, the women’s fellowship is “just the beginning” for other kinds of cohorts SBAM could create, such as for family-owned and Black-owned businesses.

“There are special challenges and then opportunities from bringing people together and just facilitating their development and support of each other, with an organization with the size and girth of SBAM behind it, really exciting things could happen,” Calley said.

Co.act Detroit founding executive director to step down

By Sherri Welch

Allandra Bulger, the founding executive director of nonprofit intermediary Co.act Detroit, will step down at year’s end.

Bulger is leaving to pursue other professional opportunities, the organization said in a news release.

Co.act said it plans to name an interim executive director by the end of the year and launch a search for a permanent executive director in January. Laura Trudeau, who is a retired managing director of the Kresge Foundation’s Detroit program and chair of Co.act’s strategic advisory board, is leading the transition.

Bulger “has brought to her service as our founding executive director a proven track record for

building transformative organizations,” Trudeau said in the release.

“Her visionary thinking and dedication have set Co.act on a strong path forward.”

Co.act launched in summer 2019 as a place-based, capacity-building center for nonprofits with seed funding from the Ralph C. Wilson Jr. Foundation.

During the COVID-19 pandemic, foundations tapped Co.act as one of several groups to help nonprofits evaluate their organizational structures and boost earned revenue.

With TechTown as its fiduciary, Co.act has emerged as a convener of philanthropic, nonprofit and private-sector groups, driving conversations aimed at collaboration, equitable grantmaking and

filling service gaps.

Since its inception, Co.act has distributed more than $6.2 million in grants to 177 organizations, many supporting nonprofits led by people of color and women.

“It has been an absolute joy to lead the high-performing and committed team that has facilitated the co-creation of a resource hub where Southeast Michigan’s nonprofit and philanthropic communities connect and access the knowledge, skills, and resources needed to collaborate, innovate, and amplify impact,” said Bulger, who was named one of McGregor Fund’s 2023 Eugene A. Miller Fellows. “I believe that a solid foundation has been created to guide Co.act into its next chapter.”

Small Business Association of Michigan Foundation’s inaugural Women’s Entrepreneurial Fellowship is giving 11 women businesses owners access to support systems to advance their business, reach goals and navigate challenges. | SmALL BUSINESS ASSOCIATION OF mICHIGAN FOUNDATION

Allandra Bulger, executive director of Co.act Detroit, speaks to nonprofit leaders during an October event. She is leaving the organization at the end of the year. | CO.ACT DETROIT

Sulkes

Cannabis testing lab needs a lame-duck vote to operate

By Dustin Walsh

Is the Michigan Cannabis Regulatory Agency’s long-awaited reference testing lab in trouble?

The lab, which has already been allocated $4.4 million in state funding to build and open in January, still requires a legislative change to the Michigan Regulation and Taxation of Marihuana Act to operate effectively.

That legislation requires a threefourths vote at the Capitol to change the MRTMA language. And with a limited number of legislative sessions left in the lame duck, whether the bill that’s been sitting on the House floor since May will cross the finish line before January is in question.

At stake is whether the state can buy and transport marijuana being sold on retail shelves and test it for banned pesticides, and to confirm whether the product matches the label in regulators’ battle against illicit marijuana infiltrating the market and artificially depressing prices.

Bill sponsor Rep. Tyrone Carter, D-Detroit, told Crain’s that he hopes House Bill 5529 can get to a floor vote before the year’s end.

“The money has been allocated already; the goal is to get it over the finish line,” Carter said in late November. “It’s not a Republican or Democrat issue … We need to jump in on what’s doable (before the end of the year) on both sides. If you look at what we’ve done on regulatory reform, we’ve been able to pass most of it out of committee with majority. Now we just need to get with their whip and see where we stand.”

The CRA “remains optimistic” the bill will pass by the end of the year, the agency said in a statement to Crain’s.

In April, the CRA named Claire Patterson, its longtime scientific manager, as director of the new lab. Construction is ongoing for the facility.

The state believes the new lab will boost regulators’ ability to stymie illicit products, audit private sector labs and optimize standard testing methodologies.

Regulators are on the hunt

Under state rules, marijuana growers are required to test 0.5% of a harvested batch of marijuana at an independent lab before it can be sold for consumer use. Batch sizes max out at 50 pounds under the regulations.

But not all batches of marijuana sold in the legal market are being tested, and CRA investigations have revealed a troubling pattern of alleged untested illicit product entering legal dispensaries.

The state has effectively accused dozens of companies of using illicit product, or at least accused them of being unable to identify where the marijuana originated. This includes complaints against Livonia-based Exclusive Brands, Chesaning-based One Love Labs and Hespe-

in active plants last month is likely due to the influx of product from “Croptober,” when operators harvest their seasonal outdoor grows for the market. And that’s just the legal product being tracked by the state. Add in illicit product in the market and oversaturation can be devastating to margins.

Last month, Fluresh LLC announced it was closing its $46 million 105,000-square-foot grow facility in Adrian and laying off 46 employees. CEO Brandon Kanitz told Crain’s that his company needed $300 per pound to turn a profit at its Adrian cultivation site, but faced stiff competition from outdoor grows that were selling product as cheaply as $80 per pound. Fluresh was losing $500,000 a month on operations in Adrian.

“(The market) is unhealthy,” Kanitz said.

Monitoring private labs

The audit lab, in theory, will also help the CRA monitor the accuracy of private labs.

In 2021, the CRA alleged that tests on 64,000 pounds of marijuana product vetted by Bay Citybased Viridis North — the state’s largest testing lab business — contained “inaccurate and/or unreliable results” after spot-checking the product at a different lab. The value of the recalled product at the time was roughly $229 million. A judge later ordered the CRA to release much of the product back into the market.

But the recall sent the industry into a brief spiral as more than 400 retailers across the state had the product in question on their shelves. Viridis alleged the recall covered upward of 70% of marijuana product on store shelves for recreational use — and lawsuits ensued.

Lab would give regulators a leg up

ria-based HiCloud LLC.

At Exclusive Brands’ Ann Arbor location, CRA inspectors discovered more than 11 pounds of infused marijuana flower that was not accounted for in the state’s tracking system as well nearly 100 pounds of marijuana distillate that never went through testing.

By ridding illicit market weed from the legal market with a lab, the industry hopes prices will stabilize.

“We need a place that is a central repository that can prove the products are safe.”

Rep. Tyrone Carter, D-Detroit

The state’s legal market is being squeezed by product oversupply. The average price for an ounce of marijuana flower plummeted 21% year-to-date to just $73.99, a record low.

There were 3.56 million active plants being grown in Michigan in October, down from 3.77 million in September, but still up 73% year-over-year. The decline

Currently, state regulators have been hamstrung by the testing process because it happens at the processor level, meaning tested product can be replaced with illicit market product after testing during packaging.  HB 5529 would authorize the state to purchase final product off retail shelves if it suspects the product did not originate from the legal market and transport that product to its testing lab in Lansing.

This would, effectively, give the state a leg up in the battle against illicit product.

“We need to give the state autonomy,” Rep. Carter said. “We need a place that is a central repository that can prove the products are safe. Consumers, vendors and anyone associated with the industry has that expectation.”

Olivia Miller conducts the foreign matter inspection process of cannabis testing at Reassure Labs in Warren. | NIc ANTAYA

Andrew Grange works with a cannabis sample at Reassure Labs in Warren. | NIc ANTAYA

Vials of cannabis products are being tested for heavy metals and contaminants at PSI Labs in Ann Arbor. | KUrT NAGL

Why Duggan decided to run for governor as an independent

By David Eggert

Mike Duggan knows the Herculean effort it will take to win an independent campaign for Michigan governor.

Yet he believes voters are so fed up — with both parties, with partisanship in Lansing, with low reading scores, with young people leaving the state, with unaffordable housing — that they will give him a shot to get things done alongside “reasonable” Democratic and Republican lawmakers.

Duggan said the decision to run as an independent, not as a Democrat, crystallized after he announced three weeks ago that he would not seek reelection as Detroit’s mayor.

“I think we have to address the big issues,” he told Crain’s in an interview. “When you look at what happens in Lansing, in that toxic partisan environment, these are the hardest issues to address because when a Democrat proposes something, all the Republicans are against it. When a Republicans proposes something, all the Democrats are against it. We’ve been sliding the wrong direction. I think we can improve the future of our kids in Michigan and we can do it by working together.”

The road ahead is daunting.

Five states — Alaska, Connecticut, Maine, Minnesota and Rhode Island — have elected an independent governor since 1990. Duggan sees that as evidence that it can be done in Michigan in 2026. No independent or third-party candidate has won a top statewide office in modern times, maybe ever.

“If you were here in 2013 when I was running for mayor as a white guy in an 83% Black city as write-in, people said, ‘What are you doing? You have no chance.’ And yet the people of this city, when I sat down in living room after living room, united behind me and I won in a landslide and then two more landslide reelections,” said Duggan, a former CEO of the Detroit Medical Center, Wayne County prosecutor and county deputy executive. He is a political moderate who

holds a nonpartisan office as mayor in the heavily Democratic city but is a close ally with President Joe Biden and ran as a Democrat for prosecutor. He has advantages and disadvantages in the gubernatorial race.

If he submits 12,000 valid qualifying signatures, he avoids a tough Democratic primary and goes straight on the general election ballot. He can spend all his time and money for almost two years running as a pragmatic, results-oriented outsider and appealing to voters to back what he called “progress over party.” (He, of course, as a longtime government leader, is an “establishment” politician.)

He will be at the bottom of the ballot after the party candidates, however, have no party infrastructure that is important to get-outthe-vote efforts and campaigning statewide, and would not be boosted by straight-ticket voting.

With enough financial resources from business executives and others — Ford Motor Co. Executive Chairman Bill Ford Jr. and lawyer Mark Bernstein are early supporters — he may get his message out. In a three-way race, he could attract disaffected voters from both parties who like the job he has done as mayor of the state’s

biggest city, a position in which he has become well-known in voterich metro Detroit.

But it remains a huge lift.

“These kinds of campaigns face significant uphill battles. But I think if one could be successful, now’s the time,” said David Dulio, an Oakland University political science professor.

A Gallup poll from September found that 58% of U.S. adults think a major third party is needed. A November survey showed that 42% consider themselves to be an independent.

“We’ve got a plurality of folks, a strong plurality of Americans who say that they’re independents, that they’re not with either of the parties. That’s before we factor in the leaners. But I still think that that matters,” Dulio said. “Both parties are not held in very high regard. They’re under water, both of them, in terms of favorability with the public. I think he’s trying to tap into that sentiment. It usually doesn’t work, but it might.”

Moderate businessman Rick Snyder considered an independent bid for governor before ultimately running, and winning, as a Republican in 2010.

Dulio said at first blush, he agrees

LuxWall strikes deal to build Detroit factory

By Kurt Nagl

Ypsilanti-based glass manufacturing startup LuxWall Inc. is planning to open a new factory in Detroit with Dan Gilbert’s Bedrock LLC as the developer.

The company aims to open a 276,000-square-foot plant in 2026 on Fort Street in Detroit’s Delray neighborhood at the former Sakthi Automotive site, LuxWall confirmed Dec. 5.

LuxWall, which specializes in energy efficient glass, had previously said it would open a Detroit plant as part of a $166 million expansion in Michigan but had not confirmed a location. The company plans to lease a build-to-suit plant on a 10-acre plot near the demolished Southwestern High School and a new Magna JV seating

plant, also in a Bedrock building.

Bedrock CEO Kofi Bonner said the real estate developer is “proud to have recruited” LuxWall to Detroit.

“LuxWall’s investment in Detroit is a win for both the economy and the environment,” Bonner said in a news release. “This investment will add hundreds of jobs, stimulate local growth, and reinforce Detroit’s position as the go-to industrial hub, all while contributing to the revitalization of the Delray Industrial area.”

The project is expected to bring 277 jobs to the city, LuxWall said in the release. That’s lower than the 342 jobs projected in July 2023, when the Michigan Strategic Fund signed off on a $6 million performance-based grant for the company’s expansion.

Crain’s inquired with the company about the discrepancy.

LuxWall in August opened its Litchfield plant, where the company planned 111 jobs inside two buildings totaling 216,000 square feet.

Jobs are expected to pay an average wage of $1,653 per week plus benefits, LuxWall told the MSF board last year.

“LuxWall’s new facility in Detroit’s Delray District will create 277 good-paying, high-skill jobs and help Michigan continue leading the future of advanced manufacturing,” Gov. Gretchen Whitmer said in the release. “I am proud that our comprehensive economic development strategy to help more companies ‘make it’ in Michigan is paying off…”

The Detroit plant will be home to the “world’s first high volume vacuum insulated glass production,” ac-

represent them. ... I just thought, maybe this is what we need, that the two-party system has limited voters’ choices. The parties just get totally wrapped up in trashing their opponent as opposed to saying what they’re going to do.”

He said that so far, feedback has been positive, not only from businesspeople but from union leaders who have told him it is hard for them to persuade members to vote for a Democrat.

There are many skeptics of Duggan’s salvo.

But political consultant Mario Morrow Sr., the president and CEO of Southfield-based Mario Morrow & Associates, said the move is “bold, smart and extremely aggressive” and Duggan will enter the general election unbruised, unlike the major-party candidates.

with the sentiment that Duggan’s bid probably helps Republicans “because he’s known as a Democrat and ... we’ll end up with two Democrats and one Republican running. He’s going to count on making inroads with moderate Republicans. He has to. That’s the only way he can carve out that middle and get enough votes to win.”

Republican consultant John Yob posted on X that Duggan’s announcement is the “best news for Michigan Republicans since Election Day.”

Duggan said he expects to win and is not “worried about which party is going to finish second or third. I think most people in the state just want the problem solved.”

He said he has worked on issues in the Capitol for over 30 years and has “never seen the partisan environment so toxic.” He said as he contemplated running for governor over the past year, he questioned if he or any governor could succeed in such a climate. He was surprised after the presidential election, he said, to learn how many people sound fed up with both parties.

He pointed to Democrats who did not vote, particularly those in the working class, “because they feel the Democratic Party doesn’t

“Duggan just upset the applecart,” Morrow Sr. said. “Leadership on both sides are in mental comas.”

Bernstein, a Democratic donor and University of Michigan regent, said Duggan has a “clear path,” one that is open because the parties “seem to have moved to the extremes. There’s a huge number of voters who want pragmatic problem solvers in Lansing to get things done. That is exactly what Mike Duggan represents. ... By running as an independent and serving as an independent, he’s free from the partisan entanglements that diminish the ability to get things accomplished.”

Duggan, Bernstein said, will have no problem raising money to mount a serious campaign. Bernstein plans to donate.

Duggan’s priorities include turning around a K-12 system in which students have lower test scores than in many states and creating “jobs of the future” — in technology and the film industry, for example — so children stop moving away.

Duggan said he has had disagreements with the City Council but they have largely worked together to “put people first. You haven’t had the kind of awful fights. I think if Lansing functioned that way, the state would be a lot better off.”

cording to the company. A month ago, the company landed a $51 million Series B fundraising round, with backers including Bill Gates. Novi-based Oliver Hatcher will oversee construction.

“The growing demand for our products is exciting, and so is the opportunity to work with Bedrock and be part of Detroit’s transformation,” LuxWall co-founder and CEO Scott Thomsen said in the release. “This project will support the city, brings jobs to Detroit and Michigan, and help our customers improve the environment.”

Detroit Mayor Mike Duggan announced his candidacy for governor of Michigan on Dec. 4. CARLOS OSORIO/ASSOCIATED PRESS

LuxWall is planning to open a glass factory on a 10-acre site in Southwest Detroit. DETROIT ARCHITECTURAL GROUP FOR OLIVER/HATCHER CONSTRUCTION

Behind the scenes look at what it takes to keep Michigan’s electricity flowing

How ITC prepares the grid for challenges like variable energy sources, extreme weather, increasing demands

By Crain’s Content Studio

ITC’s Director of Operations Engineering

Greenen leads a team responsible for operational planning and supporting applications used in the operation of ITC’s high voltage system. Tim earned a bachelor’s degree in Electrical Engineering from Oakland University and a master’s degree in Electrical Engineering from Wayne State University. He is a registered professional engineer in the state of Michigan.

Michigan’s and the world’s energy needs are evolving, and the state is depending more and more on electricity to power homes, businesses and communities. To keep power flowing no matter the conditions, proactive planning and redundancy in the electric grid are essential.

Timothy Greenen, Director of Operations Engineering for ITC, the largest independent electricity transmission company in the U.S., recently joined the Crain Content Studio to give a behind the scenes look at what it takes to keep the grid in working order.

When we talk about Michigan’s grid, what does that mean?

The grid is comprised of three different parts. Generation is where the power is made — whether it’s from fossil energy or from renewable energy like wind or solar. Transmission moves the power from the generator to the distribution system, which then enables power to get to homes and businesses. ITC’s sole focus is on the electricity transmission system, making sure that power moves from where it’s generated to where it’s needed in real time.

What can you tell us about your role at ITC, and why it’s critical for our power infrastructure?

At ITC, our goal is to keep the power flowing no matter what the conditions are outside. Our team works to make sure we’re prepared to support operations through any extreme weather or service interruptions. We complete a lot of system studies both months in advance and in real time to determine whether we’ll have adequate capacity during peak load times, or when new manufacturing operations are on-boarded, or even during maintenance work.

As we shift from fossil fuel energy sources to renewable sources, we’re taking a new approach to this kind of work. In any given location, the sun doesn’t always shine, and the wind doesn’t always blow, so we increasingly must study and monitor lines loading in real time.

This seems like highly complicated work. Can you talk about the technology and team you need in place to do this important work?

Machine learning and artificial intelligence play a role as this technology evolves for us. It’s really a multi-pronged approach. Some of it is manual, like I mentioned earlier, where the team studies discrepancies, fluctuations or disturbances that may be on the grid. But there’s also a great deal of automation. The grid checks on itself every five minutes. So, this

means that every five minutes we know automatically whether the system will stay online if any one element comes off the grid. Our team continues to analyze the current situation based on these results. There could also be times when more than one part of the grid goes offline, and we must be prepared for those times, as well.

“As

grid. How do you prepare for extreme weather that could potentially interrupt service?

We monitor the weather constantly — and I do mean constantly. Our team is monitoring for potential challenges around the clock. Obviously, we can’t plan for the weather weeks in

states and local utilities are moving toward their decarbonization goals, transmission really must be part of that conversation. It will be more critical to have the needed transmission infrastructure with increasing reliance on variable energy sources.”

- Timothy Greenen, Director of Operations Engineering for

Additionally, if we plan maintenance for a day when some part of the grid does go offline, we remain nimble enough to reschedule it. So, while automated updates are central to our strategy, ultimately our team of operators and engineers make all the decisions to ensure that we have optimal operations at all times. The work of these experts is essential to ensuring the reliability of the electrical grid, and that translates to fewer customer outages and exceptional reliability.

Extreme weather events have been on the rise and would seem to be one of the biggest threats to the

ITC

advance, but we can make sure we’re prepared for any conditions that may arise to be able to change plans based on conditions outside. This is where nimbleness and flexibility are most important.

Clearly, transmission is essential to keeping our businesses and our homes functioning. Does Michigan have enough transmission capacity to keep the lights on and keep powering forward? Can you comment on this?

As states and local utilities are moving toward their decarbonization goals, transmission really must be

part of that conversation. It will be more critical to have the needed transmission infrastructure with increasing reliance on variable energy sources. Additionally, we’re seeing an increase in electricity demand as people plug in everything from laptops to cell phones and even cars.

Artificial intelligence and data centers are also expected to use much more electricity in the coming years, so you can see how our lives are dependent 24/7 on electricity. This increased demand really requires increased investment in the grid to ensure that it can reliably meet these new and changing demands.

The most effective approach is really being proactive and not reactive, especially knowing that it could take seven to 10 years to build a new transmission line.

Scan here to watch a video interview with Greenen:

To learn more about ITC and Michigan’s transmission system, go to itcmichigan.com.

TIMOTHY GREENEN

LARGEST BANKS IN MICHIGAN CRAIN’S LIST

ResearchedbySonyaD.Hill:shill@crain.com|ThislistranksbanksandbankholdingcompanieswithapresenceinMichigan.FiguresarefromtheFDIC'sdepositmarketreports,whicharebasedon thebranch/officedepositsforallFDIC-insuredinstitutionsasofJune30.Itisnotacompletelistingbutthemostcomprehensiveavailable.Companiesarelistedwiththeaddressandtopexecutiveof theirmainMichiganoffice.Actualfiguresmayvary. 1. SucceedsMatthewElliott,whorecentlyretiredfromthecompany. 2. SucceededRobertB.KaminskiJr.asCEOonJune3. 3. AcquiredbyWintrust Financial Corp. in August. 4. Assumed role of president and CEO in January. 5. The holding company for The State Bank headquartered in Fenton.

UM Health to shut down Sparrow’s insurance plan

By Mark Sanchez

University of Michigan Health Plan, the health system’s insurance arm acquired last year that has about 64,000 total members, will wind down operations through the end of 2025.

Citing unsustainable financial losses, UM Health decided to close the East Lansing-based health insurance plan formerly known as Physicians Health Plan prior to a rebranding this fall. The health plan intends to cease enrolling new members or renew existing Medicare and individual policies after Jan. 1, 2025, and group commercial policies after Feb. 1.

the U-M Health Plan,” according to a letter sent to insurance agents last month that was posted on social media. “This announcement comes after a comprehensive evaluation of the plan’s financial sustainability, market trends, and the evolving needs of our members.”

UM Health acquired a 90% share of the health plan with last year’s acquisition of Sparrow Health in Lansing. Covenant Health in Saginaw owns the other 10%.

In a statement to Crains Grand Rapids Business, UM Health wrote that the decision to close the financially struggling health plan “was not made lightly.” The closing is pending approval by the UM Board of Regents, according to the Nov. 20 letter to agents.

“Any time our members leave the market we’re certainly disappointed. That’s less choice for Michigan consumers.”

Brian Mills, deputy director of commercial markets and communications for the Michigan Association of Health Plans

“Like many health plans, U-M Health Plan has experienced significant financial losses over the past few years. After a thorough business and financial assessment, U-M Health has made the difficult decision to discontinue

“Despite significant efforts to maintain the plan, the increasingly competitive health insurance landscape and (federal Centers for Medicare and Medicaid) changes to Medicare Advantage plans have made it unsustainable to continue offering the high level of service our members deserve,” the health system said.

“We are deeply committed to our members, agents, employers, and providers, and we will continue to serve all these groups and all members’ claims for services provided through December 2025.”

UM Health Plan offers group, individual and Medicare health plans and has about 64,000 members across all plan types.

The decision to close the health plan follows a period of financial losses.

The HMO product for UM Health Plan lost $6.9 million through the third quarter of 2024 on $104.9 million in total revenue, according to a quarterly financial statement to state regulators. The results included a $7.8 million un-

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derwriting loss on health policies.

UM Health Plan’s HMO had 25,216 members as of Sept. 30, down from 28,055 a year earlier.

The HMO lost $9 million in 2023 on $157.3 million in total revenues and a $10.7 million underwriting loss.

UM Health Plan’s 9,700-member Medicare plan lost $3.4 million through the third quarter on $81.2 million in total revenues and a $4.5 million underwriting loss. The Medicare plan lost $22.1 million in 2023 on $90.1 million in total revenues and a $22.9 million underwriting loss.

Closing UM Health Plan will mean the loss of a small health plan in Michigan in what is al-

ready one of the least competitive markets in the U.S.

A November annual report by the American Medical Association on health insurance markets share across the nation again ranked Michigan as the third-least competitive state for health insurance, above only Kentucky and Alabama, as of 2023.

“Any time our members leave the market we’re certainly disappointed. That’s less choice for Michigan consumers,” said Brian Mills, deputy director of commercial markets and communications for the Michigan Association of Health Plans, which represents HMOs in the state.

Across Michigan, Blue Cross Blue Shield of Michigan maintained a dominating 67% market share in 2023 across all types of health plans, followed by Priority Health’s 12%, according to the American Medical Association report.

Blue Cross Blue Shield held leading market shares in all 14 markets across the state that the AMA analyzed. In West Michigan, the Blues had a 52% market share to Priority Health’s 33% in the Grand Rapids area, the most competitive market in the state.

In the Lansing area, Blue Cross Blue Shield had a 75% market share to the former PHP’s 16%.

AI in Dentistry: Enhancing patient care and streamlining procedures

From enhancing diagnostics to personalizing treatment plans, AI is transforming dentistry by improving efficiency, accuracy, and patient outcomes—without replacing the essential role of the dentist.

By Michelle Fitzgerald, Crain’s Content Studio

The future of artificial intelligence in dentistry could resemble an aircraft that is on autopilot. AI increasingly will be used to guide dentists – not to replace them.

Already prevalent in many dental offices, AI has streamlined business processes, helped detect cavities and assisted with orthodontic planning. And as the technology continues to evolve, it could tailor preventative dental care for people who have chronic conditions and even create personalized treatments by incorporating social determinants of health into its algorithms.

“It will continue to make the dentist more productive, reduce the variability between practitioners and improve the patient experience,” said Mert Aksu, Dean of the University of Detroit Mercy School of Dentistry. “That will be the focus. There has been a lot of publicity given to these robots that are putting in implants. Do I really see robots performing surgery to a large extent? Probably not. Do I see artificial intelligence guides guiding for surgery? Yes, I do.”

Aksu said AI is a tool that can make a dentist’s job more predictable and a procedure more routine – but it can’t replace critical thinking.

“For a dental implant, the artificial intelligence tools are processing the image and providing recommendations on where the implant should go,” he said. “It’s up to the dentist to use their critical judgment and assess the recommendation from AI and tweak it as necessary. Much like an aircraft on autopilot, you still need highly

trained dentists with the critical thinking skills to make the procedure work.”

Christoper J. Smiley, president of the American Association of Dental Editors and Journalists, said current research is focused on using AI for imaging enhancements, disease diagnostics and predictive modeling for disease progression and treatment outcomes.

“Current research emphasizes the role of AI in stratifying patient risk, such as identifying patients with conditions like diabetes and smoking history who may be more prone to severe periodontal disease,” said Smiley, who chairs the AADEJ’s expert panel on the ethical use of generative artificial intelligence.

Unlike generative AI, which learns from open web data, clinical AI systems support specific dental tasks, he said. This provides data privacy and enhanced accuracy in clinical outcomes and results in more precise, evidence-based treatment decisions.

“AI further contributes to improved patient outcomes by providing earlier and more accurate diagnoses, which can lead to less invasive treatments,” he said. “For example, these systems can detect and measure bone loss, indicating early periodontal disease, allowing for timely interventions and reducing the risk of disease progression.”

AI in dentistry isn’t entirely new, but recent advancements have drawn public attention, said Ryan Hartley, a dentist and owner of Kentwood Family Dentistry in Kentwood.

“The concept of using computers for dental diagnostics and treatment planning has been around for some time, but these were rudimentary compared to today’s standards,” Hartley said. “Initial applications might have involved simple data analysis or basic image recognition for dental radiographs. Over time, as computing power increased and algorithms improved, AI’s role has evolved from simple tasks to more complex analyses, predictions and even semi-autonomous operations.”

Early clinical uses included basic image enhancement and pattern recognition in dental X-rays to identify bone loss. Today, AI can be used to predict surgical outcomes and create 3D models for orthodontic treatments like Invisalign.

“From planning surgeries to designing prosthetics, AI optimizes outcomes by suggesting the best treatment options based on data analytics,” Hartley said.

AI also can help dentists diagnose rare or less commonly seen diseases. By inputting a list of symptoms, dentists can use AI to get a tentative diagnosis.

“From a dentist’s perspective, the ability of AI to analyze vast amounts of data quickly is incredibly beneficial,” Hartley said. “This could be in diagnostics, where AI might catch subtle signs of disease or decay that could be missed by human eyes, or in treatment planning, where it could simulate various treatment outcomes to choose the most effective one.”

AI also can aid in patient satisfaction – both by showing patients simulations of their treatments so they know what to expect, and by simplifying office tasks such as scheduling and billing. It can organize patient records and optimize appointment scheduling by analyzing historical data on procedure times and patient punctuality.

AI can verify that insurance information is up to date and can create a synopsis of what patients put in their dental record. Ultimately, however, it can’t replace office and support staff.

“Just as it is in the clinical space, AI is automating routine procedures,” Aksu said. “But it can’t brush your teeth for you.”

UM Health bought a 90% share of Sparrow Health’s insurance plan when it acquired the Lansing-based system last year. | Um HeALTH SPArrOW

RENCEN

amid a broader debate over economic development incentives in Michigan’s Capitol. Democratic Gov. Gretchen Whitmer has hit obstacles, in both parties, to the government subsidizing corporate projects like electric vehicle battery factories. The dynamic could continue with the RenCen.

House Speaker-elect Matt Hall, R-Richland Township, said Nov. 25 that GM made billions in profit and recently laid off 1,000 workers, largely in Warren. He questioned providing $250 million as people drive on deteriorating local roads across the state.

“Does GM need it more or does your local county need it more? That’s the question that we have to make an answer to here very soon,” Hall said at a news conference for his road-funding plan, calling it “insulting” for the automaker to seek public money as it transitions to a new headquarters in the Hudson’s Detroit skyscraper. “Why don’t they pay for it?”

Senate Majority Leader Winnie Brinks, D-Grand Rapids, was more receptive but stopped short of committing to backing the subsidies.

“The RenCen is a Michigan landmark and it’s exciting to see this re-envisioning unfold,” she said in a statement. “I look forward to hearing more about this proposal.”

The redevelopment plan being presented to local and state leaders to determine if it is possible to move forward, according to Bedrock and GM.

Whitmer did not weigh in. Her office said it was reviewing the proposal.

House Speaker Joe Tate, D-Detroit, whose district includes the RenCen and who has entered his

final month leading the chamber, said the plan is under review and he looks forward to continued dialogue.

Senate Majority Leader Aric Nesbitt, R-Porter Township, said his top priority in December is “saving the 50,000 Michigan jobs in the hospitality industry that will be lost if we don’t maintain the tipped credit. This needs to happen.”

What public money would fund at the RenCen

Dave Massaron, GM’s vice president of infrastructure and corporate citizenship, said GM wants to “do right by the city” and not let the complex deteriorate, be underutilized and become the next Michigan Central Station or American Motors Corp. headquarters.

“We figured out a path forward here that’s incredible,” he said, cautioning that another approach would be to demolish all of the towers. The project would preserve the skyline and, more im-

portantly, develop the riverfront, he said.

Bonner said when the private and public sectors team up, they can do “bigger and better things” than they can individually.

“It’s philanthropic from both us, and both of us were in a position to avoid this expense. But it’s so important to the city, we’re moving forward,” Massaron said.

The government funds, he said, would pay for infrastructure and public spaces at the site. Bonner echoed that point.

“Fundamentally, in almost every public-private partnership, the public funding supports the incredible uplift of the rebuilding (of) new infrastructure to just, I think, modernize what currently exists in an area,” Bonner said, citing utilities, heating, cooling and roads as examples. “That’s one category. The second category, which is also critically important, is just the public open space that is being provided. The public funding often can support taking that from, frankly, a good level to a great level, which ultimately bene-

fits the overall project.”

The conceptual plan calls for:

Removing the low-rise base of the complex and the two office towers nearest the river.

Redeveloping three towers into a mix of offices, hotel rooms and residential units while keeping the essence of the skyline.

Creating a new pedestrian promenade.

Turning reclaimed land into public space.

Reconfiguring the site’s flow to allow direct access to the buildings and the riverfront.

Bonner also suggested building an entertainment complex near the towers, which is not part of the $1.6 billion estimate.

Tax incentives under scrutiny in Lansing

Over the legislative session, Whitmer has unsuccessfully advocated for extending automatic disbursements to Michigan’s marquee business-attraction and site development fund — set to stop after this fiscal year — and restor-

ing job-creation tax incentives. Her administration is trying to land a massive semiconductor plant near Flint, which would require an unspecified but likely major commitment of state dollars. Michigan has already allotted $259 million, mostly to buy the land.

It is not clear if lawmakers as a whole have an appetite to help with the RenCen. A lot is in flux generally in Lansing, particularly within a House Democratic caucus where members are frustrated over various stalled bills.

A person familiar with the matter said supporters of the RenCen initiative are aiming to piggyback on larger conversations if there is consensus found on the Strategic Outreach and Attraction Reserve Fund, for example, or the “transformational” brownfield tax-capture program or another potential funding source. Bedrock, GM and others, for now, are likely to let the broader negotiations play out a bit before specifying which pot or pots of money could be set aside for the RenCen, the person said.

Many local leaders, including Detroit Mayor Mike Duggan and City Council President Mary Sheffield, praised the redevelopment vision. Bonner said he believes the project could gain financial backing from the city via the Downtown Development Authority.

“We can leverage our assets, such as the Detroit RiverWalk and Dan Gilbert’s personal investment, and plan for our continued growth — or retreat with negative consequences for Detroit and Michigan,” Detroit Regional Chamber President and CEO Sandy Baruah said in a statement. “For the Detroit Regional Chamber, there is no choice. We call upon Lansing to help realize the extraordinary partnership and philanthropic investment that is on the table.”

GM and Bedrock’s plan would aim to modernize the RenCen and ease public access to an expanded riverfront area. | DEAN STORm

GM and Bedrock’s plans include a new pedestrian promenade intended to allow direct access to the RenCen and Detroit’s riverfront. | BEDROCK/GENSLER/ROSSETTI

From Page 1

in assets and $1 million to $10 million in liabilities, hinting the reorganization is largely due to the loss of funding from CMS.

However, Pontiac General anticipates the layoffs to last fewer than six months as it works to come into compliance with CMS, the hospital said in a notice to the state last month.

“Pontiac General, however, believes that this exclusion from receiving Medicare funds is temporary and will last for less than six months, and thus the layoffs are not expected to be permanent,” the notice reads. “Pontiac General does not anticipate that the entire facility will be affected and that there will not be a complete shutdown of the facility.”

It’s unclear what units of the hospital will remain open.

Emails to the company’s CEO and majority owner Sanyam Sharma were not answered.

Pontiac General has a long history with operational failures and financial struggles.

Founded in the early 1900s as the first hospital in Oakland County, Pontiac General was owned originally by the city of Pontiac as a safety net provider. But the city sold it in 1993 and it became North Oakland Medical Centers. After 15 years of unprofitability, it filed for bankruptcy in 2008.

A group of 42 physicians and McLaren Health Care acquired the troubled hospital out of bankruptcy and renamed it Doctors’ Hospital of Michigan. Three years and zero profits later, McLaren sold its 35% stake to physician investors.

From 2009 to 2014, the Doctors’ Hospital lost more than $73 million. A $2 million judgment against the hospital and accreditation problems led to the physician investors filing Chapter 11 bankruptcy in July 2015.

Sharma entered the fray when his family’s private equity firm Sant Partners acquired the hospital out of its second bankruptcy. The Sharma family got the hospital by writing off a $1.5 million loan it had made to Doctors’ Hospital and assuming $13 million of the hospital’s outstanding debt.

The family made Sharma CEO of the reminted for-profit Oakland Physicians Medical Center LLC, doing business as Pontiac General Hospital, in 2016 at just 24 years old.

Under Sharma, Pontiac General faced more challenges.

Sharma was wrapped in a payto-play scheme in which parents paid the hospital — $400,000 in one lawsuit — for placement in the hospital’s family medicine residency program. It also faced employee complaints and failed state inspections.

The hospital also expanded its psychiatric ward in recent years to more than 100 beds. That, too, led to controversy as media reports allege the hospital was keeping patients against their will.

AUTOMAKER

From Page 3

A judge in the U.S. District Court for the Eastern District of Michigan granted BorgWarner’s motion to dismiss the case in August, deciding that the case should be taken up in Mexico City. BorgWarner had supplied the Mexican-made Mustang Mach-E from its plant in San Louis Potosi, Mexico. VCST filed an appeal in the Sixth Circuit Court of Appeals in September.

The lawsuit stemmed from complaints over volumes and sourcing strategy for a major component in the all-electric Mach-E SUV and GT version as well as for the Transit van, according to the lawsuit.

Belgium-based VCST had been

ATWATER

From Page 3

“We want to reconnect with Kroger, talk with the larger chains like (SpartanNash), Westborn Market to make sure we’re on their shelves. We want to take the next year to really maximize our exposure in Michigan. We want to get into (direct-to-consumer) through Amazon, too.”

Bruce said he didn’t plan to sell the company until he met Rieth.

“It has been a true labor of love to revive Velvet Peanut Butter and shepherd the brand for the past 16 years,” Bruce said in a statement. “Now is the perfect time for me to step away and turn this iconic Detroit brand over Mark for him to lead the exciting next chapter.”

Velvet Peanut Butter was established in 1937 in Detroit by truck driver Paul Zukerman who started

contracted by BorgWarner to make pinions for the Auburn Hills-based supplier’s integrated drive module. BorgWarner won a contract from Ford to supply the drive unit on the Mach-E SUV and GT version, the supplier announced in 2020.

VCST began supplying the pinions in 2019, then in 2022 won an award from BorgWarner to produce more than 1 million pinions annually for seven years, according to the lawsuit. VCST invested $16.8 million for tooling and machinery to support the program.

“(BorgWarner) knew and understood that VCST could not supply the more than six-fold increase without undertaking significant additional investment and capital expenditure,” according to the lawsuit.

by selling cases of peanut butter out of the trunk of his car. Zukerman sold the company in 1984. New ownership moved production out of state before shutting down operations, prior to Bruce taking over in 2008. Bruce re-established distribution in Michigan.

Rieth told Crain’s that some collaboration with his other brands may involve Velvet Peanut Butter.

“We love to cross-promote our brands,” Rieth said. “Something like a Lansing Brewing Co. peanut butter whiskey or peanut butter porter could be really fun …”

Making Velvet Peanut Butter well-known again across the area could be fun, too, Rieth said.

“I love the logo. It’s the three brothers, three boys on the label,” Rieth said. “I’m one of three boys so it’s near and dear to my heart. It’s cool branding. My goal is to have a building with a mural on the side featuring that logo.”

In late 2023, BorgWarner canceled its program with VCST “due to Ford’s ‘sudden’ in-sourcing of that program in house,” the complaint said.

Insourcing is also at the heart of the Rivian case. In that lawsuit and counter-claim, filed this past summer in Wayne County Circuit Court, Bosch said Rivian refused to pay $204 million in reimbursements after the automaker axed its e-motor supply deal, brought production in-house and left the supplier with stranded capital and a big hole in revenue.

At the same time, Rivian accused Bosch of “reckless failures” and blamed it for crippling production shortages at a critical point for the company, the lawsuit said.

Automakers regularly revise sourcing strategies, pulling work in-house or contracting to suppliers, depending on a host of factors such as labor costs and supply chain stability. “This is something that ebbs and flows in the 120-year history of the auto industry,” Stevens said.

The difference with EVs, estimated to have 30%-40% fewer parts than gasoline counterparts, is there is less opportunity to participate in the value chain, making the stakes higher. The incoming Trump administration’s aim to pull back on pro-EV policy could help auto companies recalibrate.

“I think it’s going to be much more manageable for suppliers moving forward,” Stevens said of the EV shift.

Ford Motor Co.’s decision to insource driveline production for the Mustang Mach-E led to a supplier lawsuit filed earlier this year. | FOrD mOTOr cO.

He questioned the state providing $250 million to the project while people drive on deteriorating local roads across the state.

“Does GM need it more or does your local county need it more?

at’s the question that we have to make an answer to here very soon,” Hall said at a news conference for his road-funding plan, calling it “insulting” for the automaker to seek public money as it transitions to a new headquarters in Bedrock’s Hudson’s Detroit project. “Why don’t they pay for it?”

Whether the public funding is worth it to Michigan taxpayers and Detroiters is a matter of spillover bene ts and context.

Posturing rarely dissuades tax breaks

History shows that political posturing against public funding for large-scale projects in Detroit rarely stands in the way of those projects receiving the public subsidies.

e Ilitch-backed District Detroit development, which included the $862.9 million Little Caesars Arena, has been awarded hundreds of millions in public funding, both for the arena itself as well as other developments and rehabs. A kick-started vision, spearheaded by the Ilitch family and mega-developer Stephen Ross, has been awarded close to $800 million in public funding on some $1.53 billion in proposed development and redevelopment surrounding the under-construction University of Michigan Center for Innovation — which also received a $100 million

state budget earmark.

Ford Motor Co.’s nearly $1 billion redevelopment of Michigan Central Station and a former Detroit Public Schools book depository building received $300 million in state, local and historic rehabilitation tax credits.

And the massive $3 billion Henry Ford Health redevelopment in New Center is receiving $231.7 million in tax revenue reimbursement.

e city of Detroit has an incredibly high tax rate on all structures — 86 mills — that is a deterrent for new development and, to an extent, redevelopment, said Tim Bartik, senior economist and expert in economic development policies at Kalamazoo-based W.E. Upjohn Institute for Employment Research.

“ e property tax rate on new development is so high that without some tax relief, it is very dicult for projects to make sense unless they have very high pre-tax rates of return, far in excess of what would be required with a more

normal tax rate,” Bartik wrote in an email to Crain’s. “ erefore, a subsidy that simply lowers the property tax burden on new development can be rationalized — you are simply paying back a portion of an external bene t of the project, which is that it generates a scal surplus for the city if there was no subsidy.”

Duggan sought to change this process, which in theory could reduce the need for public investment in projects like the Renaissance Center redevelopment, with his land value tax proposal in 2023. e plan, which has not come to fruition, would have lowered property taxes in the city and raised taxes on land in an e ort to disincentivize the holding of vacant land in the city.

e RenCen redevelopment vision calls for the demolition of two towers and a conversion of much of the remaining complex to residential condos and apartments. ere would be 300-400 residential units in the 100 tower while

expansion of public space on the Detroit riverfront.”

Hinging the plan on converting commercial space to residential is, to some degree, a gambit. ere’s a 20% vacancy rate in Detroit’s residential leasing market, Huez said.

“If you base the project on the current market, we just don’t need it at this moment,” Huez said. “We are going to ood the market and make the rent worse.”

the upper oors of the 73-story hotel tower in the middle of the complex would be converted to luxury residential housing.

Without a subsidy, the property taxes would make any for-sale residential spaces unsellable, said Jerome Huez, a Realtor and owner of Detroit real estate brokerage e Loft Warehouse.

Case in point: A 1,900-squarefoot condo in Brush Park that Huez is selling would have a $30,000 annual tax bill without public subsidy, he said.

“Any new project has to get a tax abatement to work or it doesn’t make sense,” Huez said.

Weighing the ‘spillover bene ts’

To make a project the scope of the RenCen redevelopment worthy of a public subsidy, the “spillover bene ts” to the community must signi cantly exceed the public subsidy costs, Bartik said.

Whether the RenCen redevelopment will do that is up for debate.

In praising the plan, Duggan cited the public bene ts it would provide.

“We’ve said since the very beginning of this process that we were going to make a realistic decision about preserving as much of the Renaissance Center as possible,” the mayor said in a statement. “Dan Gilbert’s vision gives us a path forward to preserve and reuse three of the towers and, at the same time, creates a beautiful

e project does, however, call for opening up the property to the riverfront and creating more public space in the city. e plan also includes a separate sports and entertainment space likened to the O2 entertainment district in London or Navy Pier in Chicago. But that portion of the redevelopment is not included in the initial funding and public funds ask.

Selling a future vision

Will the RenCen plan spur new development in the area? at’s critical to create spillover, Bartik said.

“ en the issue for projects such as proposed changes to the Renaissance Center is what this would do to public amenities in the area of the RenCen, and whether this would have strong odds of spurring more development in the area that has public bene ts,” Bartik said. “I do not know enough about the details to know whether that is plausible. Would this redevelopment make the area around the Ren Center more of a public asset for Detroit’s residents in terms of people wanting to visit there and walk around and enjoy the area and would other new development be spurred?”

Huez, though, said the plan is about vision and what collective leaders want Detroit to become.

“I think it’s more like a transition toward a vision of Detroit 10 years from now and creating a market, not justifying it from the current market,” Huez said. “ ere are lots of people, like retiring boomers, that want to live downtown. A cool place in a cool building with a waterfront view? I am optimistic.”

Whether state and city o cials share that optimism will, ultimately, decide the project’s fate.

The RenCen plan includes a separate space likened to the O2 entertainment district in London. | BEDROCK/GENSLER/ROSSETTI

shoulder to shoulder. I love that. Anytime Detroit is No. 1 at something is good. That’s a story I want to be a part of telling.”

The 43-year-old Stewart, the fourth-generation leader of the furniture retailer, is a big part of the current and next chapters in Gardner White’s story. Stewart was named CEO in March after about seven years as company president. Her parents, co-CEOs Barbara and Steven Tronstein, transitioned to executive chair and chair, respectively.

Stewart’s focus is on intentional growth and she recognizes the opportunity to expand doesn’t mean you have to. The Gardner White executive also puts the emphasis on the “family” in family-owned business and a spotlight on community.

Gardner White has been in business since 1912. Stewart joined the company in its 100th year of operation after a nearly 10year career in the clean energy sector, including a more than twoyear run with the U.S. Department of Energy.

She has helped oversee the widening of the company’s footprint in the last handful of years. After Art Van filed for bankruptcy and closed all its stores in 2020, Gardner White took over six Art Van stores, including the company’s former Warren headquarters at 6500 E. 14 Mile Road. Gardner White now has 13 retail stores with locations scattered across metro Detroit as well as in Ann Arbor and Saginaw and about 1,000 employees across the company.

There are always plans to expand, Stewart said, but she prefers slow growth. The company has opportunities to grow in-state and hasn’t had much discussion of moving into other markets, she said.

“Either you’re growing or you’re dead,” Stewart said. “It takes time to identify a new storm. We’re always looking and we’ll keep growing. I think our thing is deliberate strategic growth. We’d rather score consistently than have a big run and a lot of stagnation.”

Smart growth strategy

Stewart declined to disclose revenues. A Furniture Today report in late 2022 had Gardner White at $305 million in annual revenues.

Stewart isn’t the only Gardner White executive navigating their way through a new role. Brad Bailey succeeded Stewart as president, moving from Atlanta to take on the role. Maurice Edwards took on the role of executive vice president of operations in January. Fay DeVriese took became CFO in September.

“I love that a lot of them have moved to Detroit and are loving it,” Stewart said. “This narrative that you can’t recruit (to Detroit) isn’t real. I think that’s old. I’m recruiting. We’ve got a new (human resources) officer, new chief of staff — both in the past two years.”

Along with talent, Stewart looks for people who would be great

culture fits for Gardner White. Stewart calls the company nimble, able to adjust and fit in where necessary. Family is big for Gardner White, too.

“We’re highly relational. We know about everyone’s kids, dogs. We have dogs in our office sometimes,” Stewart said. “I think it’s a highly relational culture. But we are hard-driving and intense. It’s a bunch of people who are going to roll up their sleeves to get the job done.”

‘We get it done’

Getting the job done does require some juggling.

Stewart is mom to 4- and 6-yearold children. She said parenting and running a company are all about making the right choices.

“I don’t think parenting is easy with a job or without one,” Stewart said. “You make a series of choices and try to make the right ones along the way. I’d like my kids to be hard-working. They’ll grow up seeing two parents who work hard, so hopefully that rubs off on them in some way. My 4-year-old the other day said, ‘Don’t inter-

rupt me. I’m on a work call’.”

Stewart is one of few women in the furniture industry in her position. She’s not alone inside Gardner White, though. About 70% of the company’s executive team are women, according to Stewart. Both of the company’s lead buyers are women.

“This is a place where working mothers do well because there’s support and the acknowledgment that things come up,” Stewart said. “Yes, we have a hard-driving culture, but things are different when you have kids in school. A lot of the fathers are super involved, too. It’s a family business. My dad was a pretty hard-working dude, but he’d leave the office to make it to my track meets and then go back to work, or have dinner with us after school and then get back to it.

“We get it done, though. We run our kids around to birthday parties and sports. We try to sneak in a workout and maintain a relationship. My version of fun, too, is being involved in a lot of community stuff.”

Stewart serves on the board of directors for Business Leaders for Michigan, The Parade Co., Math

Corps, the Detroit Economic Club and American Home Furnishings Hall of Fame Foundation. Gardner White has a decadeslong partnership with the American Red Cross on blood drive challenges and a portion of sales from Serta mattresses goes to support the American Cancer Society.

Gardner White for three years at its Warren headquarters has hosted its Twinkle Town event that includes a Parade of Trees, 20 holiday trees decorated by local celebrities, businesses and influencers to benefit local charities. Guests vote on the best tree, with the winner getting $10,000 to donate to the charity of their choice. All of the charities will get a donation from Gardner White.

“I think being involved is good for business,” Stewart said. “Especially in Detroit. Collaborations with the community are important. We want to be the best company we can be, sure, but we also want people to know we’re here for them and that we support all these different causes.”

Business Leaders for Michigan President and CEO Jeff Donofrio commended Stewart for her involvement outside of Gardner White.

“(Stewart) is a dynamic leader both on our board and in the community,” Donofrio said. “She uses her experience, energy and influence to drive actions and make our state a stronger place for all.”

Betting on the Lions

That involvement now includes a partnership with the Detroit Lions.

The team added Gardner White as its official furniture and mattress partner in July. It’s a multiyear agreement that includes the biggest promotion in Gardner White history.

The Lions Super Sale promotion gives Michigan customers the opportunity for a rebate for in-store and online purchases made July 15-Aug. 14 and Sept. 2-8 if the Lions win the Super Bowl in February.

The Lions are 12-1 and for the

first time is the betting favorite to win the Super Bowl.

Stewart said sales doubled during the promotion, but she did not disclose the total dollar figure that would go out as rebates or if the company would pay the rebates out of its own pocket. She said she’s pulling for the team to get the job done.

“It’s funny because people ask if we really want (the Lions to win the Super Bowl). We wouldn’t have done the promotion if we didn’t really want them to win,” Stewart said. “We’re Detroiters, too. We’ll be doing pirouettes in the parking lot if we have to write those rebate checks. Our business will still be around if we have to write those checks.”

‘It’s an exciting time’

Two months after Art Van’s closing was announced, a Dallas-based firm bought it out of bankruptcy and turned more than two dozen locations into Loves Furniture stores. Then Loves filed for bankruptcy less than a year later and the stores closed again.

Gardner White has navigated its way through a changing furniture retail market. That market is projected to bring in about $264 billion in sales this year, with growth at 3.82% annually through 2029, according to online data gathering platform Statista.

Stewart won’t let her company get stagnant, though. Growth is her priority — and so is home.

“We’re solidified in the market,” Stewart said, “but I think there’s always room to grow, and there’s room for us to still grow in this market. Hopefully soon we’ll hit the market share I’m looking for. But the market is always going to evolve, and you’re going to duck and weave and change. I think at some point we’ll be more integrated technologically. Right now we’re digitizing a lot of our furniture — doing virtual staging for customers so they can see what a piece would look like in their home and things like that. It’s an exciting time.”

The Gardner White Furniture store in Shelby Township is one of 13 locations owned and operated by the Warren-based company. | JAY DAVIS

“We’re solidified in the market,” Gardner White CEO Rachel Stewart said, “but I think there’s always room to grow, and there’s room for us to still grow in this market.” | JAY DAVIS

His industry can be a rat race, but this executive just ran an actual marathon

Mark Woods, COO of Signature Associates Inc., has spent more than three decades in commercial real estate, an industry known for being a rat race. He’s worked for Ford Land Development Co., the real estate arm of Ford Motor Co., and Cushman & Wakefield, before joining Signature close to 20 years ago. But in early November the University of Michigan grad completed a race of a completely different kind: the New York City Marathon, a bucket list item for long-distance runners all over the world. And he did it for a good cause, inspired by a good friend currently battling cancer and a late family member who succumbed to the same disease. He spoke with Crain’s about where he sees commercial real estate heading, and how and why he ran 26.2 miles through five NYC boroughs.

Obviously it’s been a wild ride in commercial real estate the last five or so years, with the COVID-19 pandemic and interest rate surges crimping the market. What’s your read on what’s ahead in 2025 and beyond, broadly?

It’s interesting. If you’re in the business and somebody asks you, “How is the market?” it really does change depending on your perspective and what you’re doing. You could ask the same question to 10 different people and if all have a different focus of expertise, and we’re in different markets, I think the response would be completely different.

I think you would expect us, Signature Associates, that in our markets, for what we are doing — property management, advisory services and more specifically in brokerage — it’s actually remained pretty darn consistent and stable, both in activity, but in values and new transaction activity. While we are surrounded by stuff that maybe has not been that healthy, our markets have consistently been pretty healthy.

It does change based on your perspective, and our perspective is there’s been a lot of health in our markets and our core expertise. It’s notwithstanding that I think we’ve all experienced maybe the same weaknesses, maybe some fragility to the office market, which is probably the biggest hangover from COVID that we are still facing. The other stuff, whether it’s multifamily or retail, probably has to do more with the financing marketplace. On the industrial side, at least the values have been increasing with some consistency in a pretty aggressive pace and it’s been able to keep ahead of some of the financing struggles and challenges that the other products had.  Office space still has been hit pretty hard, with some signs of progress but also some indicating that it’s still struggling to recover. Where do you see the market heading?

I think that the market is heading towards the occupancy that’s demanded, or the presence that’s demanded, by the employers. That will start to cure some of the weakness in the office market. The other thing that’s going to help reestablish at least some improvement in the office sector, along with

By | Kirk Pinho

employers requiring a little more/all of the employees on premise. We just can’t do nothing any longer.

So if you’ve been sitting in your current environment trying to figure out what the best answers are for employee attendance and efficiency, once you demand their attention back on campus, (the issue) you’re likely to be faced with is, “I’m going to bring them here. I might as well make sure that the environment I’m bringing them to is fantastic, so let’s make sure we have all the amenities that would make them comfortable and productive.”

Some employers extend that all the way to pingpong tables and pool tables and things they can do for breaks on campus. But more importantly, just better, more updated, more collaborative, more community space, more cafes, more opportunities for people to be social in a way when they are conducting business.

We are all getting older and we are also surrounded by a younger workforce that is used to being able to sit side by side with each other with a wall that’s kind of created by a desk, a chair and probably a headset that allows them to silence everything else that’s around them.

The way we used to study was go to a conference room or stay home. You’d study in a very, very quiet, secluded environment. Today, they’re sitting at tables and comfortable seating and they’re just all around each other. I think that’s the kind of

environment that’s going to be more present going forward. And how does that impact our office market? Those spaces got to be created because those spaces weren’t necessarily a dominant part of our office environment 10 years ago.

Signature was founded 35 years ago, the company has grown to be one of the biggest brokerage houses in Michigan. What are the growth projections do you have the next year or two?  Short-term, I think industrial is going to be dominant for us. Investment sales I think, unlike our competitors, has been very stable and probably more rapid growth … It’s growing because the credit sale-leaseback environment has been and has remained very healthy, and that’s where our core focus and attention has been for the last several years. Now we’ve had an opportunity not only to make inroads into that sector, but repeat clients, and we are out there amongst many that are doing that, but we are doing it from kind of a leadership position, at least for the markets we are serving on that score.  You recently ran the New York City Marathon to raise money for Fred’s Team, the official running program of Memorial Sloan Kettering Cancer Center. Talk a little bit about that experience and your training.

This is my fifth marathon, but it felt like my first because the last one I ran was in 2004. As a

59-year-old guy, it might as well have been my first. I was looking out, doing what’s on my bucket list of what I want to accomplish, and I had run a marathon in every decade except my 40s, and I wanted to make sure I got a chance to do it in my 50s. So it’s, “The New York marathon is Nov. 3 and my birthday is Nov. 13: Let’s go!”

I started running early in the spring. I ran the Dexter-Ann Arbor Run and kind of validated myself and got out there on a half marathon. And that’s right around the time Bernie Ronnisch, a dear friend of mine from Ronnisch Construction, got diagnosed with glioblastoma, a brain cancer. My sister-in-law, my brother’s wife, had already passed away from a five-year battle with a glioblastoma tumor as well. So it was just a chance to combine the two; to get in great shape to do something I hadn’t done in a long time and kind of pay tribute to both of them. So I just started running. And that was the only way I could get into the New York marathon.

I don’t know how many people apply, but let’s say it’s 1 million people. Fifty-six thousand people finished. I think there was 60,000 people to enter that race. That was the way I got into it and I will tell you, it was so rewarding. The difference between just running for yourself and running for a cause, I can’t even describe how rewarding that was because every mile I was running, I’m thinking about them. And yeah, it might be a 26-mile run, and it might be 37 degrees out and it might be raining, but you know, that’s nothing compared to what they’re going through or what they went through. It was really, really rewarding. Love Bernie and his family, and I think we are all hoping that whatever cancer research and treatment they’ve already come up with will be to his benefit.

What was your time?

Three hours, 54 minutes, which is exactly what I had trained to finish the race in. The way I raised money, I basically had 20 miles of charted territory … and I would basically run by my friends’ houses, I would record myself on video running by their houses, I would send them a link — Running for Ronnisch, Kicking Cancer for Kara (as taglines).

I raised $44,000 running by peoples’ housings, sending videos and saying hi.

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2025 ECONOMIC OUTLOOK: NAVIGATING THE YEAR AHEAD

Experts suggest a bullish outlook focuses on opportunities in infrastructure, electrical vehicles and energy innovation

Bank of America national market experts and Detroit-based thought leaders convene at an executive breakfast discussion, moderated by Crain City Brand Group President Jim Kirk, for a discussion about strategic economic growth and investment opportunities in 2025.

PANELISTS

Antony E. Ghee

Managing Director, Chief Investment Of ce (CIO), Head of CIO Equity Investments & Portfolio Management Bank of America Corp.

Antony is the head of CIO Equity Investments & Portfolio Management. The Chief Investment Of ce (“CIO”) is the combined Chief Investment Of ce of Merrill and Bank of America Private Bank, and provides thought leadership on wealth management, investment strategy, asset allocation guidance, due diligence and portfolio management solutions. Antony is a member of board of directors of Managed Account Advisors (MAA), a wholly owned subsidiary of Bank of America, and serves on the board of trustees for the VNA Health Group (VNAHG), one of the nation’s largest nonpro t providers of home health, hospice and community-based care. Antony is an author and has published two books, “People Over Politics” (2022) and “Fraud, Lies & Greed” (2017). He earned a Master of Laws (LL.M.) in Securities & Financial Regulation from Georgetown University Law Center, a juris doctor (JD) degree from Howard University School of Law, and a Bachelor of Science in Business Administration with honors from Virginia Union University.

Kerry C. Duggan

Founder and CEO

SustainabiliD

Kerry a sustainability expert, CEO, corporate board director and former climate advisor to President Joe Biden. She founded SustainabiliD to guide CEOs, C-Suites and climate tech entrepreneurs on equitable solutions. Duggan serves on global corporate boards (Perma-Fix, Envergia, BlueGreen Water Technologies) and advisory boards, and is a faculty member at the University of Michigan. A key Obama Administration leader, she was deputy of the Detroit task force and continues to advise the Secretary of Energy and Governor Whitmer.

Tom Kondrat

Advanced Analytics Global Lead

Urban Science

Tom is the advanced analytics global lead for Urban Science, with over 25 years of automotive forecasting and predictive analytics expertise. As a global leader and inventor of many Urban Science analytics solutions, he is continuously in-step with industry trends and innovations to ensure Urban Science remains best-in-class at solving clients’ automotive retail challenges. Thomas has been a speaker at automotive industry and data analytics conferences, and is frequently featured in automotive news publications, podcasts and videos on various topics ranging from arti cial intelligence to electric vehicles.

KEYNOTE

Dwain Carryl

Managing Director and Senior Equity Analyst, Chief Investment Of ce (CIO) Bank of America Corp.

In this role, Dwain supports Bank of America Private Bank with analysis of equities in the nancial sector including banks, insurance companies, asset managers, digital payments and various specialty nance names. Dwain is co-manager of the CIO managed Dividend Equity Portfolio investment solution, as well as the Bank of America Private Bank CIO managed Dividend Income common trust fund.

Previously, Dwain was an analyst at GoldenTreeAsset Management, a multibillion credit hedge fund, where he covered xed income securities for the nancials industry.

Dwain was also a vice president in the equity research department at Merrill covering large-cap banks, and an associate analyst at Banc of America Securities covering the specialty nance space. Dwain began his career at Sidoti& Company covering smallcap homebuilders and building materials stocks. Dwain earned his bachelor’s degree from Harvard College, and his master’s degree in Business Administration from Yale University.

By Brooke Bilyj | Crain’s Content Studio

As the sun rose over Ford Cove on Lake St. Clair in Grosse Pointe Shores, local business leaders gathered inside the historic Edsel and Eleanor Ford House for Bank of America’s 2025 Economic Outlook: Navigating the Year Ahead, presented in partnership with Crain’s Content Studio.

Featuring analysis from Bank of America’s national economic experts and insights from local thought leaders, the executive breakfast discussion tackled key trends, challenges and opportunities that could shape the economy in the coming year.

The speakers — with a nod toward the Ford family’s impact on the transportation

industry — painted an optimistic, forward-looking economic outlook. The value of Michigan’s bountiful natural resources, such as the scenic waterways surrounding the venue, emerged as a central theme, underscoring the state’s vital role in shaping a cleaner, more sustainable future.

Navigating market dynamics

With the event taking place less than a week before the presidential election, political uncertainty informed the conversation. In his keynote presentation, “Harnessing the Power of Economics,” Dwain Carryl, managing director and senior equity analyst, Chief Investment Of ce (CIO), Bank of America Corp., illustrated that market performance

historically depends more on the economy’s health than election results. Market volatility is typical during election cycles, although these trends tend to ease toward the end of the year as uncertainty fades, Carryl noted.

“You are best expressing your political views at the ballot box and not in your investment portfolios because the market is fairly agnostic,” Carryl said.

Instead of basing his market projections on elections, Carryl pointed to the Federal Reserve’s decision to cut rates in September when the stock market was near an all-time high. “When the Fed has cut rates in the past at or near market all-time highs, the S&P has performed quite well,” he said.

Dwain Carryl, managing director and senior equity analyst, Chief Investment Of ce (CIO), Bank of America Corp., presents “Harnessing the Power of Economics” as his keynote speech.

Likewise, “low single-digit year-overyear CPI (Consumer Price Index) has historically been a sweet spot for the performance of the S&P 500,” he said. Speci cally, “2-3% has been the best CPI environment for equity markets to thrive.”

Bank of America’s forecasted 2025 CPI in ation of 2% leans into that sweet spot, representing positive market potential in the year ahead.

In recent quarters, the “Magni cent 7” top-performing stocks led earnings growth while the rest of the S&P 500 failed to contribute — at least, until Q4, when the other 493 showed positive aggregate growth for the rst time in two years.

Antony E. Ghee, head of CIO Equity Investments & Portfolio Management at Bank of America, notes the importance of exploring new technologies and infrastructure.

“Key to our bullish outlook for U.S. equities is a broadening of what has been a fairly narrow market, both in terms of earnings growth and market leadership,” Carryl said.

Highlighting the rewards of a long-term “total return mindset” when investing across a diversi ed portfolio, compared to the pitfalls of playing the short game, Carryl stressed the cyclical nature of bull and bear markets.

“Recoveries follow the downturns,” he said, “so in the downturns you shouldn’t be panicking. That’s when you should be sharpening your pencil.” Carryl recommended focusing your investment strategy rather than pulling out of the market.

Within that bullish outlook, where do the best investment opportunities lie?

“Infrastructure remains a long-term theme,” said Carryl, citing investment

The “2025 Economic Outlook: Navigating the Year Ahead” panelists explore the role of market dynamics and investment opportunities in key markets such as energy transition and infrastructure.

Tom Kondrat, advanced analytics global lead for Urban Science, eyes signi cant investment opportunities in automotive electri cation.

opportunities to upgrade aging U.S. infrastructure, especially to support energy transition. Projections suggest that $181 trillion will need to be invested in energy-related infrastructure, technology and products between now and 2050 — presenting massive opportunities for long-term investors.

“The U.S. power demand is forecasted to grow nearly 38% through 2040. This is more than four times the total increase in power demand from 2000 to 2020,” Carryl noted. “The energy grid will have to be increased signi cantly to fully harness the power of AI.”

Exploring sustainable investment opportunities

Building on the investment opportunities Carryl introduced in his keynote presentation, Crain City Brand Group President Jim Kirk moderated a panel discussion exploring other trends at play as leaders navigate the economy ahead. With expertise spanning multiple industries across diverse markets, the panelists agreed that investment opportunities abound in energy transition and decarbonization, with Michigan’s natural resources and engineering capabilities spurring innovations in renewables, electric vehicles (EV) and critical supply chains.

From the presentation

Infrastructure remains a key theme. The U.S. has a widely acknowledged aging infrastructure base that will require signi cant public and private investment. Below at left, despite challenging macroeconomic conditions and weakness in the listed markets, unlisted infrastructure continues to exhibit steady return performance. Below at right, projections suggest a total of $181 trillion will need to be invested between now and 2050 on energyrelated infrastructure, technology and products across supply and demand side solutions.

After peaking in mid-2022, corporate margins came under pressure. In many regions, operating costs were impacted partly by elements such as wage pressures from tight labor markets. Meanwhile, heightened geopolitical tensions played a role in volatile commodity prices, also affecting global supply-chains. More recently, pro t margins have started to recover, led by the U.S.

“Michigan is home to about 20% of the world’s surface-level fresh water supply, and about 45% of the people in Michigan rely on those freshwater sources,” said Antony E. Ghee, managing director, Chief Investment Of ce (CIO), head of CIO Equity Investments & Portfolio Management, Bank of America Corp., acknowledging the nearest example right outside the window. But infrastructure failures like the issues that plagued Flint continue to threaten these natural resources, he said, forcing Michigan to explore new technologies and infrastructure improvements to fully capitalize on these assets.

The “landscape” of investment opportunities in the energy sector has expanded, creating a range of new innovations, noted Kerry C. Duggan, founder and CEO of SustainabiliD, a strategic advisory rm focused on environmental issues, programs and policies. “It’s not just oil and gas anymore,” she said. “Now, it’s a lot more complicated because there’s such a variety of technologies,” spanning wind, hydro, solar, hydrogen, nuclear and more.

Other opportunities lie in EV adoption, leveraging Detroit’s legacy of automotive innovation. When it comes to electri cation, “the momentum is strong,” said Tom Kondrat, advanced analytics global lead at Urban Science. After a slow start this year, “EVs are back up again and growing,” with national market share around 9%, said Kondrat, who has more than 25 years of automotive forecasting and predictive analytical experience.

“Let’s

Although “Michigan is lagging behind the curve,” with market share around 4.5%, “EV sales in Michigan are up about 55% this year.”

Kondrat sees tremendous opportunity ahead as renewables hit their stride while the automotive sector turns toward electri cation. “I see a bright future with all of that coming together,” he said.

Playing to Michigan’s strengths

As environmentally-conscious businesses continue looking for ways to lower their

The Edsel and Eleanor Ford House.

make this stuff here because we’re good at making stuff here,” says Kerry C. Duggan, founder and CEO of SustainabiliD.

carbon emissions, “decarbonization presents a tremendous opportunity for investment, in that there’s not going to be a one-size- ts-all approach,” said Bank of America’s Ghee. Because of that, as more diverse energy sources come online, storing and transporting power will be critical for sustainability.

“One of the biggest issues today is that we don’t have the greatest storage capacity, and we lose a lot in transmission, so we lose a lot of capability,” Ghee said.

According to research conducted by

Resolutions for resilience

What should organizations do to stay resilient in 2025? The keynote speaker and panelists at Bank of America’s 2025 Economic Outlook: Navigating the Year Ahead shared their advice for other business leaders.

“Key to our bullish outlook for U.S. equities is a broadening of what has been a fairly narrow market, both in terms of earnings growth and market leadership.”

Dwain Carryl, managing director and senior equity analyst, Chief Investment Of ce (CIO), Bank of America Corp.

“Remain exible and open-minded to what’s coming. Every time there was a change [in history], it required a structural shift in terms of the skills that were required. We’re going to require people with a different skillset, so one of the best things that the people of Michigan can do is position its workforce for that new environment.”

— Antony E. Ghee, managing director, Chief Investment Of ce (CIO), head of CIO Equity Investments & Portfolio Management, Bank of America Corp.

“Having a culture of innovation [is critical.] A lot of innovation doesn’t happen at the top of a company; it happens in the middle or closer to the entry level. Having a culture that can promote that and reward that is exciting for the whole spectrum of employees.”

— Tom Kondrat, advanced analytics global lead, Urban Science

“Ensure that your chief sustainability of cer is talking to your chief nancial of cer. I started noticing they didn’t know each other, and quickly discovered they don’t know their government relations team, either, so get your houses in order and line up your CSO, who’s going to have an eye on moving technologies and what’s appropriate for you.”

— Kerry C. Duggan, founder and CEO, SustainabiliD

Duggan’s rm, Michigan leads the Midwest in energy storage capabilities, giving the state an advantage.

“We’ve got to play to our strengths, and energy storage is certainly an opportunity,” she said. “American competitiveness is highly dependent on our critical materials. If you’re not paying attention to that, you’re not paying attention.”

As power demands multiply — driven by EV adoption, AI expansion and the super-capacity processors we all carry in our pockets — Michigan’s contributions

to grid improvements could be extraordinary.

“We have a planet that’s going to continue to need more energy, so my thesis is: Let’s make this stuff here because we’re good at making stuff here, and let’s deploy it to those who want the same quality of life and standards and views like this,” Duggan said to a round of applause.

“That energy and power is going to have to come from somewhere,” Ghee agreed. “Therein lies the investment opportunity.”

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