Crain's Detroit Business, December 11, 2023 by Crain's Detroit Business

CRAINSDETROIT.COM I DECEMBER 11, 2023

Johnson says he’s in charge at Piston Group

HOUSING SUPPLY

Case centers on minority certification dispute By Dustin Walsh

Realtor Andrea Carollo (left) and interested buyer Samantha Robinson tour a home for sale in Ferndale on Nov. 17. | NIC ANTAYA

Market frustrates first-time buyers Low inventory and selection, today’s high interest rates and higher home prices are a ‘trifecta of terror’ | Begins on Page 8

Vinnie Johnson contended he is the true leader of his automotive supplier Piston Group in contentious testimony in Wayne County Circuit Court last week. The former Detroit Pistons guard is suing the Michigan Minority Supplier Diversity Council over the group’s action to remove minority certification status from Piston Group on the grounds that while Johnson is the owner, the company is run by white men. “There’s one chief in charge. I’m the guy. That’s me,” Johnson said on the stand while being cross-examined by MMSDC’s attorney, Khalilah Spencer, a partner at Detroit law firm Honigman LLP. “I started (this business) from scratch and don’t tell me that I don’t run this business … It’s my company. I run my company.” The bitter dispute between the country’s largest Black-owned automotive supplier and the nonprofit group in charge of certifying the region’s minority

Vinnie Johnson, former Detroit Pistons guard and owner and chair of auto supplier Piston Group | PISTONS GROUP

businesses has been ongoing for three years. To be certified, a company must be 51% majority-owned by a person of color, operate independently and be actively managed in the day-to-day operations by a person of color, according to the council. Daily management is the key point of contention in the Piston Group case. See JOHNSON on Page 15

Midtown to get Marriott’s ‘apartment-style’ concept Rental building to be converted for longer-term travel stays By Kirk Pinho

The first U.S. location of Marriott International Inc.’s new foray into what it calls “apartment-style accommodations” for travelers is coming to Detroit. Bethesda, Md.-based Marriott is bringing Apartments by Marriott Bonvoy to The Plaza, the former Hammer & Nail office building on Woodward Avenue that was redeveloped into apartments by Detroit-based devel-

oper The Roxbury Group in 2016. As a result of the change, the 72-unit apartment building is being converted into about 92 units for longer-term travel accommodations. Leases for the existing apartment units will be honored, said David Di Rita, principal of The Roxbury Group. The conversion is expected to be complete next year and set to involve reconfiguring some of its two-bedroom units.

Di Rita said there has been “a continuing evolution of the marketplace” as he has fielded inquiries from various operators of less traditional apartment/ hospitality companies — think Sonder, Roost and Mint House and others — about converting The Plaza, which is just north of Detroit’s Whole Foods Inc. grocery store at Woodward and Mack avenues. See MARRIOTT on Page 16

The Plaza apartment building on Woodward Avenue in Detroit is being turned into a new Marriott International Inc. concept for travelers. | THE ROXBURY GROUP

CONVERSATION State’s top utility regulator sees 100% clean energy goals as ‘ambitious.’

OFFICE SPACE Law firm leaving longtime home in Southfield for Royal Oak.

REAL ESTATE Bedrock talking to Apple, Lego, Levi’s as possible tenants, CEO says.

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Lions CEO on Ford Field, how special the team could be By Jay Davis

Detroit Lions President and CEO Rod Wood looked to the future Dec. 5, weighing in on the NFL Draft in Detroit next April, prospects going forward for the team’s Allen Park practice facility and Ford Field — and whether the stadium might ever host another Super Bowl.

On Detroit hosting a Super Bowl It’s the dream of most football fans to see their home team play in the Super Bowl. It would be even better if that team advanced to the Big Game in a season it was slated to be the host city. Wood, speaking during the Crain’s Detroit Business Power Breakfast, told the audience of about 250 people at the Detroit Athletic Club that he doesn’t see that happening for his team. He doesn’t believe the NFL’s premier game will ever be played in a cold weather city again. “I think the plan is to keep the game in Los Angeles, Miami, Las Vegas,” Wood said, chatting on stage with Crain Communications Inc. President and CEO KC Crain. “The suites in Vegas for the Super Bowl are $1 million.” Detroit is one of 15 NFL markets

2 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

Crain Communications Inc. President and CEO KC Crain (left) and Lions president and CEO Rod Wood at the Dec. 5 power breakfast. | BRETT MOUNTAIN

to have hosted a Super Bowl, serving as the site of Super Bowl XL in 2006. The New York metro area, Indianapolis and Minneapolis are the other “cold weather” areas that have hosted the game. Super Bowl LVIII is set for Feb. 11 in Las Vegas.

On finding the right mix Wood also touched on the Lions’ current success, the performance of head coach Dan Campbell and General Manager Brad Holmes. Wood, who joined the Lions as

team president during the 2015 season, directs all football and business operations. He reports directly to team owner and chair Sheila Ford Hamp. Wood acknowledged the struggle to right the ship after decades of losing seasons, citing the February 2018 hiring of coach Matt Patricia away from the New England Patriots as a move “not for the better.” Wood said the Ford family, owners of the team since 1963, want to win as badly as anyone. He has a long-standing relationship with the Ford family. Wood in 2007

was named president and CEO of Ford Estates LLC, which provides financial and lifestyle advice to the Ford family. In 1999, he took a role as executive vice president of wealth management for Delaware-based Wilmington Trust Co. Wood also previously held various executive roles at Comerica Bank. “I’ve known the Ford family for a long time. Despite public perception, no one wants to win more than them. They watch the games as fans first and owners second,” Wood said. “There’s been a bit of a struggle to get things right. A lot of it is getting the right leadership at coach and GM. We’ve certainly swung and missed a few times, but it’s not from a lack of trying or a lack of support from the Ford family. “There’s a lot of pressure here. Sports are different from anything else I’ve ever done. So many people get invested financially and emotionally into what happens every Sunday. You can’t shy away from that. (Holmes) had never been a GM or a pro scout. (Campbell) had never been a full-time head coach, never a coordinator. So those were seen as pretty unconventional hires. ...”

On Campbell’s leadership style Campbell, in his third year as

head coach of the Lions, is at the helm of the team while Detroit has its best start in more than 60 years. The Lions current 9-3 mark is the team’s best since it started 10-2 in 1962. The team has a three-game lead in the NFC North over Green Bay and Minnesota. A strong finish would give the Lions their first 10-win campaign since 2014 and 10th since the team was founded in 1934. Detroit is on the verge of hosting its first playoff game since 1991. The Lions last made the playoffs in 2016 and last won a championship in 1957. Wood said the team knew what it was looking for when it began the search for a new coach following the 2020 season. “The thing we were looking for is someone who’s a leader of men. Ultimately, that’s the head coach’s job,” Wood said. “Sitting in team meetings, coach’s meetings, (Campbell) has a command I’ve never seen before. I think it’s authentic because he played. He’s a tough guy who knows what the players are going through. The players have an immense amount of trust in him and it shows on Sundays. “I wasn’t prepared for the ‘biting kneecaps’ comment. But that’s (Campbell). He’s authentic. See LIONS on Page 16

Laws aim at violence on health workers Industry largely backs the bills but says they’re unlikely to curb attacks By Dustin Walsh and David Eggert

Law firm Brooks Kushman PC is moving to this downtown Royal Oak building from its longtime Southfield office. | COSTAR GROUP

Law firm moving to Royal Oak from longtime Southfield home By Kirk Pinho

Brooks Kushman PC is leaving its longtime Southfield office for downtown Royal Oak. The Southfield-based law firm is substantially downsizing from about 46,500 square feet in the Southfield Town Center, where it had been since 1990, into a little under 13,000 square feet in the building at 150 W. Second St. It becomes the latest law firm to relocate in Oakland County, following Dykema Gossett LP’s pending move from Bloomfield Hills to a new building in downtown Birmingham, as well as

Dinsmore & Shohl LLP moving to a new Troy office in PNC Center. The space reduction was caused by a shift toward remote work that the law firm was noticing even before March 2020, but it was “accelerated” by the COVID-19 pandemic that caused an upheaval in workspace trends, said Sangeeta Shah, CEO of Brooks Kushman. Most attorneys had started working a day or two per week remotely before the pandemic started, and non-attorney staff have had little interest in being in the office as well, Shah said. Although the firm will save an

undisclosed amount of money with a smaller footprint, Shah said that was not the driving force behind the decision to downsize and relocate. “One of the things we pride ourselves on is being agile and focusing on being responsive to the upcoming needs of not just our clients, but our team,” Shah said. “So what we felt was we were going to be committed to a hybrid work model going forward, and that meant that we needed to change the nature of the space we’re working in.” That includes things like eliminating traditional corner offices and focusing more on open, col-

laborative work environments with things like huddle rooms and small team meeting rooms, for example. Brooks Kushman anticipates being fully operational in its new space in the next few weeks. The Southfield office employs about 125, and the office has 2025 people in it most days, according to a spokesperson. That number is expected to increase with the new office location and surrounding amenities within walking distance. Southfield-based Advocate Commercial Real Estate Advisors LLC was the brokerage firm on the deal.

Roughly 203 hospital workers were injured last year in violent attacks from patients or their families across McLaren Healthcare’s 14 hospitals in Michigan. That total represented 30% of all workplace injuries for the health care system in 2022 — a growing trend throughout the industry. Gov. Gretchen Whitmer last week signed bills that would raise the fines for assaulting a health professional or a medical volunteer. But while the industry widely supports the legislation, it’s unlikely to curb the violence. “I appreciate the legislation; it recognizes that this is a growing problem,” said Dr. Justin Klamerus, executive vice president and chief medical officer for McLaren. “But we’ve all heard the issues on air travel, which have clear federal laws. You can quickly lose your flying privileges and that hasn’t stopped the issue. We don’t have the privilege to not see patients, so this is not the end. We all need to do our work to provide a safe environment for our patients and our employees.”

Pandemic, panic and pain Klamerus said while workplace violence in health care settings has been on the rise for a decade, it was the COVID-19 pandemic that put it front and center. See VIOLENCE on Page 17

Morouns bid $38.2M for 8 Yellow trucking terminals By Kirk Pinho

The Moroun family is attempting to buy eight Yellow Corp. trucking terminals out of bankruptcy. A Dec. 4 filing in U.S. Bankruptcy Court for the District of Delaware says the Morouns’ Detroit-based real estate company Crown Enterprises LLC has offered $38.2 million for terminals in Lake Havasu City, Ariz.; Flagstaff, Ariz.; Ventura, Calif.; Fort Myers, Fla.; New Orleans, La.; Albuquerque, N.M.; Gallipolis, Ohio; and El Paso, Texas. In addition, four terminals in Michigan are set to go to new owners if the bankruptcy court signs off on the sales. Yellow’s terminal at 27411 Wick

Yellow, a nearly century-old company, filed for Chapter 11 bankruptcy protection in early August, citing a severe liquidity crisis. Road in Romulus is slated to be sold to Richmond, Va.-based Estes Express Lines as part of the company’s $248.7 million bid for 24 terminals. Other proposed sales include terminals at 1830 Calkins Road in Gaylord, plus 2180 Chicago Drive SW in Wyoming, being sold to

Johns Creek, Ga.-based Saia Motor Freight Line (Nasdaq: SAIA) as part of its $235.7 million offer for 17 Yellow terminals; and the terminal at 1059 Hurst Road in Jackson going to Phoenix, Ariz.based Knight-Swift Transportation Holdings Inc. (NYSE: KNX) as part of its offer of $51.3 million for 13 Yellow terminals, according to the filing. Overall, the potential sales would bring in about $1.9 billion for close to 130 properties around the country. The filing says Yellow still has 46 properties plus some leased properties that remain to be sold at auction. Crown Enterprises declined comment. See TRUCKING on Page 15

The Moroun family is poised to buy this former Yellow Corp. terminal in Ventura, Calif., out of bankruptcy as part of a $38.2 million sale that includes eight terminals in all. | COSTAR GROUP DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 3

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Bedrock talking to Apple, Lego, Levi’s, CEO says T here has been no shortage of shakeups in the downtown Detroit retail landscape over the last couple of years. Tenants have come, tenants have gone, and others are in the works — including some big names that Bedrock LLC’s CEO Kofi Bonner verified recently. But to be clear, he says these are not signed leases — retailers Kirk Pinho merely Detroit’s most powerful landlord has been in discussions with for possible downtown stores. The owner of the company Bonner runs, Dan Gilbert, remarked Nov. 30 during a wideranging conversation in downtown Birmingham that Bedrock continues to try to recruit an Apple store downtown — something I’ve reported as recently as this spring, and also something that’s been discussed (to no avail) for literally over a decade. “We’re getting close on Apple, but we’re not there yet so don’t print that,” Gilbert told the crowd. Gilbert also said “Levi’s is opening up a store” and “we’ve even got Lego coming in.” Bonner did not say leases have been signed with new tenants

Bedrock is seeking big-name tenants for some of the open store spaces in Detroit. | GOOGLE MAPS

Gilbert mentioned (except Savage X Fenty), but he did say there have been discussions to bring a Lego store downtown as well as a Levi’s denim store. Two of the others of note Gilbert mentioned were Alo Yoga, a yoga apparel company, as well as Lush, the cosmetics brand. What’s also particularly noteworthy is not so much that Gilbert, who is known to at times speak a bit extemporaneously, talked openly about the retailers Bedrock is trying to lure in behind-the-scenes discussions, but more that Bonner, who is more measured, confirmed them. “As you know, it takes a dentist’s forceps to drag them from us,” Bonner said, referring to the

identities of targeted tenants, when I asked him about Apple, Lego and Levi’s in particular. “We’re in active conversations in varying stages ... There are a number of really exciting tenants, and some he didn’t name — believe it or not,” Bonner said with a chuckle. The downtown retail landscape has seen ups and downs the last two years, with Woodward Avenue stores like Madewell, Détroit is the New Black, Le Labo (which has since reopened on Library Street), Under Armour and John Varvatos shuttering. However, companies like Greyson Clothiers, Gucci and Rihanna’s Savage X Fenty, among others, have set up shop as well. Oh, and don’t forget Chipotle.

Eastern Market property long targeted for redevelopment razed By Kirk Pinho

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A group of buildings in the Eastern Market area that has drawn complaints from nearby tenants over their poor condition has been demolished under a consent agreement with the city of Detroit. Dev Detroit 1346 Gratiot LLC owns the property where the buildings are being demolished. The entity was sued by a tenant across the street, meat distributor KAPS Wholesale, and the city of Detroit over its condition. Dev Detroit 1346 Gratiot is a partnership entity between Detroit real estate developer Develop Detroit Properties Inc. and an unaffiliated investor-partner, said Sonya Mays, president and CEO of Develop Detroit, which has proposed a mixed-use redevelopment project known as The Hive for the site. The property at the southwest corner of Russell Street and Gratiot Avenue, which was previously emblazoned with “Busy Bee Hardware” and appeared to be a warehouse for the now-shuttered hardware store across the street,

has for years been proposed for demolition to turn into a largescale mixed-use development with what ultimately would be more than 200 residential units, plus retail and other space. The Hive project, formerly known as the Eastern Market Gateway, went before the Detroit Planning Commission and City Council last summer seeking reinstitution of a lapsed planned development zoning classification. In its complaint, the city said it issued “numerous” blight violations for over a year to Develop Detroit and that the buildings “have suffered significant structural deterioration, and have become a blight to the surrounding neighborhood, as well as a danger to the health and safety of passersby.” The complaint also claimed the owner repeatedly failed to correct issues cited in blight tickets dating back to at least April 2022. Those tickets show as paid, according to city records. Develop Detroit says the tickets were all sent to an incorrect address and were eventually dismissed by the city for that reason.

The city dismissed its Wayne County Circuit Court complaint as a consent agreement was reached requiring Dev Detroit 1346 Gratiot LLC to clear overgrown vegetation; remove debris from the site; and hire a pest control company to exterminate any vermin, and use things like trapping or baiting as recommended by the company to keep them from reappearing. Also as part of the consent agreement, the city agreed to defer demolition of the buildings until Nov. 27. Dev Detroit 1346 Gratiot LLC was also required to install 8to 10-foot fencing around the site as well as a protective canopy along Gratiot to protect from falling debris. Under the consent agreement, Dev Detroit 1346 Gratiot was required to hire a demolition contractor by Dec. 4, with demolition required to begin by Jan. 18 and be completed by July 18. The demolition is ahead of schedule, as the property was razed in the past week and the site now is being cleared. The KAPS lawsuit remains ongoing.

BorgWarner names successor to retiring CFO By Crain's Detroit Business

BorgWarner Inc. announced a CFO transition on Dec. 5. Executive Vice President and Chief Financial Officer Kevin Nowlan plans to retire after 28 years with the Auburn Hills-based automotive supplier (NYSE: BWA). Craig Aaron, BorgWarner’s vice president and controller, will succeed Nowlan, effective March 1. Nowlan, 52, will remain with the company in an advisory capacity through April 1 to help with the transition. “Kevin has played an instrumental role in all of BorgWarner’s recent major strategic initiatives, ranging from the acquisition of Delphi Technologies to the creation and execution of our Charging Forward strategy to the spin-off of PHINIA,” President and CEO Frédéric Lissalde said in a news release. “These actions have fundamentally transformed

Kevin Nowlan (left) will retire as CFO of BorgWarner and Craig Aaron will succeed him. | BORGWARNER

BorgWarner and have driven significant shareholder value. Kevin has built a strong finance organization with a commitment to financial discipline that we expect to support BorgWarner’s continued success.” Aaron, 46, joined BorgWarner in 2007 and has held a variety of positions in accounting and finance, including controller, treasurer and vice president of finance for BorgWarner Morse Systems. Prior to joining BorgWar-

ner, he worked at Federal-Mogul Corp. and Deloitte & Touche LLP. Aaron has a bachelor of arts degree in accounting from Michigan State University and is a certified public accountant. Lissalde said in the release. “(Aaron) very adeptly helped to oversee management of our balance sheet during challenging market environments over the last few years, while simultaneously finding ways for the Company to support the financing of key acquisitions critical to the success of Charging Forward,” Lissalde said in the release. “Most recently, he was deeply involved in helping successfully execute the PHINIA spin-off by leading the separation of the financial operations of the two companies. We’re confident Craig has the right skills, coupled with his deep knowledge of BorgWarner and our industry, to help carry us into our next chapter of growth.”

GM taps Massaron to head economic development, real estate

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David Massaron is leaving Wayne State University to become the chief economic development and real estate officer for General Motors Co. Massaron, who is currently WSU’s CFO and chief business officer, plus the treasurer on the board of governors, is starting in his new role on Jan. 2, according to a release. He has been at Wayne State since October 2021, according to his LinkedIn profile. Previously, Massaron, a graduate of Michigan State University and William and Mary School of Law, was the state budget director under Gov. Gretchen Whitmer from January to September 2021 and served in Detroit Mayor Mike Duggan’s administration at varying times as CFO, COO and senior counsel from August 2014 to December 2020. “David’s unique experience serving in Michigan across the state, city of Detroit and the private sector will be invaluable to the work GM is doing in our

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saron’s hiring. Before entering the public sector, Massaron was principal for the Detroit-based Miller Canfield PLC law firm from 2007-2014 and was an associate with Detroit-based Dickinson Wright PLLC beginning in 2004. Massaron joins GM at a time when it continues to grapple with, among other things, how to handle the five-skyscraper portion of the Renaissance Center office and hotel complex it owns through an affiliate on the Detroit riverfront. The RenCen’s 500 and 600 office towers are owned by Newark, N.J.-based utility company Public Service Enterprise Group Inc. (NYSE: PEG)

Massaron has been state budget director and served at varying times for Detroit Mayor Mike Duggan. hometown and across the many communities where we live and work,” Craig Glidden, GM’s EVP for legal, policy and cybersecurity and corporate secretary, said in the release announcing Mas-

GM’s occupation of its downtown campus has been sparse over the pandemic as hybrid work has remained prevalent. GM, whose workspace policy was referred to as “Work Appropriately,” has gone back and forth on its return to the office roll-out. But on Dec. 5, GM CEO Mary Barra sent a memo to employees mandating a return to the office on Tuesdays, Wednesdays and Thursdays each week if employees live within 50 miles of an office. GM’s portfolio locally also includes the Warren Tech Center, which recently finished a massive $1.5 billion renovation that started in 2015. The automaker has been moving some employees out of the RenCen to Warren throughout the pandemic, but the precise number is not known.

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DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 5

EDITORIAL

New university leadership an opportunity T he appointment of Kevin Guskiewicz as Michigan State University’s new president offers a big and rare opportunity for Michigan. It means the state’s Big 3 research universities — MSU, the University of Michigan and Wayne State University — now all have relatively new permanent presidents with little tie to scandals and squabbles of the past. Santa Ono arrived at the University of Michigan from the University of Vancouver a little over a year ago. Kimberly Andrews Espy took the Wayne State presidency in August after serving as provost at the University of Texas at San Antonio. Guskiewicz will start at MSU in March after four years as the chancellor of the University of North Carolina-Chapel Hill. They all have come to Michigan mostly as outsiders to the state, which offers an opportunity for new ways of thinking, an opportunity to shed old habits and forge a renewed spirit of cooperation. They are all close in age, around 60, which means they have deep experience but have years left to run. They share more than that, all coming from biomedical backgrounds. Espy and Guskiewicz are both neuroscientists by training, and Ono an ophthalmology professor and microbiologist. It’s a good time for new faces and new thinking at the top at these critical institutions.

Kevin Guskiewicz (left), Kimberly Andrews Espy and Santa Ono. | ASSOCIATED PRESS, WAYNE STATE UNIVERSITY AND UNIVERSITY OF MICHIGAN

Over the past decade, governance at all three universities has sometimes been acrimonious, especially at MSU and WSU. MSU and UM are both still recovering from sex abuse scandals tied to university doctors that have cost each institution hundreds of millions of dollars. We hope healing continues on all those fronts, and that the new leaders help that process move forward. Michigan has few drivers of its economy as large and influential as these universi-

ties. They are some of the largest employers in the state, produce vital research that advances knowledge and creates businesses and growth, train the next generation of talent, and are one of our strongest magnets for attracting the best and the brightest from outside Michigan. The three universities since 2006 have made up the University Research Corridor, an effort modeled on North Carolina’s famed Research Triangle of UNC, Duke University and North Carolina State.

Now that MSU has hired a president who previously headed one of the Research Triangle universities, it seems a golden opportunity to reinvigorate and rethink the University Research Corridor, enhancing cooperation, coordination and collaboration at a time when the state very much needs those qualities. Among other priorities and challenges the leaders will face: ◗ Calming the waters among fractious boards that have led to a call among some politicians to shift to a system where trustees are appointed rather than voted on in statewide elections. The leaders’ success will be judged by how much the focus shifts toward university accomplishments and away from infighting and controversy. ◗ The universities have an opportunity to work collaboratively on technology transfer, jointly helping commercialize the research that their faculties excel at. A onestop shop for technology licensing could bring additional life to Michigan’s startup scene. ◗ The state also stands to benefit from the universities’ collaboration on efforts to stem the population and talent stagnation that have plagued Michigan. They are some of our best emissaries in luring businesses, jobs and people to the state, and leveraging those efforts together will pay dividends. We wish the trio of new presidents well, and welcome new thinking they bring to Michigan.

FROM THE EDITOR

East meets West at Crain’s in 2023

tors in both newsrooms are in regpril 17 has always been a ular communication and share special day on my calenstories they determine will be of dar. interest to their local readers. It’s my sister’s birthday — a Certainly, our West Michigan date I don’t easily forget since audience has also benefited from mine is the following day. I like the Crain’s Grand Rapids news to say I was her sixth birthday team’s access to the deep knowlpresent. edge and resources of their DeIn 2023, April 17 took on antroit counterparts, whether it’s for other meaning for me. It’s the Mickey coverage of Gotion’s proposed day we launched Crain’s Grand Ciokajlo is executive editor electric-vehicle battery plant in Rapids Business. Mecosta County or our scoop on In journalism, we are wired to of Crain’s Shinola’s plans for a store in push forward to the next story, Detroit downtown Grand Rapids. the next scoop, the next bit of Business and Our West Michigan news team news. But every once in a while, a Crain’s Grand has reciprocated, from offering notable event comes along that Rapids their background knowledge Business. burns a date into your memory. about Corewell Health to sharing Crain’s Grand Rapids Business was the first new Crain’s city brand to insider information about Lake Michigan launch since 1985. That’s the year Crain’s shoreline communities. We’ve also grown our statewide coverDetroit Business and Crain’s New York age that benefits all Crain’s readers, from Business debuted. As we’ve well documented by now, our political reporting in Lansing to the Crain’s Grand Rapids was created after tourism industry, to coverage of the rapidCrain Communications bought the Grand ly evolving cannabis sector. While we’ve expanded our reach across Rapids Business Journal and MiBiz. We merged the staffs, which complemented the state, we are still intensely focused on each other quite well, and turned the new serving our local regions in and around team loose to tell stories in West Michi- Detroit and Grand Rapids. Our staffs have deep roots in their communities. For exgan. Crain’s Detroit readers have benefited ample, the leader of our Crain’s Detroit from this coverage expansion, as the edi- newsroom, Michael Lee, is a metro Detroit

Crain’s new office in Grand Rapids | MICKEY CIOKAJLO

native while our Crain’s Grand Rapids editor, Joe Boomgaard, was born and raised in West Michigan. (I grew up in Jackson, so I figure I split the difference). Not only do our Detroit and Grand Rapids newsrooms benefit from working together, both are enhanced by their access to the broader staff within Crain Communications. For instance, our ace design team that works across the city brands did a marvelous job of presenting our 40 Under 40 honorees this fall. And our deep and timely coverage of the UAW strike would not have been possible without our partners at Automotive News, another

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 6 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

Crain Communications brand. It’s been a whirlwind of a year, capped off by our move last month into our beautiful new office inside the historic Waters Center in downtown Grand Rapids. In January, I will mark one year since I joined Crain’s. It’s been exhilarating and I’ve learned so much in what seems like a relatively short amount of time, yet I feel like we’re just getting started. We will keep working to provide you with the best business news and information, including deeply reported stories from Detroit and Grand Rapids, and relevant news from across Michigan.

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

Viktor Gjonaj out of custody after sentence for lottery scam By Kirk Pinho

The former commercial real estate executive who bilked more than $26 million from investors in sham land and buildings deals has been released from federal custody. Viktor Gjonaj, 46, was sentenced in September 2021 to 53 months in federal prison for orchestrating a Ponzi-like scheme that fueled a years-long gambling binge on Daily 3 and Daily 4 tickets, a period during which at times he bought tickets at the rate of once every eight seconds for an entire year. A text message sent to Gjonaj’s last known cell phone number was not returned the afternoon of Dec. 6. The Federal Bureau of Prisons website says Gjonaj was released Oct. 30. Crain’s reported in June that he was transferred from Federal Correctional Institution Morgantown on June 8 to “community confinement,” which can mean either home confinement or a halfway house. He began his sentence on one count of wire fraud in December 2021. This summer, Gjonaj’s defense attorney Steve Fishman told Crain’s that time can be cut from

Viktor Gjonaj | LARRY PEPLIN

what a federal inmate serves for good behavior, completion of addiction counseling and other things. “This situation is not unusual at all,” Fishman said in June. “All BOP inmates receive various credits that result in their time in custody being reduced. Keep in mind that this is solely the province of the BOP and has nothing to do with the sentencing judge.” During his several-years-long Daily 3 and Daily 4 buying spree, he both won and lost tens of millions. Gjonaj founded the now-defunct Imperium Group LLC real estate company following a long

career in brokerage with several local firms. He admitted to convincing investors to give him money to invest in fraudulent commercial real estate deals and instead of investing the money, he used to it fuel a Daily 3 and Daily 4 gambling habit that at times amounted to up to $1 million per week. The saga, details of which started to trickle out more than four years ago, involved the implosion of his company, a wild incident in an Ann Arbor hotel, lottery terminals rumored to be dedicated to feeding his near-constant play, and rampant speculation over Gjonaj’s whereabouts as lawsuits mounted seeking millions in lost investor money while he was nowhere to be found. He was charged in January 2021 of bilking at least two dozen investors in 66 sham real estate deals of $26.4 million, with none of the deals ever materializing as he used the funds to play the Michigan Lottery. He won no less than $28 million playing at various Michigan Lottery retailers around Southeast Michigan, but primarily centered in Macomb County, where he lived.

THOUGHT LEADER REPORT

An Amtrak map shows a proposed passenger line between Pontiac and Cleveland. | AMTRAK

Revised Amtrak vision would link Detroit, DTW By Anna Fifelski

The latest revision to Amtrak’s Cleveland — Toledo — Detroit/ Pontiac corridor proposal now includes a passenger rail connection to Detroit Metropolitan Airport. The previous proposal included stations in Ohio in Cleveland, Elyria, Sandusky and Toledo, with Michigan stations in Detroit, Royal Oak, Troy and Pontiac. The revised proposal includes DTW and the Cleveland Hopkins Airport in Ohio as additional locations. Downtown Detroit does not have a rail connection to DTW, about 20 miles away in Romulus. “These new rail connections between major metro areas and smaller cities would improve mobility for underserved communities and pro-

vide reliable and efficient transportation to education and employment opportunities along the route,” the proposal on the Amtrak ConnectUs site states. According to the proposal, there has not been a passenger rail connection between Cleveland and Detroit to Toledo since 2004. The new Amtrak corridor would also create connections between the University of Michigan – Dearborn, the University of Detroit Mercy, Bowling Green State University, the University of Toledo and more. “Much of the travel between Cleveland and Detroit takes place on I-90 and I-75, even though the distance between the cities of less than 170 miles represents the sweet spot for intercity passenger rail service,” the proposal states.

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8 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

Home price affordable for median earning renter household

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HOUSING SUPPLY

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The situation Robinson finds herself in is far from unique in this economic environment and real estate market. Rising rental rates since the start of the pandemic have led many to work toward becoming first-time homebuyers, particularly in late-2020, 2021 and early 2022 as interest rates were at historic lows. However, that period also brought us to the point where we now find ourselves. Millions refinanced their mortgages, and now roughly 90% have a rate of below 6%, according to a Redfin report earlier this year. That’s led many homeowners to opt to stay put and avoid moving, although that’s unlikely to remain the case forever, according to experts. “For homebuyers, it’s kind of like the trifecta of terror,” according to Andrea Carollo, a real estate agent with the Birmingham office of Max Broock Realtors. “You have high interest rates, you still have extraordinarily low inventory, which is … due to homeowners like myself. I’m locked in at a house (where) my taxes are capped, my interest rate is insanely low. I’m not selling ever.” Nick Bailey, the Denver-based president and CEO of national real estate brokerage Re/Max, said he hears similar sentiments regularly, regarding the so-called “golden handcuffs” many feel hampered by after refinancing at historically low interest rates during the pandemic. But he’s not convinced that dynamic will last. Quite simply, life happens and people move eventually, and that creates new inventory for the next homebuyer, Bailey told Crain’s. “Let’s say you have a couple with one child and they’re at their 3% rate,” Bailey said. “Well, they have twins and are in a two-bedroom. They’re going to very quickly fall out of love with their 3% (rate) as the bunk beds are sitting next to their bed. That’s just reality.” Bailey added that it’s important for the U.S. housing market “to get as far away from 2.5% and 3%” mortgage rates as we can, and consumers will adjust. And those numbers have changed, with mortgage rates hitting nearly 8% in early November. However, many forecasts say that rates have likely peaked and should fall next year, perhaps signaling opportunity for hungry buyers, as well as a wave of refinancing. Lawrence Yun, chief economist of the National Association of Realtors, in mid-November forecast that existing home sales next year are likely to rise 15%, and mortgage rates will be in the range of 6%-7%, representing a small decline from the rates seen in 2023.

‘Structurally underbuilt’ Beyond interest rates, the situation that so many would-be homebuyers find themselves in at present speaks to the “structurally underbuilt” housing market in the country, according to Neel Kashkari, president of the Federal Reserve Bank of Minneapolis.

Michigan home values, on average, have risen faster than those across the United States, which saw a 119.8% average increase from 2011-23. Zillow home value index $300,000 State of Michigan Detroit metro area Grand Rapids metro area Michigan Detroit metro area Grand Rapids metro area Lansing metro area Monroe metro area Lansing metro area Monroe metro area Traverse City metro area Traverse City metro area

3 ways to encourage affordable housing

ZILLOW 200,000 HOME VALUE INDEX

By Nick Manes

Michigan

Detroit metro area

Grand Rapids metro area Lansing metro area Monroe metro area

Traverse City metrohome area Michigan values

$315,910

$300,000

$275,810 $220,410 $216,180 $206,860 $191,950

100,000 200,000 0 2011 100,000

2013

Zillow home value index

0 2011

Michigan Detroit metro area Traverse City metro area

2015

2017

2019

Home values in Michigan increased an average 143% between 2011 and 2021.

Grand Rapids metro area Lansing metro area Monroe metro area

2013

2021

2015

2017

2019

2021

MEDIAN RENT Zillow $1,400home value index

The medianGrand rentRapids in Michigan increased anMonroe metro area metro area Lansing metro area average 27% between 2011 and 2021.

Michigan Detroit metro area Traverse City metro area

1,200

$1,067 $1,004 $996 $946

$1,400 1,000 1,200 800 1,000 600 2011

$1,324 $1,232

2013

2015

2017

2019

2021

Source: 800 State of Michigan Housing Data Portal

Online map For a 600 county-by-county 2011 2013look at how 2015 income levels homeownership Source: State ofand Michigan Housing Data Portal rates in Michigan have changed from 2011-21, go to crainsdetroit.com/ homeownership. Source: State of Michigan Housing Data Portal

“Well, I think since the pandemic we have structurally underbuilt the number of units we need to meet our growing population, and that’s the factor,” Kashkari said on an early November Bloomberg podcast. “And that’s really about regulation at the local level that are creating barriers to more supply coming in,” Kashkari added. “The (interest) rate environment will settle out over time, but structurally we have to actually bring a lot more supply online to meet Americans’ needs.” State of Michigan Housing Data Portal SoSource: is that happening? Yes and no. U.S. Census data shows that housing completions have picked up since the Great Recession, a period where construction was sparse, total Housing completions at Source:with State of Michigan Data Portal about 585,000 units in 2011. Last year’s total completions of just under 1.4 million units is roughly on par with what was being completed in the late-1960s, according to the Census data. Home construction nationally — earlier this year — was at a roughly yearlong high, as Crain’s has reported. Michigan, however, lagged far behind achieving such numbers. Last year, there were 3,511 permits issued, the lowest number since 2011 when there were 2,540 permits. As the year has progressed, however, some progress has been made.

The latest monthly report from the Homebuilders Association of Mich2017 2019 2021 igan — and based on U.S. Census data — found that single-family home permits in the state were up about 9% year over year, with 1,367 permits pulled in September. Permits, however, were down about 12% year to date through September compared with the same period in 2022. The most recent figures released by the statewide trade group “clearly show the dichotomy we face in the housing sector,” Bob Filka, CEO of HBAM, said in a statement. “On one hand we have a strong need for more housing. On the other, we have higher interest rates and building costs that have grown exponentially, limiting who can afford to buy a newly built home,” Filka said. “The result is what I would call flat demand, generally limited to those with cash and/or limited alternative options to building new. Additionally, the executive noted that most homes getting built are “at the higher end of the market.” Lawmakers in the state, Filka said, “need to continue their focus on housing attainability solutions across the state,” particularly with regards to updating Michigan’s Bureau of Construction Codes, which he said would make construction more affordable on the front end. Like Robinson, Austin Bowersock is in the house-hunting game and not loving what he’s finding.

Seeking value Bowersock, 28, works as a contractor doing window and door See HOUSING on Page 10

That Michigan has a shortage of quality, affordable housing is a largely settled debate. How to address that shortage, however, is where things get interesting. There’s no single bullet that addresses that problem. But there are no shortage of prescriptions that policymakers might look to — and in some cases, already are — as they seek to bring more housing to market. Below are three mechanisms that could address the issue, or make it worse, depending on who you ask.

Zoning changes In their bid to beef up the region’s housing stock, officials in Southeast Michigan could look to many cities that have eased zoning restrictions. One place: 140 miles northwest. Grand Rapids has taken myriad steps in recent years to ease its zoning regulations as part of an effort to densify the state’s second-largest city. Some of those efforts date back more than a decade, when the city was split into “character districts,” according to the Washington, D.C.-based Bipartisan Policy Center think tank. The initiative allowed for “denser development than was permissible in the early 2000s so long as it was consistent with what had historically been allowed before more restrictive zoning practices were implemented over the course of the 20th century,” according to the think tank. In more recent years, the city has sought to grab at the “lowest hanging fruit” policy prescriptions to address housing, according to Crain’s Grand Rapids. That includes raising unit occupancy caps, reducing parking requirements and allowing for more small-scale multi-family projects. In July, the Grand Rapids City Commission passed an amendment to the city’s zoning code allowing for buildings as tall as 20 stories — as opposed to 10 stories — “by right” in and around the central business district, meaning developers could receive approvals administratively and avoid longer public hearings.

Easing zoning restrictions is one way Grand Rapids has sought to boost its housing supply. | AMBER KIPP/UNSPLASH

to a news release from the Democratic governor’s office. The legislation is widely viewed as trying to counteract “NIMBYs,” an acronym for “not in my backyard,” those opposed to new housing in their areas. Such policy had existed in California for decades, but the bill signed by Newsom expands the program and is, in part, aimed an penalizing municipalities in the state that fail to keep up with development of affordable housing, according to a September report in the Los Angeles Times.

Rent control Many housing activists and politicians in Michigan have been calling for a path allowing for municipalities to implement rent control if they choose. The policy has long been a staple of the rental market in cities like New York and limits how much a landlord can increase rent. Those activists and politicians got their wish — at least to an extent — in September when state Rep. Carrie Rheingans, a Democrat from Ann Arbor, introduced legislation to repeal the state’s

No silver bullet can solve the problem, but different areas have tried new strategies.

California NIMBY law California Gov. Gavin Newsom, in October, signed a large package of bills aimed at “(streamlining) housing developments, (the package) allows institutions like colleges and religious organizations to use portions of their property to build housing, and continues a state statute used to hold local communities accountable for their fair share of housing,” according

ban on the policy. The legislation failed to advance beyond its introduction and the Legislature adjourned for the year last month. A similar bill could be reintroduced next year. Repealing the state’s ban on municipal rent control would allow for cities to “at least start a serious conversation about whether there is a correct rent control policy” for places like Ann Arbor, Zachariah Farrah, chair of the Ann Arbor Renters Commission, wrote in an op-ed earlier this year for the Michigan Daily. The development and landlord community, however, are largely opposed to such a policy, as Crain’s has previously reported.

DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 9

HOUSING SUPPLY

Housing crunch may be easing, but need is great

Th a S

Creative solutions may help reduce the problem By Nick Manes

Would-be homeowners and renters in Michigan face no shortage of barriers in the quest for housing, but not all hope is lost. Since the pandemic times in particular, costs to both rent and own housing have increased substantially amid scarce inventory, and would-be buyers have felt the pain of elevated interest rates. But the housing shortage and ensuing issues of affordability, both in Michigan and nationally, does show some signs of easing. To some extent, macroeconomic factors that have worked to the detriment of many would-be homebuyers for the better part of two years are starting to loosen, according to some experts. At the same time, the shortage is also forcing many to get creative. Mat Ishbia, CEO of Pontiac-based United Wholesale Mortgage, the nation’s largest home lender by volume, recently said he expects borrowers will see some relief in the new year. In an early November video message, Ishbia shared that he expects home purchase volume to increase next year, “regardless of interest rates,” pointing to data from federal mortgage buyer Fannie Mae. “We believe interest rates are going to drop, whether it’s by the (presidential) election, or even sooner in 2024,” Ishbia said. “However, assuming they don’t — assuming rates stay at the same level — purchases are going to be up by 10% or more Fannie Mae expects. So, understand the opportunity, because more inventory will hit the market.” Titans of Wall Street are also forecasting some easing of the headwinds many home seekers face. New York City-based investment banking firm Morgan Stan-

HOUSING From Page 9

installations, living with his girlfriend in a three-bedroom apartment in Commerce Township. With the couple planning a family in the coming years, buying a home simply makes the most sense, he said. While focusing their search in the Livonia and Farmington Hills areas, the couple are less concerned about geography, Bowersock said. “We’re not so much restricted by location as we are about value for the house that we find,” said Bowersock. “Price-per-square-foot is a 10 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

ley, in an investor note last month, forecast an overall 3% decline in housing prices in 2024. “The US housing market finds itself in an interesting position heading into 2024,” reads the note. “Recent bouts of rate volatility have led to swings in affordability. The immediate response in the market has been renewed decreases in inventory, which we think provide near-term support for home prices. As rates come down throughout the year, we would expect affordability to improve and for-sale inventory to increase.”

H Last year, Short’s Brewing bought and renovated the Bellaire Inn near its pub into 26 dormitory-style housing units. | SHORT’S BREWING COMPANY

time, cost and uncertainty. How do leaders rally their communities? They articulate the case for housing. The community needs to see housing as integral to economic growth, and regional leaders need to speak with one voice.” Such sentiment rings true to Melissa Milton-Pung, program manager for the Policy Research Labs at the Michigan Municipal League, an Ann Arbor-based trade association for the state’s municipalities. The need for housing, at a variety of price points, is well known and understood by local government officials, Milton-Pung told Crain’s in an interview. The goal, according to Milton-Pung, is for planners and housing developers to “activate a sense of compassion” for neighbors, to bring more housing units to market. Doing so requires “cutting through” neighbors’ fears over design and other impacts they may face as a result of the development. “Cutting through that and increase people’s understanding about how this is a need,” said Milton-Pung. “And if you participate in helping determine how we serve our community, then you’re going to have a better outcome than if you were to oppose it, and it pops up in a different way.”

The housing shortage in recent years has become salient in myriad ways. For starters, look no further than the tourist-clogged resort towns of northern Michigan. For years, seasonal workers on Mackinac Island and around Traverse City have struggled to find adequate housing as they work in the restaurants, gift shops and hotels throughout the region. The situation has led to some well-known Michigan companies making maneuvers well outside their usual business practices. Short’s Brewing Co., for example, had been having trouble finding people to work in its Bellaire taproom south of Charlevoix as workers struggled to find adequate housing. So the brewery opted to purchase the 26-room Bellaire Inn and convert it to housing for taproom workers with subsidized rent. “Even we were surprised, but as we were looking down a very busy summer and had employees leave the area because of the lack of affordable housing, we had to do something,” Short’s Brewing CEO Scott Newman-Bale wrote in a re-

cent blog post. “This model is fairly common in larger resort towns. We attempted to subsidize the rent of our employees by offering a limited number of vacation-rental rooms but in the end demand for staff housing left few openings.” While such maneuvers may provide solutions in some situations, many experts tout that the real solution is to simply add more supply to bring down costs. And in some places, it’s working. The San Francisco Chronicle reported in October that rents in Oakland, California, had dropped more than 7% in September from a year earlier as a flood of new apartment supply had struggled to attract enough renters and was sitting on the market vacant. Median rent in the Bay Area city was down to $1,430 per month, according to the report, which cited data from Apartment List. Minneapolis has also seen rents drop dramatically as new housing inventory has hit the market, spurred in part by an easing of the zoning code, as Crain’s has previously reported. Closer to home, officials in Michigan say the state is making slow progress on its housing goals, but has a long way to go. “The governor put a goal of 75,000 units over a five-year peri-

od and we are in line at the state to meet that goal, and we’re excited about that. The tools are working,” Amy Hovey, executive director of the Michigan State Housing Development Authority, recently told Crain’s. “But we need 190,000 units. And so while I think we’re going to surpass that 75,000 units — and I’m excited and I’m proud of that — we have a ways to go.” Of course, there are myriad external factors when it comes to the development of new housing. Opposition from neighbors — frequently called “NIMBYs,” short for “not in my backyard” — stands high among them. Tom Barkin, president of the Federal Reserve Bank of Richmond in Virginia, recently spoke on the topic, with the comments posted by residential real estate news outlet Resiclub. “While the need for more housing may be obvious to us, it often isn’t to those who don’t want their town to change, or who don’t like the specific change being proposed,” Barkin said, according to Resiclub. “They understandably worry about environmental impacts, or infrastructure capacity or school crowding,” Barkin said. “NIMBYism is real, and failing to secure buy-in from the community adds

relatively good gauge for us.” With a goal of staying under $350,000 for whatever home they settle on, there definitely are “opportunities,” he said, but also pointed out that competition for such properties can be intense. In one instance, Bowersock said he and his partner were 12th in line on an offer they made on a Livonia house. “That was kind of a shock to us because … it’s sort of a gauge of where other people are in terms of buying and how desperate they are, or how eagerly they want to move into a house,” he said. “But I’m generally an optimist, so I feel like there’s definitely some houses that we’ve come across that are

good buys, even in this time period.” Timing is critical and makes for the “main key” for many first-time homebuyers, according to Rakesh Gangwani, a Realtor in the Northville office of Re/Max Dream Properties who’s working with Bowersock on the search for a home. “To be at the right (place) at the right (time) and do the right thing is a main key,” said Gangwani. “If we stay in the perception of ‘let’s wait and hang on,’ that’s where many first-time homebuyers struggle and land up in a bidding situation. So I always tell my great clients … if you like something, move forward. There will be no perfect home.”

Rakesh Gangwani, a real estate agent in metro Detroit, says timing is everything, and interested buyers need to be ready to take the leap. | NIC ANTAYA

Getting creative

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ousing is a problem that abling bad-faith arguments dewe’ve built on 50 years of signed only to stop housing projdenial in service of fear ects, whether it’s complaining and a belief in a nonexistent beabout traffic, or parking, or neighnevolent stasis of land value. Our borhood character. We know these denial pushes us down a path of arguments are fallacious and that least resistance while relying on the data clearly and repeatedly the Invisible Hand to lead us to a proves them so. We’ve all heard it, mono-culture of shitty, slightly and if you’re like me you’ve tried above-market-rate, single-family Ted Lott is an to bargain, cajole and persuade housing, housing that becomes architect at the bad faith away — to no avail. overvalued the moment it hits the Lott3Metz These arguments exist only to rile market. up support and stop progress. We Crutcher We need to build more housing Architecture in need to recognize them and disreof all types and sizes. gard them immediately. Detroit. Aside from a European model of Furthermore, in the face of bad government-funded housing (check out faith and complex solutions, we need to how those Viennese solve this problem), understand that perfection is the enemy of what can we do to find our way home from progress. For the people looking for a place this remote, vinyl-clad cul de sac? to live right now, time is critical. We simply A short and incomplete to-do list for can’t afford the additional time fussing concerned citizens: over good, better or best. We don’t have ◗ First, do no harm. The most affordable time to fall into the neighborhood characand quickest-to-market housing is the ter trap of open-ended design reviews or housing that already exists. No matter its vague catering to folks who will “know it condition, we need to stop tearing our ex- when they see it.” Housing is good. And, isting housing down and invest in rehabili- housing is good enough. tation. Not only will rehabbed homes con- ◗ As both designers and consumers, we tribute to a systemic housing solution but need to embrace the values of smaller and the renewed homes will always positively simpler. Too often in the past 50 years bolster neighborhood stability. American culture has confused quantity ◗ We need to stop entertaining and en- and complexity for quality and clarity.

BLOOMBERG

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The key to more affordable housing: Start building now

The comfort in our huge messes blinds us to the possibility that there might be other ways to live: “Nobody would want to live in an apartment that small! Where would they put all their stuff?” Building smaller and simpler opens up efficiencies and opportunities to address nontraditional housing types on nonconforming lots in unexpected places while reducing costs throughout the project. ◗ Finally, build everything, now. While housing is a complex problem that requires a wide array of solutions from greater ac-

cess to transit, to higher incomes, to regulatory reforms, to public investment; there is no doubt that we need more homes. And, we need those homes as soon as possible. All kinds. All types. All places. Our friends in Minneapolis have done inspiring work over the past 10 years in addressing the supply side of the problem to great effect. Minneapolis remains a growing, vibrant metropolis with one of the most affordable housing stocks around. We can do it too. Let’s build homes. All of them. Everywhere. Right now.

Proposed code changes will increase housing costs

add some $20,000 or more to the ichigan’s effort to address cost of an average home. its housing affordability At the same time, six-figure and attainability crisis has household income is now needed accelerated and should be lauded. to afford the typical home being Gov. Gretchen Whitmer and legissold across the state. With high inlative leaders like Senate Majority terest rates and a median home Leader Winnie Brinks and Speaker sales price approaching $400,000 Joe Tate have passed and signed or more in some areas, many Michinto law a host of new tools that are iganders have already been priced now available to help communities out of the housing marketplace. attract much needed workforce For every $1,000 increase in the housing investment. Rich cost of a home in our state, nearly Other efforts targeted at zoning Kligman, 5,000 households are priced out of reform are in the works. The state founder of housing authority, too, under Di- Superb Custom being able to afford one. If not altered, the state’s proposed code rector Amy Hovey’s leadership is Homes, is the changes will price-out more than moving aggressively to broaden 2023 president 100,000 additional Michigan famithat agency’s focus toward work- of the Home lies. These proposed changes need force housing. This progress, how- Builders to be modified and can be, while ever, will be severely thwarted if Association of achieving similar goals at far less the state Bureau of Construction Michigan. cost. Codes is allowed to proceed with Our association is not opposed to imcostly code changes that could soon go into effect. State leaders need to be made aware proving state building codes. To the conof these perhaps unintended consequenc- trary, the Home Builders Association of Michigan has offered an alternative proposes. The Bureau of Construction Codes’ pro- al to the state that would result in similar posals, as currently drafted, will require energy efficiency improvements at onenew residential homes (and most renovated third of the cost of the bureau’s proposal. homes) to have 2-by-6 framing, R-60 insula- How? By removing manufacturer-driven tion in ceilings, inch-thick exterior sheath- proscriptive requirements and providing ing, mandatory fire suppression systems more options and flexibility for builders. So long as the energy performance of a (yes, sprinklers inside homes) and arc fault circuit interrupters in every room, among home meets the same targets, why must the other costly measures. These changes will state dictate a narrow approach to achieve

NICK MANES

PANY

COMMENTARY | HOUSING SUPPLY

it? Let technology and innovation reign instead of mandating methods and products. In terms of ensuring citizens are protected from needless fire fatalities, neither sprinklers nor arc fault circuit interrupters will save lives. Research shows that properly functioning smoke detectors are the key to fire safety in homes. Requiring sprinklers in all new homes will not. To the contrary, it will make new housing more expensive and

keep or push people into older substandard housing that is more susceptible to fire. Virtually every state in the country has rejected the idea that sprinklers should be required for residential homes. Michigan should, too. Let’s keep the positive momentum and attention on our state’s housing needs by balancing new building code standards with cost and housing attainability. DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 11

HOUSING SUPPLY | COMMENTARY

‘It all falls apart’ without more affordable housing

GETTY IMAGES

create or preserve 75,000 units here has been lots of talk over the next five years, along with about housing lately, and plans to address critical gaps and rightfully so. For decades, challenges in the statewide housMichigan has underinvested and ing landscape. With Michigan fallen behind in housing creation, striving to reverse its population as well as the preservation of subloss while also attracting business, sidized units. housing creation has become an Forty-seven percent of our essential consideration. state’s housing was built prior to As Regional Housing Partner1970. Renters comprised 28% of Lisa Chapman ship groups (as part of the state all Michigan residents in 2021 is director of and, of these, 25% were catego- public policy at plan) identify gaps in the housing ecosystem and develop strategic rized as being severely cost-bur- the Michigan action plans and goals that will indened, meaning they spent more Coalition crease housing stock and end than half of their income on rent. Against homelessness, they must be guidFor those making under $35,000 Homelessness. ed by the belief that to truly be an per year, renter cost burdens in inclusive and welcoming state, we must asMichigan exceeded 70%. The U.S. Department of Housing and Ur- sure housing for all income levels and peoban Development estimates that “housing ple. Soon to be released data indicates that affordability” means a household spends no more than 30% of its gross income on homelessness increased by 8% on average housing. This affordability standard is hard across the state between 2021 and 2022, afto attain with the current condition of our ter years of progress. We know that housing state’s housing system; vacancy rates are at availability, affordability and homelessness the lowest point in decades, with median are inextricably linked. Many seniors on rents increasing by more than $250 over fixed incomes, people with disabilities and three years for a one-bedroom apartment single-parent families have difficulty sustaining their housing, with a single finanin Michigan. In recognition of the vital importance of cial crisis leading to being evicted, doubled housing, Michigan’s first housing plan ever up with relatives, sleeping in a vehicle/on was developed and released in 2022 which the street or entering shelter. In the 2023 Michigan legislative session, “is designed to rectify historical and current inequities in housing access and other no less than 25 housing-related bills were introduced, with many advancing housing challenges.” The plan sets out an ambitious goal to much-needed renter protections. While

these bills represent a positive effort to begin rectifying inequities in our state housing system, none of the legislation has passed. Assuring a quality, attainable supply of affordable housing for all residents of our state is a bipartisan issue. We call on our state Legislature and other leaders to act

with urgency to enact legislation, assure funding for the creation of housing for residents of all income levels and change the trajectory of our housing supply in Michigan. As award-winning author Matthew Desmond says, “Housing is absolutely essential to human flourishing. Without stable shelter, it all falls apart.”

results of the 2023 Michigan Public Policy Survey, conducted by the University of Michigan. This report verified that the issue of workforce housing at all income levels has become a critical statewide issue, and a particularly growing concern in rural areas. The barriers to building affordable housing are numerous. However, a key hindrance is the stigma of “affordable housing” and the impact that stigma has on the willingness of local governments to support it. In addition, decision-makers are often misinformed about the income levels that actually fall into the affordable range in their communities. Positive housing trends across the country show developers break-

ing this stigma through open dialogue, strategic partnerships and thoughtful project design. Here in Michigan, communities need to embrace quality affordable housing as a key factor in economic growth. We must continue to focus on creating and attracting high-paying jobs and talent. But the framework of our economy is supported by workers in positions like my mom and dad had, that do not make high wages. And these workers deserve affordable housing. For it is these workers who teach our children, drive our ambulances, keep our neighborhoods safe, manage our favorite restaurants … and assemble our cars.

Affordable housing key factor to spurring economic growth

12 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

GETTY IMAGES

communities to urban areas y father was an assembly throughout Michigan and hear line worker for Ford Mosimilar stories. In every corner of tor Company in the our beautiful state, we hear from Wayne, Michigan, plant. He had employers who wish to grow, but been a Marine and was a founding can’t … because of the lack of housmember of our church. Even ing available for their workforce. though he was a relatively quiet While there are often high-payman, our neighborhood revolved ing jobs that these companies need around him like he was the sun. He to fill, we often hear that there is a worked the night shift, so he was Jill Ferrari is great need to fill positions that always home when we got back managing would qualify for affordable housfrom school. And he always made partner of ing. In a recent public meeting for time for a beer with anyone who Renovare one of our housing projects, a reneeded him. Development cruiter for a major employer in the My mom worked part time as a and Renovare area happened to be present for secretary. She made our clothes on Opportunity another issue. But when our item her industrial-size Singer sewing Fund. came up on the agenda, he was machine (to our constant dismay) and reupholstered furniture for extra mon- compelled to speak. He told the people ey. Her spirit was indomitable, her laughter present about his personal challenges in was infectious and our neighbors loved her. filling open positions, and the significant My parents were average, hard-working role the lack of affordable housing has played. Americans. Executives from industries ranging from At today’s pay rates for these same positions, my parents would be eligible for af- manufacturing to health care, and even fordable housing. According to Glassdoor. craft beer, are speaking publicly about the com, the average wage for a Ford assembly role the workforce housing shortage is playworker in the United States today is $20 per ing in economic growth. At the 2023 Investhour. That equates to roughly $41,200 per UP CEO Summit, over 100 CEOs agreed that year in salary. I found several positions workforce and professional housing were open for part-time administrative workers their No. 1 priority. In a recent public meeting in Midland, on Indeed.com at $13 per hour. In Wayne County, a household of four with $56,820 in the president of the largest health care proannual income is at 60% percent of the Area vider in the area spoke about the over 800 Median Income. That qualifies for afford- open positions the company was trying to fill. He stated that roughly 40% of the posiable housing. My Renovare Development co-founder, tions would qualify for affordable housing. Shannon Morgan, and I travel from rural These concerns were noted strongly in the

CRAIN'S LIST | MICHIGAN BANKS Ranked by 2023 Michigan deposits inside market MICHIGAN DEPOSITS INSIDE MARKET ($000,000) JUNE 2023/2022

NUMBER OF MICHIGAN OFFICES INSIDE MARKET 2023

DEPOSITS OUTSIDE MARKET ($000,000) 2023

NUMBER OF OFFICES OUTSIDE MARKET 2023

$68,495.7

178

$1,999,546.3

4,697

$36,512.6 Sandra Pierce 2 senior executive VP, private client group and regional banking director $38,001.4 and chair of Michigan

313

$115,534.4

738

Steve Davis Michigan Market president Megan Crespi senior executive vice president, chief operating officer

$33,116.6

177

$34,495.4

231

4 BANK OF AMERICA

Matthew Elliott Michigan market president and region executive

$30,838.5

$1,848,322.2

3,734

5 PNC BANK

Michael Bickers president for Detroit and Southeast Michigan

$23,048.5

135

$411,462.1

2,306

6 FIFTH THIRD BANK EASTERN MICHIGAN

David Girodat regional president, executive VP, Eastern Michigan

$20,144.6

168

$149,502.7

914

7 CITIZENS BANK

James Malz Midwest regional executive

$6,764.6

$173,949.6

1,021

8 INDEPENDENT BANK CORP.

William Kessel CPA president, CEO and director

$4,557.0

$0.0

9 MERCANTILE BANK CORP.

Robert Kaminski Jr. president, CEO and director 3

$3,775.8

$0.0

10 NORTHPOINTE BANCSHARES INC.

Charles Williams president and CEO

$3,037.0

$0.0

NATIONAL BANCSHARES INC. (FIRST NATIONAL 11 FIRST BANK OF AMERICA)

Ken Foote CEO

$2,955.9

$0.0

12 FIRST MERCHANTS BANK

Mark Hardwick CEO

$2,777.6

$11,881.9

13 ARBOR BANCORP (BANK OF ANN ARBOR)

Tim Marshall president and CEO

$2,485.5

$0.0

14 MACATAWA BANK CORP.

Jon Swets president and CEO 4

$2,329.9

$0.0

15 CHOICEONE FINANCIAL SERVICES INC.

Kelly Potes CFP CEO and director

$2,096.4

$0.0

Todd Clark Central Michigan market president and president, small business lending

$1,744.0

$34,803.0

243

17 HORIZON BANK

Thomas Prame 5 CEO

$1,743.6

$4,038.5

18 ISABELLA BANK CORP.

Jae Evans president, CEO and director

$1,729.6

$0.0

19 KEYBANK N.A.

David Mannarino market president, commercial bank sales leader

$1,390.4

$146,793.8

966

20 FENTURA FINANCIAL INC.

Ronald Justice president, CEO and director

$1,380.0

$0.0

21 SOUTHERN MICHIGAN BANCORP INC.

John Waldron 7 CEO

$1,187.9

$0.0

Victor Dodig president and CEO Michael Capatides vice chair, CIBC Bank USA

$1,150.8

$38,875.0

23 COUNTY NATIONAL BANK

Joseph Williams president and CEO

$1,068.7

$0.0

24 FIRST STATE BANK

Mark Jansen president and CEO

$880.3

$0.0

FINANCIAL CORP. (SUPERIOR NATIONAL 25 KEWEENAW BANK)

Michael Hauswirth 8 CEO

$862.9

$0.0

COMPANY NAME ADDRESS PHONE; WEBSITE

JPMORGAN CHASE & CO.

611 Woodward Ave., Detroit 48226 313-256-8500; jpmorganchase.com

2 HUNTINGTON BANCSHARES

1 801 W. Big Beaver Road, Suite 500, Troy 48084-4724 248-244-3541; huntington.com

3 COMERICA BANK

411 W. Lafayette, Detroit 48226 248-371-5000; comerica.com

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

27777 Franklin Road, Southfield 48034 248-226-7998; citizensbank.com 4200 East Beltline, Grand Rapids 49525 616-527-5820; independentbank.com 310 Leonard St. NW, Grand Rapids 49504 616-406-3000; mercbank.com 3333 Deposit Drive NE, Grand Rapids 49546 616-940-9400; northpointe.com

241 E. Saginaw, East Lansing 48823 800-968-3626; fnba.com 10 Washington St., Monroe 48161 800-205-3464; firstmerchants.com

125 S. Fifth Ave., Ann Arbor 48104 734-662-1600; bankofannarbor.com

10753 Macatawa Drive, Holland 49424 616-820-1444; macatawabank.com 109 East Division St., Sparta 49345-0186 616-887-7366; choiceone.com

16 OLD NATIONAL BANK

2723 S. State St., Ann Arbor 48104 734-887-2600; oldnational.com 200 E. Big Beaver Road, Troy 48083 248-781-2584; horizonbank.com 401 North Main St., Mount Pleasant 48858 989-772-9471; isabellabank.com 100 S. Main, P.O. Box 8612, Ann Arbor 48107 800-539-2968; keybank.com

6 175 North Leroy St., Fenton 48430 810-629-2263; fentura.com 51 West Pearl St. , Coldwater 49036 517-279-5500; smb-t.com

22 CIBC BANK

34901 Woodward Ave., Ste. 200, Birmingham 48009 248-566-4700; us.cibc.com/en/home.html

1 S. Howell St., Hillsdale 49242 517-439-4300; cnbb.bank

24300 Little Mack, St. Clair Shores 48080 586-775-5000; fsb.bank

235 Quincy St., Hancock 49930 906-482-0404; snb-t.com

TOP EXECUTIVE(S) Jason Tinsley vice chairman, Private Bank and Michigan market chair

$74,899.5

$37,728.6

$33,989.7

$25,375.7

$21,517.9

$6,899.5

$4,359.0

$3,891.6

$2,423.7

$2,395.7

$3,274.4

$2,808.3

$2,502.3

$2,150.8

$1,815.6

$1,971.3

$1,770.0

$1,497.1

$1,231.7

$1,039.4

$1,525.3

$1,017.2

$905.1

$898.3

SOURCE: Federal Deposit Insurance Corporation (FDIC) | This list ranks banks and bank holding companies with a presence in Michigan. Figures are from the FDIC's deposit market reports, which are based on the branch/office deposits for all FDIC-insured institutions as of June 30. It is not a complete listing but the most comprehensive available. Companies are listed with the address and top executive of their main metro Detroit office. Actual figures may vary. NA = not available NOTES: 1. Formerly Huntington National Bank. Rebranded as Huntington Bancshares after TCF Financial Corp. merger closed with in June 2021. 2. Will leave Huntington Bank at the end of the year. 3. Plans to retire in 2024. Raymond E. Reitsma is expected to succeed Kaminski as president and CEO, effective June 1, 2024. 4. Succeeded Ronald Haan as CEO, effective Nov. 1. 5. Succeeded Craig Dwight as CEO, effective June 1. 6. The holding company for The State Bank headquartered in Fenton. 7. Succeeded John Castle as CEO, effective Oct. 3. 8. Succeeded David Vlahos as CEO, effective Jan. 1.

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New law clears way for solar, wind farm build-outs By David Eggert

LANSING — Renewable-energy developers and advocates are hopeful that a key part of Michigan’s new energy laws will clear the way for a big expansion of utility-scale projects — particularly solar farms — that will be crucial to the transition away from burning fossil fuels to generate power. A change taking effect next November will enable utilities and other electric companies to seek approval of large-scale wind, solar and energy-storage projects from state regulators if they cannot secure local authorization. Proposals to build solar and wind facilities have met opposition at the local level. While some farmers want to lease their land for income, rural townships have passed ordinances restricting or outright banning wind turbines and solar panels amid opposition from residents. “The situation for siting renewables in Michigan has been really challenging for a number of years,” said Laura Sherman, president of the Michigan Energy Innovation Business Council, an advanced-energy industry group. Without the reform, she said, utilities may not be able to procure renewable sources they are banking on to meet both their longrange goals and, as of recently, requirements enacted by Gov. Gretchen Whitmer and the Democratic-led Legislature. Power providers will have to reach a 50% renewable energy credit portfolio in 2030 and 60% in 2035 — triple and quadruple a prior 15%-in-2021 standard. “The place we’re at now isn’t working,” Sherman said, saying a “very vocal minority” of opponents

A change taking effect next November will enable utilities and other electric companies to seek state approval for projects if they cannot secure local authorization. | DTE ENERGY CO.

have pressured elected municipal officials to block projects. “This legislation sets up a fair, commonsense process that allows for local input, allows for initial local decision-making, allows for farmers who want to participate to be compensated for leasing their land and allows projects that are beneficial to the state, that are beneficial to labor, that are beneficial to the environment and local communities to move forward.” The state certification will be available for proposed wind farms with a capacity of 100 megawatts or more, solar farms with a capacity of at least 50 megawatts and storage facilities with a capacity of 100 or more megawatts. A developer can apply for a construction permit from the Michigan Public Service Commission if the local government does not approve or deny an application within 120 days or if it has a moratorium on such facilities or a more restrictive renewable-energy ordinance than allowed under the new law. Critics, including Republican legislators and associations repre-

senting municipalities, have said the law will usurp local control in areas that do not want renewable projects for reasons ranging from aesthetics to the “industrialization” of farmland. MISO, which manages the flow of high-voltage electricity across 15 states, has a queue showing 125 pending renewable-energy or storage projects across Michigan — almost all of them utility-scale. Of those projects, 79 are solar (totaling 12,772 megawatts), 42 are battery storage (6,145 megawatts) and four are wind (786 megawatts). Why is solar so prevalent? Sarah Mills, who directs the Center for EmPowering Communities at the University of Michigan’s Graham Sustainability Institute, said the economics of solar make more sense now, and it is very difficult to get a wind farm sited. “Developers, I think, thought it would be easier to get solar projects sited and that’s not necessarily what they’ve found. This is exactly what gave rise to the siting bills,” she said. Streamlining the process will en-

PEOPLE ON THE MOVE

able the build-out of what the state projects is 209,000 additional acres of renewables to hit the targets, on top of 17,000 acres in use and 117,000 acres in the works. All told, 343,000 acres is 0.55% of Michigan’s land area — more than the size of any of its 20 counties. Mills, who studies the positive and negative effects of renewable-energy development in rural communities, said the average solar project in the queue is 157 megawatts, requiring an estimated 1,300 acres, or 2 square miles. Many smaller, 1- and 2-megawatt solar arrays do not garner much controversy, she said, but larger ones — which offer economies of scale and cheaper power — do. With wind turbines there also is a “farmers vs. lakers” dynamic, Mills said: Places with more farmers and productive land tend to be more predisposed to wind as a way to diversify farm income and keep it going. It is more controversial in high-amenity areas with lakes that attract seasonal residents and transplants. “We have places where there are farmers and lakers kind of right up next to each other. Those are common flashpoints when there is discussion of wind energy,” she said, saying the pattern is less evident for solar because “not all ag interests are aligned in terms of how they’re thinking about solar.” While some individual farmers lobbied in Lansing for the right to host projects on some of their property, the Michigan Farm Bureau opposed the bills and said siting decisions should stay in the hands of locally elected officials. It said it has members on both sides of the issue but supports the township government system and the idea that local leaders are best po-

Advertising Section To place your listing, visit crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

AUTOMOTIVE

INSURANCE / FINANCIAL

NONPROFIT

Fenner, Melstrom & Dooling, PLC

Ziebart World Headquarters

NFP

The Community Builders

Having been with the company for over 15 years, Ziebart is proud to announce the promotion of Brian Jackman to Senior Vice President and Chief Operating Officer of Ziebart International Corporation and President of Ziebart Corporation. In his new role, Brian will oversee the operational business functions related to Ziebart International Corporation and Ziebart Corporation. This includes US Franchise Operations, Finance and Accounting, Product Development, and Order Services.

Tina Woods, the administrative team lead in NFP’s Detroit office, was recently honored as an NFP Unsung Hero. As the executive assistant to several NFP managing directors, Tina’s contributions are felt throughout the office. She is a proactive leader who streamlines operations and elevates positivity. Tina exemplifies NFP’s people-first culture by selflessly helping others any way she can and always showing what it means to be an exceptional teammate.

The Community Builders named George Tabit regional vice president for real estate development in the Great Lakes region, including Michigan, Ohio, Kentucky and southern Indiana. He will direct a real estate development portfolio of $435 million across the region, serve as relationship executive and lead a project management team in identifying and executing residential and mixed-use developments from conception to completion, including the Clement Kern Gardens Choice Neighborhoods Initiative.

The Management Committee of Fenner, Melstrom & Dooling, PLC is proud to announce the promotion of Brianna J. McNamara, CPA to Partner. Brianna leads the Estate and Trust Department at FMD. She has concentrated her career in the field of trust and estate planning, fiduciary accounting, and tax planning and compliance. In addition, she serves in a client advisor capacity to a wide range of the firm’s entrepreneurial clients on issues including strategic planning and business succession planning.

14 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

sitioned to consider community variables in ways that state authorities cannot with a “one-size-fits-all approach (that) will have consequences for years to come.” Utilities, including the state’s two dominant companies, DTE Energy and Consumers Energy, have options to add renewable installations. They can build them themselves, buy projects developed by other businesses or purchase power from the facilities. DTE and Consumers did not take a position on the legislation but have noted siting obstacles. DTE, for instance, said siting was a factor in why it proposed an annual renewables build-out limit in its most recent long-range plan. “We believe the siting legislation would allow us to continue to work constructively with local communities to achieve good outcomes for the communities, their local governments and the state,” DTE spokesperson Pete Ternes said. Consumers spokesperson Katie Carey said it has and will continue to work with local landowners and communities to explain the economic benefits and community value from solar energy. “If the state is going to set these targets to build out renewable energy, we will need all the tools in the toolbox to accomplish the aggressive goals prescribed in the recently passed energy law,” she said. Under the law, the Public Service Commission will rule within a year of receiving an application. It will have to issue a certificate if the public benefits justify construction and other criteria are met, including that contractors enter into a project labor agreement with organized labor or operate under a union contract. The regulatory agency also must determine that the project will not “unreasonably diminish farmland, including, but not limited to, prime farmland and … farmland dedicated to the cultivation of specialty crops.” Dan Scripps, who chairs the commission, noted it must consider how much other land in a community is being used for energy generation, not just that from the project itself. “There are concerns that everything is going to look like the Thumb or Gratiot County,” he said. “Being conscious of the statutory requirements that we also have to consider the other parts of the community being used and not oversaturate is going to be one of the considerations that we’re looking at.” Unlike with basically every other type energy infrastructure the agency sites, he said, the government will have no power of eminent domain to take property to facilitate renewable projects. Mills said that moving forward, the agency will have to “think through how they operationalize” how much land, especially agricultural land, is used to make electricity. Developers pick rural areas over urban or brownfield sites because they have large tracts of cheaper, already-cleared land and lower taxes, she said.

JOHNSON From Page 1

The supplier argues that it clearly qualifies, as Johnson, a Black man, is either the sole or majority owner of each business — Piston Automotive LLC, Irvin Automotive Products LLC, Detroit Thermal Systems — and is involved in the operations of each division. The council says that although Johnson is the owner, the business units are run by white men, and therefore the company does not qualify. The council revoked Piston Group’s certification in February 2021. A few months later, the company sued the council to regain its status. Just a few months after that, the council countersued, alleging breach of contract and defamation. In March 2022, the Michigan Court of Appeals determined that the Piston Group could keep its certification while the lawsuits played out in court. MMSDC’s attorneys in court Dec. 5 led a line of questioning that challenged whether Johnson was, in fact, in charge of the companies. The presidents of all three of Johnson’s companies under Piston Group are white men. The defense questioned Johnson on a restructuring of the companies in 2017 that put all three entities under the Piston Group, including the promotion of Joe Finn, a white man, as CEO of Irvin Automotive, which Piston acquired in 2016 in a $175 million deal from then-bankrupt Takata Corp. On Dec. 4, during Johnson’s testimony before his own counsel, Johnson said promoting Finn was about keeping talent and acknowledging that Finn was the expert on Irvin’s automotive trim business and Piston had not been in that market before. “I wanted him; he knew the business,” Johnson said. “We didn’t know the trim business.” Finn ultimately left the company in April and was replaced by Tim Mann, another white man. Prior to the MMSDC attempting to revoke Piston’s minority certification, the organization issued a letter to Piston that it could come back into compliance if its top management positions were held by minority executives, per its rules. Johnson, in court last week, said he would not terminate his long-

MARKET PLACE

time presidents because they were white, including veteran president of the Piston Automotive subsidiary Bob Holloway. “From day one, Bob has been with me,” Johnson said on the stand Dec. 4. “I am not going to let Bob go. He helped me build this company. I got good guys. He’s white. I understand the concept of (the MMSDC rules), we got a good team and I am going to go with that team.” In court on Dec. 5, Johnson reiterated that point. “I’m not going to fire somebody just to replace them with a minority just because some system says I’ve got to,” Johnson said. “I wouldn’t be here without those folks. You hurt one, you hurt the whole group. That would destroy my company and I wasn’t going to let that happen. That’s reverse discrimination because they are white.” In fact, Johnson and his company appeared to double down on his loyalty to his current executives and seemingly thumbing its nose at the MMSDC by announcing in court that Holloway would become COO of the Piston Group and have oversight of the company’s three subsidiaries. The MMSDC maintains that Johnson is not involved in the daily management of his businesses and that the company is “effectively demanding that the MMSDC bend (the National Minority Supplier Development Council) rules,” the organization said in a statement to Crain’s. The Detroit-based council is one of 23 regional affiliates under the National Minority Supplier Development Council. MMSDC’s defense is focused on board meeting minutes that reveals Johnson planned to step away from day-to-day activities when the Piston Group holding company was created as part of a succession plan. In court, Johnson denied this happened as customers demanded his continued involvement. He said the plan was to back off from dayto-day operations to seek diversification opportunities, but hasn’t removed himself from the operations. “Since I started this business in 1995 … it was a struggle,” Johnson said. “It was a lot of work. You had to prove yourself. You had to develop relationships and get your butt kicked a bunch of times. You have to build teams. We did that. We built a solid team … but I never

backed off. I can’t. The customer won’t allow me to. I have to be involved and deal with the banks.” The trial follows the court’s most recent opinion, issued Oct. 2. In that opinion, the court dismissed the defamation claim against Piston Group and denied MMSDC’s motion as to breach of contract due to there being “sufficient evidence creating a genuine issue of fact that MMSDC used ‘shifting’ standards when it decertified Piston Companies.” The court also denied MMSDC’s motion for partial summary disposition and decided against dissolving the preliminary injunction that has allowed the Piston Group to keep its certification. At the same time, it denied Piston Group’s request for a permanent injunction “without a resolution of the case” and dismissed its claims of fraud, negligence and discrimination. Piston Group claims MMSDC President and CEO Michelle Sourie Robinson became upset with the company after it hired away one of the council’s executives, Frank Irvin, and after the company declined to provide $300,000 to support a new MMSDC program. It also claims Robinson attempted to make the certification standards more stringent shortly before decertifying the supplier. The case undoubtedly is being monitored closely by Stellantis NV, Ford Motor Co. and General Motors Co. who contract with Piston Group. Minority certification can be lucrative for automotive suppliers, as automakers continue to prioritize contracts with minority-owned businesses. Ford and Stellantis account for 75% of Piston Group’s sales, while the supplier says its contracts with Stellantis are contingent on the certification, according to court documents. The company has also been pursuing new business with GM. The Piston Group had $3.2 billion in revenue in 2022 and employs roughly 11,000 people. Johnson was the first witness to testify in the bench trial that is expected to last the next several weeks. Judge Annette Berry is overseeing the case and will make ultimate judgment whether Piston Group can keep its certifications. — Crain’s reporter Kurt Nagl contributed to this report.

ated companies, but looming debt associated with earlier acquisitions plus a $700 million COVID-19 relief loan from the federal government coming due in September led to larger issues, multiple outlets have reported. Other factors at play include a drop in shipping demand, the Wall Street Journal reported. Associated Press reporting said the company went from 49,000 shipments per day in 2022 down to as few as 10,000 per day this year. The International Brotherhood of Teamsters represents about 22,000 Yellow workers, mainly drivers, dock, maintenance and clerical workers. The company employed about 30,000. “Today’s news is unfortunate but not surprising,” Sean O’Brien, Teamsters general president, said in

a statement in late July when it was notified the company was closing and filing for bankruptcy. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry.” In a first-day filing in August, Yellow said it was the largest unionized less-than-truckload carrier in the U.S., moving about 10% of the country’s freight in that category. Last year, it had some 14.2 million shipments for 250,000 or so customers, its filing said. It had $5.2 billion in operating revenue last year. In addition to its 170 or so terminals, also had some 12,700 owned and leased trucks, plus 42,200 owned and leased trailers.

HEALTH BENEFITS

TRUCKING From Page 3

Crain’s reported in August prior to Yellow’s bankruptcy filing that it had shuttered its Michigan operations, laying off 654 at facilities in Romulus, Taylor, Jackson, Pontiac and Grand Rapids. Yellow, based in Nashville, was a major operator in what’s known as “less-than-truckload” shipping, COMMERCIAL PROPERTY meaning multiple customers can ship goods on one truck. It filed for Chapter 11 bankruptcy protection in early August, citing a severe liquidity crisis. The nearly century-old company blamed its cash crunch on union leadership for stonewalling a restructuring plan called One Yellow, which would consolidate its affili-

REAL ESTATE

JOB FRONT

Detroit expands help with down payments By Nick Manes

What started earlier this year as a $6 million down payment assistance program for Detroiters has more than doubled in size and will make a return in the new year. The program, rolled out in March by Mayor Mike Duggan and other officials, has enabled more than 300 residents to become homeowners over the last nine months, according to a news release from the city on Dec. 5. The re-emergence of the program comes as the income needed to afford a house has continued to escalate. “There are a lot of Detroiters who are paying enough in rent to pay a mortgage, but just need some help with the down payment costs,” Duggan said in the release. “We created the down payment assistance program so hundreds of Detroiters can kiss their landlord goodbye and have the security of owning their own home.” The city has received nearly 500 applications from Detroiters seeking support from the program, which is funded with more than $12 million from the federal American Rescue Plan Act. Some 93% of applicants were Black, according to data released by the city, and 385 of the applications have been approved for funding and 314 have closed. The average purchase price for those approved for assistance was $116,000 and the average household income was $47,810. While initially launched as a $6 million program, Detroit City Council approved two amendments to double the original allocation, bringing the total round one funding support for firsttime homebuyers to $12.25 million. A second round will launch early next year and those seeking support can do so at detroitdpa. org, according to the city.

Mayor Mike Duggan | DALE G. YOUNG

“We are thrilled with the success of the Downpayment Assistance Program, and that so many Detroiters now have a house to call home,” Julie Schneider, director of the city’s Housing and Revitalization Department, said in a statement. “This program allows Detroiters to achieve housing stability through an investment that also brings vibrant neighborhoods.” The median sale price of a home in the city in October stood at $85,000, a five-year high for that month, according to data from Realcomp II Ltd., a Farmington Hills-based multiple listing service used by many Realtors in the region. The median sales price for that month for Southeast Michigan was $250,000, also a five-year high for October. Data released last month by the National Association of Realtors showed that around the country, from July 2022 to June 2023, the median household income for homebuyers jumped to $107,000 from $88,000. Figures provided to Crain’s by the Michigan State Housing Development Authority show the state-level agency assisted 4,340 first-time homebuyers during the same period as the NAR data, making for a 33% increase over the previous year.

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JOB FRONT POSITIONS AVAILABLE

DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 15

Nelson to retire as Michigan director of Kellogg Foundation dation to support the continual growth and development of its The W.K. Kellogg Foundation’s Michigan operations, something Michigan director, Faye Alexander she has done by hiring talent Nelson, will step down at year’s around the state, bringing teams end to try another go at retirement. together under one umbrella and She left the top job at the DTE crystallizing the $8 billion foundaEnergy Foundation six years ago tion’s Michigan strategy within its larger mission to support with the intention of rechildren, families and comtiring. But LaJune Montmunities to propel vulneragomery Tabron, presible children to success. dent and CEO of Battle “I’ve been able to do Creek-based Kellogg what I joined the foundaFoundation, talked Neltion to accomplish. I know son into taking on overit’s now time to move on,” sight of its grantmaking she said. “It’s been a wonand programmatic inderful experience, and one vestments in the state in Faye Alexander I was very honored to take 2018. Nelson on.” “I’ve had the privilege Before Kellogg, Nelson was to really work on so many projects and initiatives. But at some point chair and president of the DTE Enin time, sooner rather than later, ergy Foundation and a vice presiit’s important to step aside and let dent with DTE Energy Co. for five our younger leaders lead. That years. She was also the founding presicoupled with the importance of family and friend and me time, it’s dent and CEO of the Detroit Riverthe right time,” the 69-year-old front Conservancy, shepherding its first 10 years of property assemNelson said. Kellogg’s board has launched an bly and riverwalk construction, internal search for Nelson’s suc- staff and programs on the east rivcessor, with the goal of having that erfront until 2013. In that role she person in place by the end of the led efforts that raised about $160 million over a decade to support year, she said. As Michigan director, Nelson land acquisition and easements has overseen an annual grants and completion of three miles of budget of $60 million-$80 million, the east riverwalk. That developmoving funds statewide and in ment spurred more than $1 billion Detroit, to efforts including the in public and private investment Detroit Commons food co-op in along the riverfront. For her philanthropic leaderthe North End neighborhood with other funders to provide fresh ship, Nelson was named among food and a developing facility that Crain’s 100 Most Influential Womwill provide maternal and child en in 2021 and in 2016 and among its Notable Women in Nonprofits care. Nelson said she joined the foun- in 2018.

By Sherri Welch

LIONS From Page 2

The point of that was that we’re going to be a tough team. I think that’s proven to be the case. In that first season, we weren’t winning but we were playing hard. We were getting close. I think all we had to do was figure out how to win.”

On Brad Holmes’ trust in the process Holmes prior to joining the Lions in 2021 held executive roles for 17 years with the St. Louis/Los Angeles Rams. Ironically, his first big move as Lions GM was a late-January 2021 trade of longtime Detroit quarterback Matthew Stafford to the Rams for three draft picks and quarterback Jared Goff. Wood said Holmes wasn’t fazed by the prospect of dealing Stafford, who spent 12 years in Detroit. “When we started looking at GMs, Stafford had requested a trade but it hadn’t been made public,” Wood said. “After that, we wanted to find a GM to build through the draft. I did an interview over Zoom with (Holmes) and about a minute in I knew he was the guy. His passion, presence jumped through the screen. I brought (Holmes) in for an interview and told him Stafford 16 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

wanted to be traded and Holmes said, ‘good.’ He wanted to build through the draft. We used the capital from the Stafford trade to get a lot of the players we have contributing right now.”

On high level of enthusiasm The Lions prior to the start of the 2023 season sold out of season tickets for the first time since the team moved to Ford Field in 2002. Wood said the Lions capped season tickets at 55,000 and that another 8,000-9,000 fans are on a waiting list. Wood also touted Lions fans’ willingness to travel to see their team play. He cited the 25,00030,000 fans who traveled to Kansas City for the season opener and Lions fans’ pilgrimage to Green Bay for a Sept. 28 night game that led Packers officials to send out a note alerting ticket holders to not sell tickets to outside fans. “There’s intense enthusiasm and participation on the road,” Wood said. “It started in Green Bay last season, where we had about 20,000 fans in (Lambeau Field). It’s encouraging to see fans who are that enthusiastic to travel. At home and on the road, that shows we’re providing value for people. It’s not cheap to come to a game, and you never want to forget the financial commitment

Units at The Plaza apartment building in Midtown are being turned into “apartment-style accommodations” for travelers in a new concept from Marriott International Inc. | THE ROXBURY GROUP

MARRIOTT From Page 1

“It’s something we’re starting to evaluate, not specific to The Plaza but to our portfolio generally,” Di Rita said. “In our ongoing relationship with Marriott, they introduced Apartments by Marriott to us as a possibility for somewhere in our Detroit portfolio and The Plaza struck us as a really nice fit.” That includes being 100% residential already as well as the unit layout and site location. Unlike hotels, Marriott Bonvoy properties don’t provide amenities like daily housekeeping or meeting spaces, but do fans make.”

On Ford Field logistics Wood mentioned $100 million in improvements made to Ford Field over the last handful of years. He said investments are being made to keep the venue current and vibrant. He acknowledged the setup downtown does present some challenges, but the improvements will continue as the team has no plans to move or build a new stadium. “It’s something we talk about all the time. When we moved downtown, it was a very different downtown than it is now,” Wood said. “Getting 65,000 people in and out of there is a challenge. We’ve tried to do a lot of things: opening the doors earlier. We do the best job we can getting people out of the stadium in a timely fashion so they want to come back. “The situation isn’t ideal. We don’t have great parking. There’s not great tailgating other than in Eastern Market. But I don’t think we’d rather be anywhere other than downtown Detroit. You take the good with the bad.”

On Allen Park practice facility Wood said renovations have been made to the Lions’ Allen Park

offer things such as private bedrooms, separate living rooms, full kitchens, and washers and dryers, the hotel chain says. The Roxbury Group has redeveloped historic Detroit buildings including the David Whitney and the Metropolitan into Marriott-brand hotels, and is constructing another one groundup on Woodward. Brian Povinelli, senior vice president and global head of marketing and brand for Marriott, said in a news release: “Consumers looking for longer term accommodations, whether traveling solo or as a family, are increasingly blend-

ing work and leisure trips and seeking out the residential amenities that Apartments by Marriott Bonvoy offers.” On Dec. 5, Marriott announced it had started taking reservations for its first Marriott Bonvoy concept in San Juan,

practice facility to make it more current. Wood admitted Lions officials have discussed the possibility of moving out of the space, which was built in 2002. “We’re looking at whether to stay there long term. There’s a lot of maintenance to be done,” he said. “How much money do we put in there vs. relocating is what we’re looking at right now. With that location, it’s easy to get to. The location is good. We’re landlocked with things around us. That spot is something we’re constantly evaluating.”

the draft to have an economic impact of hundreds of millions of dollars.”

Marriott Bonvoy properties offer bedrooms, separate living rooms, full kitchens and washers and dryers.

On hosting the 2024 NFL Draft It was announced in March 2022 that Detroit will be the site of the 2024 NFL Draft, which Wood said is another opportunity for the city to showcase itself. He expects there to be several hundred thousand people in the city throughout the three-day event. “When you have events like the draft, it does a lot for the hotels, restaurants, bars, parking lots,” Wood said. “We want (the draft) to be tremendous in person, but there are going to be 50 million-60 million people watching every night on TV. It’s a great way to shift the perception of the city, and it could have some long-term effects. I think there’s potential for

Puerto Rico, which is opening in a few weeks with 107 units. Next year, Marriott Bonvoy properties are expected to open in Canada, Europe and the Middle East.

On the team’s prospects At 9-3, the Lions are one game behind the Philadelphia Eagles for the best record in the NFL. Detroit in its last five regular season games faces one team with a record currently above .500: the Dallas Cowboys on Dec. 30 in Texas. Wood thinks this year’s team has a chance to do something special. “I think we’re in a good position to control our own destiny,” Wood said. “We have a chance to end up as a 1 or 2 seed. That’d be awesome. I wouldn’t want to be the team coming into Ford Field to play us (in the playoffs). You have to be healthy, though. There have been a lot of quarterbacks hurt this year. Luckily we’ve been able to keep (Goff ) upright, a lot of which has to do with our extremely strong offensive line. “I think every team has some holes. The neat thing about the season is that coaches try to exploit the weaknesses of every team. It becomes a chess match because no team is invincible. Being at 9-3, tied for the second-best record in the league, whatever holes we have we’ve been able to cover.”

From Page 3

“What we saw in the pandemic was that health care workers were really made to deal with the frustrations the public had, not just limited visitation rights and the restrictions we had that were very necessary to keep us safe, but all of the frustrations out of the hospital, too,” he said. “That just seemed to create enough animus for us to notice the rise of verbal and physical assaults by patients and their caregivers.” Health care workers are five times as likely to experience workplace violence as other workers, according to government data. According to a 2022 study from medical practice survey firm Press Ganey, 57 nurses are attacked every day in the U.S. Last month, Hospital Sisters Health System in Springfield, Ill., announced it was removing all wood and metal crucifixes from rooms throughout its hospitals, citing a first line of defense against anyone who would use them as weapons against medical professionals at the Catholic system. At least 38 states have enhanced penalties for assaulting nurses, and several states apply enhanced penalties to assaults on specific health care workers or in specific settings such as emergency departments, according to a House Fiscal Agency analysis of the legislation. Bob Riney, CEO of Detroit-based Henry Ford Health, wrote in June testimony in support of the Michigan bills that the system had installed weapon detection systems in many of its emergency departments, increased de-escalation and safety training for staff and created a 24/7 support line for workers to combat the violence. The increasing frequency of the attacks — up 58% between 2021 and 2022 at McLaren — is leading to more workers on leave to recover as well, exacerbating the ongoing labor shortage at hospitals across the country. Michelle Peña, chief nursing officer for Trinity Health Grand Rapids, in June testimony in support of the Michigan legislation described some of the injuries workers at the Catholic system were facing. “We have had colleagues off work for injuries such as concussions, internal bleeding of a pregnant woman, a fractured jaw, dislocated shoulders and severe anxiety from an assault, as examples,” Peña wrote in June. “As recently as last week, one of our colleagues sustained three fractured facial bones, needing care from a plastic surgeon.” As of Nov. 30, workers at Trinity Health Michigan, which operates nine hospitals in Michigan, had missed 17 days this year and had 11 days of restricted duty in total in the state due to workplace violence. Though Trinity Health Michigan continues to see a consistent upward trend in workplace violence encounters year over year, the number of lost work days resulting from workplace violence remains low. “Though Trinity Health Michigan continues to see a consistent upward trend in workplace vio-

lence encounters year over year, the number of lost work days resulting from workplace violence remains low,” the health system told Crain’s in an email. Last year, 18 days were missed due to workplace violence at Trinity and 18 in 2021. However, hospital systems disagree on the legislation itself. Under the bills, maximum fines for assaulting a hospital worker would double. Under the legislation, if the victim of a simple assault is a medical professional or volunteer the fine increases to $1,000. Aggravated assault against a health care worker would double it to $2,000 and assault with a deadly weapon of a health care worker would double that to $4,000. The jail sentences would remain the same.

Victim of society? However, the stricter fines only apply to family members and other visitors in a health care setting, not patients. Klamerus said the vast majority of assaults are coming from patients at McLaren. “The majority of ours (attacks on workers) come from patients,” Klamerus said. “There are medical causes for these events. We’re seeing higher rates of drug abuse and mental disorders in our hospitals.” HFH’s Riney supported the legislation to avoid stricter penalties for punishing patients who abuse health care workers. “The bills also exempt patients from the enhanced fine structure, an exemption that Henry Ford Health believes is needed to protect against behavioral health patients being overly prosecuted for behavior that is a direct manifestation of their health condition,” Riney wrote. Trinity, however, asked for the legislation to also target patients who are cognitively functional. “While we are conceptually supportive of this legislation and greatly appreciate the sponsor’s willingness to look at this issue, we believe these enhanced penalties should apply to those patients who have adequate cognitive function with decision-making capacity and commit acts of violence against our healthcare workers and medical volunteers,” Peña wrote. Peña wrote that at least 25% of patients who have attacked workers have adequate cognitive function to be prosecuted. Klamerus said the violence commonly occurs in five departments at McLaren’s hospitals: emergency departments, behavioral inpatient units, medical floors, surgical floors and geriatrics. Mostly it’s from patients unconscious of their behavior, but something has to change. “It underpins what we need in society: more attention to some of these behavioral issues,” he said. “Many patients don’t know they’re even doing this. We understand patients are vulnerable. They may be under the influence of substances. Medical conditions such as pain and trauma will impact the behavior of patients . . . but we’re human, too. We ask that our patients, our visitors be patient and know we are tending to their needs as best we can.”

Cannabis operators sue Detroit over facility near high school By Dustin Walsh

Schools are a drug-free zone. Yet the city of Detroit approved a group of marijuana companies to operate a multi-use marijuana facility near Detroit Community High School, including signing off on a certificate of occupancy this fall, according to a lawsuit. Six weeks later, the city allegedly discovered the school’s proximity to the building and revoked the operating licenses linked to the companies after the operators allegedly invested millions of dollars and secured lucrative customer contracts. The operators — Cannabis Professional Design LLC, MB City Transportation LLC, HZ Detroit Holdings 1 LLC and HZ Detroit Holdings 2 LLC — in turn filed a lawsuit seeking an immediate injunction from Wayne County Circuit Court on Nov. 9. Dave Bell, director of the city’s Buildings, Safety Engineering and Environmental Department, and Detroit City Clerk Janice Winfrey are named as defendants in the case. Neither the city nor representation from the companies responded to requests to discuss the lawsuit. The plaintiffs allege the city issued building, mechanical and plumbing permits as well as a special land use permit for the buildings in 2022 that would house a marijuana processor, testing lab and transporter.

The city revoked a group of marijuana companies’ business licenses because their operation at 20601 Glendale St. on the city’s west side is too close to a drug-free zone. | COSTAR GROUP

The companies claim in the lawsuit they invested $15 million in retrofitting the building, as well as securing “verbal” contracts with customers worth an additional $20 million. State law does not allow companies to secure written contracts until they have secured state licensure, which had not yet occurred. Three of the four companies did secure prequalification for state permits. It’s unclear what Cannabis Professional Design does, but a nonplant-touching company does not require a marijuana license to operate. The city issued the final building permit for the operation at 20601 Glendale St. on the city’s west side on May 3, followed by a post-inspection certificate of occupancy on Sept. 13. However, on Oct. 27, the city re-

voked the companies’ business licenses due to the marijuana businesses being within 1,000 feet of a drug-free zone, the Detroit Community High School charter school, in violation of the city’s marijuana ordinance. The companies were licensed to process bulk marijuana, test and transport marijuana. The plaintiffs did not seek to operate a dispensary, which has even stricter rules near schools. The plaintiffs allege the city’s original zoning map did not include the school, which has been open for 14 years. The plaintiffs are seeking an immediate injunction to prevent the city from revoking its licenses and a declaration that their permits are valid and enforceable. The first hearing on the case is set for Jan. 30.

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DECEMBER 11, 2023 | CRAIN’S DETROIT BUSINESS | 17

THE CONVERSATION

Michigan’s top utility regulator sees 100% clean energy goals as ‘ambitious’ Michigan Public Service Commission Chair Dan Scripps was a key figure as the Democratic-controlled Legislature passed a plan to transition toward 100% clean electricity. He testified at committee hearings and was on the House floor as lawmakers took crucial late-night votes on the package. Next, he will help to implement big components, including a change empowering the agency to issue permits for utility-scale wind, solar and energy-storage projects that hit opposition at the local level. Scripps was appointed to the three-member commission that regulates Michigan’s utilities by Gov. Gretchen Whitmer in February 2019 and named chair in July 2020. Before becoming a regulator, he worked various jobs in the clean energy sector. The Alma College and University of Michigan Law School graduate lives in Northport and represented that area as a Democrat in the state House of Representatives for one term in 2009-10. The following interview has been edited for length. | By David Eggert How did you get to where you are today? I was born in Grand Rapids and raised in Alma. While attending Alma College, I ended up interning for Gary Peters. He had just been elected to the state Senate from Oakland County in 1994 and was an Alma graduate. I was interested in political science. I ended up working for a summer for Consumers Energy on a municipalization. The city of Alma, largely driven by Total Petroleum at the time, was thinking about creating a municipal utility, and I (was) hired on the news and information side with Consumers. Those are pretty separate pieces. But you know, looking back, it’s just interesting the roads that lead from there. I went to law school, was elected to the House in 2008 from Leelanau County, which is where I had moved to and served one term, was on the Energy Committee and was active on energy issues. After leaving the House, I practiced law in Washington, D.C., and then came back to Michigan to run the Energy Innovation Business Council. That led to a role in philanthropy immediately before being appointed to the commission. Why do you like working on energy issues? I really got into it when I was in the House. The district that I represented went from Leelanau County down to Ludington. We had one of the first wind towers in the state, just north of Traverse City. We had a lot of oil and gas drilling. There’s a coal plant in Manistee. The Ludington Pumped Storage Plant is the largest grid-scale battery in North America. It’s just one of those districts where you got to see a little bit of everything in regard to energy. That’s really what I think is just so interesting. It’s not just one thing. It’s a whole lot of different technologies that increasingly underpin everything that we do in modern life. It’s rapidly changing. How do you manage that transition while thinking about the costs that customers have to pay, the reliability that we increasingly expect from our energy systems? The deeper you get, the more you realize you don’t know, which just makes every day interesting.

our state energy goals to not be vetoed at the local level. But I will tell you that in the siting of other infrastructure, and whether it’s pipelines, gas pipelines, liquids pipelines, electric transmission lines, it’s a robust process. We have in the past actually rejected some of those applications. And this one has more opportunities for local involvement and clear standards on what’s needed in order for the commission to approve a project than we have in any other place where we site energy infrastructure. Dan Scripps

What were the biggest sticking points to resolve to get the new laws enacted? It was really around how do you take some pretty ambitious targets in terms of 100% clean energy, ramping up to 60% renewables by 2035, 50% by the end of this decade, increases in the efficiency standard, how do you make them actually work so that they can actually be implemented? That really led to the consideration of everything, from the range of technologies that could be considered clean, which is not just renewables but also nuclear and natural gas with carbon capture and sequestration, and looking at some other opportunities that are coming forward as technology develops and giving the commission the ability to add to that list as technologies get commercialized. But it also looks at where are the places where, if things turn out differently than we think they will today, that we can tap the brakes. How hard will it be for Michigan to reach the renewable and clean energy requirements? They’re ambitious. We start from a point where the statutory target that we’ve met is 15% renewables by 2021. But to get to 50% by the end of the decade is a pretty significant ramp-up in renewables and doing that on the path to 100% clean energy by 2040 continues to be aggressive. But again, it’s done through a planning process that’s evidence-based, that the interested parties can intervene and provide their view of what is the right mix of resources to get

Read all the conversations at CrainsDetroit.com/TheConversation 18 | CRAIN’S DETROIT BUSINESS | DECEMBER 11, 2023

to those targets in an optimized way that preserves reliability and affordability for customers. The commission will be able to make decisions on siting new large-scale renewable projects. What is next? We’ve got a little over a year to get the processes together. Before a developer could ever come to us, they need to meet with local officials. If there is a compatible ordinance at the local level that contains some of the same standards as what’s written into statute, they need to go through the local process. Only if essentially it takes longer than the time periods that are included in the statute or they get a rejection at the local level can they then come to the commission. That tries to strike a balance between preserving elements of local control but also providing a path at the state for approval of projects that ultimately serve not just a local interest but a state interest in terms of reliability and getting to the resource mix that’s included in statute. Will the commission have flexibility to reject projects or is it a rubber stamp if they meet the standards? No, we absolutely have a role to play. There are a number of standards that are written in, including setbacks and noise ordinances and lighting and the considerations around prime farmland, the amount of a given community that is already being developed or has been developed for energy projects. There’s a process here, and it’s an important process to allow for projects that are necessary for

Will these projects be spread evenly across Michigan or will they be concentrated in certain areas, along major transmission lines, for example? I would answer it in a couple of ways. One is that when you’re looking at where are the best places to locate these, you need land. That probably skews more toward more rural areas. You need access to transmission that’s either there or is coming. And you need the resource. The wind speeds across Michigan differ pretty significantly. Even solar radiation, which you’d think would be fairly constant, there are cloudier parts of our state than in other places. On the flip side, in the legislation we are specifically required to consider the total amount of land that’s being used for energy generation in a local community — not just related to the project that’s in front of us, but what else is also in the queue or being proposed and what’s already there. As we’re considering these applications that may come to us, being conscious of the statutory requirements — that we also have to consider the other parts of the community being used and not oversaturate — is going to be one of the considerations that we’re looking at. What do you do outside work? Being a dad, which is my best job, to two young boys. They’re in fourth grade and eighth grade. Anytime I get to spend with them and the family is a blessing. I live in northern Michigan. Any chance to be outside — it might be skiing at Crystal Mountain, walking in the woods and certainly enjoying our lakes — is a great way to enjoy this special state.

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