Crain's Detroit Business, April 28, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 17

APRIL 28 – MAY 4, 2014

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Biz tied to Libya wins airport deal

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Planterra loses landscaping contract over $40K difference BY AMY HAIMERL

Headset startup seeks investors for hi-def device The ups and downs of metro Detroit real estate

Inside Ex-Detroit Lion works to expand clothing line, Page 5 Legislators may enact new compound pharmacy rules, Page 29

CRAIN’S DETROIT BUSINESS

Every week, Planterra Corp. staff comes to the Detroit Metropolitan Airport’s North Terminal to care for the landscaping. They water, groom, clean and generally maintain all of the potted plants and foliage that is the backdrop of the 26gate, 850,000-square-foot terminal. But after six years, the West Bloomfield Township-based company lost the contract. It was beat

not by a U.S. competitor, but by a division of British multinational company Rentokil Initial PLC, which has ties to late Libyan leader Moammar Gadhafi. The difference in the two bids was $40,000 over the three-year contract. Michael Conway, director of public affairs for the Wayne County Airport Authority, said the authority’s legal team looked at Rentokil and the U.S. division actually bidding on the airport work.

“Neither of them is on the U.S. State Department’s statutorily or administratively debarred companies. So the management team really had no reason not to Shane Pliska recommend them considering that they were the lowest responsive and responsible bidder.” The loss of that contract, effective May 1, was a slap to Shane Pliska, whose father, Larry, started Planterra in the 1970s and has grown it from a small retail shop

into a landscape and events business with $5 million a year in revenue. It has such high-end clients as Somerset Collection in Troy and the Mansion at MGM Grand, an exclusive suite hotel in Las Vegas. The company creates living green walls and elaborate interior gardens as well as throws lavish parties in Planterra’s 11,000-squarefoot greenhouse. “They don’t care about Detroit,” said Pliska, referring to Rentokil. “They don’t care at all. We’re proud of our local airport. It’s a real pride point to do business (there).” Planterra continues to service the airport’s larger McNamara See Contract, Page 35

Fear not the ’bot? As robots take jobs, experts ask if humans will keep up BY DUSTIN WALSH

Belle Isle fountain cleanup a crusade for caretaker, Page 33

This Just In Invest Michigan leases downtown Detroit office

NEWSPAPER

Invest Michigan, a new organization affiliated with the Michigan Economic Development Corp. that will run the Michigan Pre-Seed Capital Fund 2.0, signed a lease Friday for an office in the Guardian Building in downtown Detroit, beginning May 1, according to President and CEO Charlie Moret. Previously, Moret was managing director of technology-based entrepreneurship at Detroit’s TechTown. The 2.0 fund will typically invest $250,000 in startup and young companies that have been able to raise matching funds. — Tom Henderson

CRAIN’S DETROIT BUSINESS

A robot can screw in a bolt, run a conveyor system or track inventory — and, so far, can even be trusted with large sums of cash. At the Federal Reserve Bank of Chicago in Detroit, automated hilos move wrapped pallets of cash, often as much as $8 million at a time, to and from the counting room to the vault, which is home to $14 billion of U.S. currency. The hi-los replaced traditional laborers in managing the cash pallets, a local example of how robots increasingly perform some previous functions of bloodpumping, oxygen-breathing humans. Advancements in automation and artificial intelligence have already eked out or radically changed job duties for certain logistics, manufacturing, mass transit and health care workers. During the next 10 to 20 years, real estate agents, cab drivers — even associate lawyers — are subject to automation, according to an Oxford University report published in March. The study esti-

COURTESY FANUC AMERICA

A Fanuc America CNC machine loads and unloads brake components while a worker packages the output.

mates that robots could replace nearly half of the current U.S. workforce. Technological change is occurring at a rapid pace, faster than in any point in history, but is it threatening the livelihood of the American, and Southeast Michigan, workforce? Experts say that depends on whether organizational leaders learn to embrace the robot

and shift human jobs to the right parts of the manufacturing or service-providing process: programming the robots, repairing and maintaining them, and adapting work processes as the economy continues to evolve. In other words, humans remain in control of the discovery. See Robots, Page 36

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Grand Rapids malls rebound with increased capacity Here’s a good sign that Grand Rapids retail has rebounded from the Great Recession: For the first time in years, its malls are at or near capacity. “We’ve had some great momentum in the past couple of years,” Andrea Lukens, Philadelphiabased director of leasing for Pennsylvania Real Estate Investment Trust, the company that owns Woodland Mall in Kentwood, told MLive.com during a visit to West Michigan. Woodland is at 99 percent occupancy for the first time since its local competitor, Grandville’s RiverTown Crossings, opened in 1999. The Grandville mall now has a 98 percent occupancy rate. Centerpointe Mall, across the street from Woodland, is at full occupancy for the first time in decades after going through a recent “de-malling” that essentially rid the development of its indoor space. The newly configured Centerpointe, which now lets shoppers enter stores from the parking lot, has retailers clamoring for leases. Mike Murray, principal at Grand Rapids real estate broker Colliers International, says he has been writing offers for Centerpointe for full price and getting denied because others are willing to pay more.

HopCat exports craft beer cool to land of Hoosiers The rapidly expanding HopCat craft beer bar chain — already set to clink its first bottles in Detroit this fall — is branching out beyond Michigan and into the Hoosier State. Grand Rapids-based BarFly Ventures LLC last week detailed plans to launch a fourth HopCat restaurant and bar in Indianapolis, MiBiz reported. The $2.5 million bar operation, the company’s first venture out of state, is expected to open in early August in Indianapolis’ Broad Ripple Village, one of the city’s cultural districts just north of downtown. “Broad Ripple’s history as a place with an artistic heart and musical soul made it the ideal area for us to open our first HopCat outside of Michigan,” BarFly owner Mark Sellers said in a statement. BarFly projects the new location will create 100 jobs. But there may be bigger challenges on the horizon, not the least of which is potential competition from an 80-store outlet mall going up in Byron Township. Stay tuned.

MICH-CELLANEOUS 䡲 Worklab by Custer is developing an alternative office space environment for a newly renovated downtown Grand Rapids office building, MiBiz reported. Worklab recently inked a deal to create 10,000 square feet of co-working

MiBiz broke news in February that Sellers was tapping investors to help fund the launch of 12 to 15 HopCat beer bar locations in Michigan and nearby states. The company earlier announced plans for a HopCat location at 4265 Woodward Ave. in Midtown that is expected to open in October. According to state records, Sellers set up HopCat LLCs with the cities of Ann Arbor, Detroit, Chicago and Indianapolis in their names. Last year, EL Brewpub LLC, a wholly owned subsidiary of BarFly Ventures that does business as HopCat East Lansing, also received funding from state-backed mezzanine fund Grow Michigan LLC. BarFly Ventures operates a handful of bars and restaurants in West Michigan, including Stella’s Lounge, McFadden’s and Grand Rapids Brewing Co. in Grand Rapids and HopCat locations in Grand Rapids and East Lansing.

space on the second floor of the 99 Monroe building. It is scheduled to open in June. Worklab was developed based on research from office furniture manufacturer Steelcase Inc., and the project will utilize Steelcase technologies. 䡲 Consumers Energy is committed to helping find a new use for the site of a coal-fired power plant in Muskegon that’s scheduled to close in two years, according to The Muskegon Chronicle. As part of plans to decommission the B.C. Cobb plant, the Jackson-based utility said it will work to maintain

federal dredging of the Muskegon Lake port by finding a new use that would boost shipping, such as agricultural products or industrial use. 䡲 Michigan State University trustees voted to raise room-andboard rates for the school’s dorms

by 3.95 percent next academic year, The AP reported. With the rate change, the residence hall double-room rate for undergraduate students will increase $144, to $3,780 per year. The school said its unlimited dining meal plan will increase $204, to $5,374 per year. 䡲 After record levels of ice cover on the Great Lakes, one of the Shepler’s Mackinac Island Ferry boats finally took a stab at making it to the island from the ice-bound St. Ignace harbor on Thursday. In five hours, the boat, fitted with ice-breaking capabilities, made it about one mile through the 1 to 3 feet of ice clogging the harbor, MLive.com reported. The plan is to ensure the path is wide enough to remain open. “It doesn’t sound like much, but from where I’m sitting it’s a big victory,” said Chris Shepler, ferry service owner. Find business news from around the state at crainsdetroit .com/crainsmichiganbusiness. Sign up for Crain's Michigan Business e-newsletter at crains detroit.com/emailsignup.

CORRECTION 䡲

A story on Page 1 of the April 21 issue should have said the Chaldean American Chamber of Commerce provides social services from Southfield and Sterling Heights, rather than Dearborn and Sterling Heights.

Rocking the Intellectual Property World Warner Norcross & Judd attorneys blaze new trails in intellectual property law. Raymond Scott and Greg DeGrazia represent KISS Catalog, Ltd., providing trademark solutions and litigation that protect the licensing of the rock stars’ images. When the U.S. Patent and Trademark Office said that faces of entertainers couldn’t be trademarked, they were persuaded to approve precedent-setting trademarks for the iconic face paint of KISS. Trademarks Uâ cWT UPRT _PX]c P]S [^V^ PaT ]^f aTVXbcTaTS X] \âT cWP] # R^d]caXTb Finding new ways to protect intellectual property is one way our attorneys go the extra mile for clients.

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CRAIN’S DETROIT BUSINESS

April 28, 2014

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Headset startup sights success

Inside

Avegant seeks investors for hi-def video technology BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Avegant Corp. won’t have its video headset ready for market until at least year’s end, but its founders are hoping the sale last month of a competitor for $2 billion will move the Ann Arbor startup from a “who’s that?” to a “who’s who” with potential investors. The $2 billion purchase March 25 of Oculus VR Inc. — an Irvine, Calif.-based maker of virtual-reality goggles for video gamers — by Facebook has drawn investor attention to head-mounted technology first opened by Google Avegant says its headsets Glass last year. can be used to watch any Avegant’s headsets are video source on mobile for gamers, too, but, undevices. like Oculus devices, they can also be used to watch any video source on mobile devices, including streaming video from Netflix. The headsets deliver high-definition images directly to the retinas — the brain is tricked into thinking it is looking at a screen out in front of the viewer. “The sale of Oculus was huge for us. Wearable, headmounted technology has really heated up,” said EdSee Avegant, Page 36

ProNAi closes on state’s largest VC round, Page 23 Company index These companies have significant mention in this week’s Crain’s Detroit Business:

CARTER SHERLINE

“I peered into this optical contraption and I said, ‘Allan, you gotta quit your job. We have to start a company,’ ” Avegant CEO Edward Tang recounted of his first experience with the headset technology.

The realities of metro Detroit real estate Fisher, Albert Kahn buildings among prominent office properties in default BY KIRK PINHO CRAIN’S DETROIT BUSINESS

The Fisher and Albert Kahn buildings in Detroit’s New Center area could get new owners, or its current owner could work out a deal to maintain ownership of the iconic buildings. The properties are among the ranks of highprofile office buildings in the region in mortgage default. The driver? The economics of office rental rates and real estate carrying costs. According to commercial mortgage-backed securities data from Bloomberg LP, entities of FK Acquisition LLC are in default on the $27 million mortgage on the New Center buildings. The registered agent for FK Acquisition is Southfieldbased Farbman Group CEO Andy Farbman; Farbman Group handles property management and leasing. Negotiations with Farbman and the foreclosure process will continue until a resolution is reached, according to notations on the loan reported by Bloomberg earlier this month. A letter of default was first sent in November 2012. The 2005 loan matures in July 2015. In December 2011, the $24.6 million balance on the 2005 Goldman Sachs Group Inc. loan was transferred to Miami Beach, Fla.-based special servicer LNR Partners Inc. A representative for Farbman Group said company President Andy Gutman would not be

1001 Woodward financing deal lifts CDB value BY KIRK PINHO CRAIN’S DETROIT BUSINESS

COSTAR GROUP

The Albert Kahn Building is one of several prominent buildings in the region in mortgage default.

made available for an interview. She sent the following statement from Gutman: “We continue to be the proud operators of these great buildings in the heart of the city of See Default, Page 37

It took tours of downtown and Midtown — and even some of the less thriving areas of the city — with commercial lenders to show them why Detroit’s central business district is a sound investment. Out of the seven lenders that toured, it was Miami Beach, Fla.-based Starwood Mortgage Capital that financed a $24.5 million loan at 75 percent of the 1001 Woodward Ave. building’s value for Dan Gilbert’s Bedrock Real Estate Services LLC. This valuation is significant because it marks the first time a lender has financed a loan for 75 percent of a Detroit office building’s value in recent memory, said Dennis Bernard, founder and president of Southfield-based Bernard Financial Group Inc., which originated the loan on Gilbert’s 299,000-square-foot building at Woodward and Michigan avenues. Financing at 75 percent of a building’s value is an industry standard, although it has fluctuated in down times from See 1001, Page 37

Association of Corporate Counsel . . . . . . . . . . . . . 17 Attorneys Title Agency . . . . . . . . . . . . . . . . . . . . . . 14 Augment Ventures Management . . . . . . . . . . . . . . 36 Avegant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Barbara Ann Karmanos Cancer Institute . . . . . . . . . 6 Bedrock Real Estate Services . . . . . . . . . . . . . . . . . 3 Belfor Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Bernard Financial Group . . . . . . . . . . . . . . . . . . . . . 3 Blaze Contracting . . . . . . . . . . . . . . . . . . . . . . . . . 10 Business Leaders for Michigan . . . . . . . . . . . . . . . 28 Certified Restoration Drycleaning Network . . . . . . 15 Colliers International. . . . . . . . . . . . . . . . . . . . . . . 37 Cooper-Standard Holdings . . . . . . . . . . . . . . . . . . 19 Core Partners Associates . . . . . . . . . . . . . . . . . . . 37 Crain’s Detroit Business . . . . . . . . . . . . . . . . . . . . 16 Detroit Economic Growth . . . . . . . . . . . . . . . . . . . 34 Detroit Innovate Fund . . . . . . . . . . . . . . . . . . . . . . 36 Detroit Lions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Detroit Medical Center . . . . . . . . . . . . . . . . . . . . . . 6 Detroit Metropolitan Airport . . . . . . . . . . . . . . . . . . 1 Detroit Pistons . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 East Michigan Export District Council . . . . . . . . . . 26 Fanuc America . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Farbman Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Flagstar Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . 15 Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 General Motors . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Hayman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 HelloWorld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Hendricks-Berkadia Apartment Real Estate Advisors 4 Henry Ford Health System . . . . . . . . . . . . . . . . . . . 27 Inforum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Initiative for a Competitive Inner City . . . . . . . . . . 34 Inland Waters Pollution Control . . . . . . . . . . . . . . 10 Invest Detroit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Jaffe, Raitt, Heuer & Weiss . . . . . . . . . . . . . . . . . . 10 Jones Lang LaSalle . . . . . . . . . . . . . . . . . . . . . . . . 37 Lakeshore Global . . . . . . . . . . . . . . . . . . . . . . . . . 10 Lakeshore TolTest . . . . . . . . . . . . . . . . . . . . . . . . . 10 Lambert, Edwards & Associates . . . . . . . . . . . . . . 28 Lionblood Clothing . . . . . . . . . . . . . . . . . . . . . . . . . 5 Marcus & Millichap Real Estate Investment Services 4 Masco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 McLaren Health Care . . . . . . . . . . . . . . . . . . . . . . . 6 Michigan Pharmacists Association . . . . . . . . . . . . 29 Munder Capital Management . . . . . . . . . . . . . . . . 24 NSK Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Plante Moran . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Planterra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ProNAi Therapeutics . . . . . . . . . . . . . . . . . . . . . . . 23 Pro Sports Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 PulteGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Q10 | Lutz Financial Services . . . . . . . . . . . . . . . . 37 Redico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Renaissance Venture Capital Fund . . . . . . . . . . . . 36 Severstal North America . . . . . . . . . . . . . . . . . . . . 12 SME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 TriMas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 University of Michigan . . . . . . . . . . . . . . . 11, 18, 22 Wayne County Airport Authority . . . . . . . . . . . . . . . 13 Wayne State University . . . . . . . . . . . . . . . 11, 17, 36

Department index BUSINESS DIARY . . . . . . . . . . . . . . . . 31 CALENDAR . . . . . . . . . . . . . . . . . . . . 32 CAPITOL BRIEFINGS. . . . . . . . . . . . . . 28 CLASSIFIED ADS . . . . . . . . . . . . . . . . 33 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 LETTERS . . . . . . . . . . . . . . . . . . . . . 8, 9 OPINION . . . . . . . . . . . . . . . . . . . . . . . 8

THIS WEEK @ WWW.CRAINSDETROIT.COM

PEOPLE . . . . . . . . . . . . . . . . . . . . . . 32 RUMBLINGS . . . . . . . . . . . . . . . . . . . 38 WEEK ON THE WEB . . . . . . . . . . . . . . 38

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

$84 million sale of Ann Arbor-area apartments largest in Mich. this year BY KIRK PINHO CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

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A joint venture between Troybased Hayman Co. and Birmingham-based Belfor Holdings Inc. has completed the largest, by dollar value, multifamily property purchase in Michigan so far this year. Two apartment complexes totaling 1,022 units in Washtenaw Countyâ&#x20AC;&#x2122;s Pittsfield Township sold this month for $84 million, dwarfing the second most expensive Michigan multifamily deal of $25.8 million. New York City-based Sterling Equities Inc. sold the 582-unit The Pines of Cloverlane for $42.25 million and the 440-unit Hamptons of Cloverlane sold for $41.75 million, according to property transfer affidavits. â&#x20AC;&#x153;It bodes well for the market. For Michigan, thatâ&#x20AC;&#x2122;s a sizable trade,â&#x20AC;? said Paul Kerber, vice president of investments in the Southfield office of Marcus & Millichap Real Estate Investment Services Inc. The second-largest deal this year was the ownership change on the 663-unit Old Orchard apartments in Grand Rapids. That $25.8 million purchase was in February, according to CoStar Group. Kevin Dillion, partner in the Troy office of Phoenix, Ariz.-based Hendricks-Berkadia Apartment Real Estate Advisors, represented the buyer and seller in the Pittsfield Township deal. Terry Halverson, senior vice president of commercial real estate finance for Hendricks-Berkadia, arranged the financing on the deal, Dillon said. The joint venture closed on the complexes, both between I-94 and West Michigan Avenue, on Thursday, said Andrew Hayman, president of Hayman Co. Joint venture partner Belfor Holdings is a privately held holding company; it owns a number of entities, including Belforâ&#x20AC;&#x2122;s disaster recovery and property restoration businesses. Sheldon Yellen is CEO. The joint venture plans $6 million to $7 million in renovations at the apartments, including updated kitchens and bathrooms, and improvements to clubhouses and landscaping, Hayman said. Sterling Equities was co-founded by New York Mets co-owner Fred Wilpon, a University of Michigan graduate, and team President Saul Katz. Wilpon is also the Sterling Equities board president, while Katz is the company president. The average monthly rent at Hamptons of Cloverlane is $1,003; it was built in 1986, according to CoStar. The average monthly rent is $793 at The Pines of Cloverlane, which was built in 1976, according to CoStar. The complexes are about 96 percent occupied, Hayman said. â&#x20AC;&#x153;They are pretty strategically located, about 10 minutes from downtown Ann Arbor and 10 minutes from Eastern Michigan University,â&#x20AC;? Hayman said. The Ann Arbor multifamily residential market had a 98.7 percent occupancy rate in the fourth quar-

COSTAR GROUP

Hamptons of Cloverlane sold for $41.75 million.

The Pines of Cloverlane sold for $42.25 million.

ter last year, according to data from the Southfield office of CBRE Inc. Average rents in Ann Arbor increased from $994 in the second quarter of 2013 to $1,038 in the fourth quarter, a 4.4 percent increase, according to CBRE. The complexes have one- and two-bedroom units ranging from about 700 square feet to 1,200 square feet, Hayman said. Hayman Co. will manage the properties. The purchase brings Hayman Co.â&#x20AC;&#x2122;s multifamily residential portfolio to more than 12,000 units in

Michigan, Ohio, Illinois, Tennessee and Texas. In December, Hayman purchased the 981-unit Independence Green apartment complex in Farmington Hills from Denver-based real estate investment trust Aimco. Independence Green, located at Grand River Avenue and Halstead Road, was 95 percent leased at the time of the closing. That sale was for $53 million, according to CoStar. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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Ex-Lion hopes Detroit-based clothing line catches national buzz BY BILL SHEA CRAIN’S DETROIT BUSINESS

Nate Burleson now plays for the Cleveland Browns, but his clothing line will remain headquartered in metro Detroit. He also plans to go national with it. The 32-year-old wide receiver, released by the Detroit Lions in February after four seasons, launched his Canton Township-based Lionblood Clothing Co. brand of men’s and women’s lifestyle graphic T-shirts, hoodies, hats and accessories in 2013. Burleson Since then, the company has generated about $250,000 in revenue, said Robert Montalvo, Burleson’s partner in Lionblood and a minority owner of the company. The duo now is working on a new concept: providing turnkey services to pro athletes in other cities who want to launch clothing brands of their own. “We have something in the works that will encompass different cities and athletes in those cities,” Montalvo said. “We want to be able to work with that premier athlete in that city.” In a month, they’ll also launch “City Socks,” a line of men’s socks that show landmarks and icons and area codes from major cities in sports team colors, Montalvo said. The socks first will be sold in Detroit, where they already have distribution channels via Lionblood, and then launch in Chicago and New York City. Atlanta and Cleveland are down the road. The fashion endeavors stem from Burleson’s and Montalvo’s shared interest in young men’s contemporary fashion. Montalvo, 42, has been in the fashion industry for more than 20 years, starting by selling brands from a duffel bag in 1992. He met Burleson in 2006, and they’ve spent the past couple of years hammering out ideas. “We both love clothing, love fashion,” Montalvo said. The graphic T-shirt line made sense, he said, because of the fashion habits of Burleson and other pro athletes. “When he’s not in a suit, he’s wearing the high-end denim with the high-end T-shirt,” Montalvo said. “We are definitely middle- to high-end, as far as the quality of the T-shirt and the price.” The clothing is manufactured, warehoused and distributed through a contract with screenprinting and embroidery company

Atlantis Sportswear Inc. in Piqua, Ohio. “It doesn’t make sense for us to go out and get all this overhead and expenses that are unneeded right now,” Montalvo said. Instead, he and Burleson focus on the design, merchandising and marketing. Burleson said they spent 18 months doing research and planning. “I did my research, I saw there were websites available, and nobody had a clothing line close to it,” he said. “I started putting my ideas into motion.” The lead time also gave Burleson time to heal from injuries that kept him from playing. “I didn’t want to push a brand off the field when I wasn’t playing on it,” he said. “I didn’t want to be perceived as P. Diddy instead of playing.”

The clothing Lionblood items include graphic T-shirts ($30), crewneck sweatshirts ($58), hoodies ($64-$68), letter jackets ($79) and a variety of hats, stickers, pins, bandanas and dog tags. There’s also a $38 “Bless You Boys” baseball raglan aimed at Detroit Tigers fans, and gold and silver earrings on sale for $168. “I’m as excited about Lionblood as I ever have been about football,” Burleson said. “We’re going to make it sexy, make it look fly, make it look good.” Burleson and Montalvo didn’t want the clothing to be purely for Lions fans or the National Football League. They didn’t seek an NFL licensing fee. “We didn’t want to be associated just with the Detroit Lions. It’s more of a lifestyle brand,” Montalvo said. The clothing was sold for a time at Ford Field’s retail shop, but the duo didn’t want to pay the NFL’s hefty fee (which is typically about $100,000 annually in the form of a minimum royalty guarantee, according to information online from NFL Properties LLC). The clothing brand does capitalize on Detroit in general, which was a business decision. “We see Detroit having that cool factor as a Brooklyn does. We want to be part of that growth,” Montalvo said. While Lionblood will remain Detroit-centric, its wider fashion entrepreneurship won’t be specific to where Burleson plays football. “The color choices won’t be dictated by who Nate plays for,” Montalvo said.

Blood lines The Lionblood name has as much to do with the stars in the sky as pro football. Burleson was born in August 1981, making him a Leo. His astrological sign is important to him — on his chest is a tattoo reading “A lion sleeps in the heart of every man” — and that lent itself to the clothing line, he said. “Me being a Leo and signing with the Lions, it seemed so or-

ganic,” he said. “No matter what jersey I put on or what job I have after football, I am a lion. I am a Leo.” The brand got a boost when the Lions signed star running Reggie Bush last year, and without knowing what it meant, he hash-tagged “Lionblood” in an Instagram photo, Burleson said. Bush had seen Lions fans using the term on social media. Later, Burleson explained to him that Lionblood was his clothing line. Bush and other players, including megastar Calvin Johnson, took to wearing the clothing — and putting photos of themselves in the gear on social media. That was priceless viral marketing, and fans picked up on it, Burleson said.

Brick-and-mortar interest Retailers took notice of Lionblood, too. “The stores reached out, vendors, because fans were walking into boutiques and athletic stores asking for it,” Burleson said. Lionblood is available at 25 retail locations in metro Detroit, but there are no plans to expand that, Montalvo said. “I don’t want to flood the area with it. I think we’re good where we’re at,” he said. John Yu, owner of the Pro Sports Zone retail shop for the past six years in Livonia’s Laurel Park Mall, is an unabashed fan of Burleson and Lionblood.

“They always come out with something unique,” he said. “It did really well for me last year. People still come in and buy it.” Yu estimated he has sold “a few hundred” Lionblood items in the past year, and carries four or five of the shirts currently. “It doesn’t have Nate’s face on it. It’s a nice brand, good quality,” he said. “I trust this guy. I’m going to carry his clothing line.” This isn’t Burleson’s first foray into fashion: He and his three brothers launched a private-label bespoke suit line, B-Line, a few years ago. It was created by menswear designer William Malcolm of the Troy-based suiting label William Malcolm Luxe Collection, and includes custom suits, overcoats, shirts and accessories.

Preparing for the future Burleson is able to sell T-shirts and hoodies because he’s been a good, visible football player for a long time, and known for being gregarious. Burleson said he knows his onfield career is nearing its end, so he’s setting up options for the long term. In addition to fashion, he’s

been training to enter sports broadcasting — another visible job that can serve to passively market his clothing efforts. “It’s hard for me not to see the branding opportunities in every city,” he said. “Each individual player is like a cult movie. They have their own following.” He was widely acknowledged as a valuable veteran leader in the locker room and on the field, but he missed 19 games in four seasons in Detroit because of injuries — including a broken arm last September when he crashed his car on I-696 after attempting to save a pizza from falling off the front passenger seat. The Lions released Burleson in February to save money under the salary cap, but the team still must pay him $2 million this season. He had signed a five-year, $25 million free-agent deal with Detroit in 2010 after four seasons with the Seattle Seahawks. Burleson renegotiated his contract to help the team with its salary cap maneuvering. Burleson signed a one-year deal with Cleveland on April 6, but the financial terms haven’t been disclosed. A third-round draft pick by the Minnesota Vikings out of the University of Nevada in 2003, the Canadianborn Burleson has played in 135 regular-season NFL games with the Lions, Vikings and Seahawks, with 103 starts. He has 457 career receptions for 5,630 yards with 39 touchdowns. Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

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DMC says it offered to buy back Karmanos; McLaren says no sale BY JAY GREENE CRAIN’S DETROIT BUSINESS

After court-ordered mediation failed last month between McLaren Health Care Inc. and Detroit Medical Center in a contract dispute over McLaren’s acquisition last December of the Barbara Ann Karmanos Cancer Institute, the two health care systems are headed back to Oakland County Circuit Court to settle their problems. But two weeks ago, DMC officials said they mailed a letter to Flintbased McLaren that included an offer to buy back Karmanos, located on the DMC campus in downtown Detroit. McLaren spokesman Kevin TompTompkins kins, in an email to Crain’s, said Karmanos is not for sale. “McLaren Health Care has not received nor is it aware of any offer made by the DMC to purchase Karmanos,” Tompkins said. “Karmanos Cancer Institute is a subsidiary of McLaren Health Care and is not for sale.” Conrad Mallett Jr., DMC’s chief administrative officer, said DMC’s letter to McLaren also contained a

request for McLaren to give it an audited financial report of Karmanos and McLaren. “There is a clause in the contract (between DMC and Karmanos) that says every year Karmanos will give us audited financial report to demonstrate if not more than 5 percent of their business is unrelated to cancer services,” said Mallett. DMC said it sold DMC’s cancer business to Karmanos in 2005 for the below-market price of $9.9 million because it included an exclusive affiliation into perpetuity. Karmanos had offered a no-strings $45 million deal for the DMC cancer operations. Last October, McLaren signed an agreement to acquire Karmanos for an unspecified amount of money but also with a pledge to spend $80 million over the next four years to upgrade Karmanos’ downtown hospital and expand outpatient centers in Farmington Hills and Monroe. “Now that Karmanos is owned by McLaren, we want clarification to their compliance with the contract,” Mallett said. “It is fairly clear based on our uneducated understanding of McLaren that their business includes more than 5 percent of non-cancer services.” Mallett said he believes Karmanos now is in violation of the

sale and affiliation agreement and contract it signed with DMC nine years ago. “We would like to discuss buying back the cancer services,” Mallett said, adding: “It was inappropriate that Karmanos sold to McLaren.” On the same day McLaren and Karmanos announced they would join forces, McLaren filed a lawsuit against DMC in which it asked the court to declare DMC’s 2005 affiliation agreement with Karmanos to be an “unreasonable restrictive covenant” that violates Michigan’s antitrust laws. In its lawsuit, McLaren said it wants to use Karmanos’ name on its cancer centers at McLaren Oakland, a hospital in Pontiac; McLaren Cancer Clarkston; and other McLaren health care facilities in Oakland County. But DMC and Karmanos’ 2005 sale agreement also prohibits Karmanos from marketing or advertising its services in Oakland, Wayne or Macomb counties with anyone other than DMC, said DMC in a November court filing. DMC alleges that Karmanos is liable for breach of contract and McLaren for tortuous interference with its prior agreement with Karmanos. DMC also said its sale agreement with Karmanos also provided that “any breach by Kar-

manos of any provisions would cause irreparable harm to DMC (and allow for) injunctive relief.” In February, after hearing several months of motions from each side, Judge Wendy Potts ordered the two parties into mediation. But the mediation failed. Tompkins and Mallett said goodfaith effort Conrad Mallett Jr., was made to DMC address the problems, but both sides were too far apart in their positions. “Everything about this transaction is legitimate and beyond dispute. Everything about this agreement has been done to benefit Karmanos, its clinical and research staff and the communities they serve,” Tompkins said.

We “ would like

to discuss buying back the cancer services.

”

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Mallett said DMC continues to believe it has a valid contract with Karmanos that has been interfered with by McLaren. “We presented a plan to Karmanos that would have reinvigorated the partnership and created ambulatory opportunities for them across Southeast Michigan,” Mallett said. “It was flatly turned down.” Mallett said now the two health systems are headed back to court. He said Potts is expected to rule April 30 on DMC’s motion for summary disposition and preliminary injunction to stop further integration of Karmanos into McLaren. “(McLaren) filed an amended complaint that amped up (the allegations against DMC) by saying DMC has been purposefully overcharging Karmanos for services Karmanos is supposed to buy from us,” Mallett said. “We tried to settle this, but it looks like we are going to trial now,” Mallett said. DMC was acquired by for-profit Tenet Healthcare Corp. last October after Vanguard Health Systems, another for-profit chain, took over DMC on Jan. 1, 2012. McLaren, a nonprofit system, owns and operates 11 hospitals in Michigan, including Karmanos. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

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Planet Aid sues Ypsilanti Twp. over donation bin ordinance

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Penske Automotive plans hiring across dealerships States, with retail sales of 199,795 new vehicles in 2013. The company credited its broad Penske Automotive Group Inc., brand mix and market diversity which last week reported the high- for the increase in income. est quarterly income from continBoth factors helped offset losses uing operations in the company’s in sales and service when severe history, said it is looking to hire winter weather forced some more salespeople Penske stores to at each of its 243 shut down temdealerships. porarily. And given the “We had 280 push for dealers days of closures to add “product on our dealergeniuses,” Chairships in the man Roger Northeast, and Penske said in an that had a sizable interview with impact on us. But Automotive News the geographic diit will be “looking versity we have out for a different Roger Penske, in the West and kind of person” Penske Automotive our international than one with trapresence, both ditional sales exhelped,” Penske perience. Also, Penske’s service bays have said. Penske said first-quarter incapacity for more work, but not come from continuing operations enough mechanics to do it, Penske rose 15 percent to $66.1 million. said. “The issue is trying to attract Revenue rose 21 percent to $4 bilmechanics who want to make it a lion. Accounting for a gain from discareer,” Penske said. Penske ranks No. 2 on the Auto- continued operations, net income motive News list of the top 125 rose 17 percent to $67.9 million. From Automotive News dealership groups in the United

JAMIE LAREAU

CRAIN NEWS SERVICE

BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

An East Coast nonprofit with local operations in Romulus has filed suit against Ypsilanti Township to prevent it from enacting what it perceives as a ban on clothing and shoe donation bins. Last week, U.S. District Judge Denise Hood granted Massachusetts-based nonprofit Planet Aid a temporary restraining order that allows it to keep its 16 donation bins in place in the township. Bloomfield Hills law firm Dalton & Tomich PLC is representing Planet Aid in the case. In its complaint, Planet Aid said a representative of Ypsilanti Township contacted it on April 8 to let it know it had 30 days to remove its donation bins that did not comply with a zoning ordinance requiring property owners to maintain the property in accordance with approved site designs. Planet Aid said it secured prior consent from property owners before placing its 16 bins in the township or entered into rental agreement contracts with the

property owners or site managers to allow it to place the donation bin on the property. It had not been notified of any issues with its recycling bins, the nonprofit said in the filing. Planet Aid sells the clothing it collects to markets around the world and uses the proceeds to pay for development programs in poor communities in Latin America, Africa and Asia. Ypsilanti Township’s attorney has yet to file a response in U.S. District Court, but Planning Director Joe Lawson said it is not banning the bins. The township is enforcing its zoning regulations that stipulate where donation bins can be placed and the surrounding enclosure required for them, he said. “Some property owners were concerned because some of these bins were being placed on property without permission,” he said. Some of the bins have been blighted, and people were leaving non-textile items in front of some of the bins, like tires and couches.

“It just got out of hand ... (and) became an issue of blight,” Lawson said. Three groups affected by the township’s enforcement of the ordinance have contacted it to seek alternatives, he said. Aside from Planet Aid, they include Massachusetts-based Institute for International Cooperation and Development and Houston-based for-profit American Textile Recycling Services. “ATRS and IICD wanted to provide us with draft ordinance language to allow them and no one else to put their boxes in the township and in return, they’d offer the township a permit fee for doing so,” Lawson said. The township won’t enter into any type of negotiation on the matter until the Planet Aid lawsuit is settled, he said. But, he said, “I don’t think it would be appropriate to do such a thing. We’re not looking for opportunities to create monopolies in our community.” Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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CRAIN’S DETROIT BUSINESS

OPINION

Stronger pharmacy laws could save lives bout 18 months ago, Michigan became “ground zero” in a fungal meningitis outbreak that claimed 19 lives and injured more than 260 patients in our state alone. The culprit: tainted steroid drugs manufactured in Massachusetts by a compounding pharmacy and distributed in spinal injections at various medical facilities in four Michigan counties, including a pain clinic in Brighton. Compounding pharmacies mix and assemble pharmaceuticals to create medicine needed by a patient but not commercially available in the dose or format required. Meanwhile, a new federal law was passed to ensure greater oversight, but its rules are still being written. In Michigan, a Brighton-area lawmaker is leading the charge to tighten state rules through its own pharmacy board. As Chris Gautz reports on Page 29, if patients are injured or die because the new rules aren’t followed, the proposed law would impose felony charges and possible prison sentences. Compounding pharmacies can offer many patients a safe alternative to stronger doses or ingredients they may be allergic to that are found in commercially available drugs. They can also create medications that are found to be in short supply. The proposed legislation would require inspections and a “pharmacist-in-charge” responsible for quality control. Reputable businesses should have no problems with the proposed legislation.

LETTERS

Bolger’s demand no aid to deal

Biz, public are key in water talks

Detroit is edging closer to a bankruptcy plan and blueprint. But the insistence by House Majority Leader Jase Bolger that unions pony up some cash as part of the deal could actually be a deal-breaker. Lawmakers will need to approve any state contribution toward the “grand bargain” to help the underfunded Detroit retiree pension funds. Last week, Gov. Rick Snyder and Senate Majority Leader Randy Richardville seemed to distance themselves from Bolger’s demand. Some retirees (not police and fire) already are foregoing a cost-of-living increase and probable reductions in retiree health care coverage. Non-uniformed retirees are taking a 4.5 percent cut overall. If anything, unions might voluntarily contribute toward a health care fund for retirees. But that shouldn’t be required to move the final agreement to secure state support for a resolution of the pension issue. Bolger says he made his views on union contributions publicly known in January. But it still smacks of an attempt to move the goal line halfway through the game.

Editor: Bravo for the April 21 Crain’s Detroit Business editorial: “Biz must wield clout on water authority.” Up to this point, the counties have been the only players. There are more “publics” than just the public sector that are and will be affected. We need to bring the water-sewerage customers to the table, as they have the bigger stake in the future of the DWSD. It is the business community, especially manufacturers, that are going to be hit the hardest if something is not done to solve the problem. Of course, we residential ratepayers are being hit hard, too. If we do not solve this problem, metro Detroit will lose jobs due to astronomically high water and sewerage rates. And what about the reliability

Crain’s Detroit Business welcomes letters to the editor. All letters will be considered for publication, provided they are signed and do not defame individuals or organizations. Letters may be edited for length and clarity. Write: Editor, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207-2997. Email: cgoodaker@crain.com of a future water supply? It is paramount that any DWSD mediator bring business and residential ratepayers to the table to address this problem. There is another aspect of this problem that we are hearing very little about, one that hits the manufacturing sector especially hard: The amount of electricity it takes

to pump the DWSD water to their facilities — and the resulting cost. These combined rate increases are simply unsustainable. Joe Neussendorfer Livonia

Consider those with cognitive impairments Editor: George Lenyo’s opinion piece (“Employers must accept diverse abilities,” April 21, Page 9) is timely and instructive. When the U.S. Department of Labor recently announced new regulations designed to improve job opportunities for individuals with disabilities, I was immediately reminded of the uproar surrounding the original Americans with Disabilities Act of See Letters, Page 9

KEITH CRAIN: We need another Judge Greene today There are probably not many who remember federal Judge Harold Greene and his earth-shattering ruling in 1984 that led to the breakup of AT&T. That led to the birth of “Baby Bells,” which have since merged and morphed from regional phone companies into telecom giants while new wireless companies formed and competed. Now, our primary cable operator in Southeastern Michigan, Comcast, wants to do a billion-dollar merger with Time Warner Cable, which will result in one big cable company — probably 30

million customers — for the entire nation. It’s a bad idea, and I hope federal regulators say no. I remember not too long ago when XM and Sirius both came out with satellite radio systems. They both promised to be strong independent operators and they would never even think of merging. It wasn’t long before they were both whining that they couldn’t survive without a merger. They merged, and we have

a monopoly that has decreased service and raised prices. I can’t think of any good argument for allowing this multibillion-dollar cable merger. It would be good for shareholders but bad for customers. Supporters say the geographic markets for Comcast and Time Warner don’t overlap much. But it’s more than cable. It’s also broadband Internet service. Which is why companies like Net-

flix — which send streaming content — oppose the deal. Who regulates cable companies anyway? States used to regulate phone companies and cable companies. But that power has diminished. And monopolies are growing. Competition is a good thing. It makes products and services better and keeps prices low for the consumer. Just look at competition in the cellphone arena. Lots of competitors and low prices. You and I don’t have a vote in this cable deal. But think about how you might be affected. “Too big to fail” is a phrase used

to justify federal bailouts of certain banks during our recent financial crisis. Well, maybe we need another battle cry: “Too big to get bigger.” We are lucky to have monopolies in Detroit that provide electricity and natural gas. They are still regulated and seem to understand the responsibilities of a monopoly. It may be a tough sell by Comcast to convince federal regulators to allow this monopoly. My guess is that it will be more political rather than economic. That’s too bad, but seems to be the way it is these days in Washington.

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Crain column draws responses From letters: ‘Overseer’: Much ado about nothing? Editor: Is it me or is this “overseer” thing on HuffPost Detroit or wherever stupid? Did anyone actually read Keith’s column (“Maybe we need a permanent overseer,” April 21, Page 8)? Aside from the headline (and even then, who cares?), I didn’t see the word “overseer” used in his column. And even if it was, who the hell cares? As a subscriber and pragmatic progressive, the PC Police need to get a life! Fred Newton

Myopic views ignore the real issues that precipitated the current events that Detroit will revisit this probably in the next 10 years. Overseer or not. Michael Tucker In most municipalities, or even states, oversight of executive operations would be the role of the legislature, correct? Neil Tamble

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LETTERS CONTINUED ■ From Page 8

1990. Many feared scenarios where hoards of disabled people would be wheeled into massive corporate headquarters demanding jobs for which they were unqualified, or where teens and college students would be forced out of part-time jobs by a group perceived to be granted an entitlement based on their physical disabilities. Not only did neither happen, the employment rate for those with disabilities has remained disappointingly flat in the post-ADA era. I would like to add a few points of consideration to Mr. Lenyo’s thoughtful writing, notably about

hiring individuals with cognitive impairments. I challenge employers and hiring managers to redefine the meaning of the best and the brightest when aiming to fill entry-level jobs that can be successfully completed by people with intellectual challenges such as Down syndrome and autism. After a generation of inclusion in the public school system, many of today’s young adults with cognitive impairments hold a high school diploma or equivalent and are well qualified for work in restaurants, retail and light industrial environments.

Their best qualities are loyalty, honesty, timeliness and the desire to do a good job. Their brightest attributes, at the risk of a reverse stereotype, may be “pleaser” personalities, a constant smile and a tremendous sense of appreciation for being included as part of a workplace team. At the end of the (work) day, people with cognitive impairments, like all good workers, seek purpose and a sense of accomplishment to create a full and meaningful life while bringing value to their employers. Cynthia Hutchison Founder, Band of Angels

Chicago

From Talk on Web: Re: KEITH CRAIN: Maybe we need a permanent overseer “Overseer”? Someone really should have thought this through before pushing the “publish” button. Why fan Detroit’s consistently smoldering racial animosities? Keith Crain should know better. NadirOmowale The people who need an “overseer” are most of the very people that Crain’s represents. They are the ones who destroyed our economy through predatory lending and the global financial crisis, and then went begging to the public sector (us) to bail out their behinds. They are “too big to fail” yet have no allegiance to our country or society — they will move overseas the moment they find a cheaper, more exploitable workforce and nonexistent environmental protections. They are the “overseers.” Thomas C. Pedroni

Partnership Stephanie

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Did everyone forget about the global competition effect on the car industry? They took a major hit and the money dried up, which exposed the actual financial condition of life without the auto industry dollars. The pathetic management of the city became exposed as well as the result of putting all your eggs in one basket. Ididitright Wow. This is beyond insulting. Crain’s has sunk to a new low. We have new leadership. Also, we have a democracy here. Muckraker steve Yes, we do have a democracy here, and that democracy routinely elected criminals to “lead” the city. That is being done up to the very most recent election. Demonstrate that the voters are ready to elect competent politicians and then post your piece. William J

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Bidders may protest the awarding of DWSD contracts to Lakeshore BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

Two competitors with Lakeshore TolTest Corp. could lodge bid protests before the Detroit Water and Sewerage Department within days, after the department’s governing board awarded Lakeshore $60 million of contract work and

then reassigned it to a different company. The Board of Water Commissioners last week awarded Lakeshore two three-year sewer lining and repair contracts worth $30 million each, for the city’s east and west sides, and a separate authorization measure to assign those two contracts from Lakeshore to

Lakeshore Global Corp. Lakeshore Global, an entity that shared a corporate address and some principals in common with Lakeshore TolTest until recently, remains based in Detroit and is managed by Avinash Rachmale, former chairman and CEO of Lakeshore TolTest, sources told Crain’s. Lakeshore TolTest, or LTC, has been headed by Chairman-CEO Grant McCullagh since late 2012 and submitted the original two contract bids to DWSD sometime in mid-2013. It relocated its headquarters to Chicago a few months ago. McCullagh did not respond to requests for comment last week. Adi Dalvi, a director of business development for Middle East/North Africa oil and gas programs at LTC, deferred comment to Andrew Haliw, executive vice president and general counsel at Lakeshore TolTest, who also did not respond to requests for comment. Audrey Young, strategic communications adviser to Lakeshore TolTest at Holland & Knight LLP, also declined to comment publicly on the Chicago move or separation of companies, but said she does not represent Lakeshore Global. Detroit-based Inland Waters Pollution Control Inc. and Blaze Contracting Inc. also vied for the lining and repair contracts, and voiced their opposition to Lakeshore’s “irregular” bid at DWSD board meetings.

A main concern for both companies is that the company that bid on the contracts isn’t the same one that will perform on it, which appears to violate the terms of a request for proposals DWSD put out on both contracts last year. Gayl Turk, Blaze director of business development, and Michael Jacobson, an attorney for Inland Waters at Southfield-based Jaffe, Raitt, Heuer & Weiss PC, said the companies will decide shortly whether to file a bid protest of the Lakeshore award. “I know Lakeshore has a settlement with the DWSD that was supposed to pay out in installments and I understand those aren’t done yet,” Turk said. “So they’re evaluating a company they have an interest in. That was just one of the things that seemed irregular to me.” Among the others, Jacobson said, is that Lakeshore TolTest was able to reassign its previous bid to someone else after submitting it, and that Lakeshore Global did not have to disclose records on its bonding capacity, financial status or personnel, as the other bidders have done. The contract requirements in DWSD’s bid solicitation last year state that “no modification or revision to any proposer’s proposal form … will be accepted, nor will a proposer be allowed to withdraw its proposal and submit another

proposal for the work,” once the deadline for bids has passed. “They’re not following their own rules. That was a part of the bid package, that the proposer cannot be modified,” Jacobson said. “And Lakeshore Global is not the proposer. So what the department did is make the allowance, to say, ‘Lakeshore TolTest, you stay on as the proposer, but you can somehow assign your proposal after the fact to someone else.’ ” Competitors had seven days to respond after the water board’s contract decision last Wednesday. Lakeshore was also one of 14 companies DWSD suspended in December 2011 from contracting with the department as nonresponsible bidders, based on their connections to the so-called Kilpatrick enterprise. The company challenged the suspension, but Lakeshore and two others later agreed to withdraw from DWSD bids for one year. Lakeshore Global then won a three-year, $21.8 million contract last October with Lakeshore to provide supplemental staffing and help manage corrective maintenance and related construction at sites such as water treatment plants and stations. But that contract is now on hold, according to Detroit Emergency Manager Kevyn Orr’s office. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

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REPORTER’S NOTEBOOK Chad Halcom covers litigation and the defense industry. Call (313) 446-6796 or write chalcom @crain.com.

Page 11

Focus

general and in-house counsel awards Chad Halcom

Law schools target diversity in varied ways The University of Michigan Law School launched years of national debate building to last week’s U.S. Supreme Court decision on race and admissions practices — but some local schools have moved on to try for diversity by other means. At UM, for example, ethnic diversity has been on a climb even though student headcount is slightly down. The school, whose practices spawned the initial Grutter v. Bollinger lawsuit over 15 years ago, now reports that 27 percent of its 344 students expected to graduate next year are minorities. That’s compared with 24 percent of the 359 students graduating this year, and 21 percent of the 376 who graduated in 2013. The high court ruled 5-4 in 2003 that the UM law school admission policy that made race an admissions factor without creating quotas was constitutional. That led to Michigan voters passing a state constitutional amendment in 2006 to ban “preferential treatment to any individual or group on the basis of race, sex, color, ethnicity, or national origin in … public employment, public education, or public contracting.” Two civil rights organizations challenged that law, but the high court in a 6-2 ruling Tuesday upheld it. Wayne State University Law School Dean Jocelyn Benson said new laws have prompted the school’s admissions committee to consider geographic diversity, income and other factors as part of a deeper evaluation of applicants. However, minority talent attraction remains an uphill climb. “Schools that have robust affirmative action policies in neighboring states are now able to use those to court and lure away our best and brightest,” she said. “But one benefit of going through this saga is that we are now using a more fully holistic evaluation of all that an applicant can offer.” Wayne State University Law School’s fall 2013 first-year student class was 16.7 percent minorities, down from 17.7 the previous year. But law schools and other schools may be recruiting from an incrementally more diverse undergraduate student body in years to come, according to the Center for Educational Performance and Information. Almost 20.6 of students enrolled in four-year colleges and universities in Michigan in 2012-13 identified as one of six ethnic categories other than Caucasian/white, or as biracial, compared with about 20.3 percent of students in 2011-12 and 19.3 percent in 2010-11. “As our country becomes more diverse, inevitably the student body will grow to reflect that diversity at every level,” Benson said.

Raising the bar M

ichigan companies have been at ground zero for some of the most tumultuous business events in this young century. How well have corporate attorneys handled the challenge? In the fourth year of the Crain’s General and In-House Counsel Awards, a team of judges and Crain’s staff looked at nomina-

HONOREES

Attorneys who take their work to a higher level

Revenue over $1 billion Winner: Joshua Sherbin, TriMas Corp., Page 12 Finalist: Martin Szymanski, Severstal North America, Page 12

Revenue $100 million to $1 billion Winner: Emily Neuberger, Wayne County Airport Authority, Page 13 Finalist: Christopher Nelson, Plante Moran PLLC, Page 13

Revenue $10 million to $100 million Winner: Ira Schlussel, HelloWorld Inc., Page 14 Finalist: John Bommarito, Attorneys Title Agency, Page 14

tions from companies across the state to pick the region’s top in-house counsel. This year, there are two new awards: “Rising star,” to recognize people who are not yet the chief legal officer, and a pro bono award to recognize volunteer work. Profiles begin on this page and continue through Page 15.

Revenue under $10 million Winner: Jessica McGrath, Certified Restoration Drycleaning Network LLC, Page 15

Rising star Winner: Tamika Mayes, General Motors Co., Page 15 Finalists: Kimberly Coleman, Flagstar Bancorp Inc., Page 15; Yvette VanRiper, Masco Corp., Page 15

Pro bono

WINNER: PRO BONO

Winner: Andrew Pride, Ford Motor Co., at left

ANDREW PRIDE, 46

JUDGES

Title: Counsel, Ford Motor Co. Recent achievement: Worked with the Mexican Bar Association to create pro bono standards. eshaping the legal culture in Mexico, South America and Europe. Helping disadvantaged people with their legal problems. Resolving immigration issues. These are just a few of the things that Andrew Pride does on the side at Ford Motor Co. As chairman of the Dearborn-based company’s pro bono committee, he coordinates the activities for the automaker here and abroad — in addition to his in-house counsel duties. “One person spending two hours of their time can make a big difference in someone’s life,” said Pride, recalling the client who couldn’t sleep at night until the lawyer arranged for clear title to his home, or the one with a master’s degree who couldn’t advance in her career until he got an old court record expunged. “It is pretty near immediate change for the better in their lives,” he said. “And what I do here (Ford litigation) can take 10 years.” Pride has some high cultural hurdles to straddle in his international work of setting up pro bono programs. For instance, until austerity measures were imposed, people in the United Kingdom got government-provided legal representation and had no need for donated services. Also, attorneys in Mexico view pro bono work as depressing fees for all lawyers. But Pride says the Mexican fee argument is moot. “(In Mexico,) the people you’re helping … they’re the ones who couldn’t afford a lawyer, no

PIERRETTE DAGG/CRAIN’S DETROIT BUSINESS

Andrew Pride: “One person spending 2 hours of their time can make a big difference in someone’s life.”

matter what the cost,” he said. Pride and other Ford attorneys are working with the Mexican Bar Association in Appleseed Mexico, which is a network of public-interest justice centers, and others to establish pro bono regulations there, and helping to repeal anti-pro bono regulations in Brazil with a similar group of partners. In Europe, Ford’s pro bono program provides counsel to a social services agency for youths in the United Kingdom; a nonprofit that informs children about Internet and social media-related risks and their privacy rights in France; and Ashoka Fellows, social entrepreneurs with innovative solutions to societal problems in Germany. Ford General Counsel David Leitch’s goal is to examine the possibility of providing free legal aid in every country where Ford has a presence: Pride has yet to tackle Thailand and Australia. Leitch also wants to meet the State Bar of See Pro Bono, Page 12

Lisa DeMoss, director, graduate insurance program, Thomas M. Cooley Law School Kelly Freeman, assistant general counsel, Meadowbrook Insurance Group Chris Heaphy, senior vice president, general counsel and secretary, The Taubman Co. LLC Robert Kurnick Jr., president, Penske Automotive Group Bernard Lourim, corporate counsel, Fanuc Robotics America Corp. Wendy Richards, director of legal and policy programs, Michigan Community Network Lloyd Semple, professor of law, University of Detroit Mercy School of Law

GENERAL AND IN-HOUSE COUNSEL SUMMIT What: Honor award winners and finalists, discuss business and legal issues, May 13. For more details, see Page 16. Where: Westin Book Cadillac, Detroit Register: crainsdetroit.com/events

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April 28, 2014

Focus: General and In-House Counsel Awards WINNER: OVER $1 BILLION

JOSHUA SHERBIN, 51 Title: General counsel, secretary and chief compliance officer, TriMas Corp., Bloomfield Hills Recent achievement: Overseeing legal support services for 10 TriMas acquisitions worth more than $70 million combined in 2013, and an expanded legal communications campaign across the company’s footprint in 17 countries. s general counsel, it’s implicit that Joshua Sherbin oversees all things legal at Bloomfield Hills-based TriMas Corp. But the company is giving that role a higher profile with the late2013 launch of “All Things Legal,” a multimedia strategy to raise awareness of legal issues worldwide. TriMas — a diversified manufacturer of engineered aerospace, energy, packaging, trailer and other component products with 5,000plus employees, including more

Congratulations

Jessica McGrath

2014 Crain’s General Counsel of the Year Award from your Clean Brands family of companies.

than 200 in Southeast Michigan — confronts an array of legal issues regularly across its various businesses in 17 countries, Sherbin said. The All Things Legal effort builds on the legal webinars the company has hosted for more than two years with a Sherbin series of threeminute streaming video primers on various legal topics on the company intranet, plus a quarterly phone conference “roundtable” that portfolio companies can join from several continents. “We’ve had great participation in the webinars, and we’re also getting some good questions during our visits at individual business units, or in roundtables,” he said. “So we’re starting to see those tools really get utilized.” Webinar participation is up 10 percent since 2012.

TriMas also closed on 10 new company acquisitions in 2013, including Kansas-based Mac Fasteners Inc. for $34 million in October, Wulfrun Specialised Fasteners Ltd. for about $9.6 million in March, California-based Martinic Engineering Inc., for $19 million in January, and the assets of Tat Lee Ltd. for an undisclosed sum in April. In late 2012, the company also contracted with legal processing firm EXL in India to conduct initial review of its legal billings across 10 law firms worldwide and ensure compliance with TriMas’ outside counsel guidelines. “That’s not a substitute for doing your own careful read of the billings internally, and completing some analysis,” Sherbin said. “But it takes aside a whole initial administrative function of comparing statements against our outside counsel guidelines, just a basic running of the rules, and frees up a number of hours our internal legal employees can now devote to other complex tasks.” — Chad Halcom

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MARTIN SZYMANSKI, 60 Title: Vice president, general counsel and secretary, Severstal North America, Dearborn Recent achievement: He and his team avoided litigation with a supplier, recovered a $2 million charge, and secured a contract extension and price reductions totaling $16.7 million over five years. artin Szymanski, vice president, general counsel and secretary for Dearborn-based Severstal North America, is an executive relic for the automotive steelmaker. He continues to lead the North American subsidiary’s legal team after sweeping executive changes over the past 12 months in which most of the company’s top executives were replaced.

“I was one of two members of our senior management team not replaced; our new team members are mostly in their 30s and have little experience in our industry,” he said. “I have been entrusted with acting as a mentor to this group.” The changes have led Szymanski and his team of two atSzymanski torneys and a paralegal to become more aggressive in negotiating and litigating contracts. Last year, management discovered an improper and costly charge Severstal was incurring in a large contract. One of its customers was charging a capital expenditure fee tied to new equip-

ment — equipment it never purchased. Szymanski and his team avoided litigation with the supplier and recovered a $2 million charge and secured a contract extension and price reductions totaling $16.7 million over five years. He also litigated two separate suits with the same raw materials supplier totaling nearly $20 million in savings. Szymanski and his team also negotiated in arbitration over its sales of three mills to Renco Group in 2011. The arbitration ended late last year with Severstal paying only $32 million of a $90 million claim. “In order to stay profitable and competitive, we have to be aggressive,” Szymanski said. “We now have a greater consciousness about not overlooking issues and turning over every stone.” — Dustin Walsh

Pro Bono: ‘Immediate change’ ■ From Page 11

Michigan’s standard and have every Ford staff attorney provide 30 hours of pro bono services yearly. Closer to home, Pride and his colleagues provide immigrationrelated pro bono services to clients arranged via Dykema Gossett PLLC’s Ann Arbor office, as well as through state-based community service organizations, and to clients of the Legal Aid and Defenders Association in Detroit. The LADA clients typically need help with property, contract, power of attorney and housing matters, and with expungements of criminal records. Also through LADA, the Ford attorneys volunteered for 10 food stamp, elder law and nonprofit clinics in 2013. Lynda Krupp, managing attorney for LADA’s private attorney involvement unit, calls on Ford

lawyers regularly and said Pride is her “go-to” attorney whenever she has an urgent request because he’s willing to do whatever it takes for her clients. “They think he’s really wonderful,” she said. “He treats them as though they are his corporate clients.” LADA awarded Ford’s lawyers its Pro Bono Corporation of the Year award in 2011 and 2013. Appleseed honored Leitch, Pride and their team in 2013 for their volunteer work in Mexico. How does this Wayne State University-educated product litigation attorney manage all of these pro bono activities along with overseeing up to 100 lawyers working on more than 140 Ford cases in Canada and five Southeastern U.S. states, not to mention helping to raise three girls,

ages 13, 11 and 9? “There’s a great group of committed people here at Ford and in the community,” Pride said. “I couldn’t do what I do without my colleagues here and my colleagues on the international level. “This is definitely a team effort.” Pride could explain away the amount of work he’s done on Ford’s Pro Bono Committee since its formation in 2010 by saying that Leitch — the auto company’s top lawyer — asked him to do it. But there’s more to it than that. “He’s a strong leader and has the respect of his peers,” said Leitch of Pride. “He gets a real spark in his eye when he talks about the work our office is doing for pro bono.” — Ilene Wolf

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Focus: General and In-House Counsel Awards WINNER: $100 MILLION â&#x20AC;&#x201C; $1 BILLION

EMILY NEUBERGER, 62 Title: Senior vice president and general counsel, Wayne County Airport Authority Recent achievement: Executed a complex land swap that gave more land to Willow Run Airport, but also helped the clean up of a former General Motors Corp. property. mily Neuberger didnâ&#x20AC;&#x2122;t expect to become an expert in aviation law, but thatâ&#x20AC;&#x2122;s what happened. Her plan was to go to law school to become a lawyer for schools. Instead, she got a job doing corporate transaction work in Chicago after graduating from Northwestern University School of Law. That included negotiating airport contracts. Fast-forward a couple of decades, and Neuberger today is general counsel for the Neuberger Wayne County Airport Authority, the public body that oversees governance of Detroit Metropolitan Airport and nearby Willow Run Airport. Because airport budgeting is based on how much the airlines use the complex, and the carriers must make up any shortfall, there is constant pressure to keep balanced books. Such budget pressure forced Neuberger to entirely remake her department

It was a little hairy for about five months because it was just me (as the lone legal expert for two airports).

â&#x20AC;&#x153;

â&#x20AC;?

Emily Neuberger, Wayne County Airport Authority

while still handling legal issues. An early retirement incentive in February 2012 lured the departmentâ&#x20AC;&#x2122;s other two lawyers and a secretary out the door. It saved money but left Neuberger as the lone on-staff legal expert for two airports. â&#x20AC;&#x153;It was a little hairy for about five or six months because it was just me,â&#x20AC;? she said. The airport did contract some outside counsel work until Neuberger was able to hire three young (and less expensive) attorneys who have expertise in subject areas such as construction and environmental litigation. â&#x20AC;&#x153;We do virtually all of our legal work in house,â&#x20AC;? she said. That work includes construction documentation for massive airport projects, leases, ordinance preparation, bond disclosure, real estate and development transactions, she said. Metro Airport has 590 employees and a $325 million budget.

F I N A L I S T: $ 1 0 0 M â&#x20AC;&#x201C; $ 1 B Neuberger also quarterbacked a complex land swap in November that gave the authority additional runway threshold space so larger planes could land at Willow Run. In return, the federal trust charged with cleaning up GMâ&#x20AC;&#x2122;s old Willow Run Powertrain plant got land it needed for cleanup and possible redevelopment. â&#x20AC;&#x153;A lot of agencies were involved. That was a big deal for us. We didnâ&#x20AC;&#x2122;t want any continuing liabilities related to it,â&#x20AC;? she said. â&#x20AC;&#x153;It was not simple.â&#x20AC;? She also got the airport through construction of the $440 million North Terminal, which opened in 2008, without litigation. Neubergerâ&#x20AC;&#x2122;s job also includes defending the airport and the seven-member authority in court. The authority was in the spotlight after it fired airport CEO Turkia Mullin in October 2011 amid scrutiny about the hiring process for her, and a $200,000 severance payment from her previous job as Wayne Countyâ&#x20AC;&#x2122;s economic development director Neuberger hadnâ&#x20AC;&#x2122;t been involved with either the hiring or firing, but was in charge of defending the unlawful termination lawsuit Mullin filed against the authority. An arbitratorâ&#x20AC;&#x2122;s decision in April 2013 awarded Mullin $712,300 and more than $98,000 for attorneyâ&#x20AC;&#x2122;s fees. Neuberger joined the airport in 2004 from the Chicago office of Foley & Lardner LLP, of which she had been a partner. Prior to that, she was with law firm Hopkins & Sutter from 1988 until its 2001 merger with Foley & Lardner. â&#x20AC;&#x201D; Bill Shea

CHRISTOPHER NELSON, 43 Title: General counsel, Plante Moran PLLC, Detroit Recent achievement: Creating an in-house office of the general counsel t the 90-year-old accounting firm Plante Moran PLLC, General Counsel Christopher Nelson is the first of his kind. Building his department from the ground up, in a $400 million organization with 200-plus partners and more than 2,000 employees, is something he considers his biggest challenge and his greatest opportunity. Along with minimizing legal costs and exposure, Nelsonâ&#x20AC;&#x2122;s task will be staying attuned to the needs of employees in 22 offices. Because their specialties range from wealth management to real estate investment, it means being well-versed on a host of regulations. Nelson â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a popular misconception that a general counsel has one client,â&#x20AC;? said Nelson, who stepped into his role about a year ago. â&#x20AC;&#x153;The challenge and opportunity lies in maintaining that first-rate accessibility across the firm.â&#x20AC;? Being an insider provides a breadth of experience Nelson otherwise wouldnâ&#x20AC;&#x2122;t get. â&#x20AC;&#x153;I enjoy being in a position to develop a deeper and stronger understanding of the firm than you could hope to develop being an outside counsel,â&#x20AC;? he said. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m not as much in a position of being a task-oriented lawyer as a strategic partner who can help the client.â&#x20AC;? â&#x20AC;&#x201D; Doug Henze

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April 28, 2014

CRAIN’S DETROIT BUSINESS

Focus: General and In-House Counsel Awards WINNER: $10 MILLION – $100 MILLION

IRA SCHLUSSEL, 46 Title: Senior vice president, general counsel, HelloWorld Inc., Pleasant Ridge Recent achievement: Overseeing the rebranding of the company — in secret

t has been a busy couple of years for Ira Schlussel and his legal team at the Pleasant Ridge-based digital marketing firm HelloWorld Inc. That’s because it wasn’t HelloWorld until January. For the 15 years before that, the company had been known as ePrize Inc., which had established itself as one of the premier companies in the world for managing sweepstakes and customer loyalty programs. As general counsel, Schlussel Schlussel oversaw the company’s rebranding over the past year. It required legal filings, new credit cards and contracts with the HelloWorld name; explanation briefings for clients; and other changes — all done in secrecy. “We were trying to keep that quiet,” Schlussel said. “We had to modify all our internal contracts to match the new name.” The rebranding wasn’t especially challenging because it wasn’t a change in legal entity. That came in August 2012, when Con-

We were trying to keep (the rebranding) quiet. We had to modify all our internal contracts to match the new name.

“

”

Ira Schlussel

necticut-based private equity firm Catterton Partners Corp. bought ePrize for $100 million. Schlussel was associate general counsel then — he was promoted to his current job early last year — and did much of the due diligence work required in the acquisition. That included producing documents, contracts and other paperwork. “We were asked to provide a ton of information,” he said. “This was a complete entity change. This was the behemoth deal and required a lot more significant work” than the rebranding. In the months after the acquisition by Catterton, ePrize bought three marketing services companies in deals Schlussel had to handle. That required conducting all the legal due diligence, reviewing documents and analyzing risk assessment, along with negotiating the purchase agreements before integrating all the contracts and employees into the business. Schlussel’s day-to-day work involves navigating the federal and state laws governing sweepstakes and contest rules —

the sea of small-type language on the digital sites created by HelloWorld for its clients and their marketing. “That’s the core of the job,” said Schlussel, who also is a hockey player and won a gold medal at Israel’s Maccabiah Games in 2013. For example, he and his staff have to ensure all campaigns comply with new disclosures required under the 1991 Telephone Consumer Protection Act, which governs telemarketing calls. HelloWorld also has to avoid running any sweepstakes that qualifies as a lottery — which state governments have a monopoly over. Additionally, HelloWorld does campaigns in 44 countries. Schlussel outsources some of the legal work in those nations to ensure compliance. HelloWorld clients include the CocaCola Co., Microsoft Corp., The Gap Inc., Live Nation Worldwide Inc., Yahoo Inc. and Procter & Gamble Co. Revenue last year totaled $65 million. HelloWorld has 400 employees. EPrize was launched in 1999 by Josh Linkner, who sold his stake when Catterton bought the company. Schlussel was promoted after his predecessor followed Linkner last year to Detroit Venture Partners LLC. HelloWorld is headquartered in a 46,000-square-foot former brewery east of Woodward Avenue near I-696. The company has offices in New York City, Chicago, Los Angeles, Phoenix, Seattle and Nashville, Tenn. — Bill Shea

F I N A L I S T: $ 1 0 M – $ 1 0 0 M

JOHN BOMMARITO, 46 Title: Corporate counsel, Attorneys Title Agency LLC, Farmington Hills Recent achievement: Helping the company expand into new Midwest markets John Bommarito joined Attorneys Title Agency LLC in 2009 and has seen the company more than double in size to 420 employees and 35-plus offices in Michigan, Ohio and Indiana. In the past 18 months, the University of Dayton and University of Detroit Mercy School of Law graduate has won summary disposition in a pair of cases that have saved Attorneys Title Agency about $500,000. Bommarito said his greatest accomplishments in the past year were helping the company expand into Ohio (January 2013) and Indiana (summer 2013). He views his job not as one Bommarito where he helps Attorneys Title Agency, the title insurance and services company owned by attorney David Trott of Trott & Trott PC, avoid risk but instead as one where helps the firm manage it. The company has $45 million in annual revenue, “My job is to analyze situations and solve problems to minimize risk,” he said. “It doesn’t mean you get rid of it entirely.” The Detroit-area native was previously in private practice. Before that, he was state council for LandAmerica Financial Group Inc. That followed a job as staff attorney at Greco Title Co., where he started as a law school student. — Kirk Pinho

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Focus: General and In-House Counsel Awards WINNER: RISING STAR

TAMIKA MAYES, 38 Title: Senior attorney, U.S. tax counsel group, General Motors Co. Recent achievement: Resolved 10 cases in five states, saving millions of dollars

I’m always “ thinking about what is the big picture. ” Tamika Mayes

hortly after arriving at General Motors Co., Tamika Mayes inherited a mess that needed cleaning up — a bundle of state income, franchise and employment tax cases which had been unresolved for several years. Two years later, she had wrapped up 10 of those cases in five states — the bulk of the bundle — generating Mayes $50 million in savings, refunds or risk reduction for the company. Mayes accomplished that while also overseeing a complex employment tax settlement with the federal government. For Mayes, who has worked as a CPA at Ernst & Young LLP and as an

attorney for law firms in New York City and Chicago, the GM position is just the latest challenge accepted. “The challenging thing is just the complexity of the business,” Mayes said of the position, which she took on 3½ years ago. “It’s a large, global company, and there are tons of parts to each decision.” Mayes said she finds the diversity of projects, with a global spin, the most enjoyable part of the job. “I love the opportunity to see U.S. issues, and then I have an opportunity to see how it plays out in a different environment,” she said. More recently, Mayes has taken on tax responsibilities for GM’s global connected consumer business unit — which includes OnStar — in markets including Mexico, Canada and China.

WINNER: UNDER $10 MILLION “That is a critical part of the GM strategy,” Mayes said of the growing business unit. And “there is no guidance on how to solve those issues.” The keys to her success, Mayes said, are keeping in mind how decisions affect key stakeholders and being able to communicate technical concepts to her business counterparts. “I’m always thinking about what is the big picture and what does the client need,” she said. In addition to her work, Mayes devotes time to professional and civic organizations. She is a tax committee chairwoman for the State Bar of Michigan, a board member of the Michigan Women’s Tax Association and a mentor for the Women of Tomorrow at Osborn Collegiate Academy of Mathematcs, Science and Technology in the Detroit Public Schools. “At the core of who I am is this community impact,” Mayes said. “(I have) a deep-rooted commitment to the development of young women, entrepreneurs and communities. GM is very committed to employee-community engagement.” — Doug Henze

JESSICA MCGRATH, 31 Title: In-house counsel, Certified Restoration Drycleaning Network Recent achievement: Handled all aspects of the acquisition of a franchise network hen Berkley-based Certified Restoration Drycleaning Network opted to acquire another company in its industry in 2012, Jessica McGrath found herself awash in paperwork. “There was a lot of due diligence to see if we could bring them on (and) there’s a lot of disclosure regulations in franchisMcGrath ing,” said McGrath, who oversaw the acquisition of 1-800-DryClean. “It doubled my job.” But the marriage of CRDN, which does textile restoration

when a home flood or fire occurs, and the laundry pickup service 1-800-DryClean was a challenge McGrath welcomed. The companies generated combined revenue of about $8.5 million in 2013. “It was interesting to be part of it,” McGrath said. “You’re kind of the central person in making sure you submit all the compliance documents. I feel fortunate I could be instrumental” in the transaction. Although McGrath finds the legal work interesting, she tries to keep in mind the people she’s affecting. “Every decision I make impacts our franchisee network,” she said. “I really do love working with people. At a lot of firms — I started at a firm — you don’t work with the clients every day.” Supporting those clients is important from a business standpoint, too. CRDN’s revenue is tied closely to that of its franchisees. — Doug Henze

F I N A L I S T: R I S I N G S TA R KIMBERLY COLEMAN, 32 Title: Vice president/attorney, Flagstar Bancorp Inc. Recent achievement: Handled the divestiture of a company subsidiary herself

hen Kimberly Coleman took her first job after law school, she had no idea it would turn into three. But when two senior attorneys left the company during Coleman’s first couple of years at Flagstar Bancorp Inc., she stepped up to take on their responsibilities. “I’m a younger attorney, but I’m functioning at a more senior level,” said Coleman, who joined Flagstar 3½ years ago. “I generally work between 70 and 80 hours a week. I’m happy to do it.” Coleman considers dedication and drive her biggest assets in

helping the company. “When we’ve had a huge project come in, I’ve jumped on numerous calls over the weekend,” she said. “I’m generally in the office one Coleman day a weekend.” Coleman, who also accepts pro bono work for nonprofits, said she puts in the extra hours because she enjoys everything about her job — from negotiating and drafting legal language to managing paralegals. And she’s driven to assist colleagues across Flagstar. “I love all of my clients — which are the different business units,” she said. “There are a lot of personalities, but we all get along.” — Doug Henze

F I N A L I S T: R I S I N G S TA R YVETTE VANRIPER, 45 Title: Corporate securities counsel and assistant secretary, Masco Corp. Recent achievement: Started a shareholder outreach program to get feedback on executive compensation aving watched shareholders turn down a “say-on-pay” executive compensation proposal in 2011, Masco Corp. knew it needed to improve communication. Enter Yvette VanRiper, who started an outreach program she considers her biggest contribution to the Taylor-based company. Twice-a-year, company leaders contact Masco’s largest shareholders to learn their thoughts on issues affecting the corporation. “It’s just been really valuable for those board members to hear what our shareholders are saying,” she said. “The shareholders have really

appreciated having that regular conversation with us.” In 2012, a year after giving the “say-on-pay” compensation a thumbs-down, 95 percent of shareholders apVanRiper proved it. The proposal allows a company’s shareholders to vote on compensation packages for executives. For VanRiper, it’s all part of the job, which also includes securities compliance work and governance. “The most challenging thing is keeping on top of everything,” said VanRiper, who left private practice for her first in-house position. The mother of five, VanRiper said her organizational skills allow her to balance her corporate duties with her personal life. — Doug Henze

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CRAIN’S DETROIT BUSINESS

Focus: General and In-House Counsel Awards

Business, legal issues find common ground at Crain’s summit BY DANIEL DUGGAN CRAIN’S DETROIT BUSINESS

One of the places where business issues meet legal issues is the office of the general counsel. And bringing this group of executives together has been the focus of the Crain’s General and In-House Counsel Summit, to be held May 13 at the Westin Book Cadillac. Now in its fourth year, the event will highlight both business and legal issues. It will also honor the winners of the General and In-

THE EVENT When: May 13, 2 p.m. Where: Westin Book Cadillac, Detroit Cost: $100 Register: Crainsdetroit.com/events

House Counsel Awards. The winners and finalists are profiled on Pages 11-15. Last year’s event drew 311 people. This year’s keynote speaker is Mary Ann Hynes, senior counsel at

the Dentons law firm in Chicago. In 1979, she was the first woman to hold the position of general counsel at a Fortune 500 company, CCH Inc., a RiverHynes woods, Ill.-based provider of information services, software and tools for tax, accounting, legal and business professionals.

Hynes has gone on to hold a number of general counsel positions at companies that span multiple industries. She was the first female officer of Sundstrand Corp. — now UTC Aerospace Systems. She was also the first female member of the Chicago-based North Shore General Counsel Association and the first female officer of the Chicago Crime Commission. Those experiences — both as a woman GC, as well as a GC at companies in different industries — will be the basis of the comments

she’ll make at the event. “I’ve been in five different industries,” Hynes said. “Don’t think that just because you work in one industry, you are stuck in it for life. “Don’t be befuddled by a different building.” Overall, she said, the focus shouldn’t be what you know, but what you can do. “Think about how you create value,” he said. “And how you can be accountable.” A series of panel discussions on hot topics in the legal community — related to in-house attorneys, specifically — will also be held at the event: Employment law in the smartphone era This panel will cover ways that personal smartphones are being used in employment law situations. Strategies that GCs use to approach issues of personal surveillance will be covered, as well as other technology-related issues GCs need to know about. Intellectual Property: Strategies to battle the patent trolls Companies have built a business model around so-called “patent trolling,” buying a portfolio of patents and then using them to sue companies that may be using them. This panel will examine the ways that GCs are defending their companies and how they might be successful at fending off these suits. M&A: How to balance the business side of deals with the legal issues While GCs typically evaluate the legal terms of an M&A deal, there are many more issues at play. This panel will delve into the issues other than finances that need to be considered in an M&A deal, and most importantly, how GCs can tactfully play a role in the “non-financial” elements of the deal. Data protection meets globalization This panel will delve into strategies about how personal data and information are segmented and protected, and how companies can remain in compliance in the different countries where they operate. No country seems to have a similar policy. How to speak “business” Looking at the business skills for in-house attorneys — going beyond the legal issues that emerge in the C-suite. It will discuss concepts for in-house counsel that reflect real-world managerial decision-making. The event is being held in partnership with the Association of Corporate Counsel, Michigan chapter and the State Bar of Michigan-Business Law Section In-House Counsel and in cooperation with the Oakland County Bar Association and the Society of Corporate Secretaries & Governance Professionals. Title sponsor of the event is Ogletree, Deakins, Nash, Smoak & Stewart PC. Daniel Duggan: (313) 446-0414, dduggan@crain.com. Twitter: @d_duggan

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BOB CHASE

Susan Diehl, vice president-legal and general counsel at NSK Americas Inc., has worked as a general counsel for three companies.

Suite dreams Growing number of aspiring female general counsels find a happy ending BY GARY ANGLEBRANDT SPECIAL TO CRAIN’S DETROIT BUSINESS

It’s no secret that women are underrepresented in the C suites of big American companies. There is one door, though, that women apparently have found more open to them than others. That is the door of the general counsel’s office. The Minority Corporate Counsel Association in Washington, D.C., every year looks at American public companies’ general counsel roles. The most recent survey, released in September, counted 105 women holding down the general counsel role among Fortune 500 companies, or 21 percent of the whole. The pattern holds in Michigan. There are three women general counsels among the state’s 16 Fortune 500 companies, or 18.7 percent, the same ballpark as the national ratio. This is according to research requested by Crain’s from Inforum, a Detroit-based professional women’s group, and Wayne State University’s School of Business Administration, which together put out Inforum’s Michigan Women’s Leadership Index last year. For this story, Inforum and the WSU researchers this month examined general counsel positions among Michigan’s 50 largest companies by market capitalization. (See

Page 19 for more numbers.) The Association of Corporate Counsel’s Michigan chapter also provided numbers, showing that among its 160 general counsel members, 41 are women, or 26 percent. The numbers aren’t grand. As Inforum’s report notes, “Despite earning more than 40 percent of U.S. law school degrees since the mid-1980s, a disproportionately low number of women today hold top legal positions in major corporations and law firms.” But they are an improvement over other executive officer numbers. Women accounted for just 4.6 percent of CEOs at all Fortune 500 companies, according to a study released in January by Catalyst, a New York-based nonprofit researcher of workplace issues. Women held 14.6 percent of executive officer positions as a whole at Fortune 500 companies, according to a Catalyst report from December. At Michigan’s 16 Fortune 500 companies, women held 10.8 percent of executive officer roles overall, according to last year’s Inforum report. So why are women gaining more C-suite access through the general counsel office than other offices? It’s tempting to ascribe a single cause — such as the work of a genSee Suite, Page 18

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Focus: General and In-House Counsel Awards

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Suite: Making the grade ■ From Page 17

eral counsel allows more leeway “They’re seeing the talent out for raising children — but it’s most there,” said Hynes, senior counsel likely a combination of factors, in the Chicago office of global law said Terry Barclay, president and firm Dentons. CEO of Inforum. Hynes wouldn’t venture any exOne factor is the number of planations on something as inherwomen earning college degrees ently complex as the decision-makmakes it more likely that they’re ing behind hiring across going to make headway some- industries. But she was happy to where, and with women soaking torpedo a few. up 40 percent of law school degrees The idea that companies use the since the 1980s, it’s no surprise general counsel job as a place to that it’s a legal position where show diversity in their executives is that’s happening. ridiculous, she said. “It’s a very speOther C-suite residents tradi- cial role; it’s being a confidante of tionally have come from the ranks the board and the chairman,” Hynes of operations, Barclay said. “Most said. “It’s one of the most sensitive people going into the general coun- positions in the corporation.” sel role are not from an operaSmooth chemistry needs to exist tional background,” she said, leav- between the general counsel and ing a path open to women armed CEO to deal with sensitive issues. with law degrees and experience. With so much at stake, diversity Outsider status checklists are a could be another tertiary considfactor. eration at best, For boards and Hynes said. CEOs seekAnother caing new senard, she benior-level lieves, is that opinions — women are not perhaps to risk-takers and offset all the therefore more guys comsuited to a proing up from tective legal operations role, as opposed — it makes to chief execusense to tive. The generlook to the general al counsel counsel slot, Barclay works hand-insaid. Candidates hand with other likely will have company execuworked for a few tives on matters companies in the like acquisisame industry or as tions, growth attorneys for firms and competitive specializing in that strategies. They industry — nice are front and qualities to have for center when it Terry Barclay, Inforum a role that has incomes to makcreasingly taken on ing deals. This more strategic responsibilities. is not territory for the risk-averse, “So many women I know who Hynes said. have moved into the general coun“If you want to be risk-averse, sel role are really well-equipped to stay at home and lock the door,” advise on strategy because of the Hynes said. depth of experience they’ve had,” And then there’s the theory that Barclay said. women attorneys gravitate to genGerald Meyers, adjunct profes- eral counsel because the position sor of management and organiza- is more of a 9-to-5 job, i.e., one that tions at University of Michigan’s Ross leaves room for child-rearing, School of Business and former whereas cutthroat law firms dechairman of American Motors mand all of a person’s time. Hynes’ Corp., said that if he had to take an experience as a general counsel educated guess as to why there are says otherwise. Working in the Cmore women general counsels suite of major corporations is a 24than other C-suite jobs, it’s be- hour-a day job involving people cause general counsels are re- around the world. quired to have highly disciplined “I have people who have needs in and specialized knowledge. Thailand and Australia. I have to be Women can increase their odds there to meet their needs in the midof getting the job by obtaining that dle of the night,” Hynes said. knowledge, whereas the process Meyers also discounted the theofor landing a CEO title is murkier. ry that women are risk-averse, but “It’s a little different than the said the perception that they are CEO job. There isn’t a single disci- might play into hiring decisions. pline that’s dominant; they come “For the general counsel role, from all different disciplines,” you’re not looking for a risk-taker. Meyers said. That person’s job is to protect Mary Ann Hynes, an industry stakeholders,” Meyers said. speaker who has served as general Susan Diehl, vice president-lecounsel to several global corpora- gal and general counsel at NSK tions and is credited as the first Americas Inc. in Ann Arbor, has woman general counsel of any For- worked as general counsel for tune 500 company, said the main three companies. She said people driver behind a general counsel enter the field and are hired for all hiring decision is the quality of the sorts of reasons, many of them candidate. Other factors stay in having to do with particular presthe background as companies seek See Next Page business-savvy people.

women “ So many I know who

have moved into the general counsel role are really well-equipped to advise on strategy because of the depth of experience they’ve had.

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Where women stand in Fortune firms The report from Inforum and Wayne State University looked at Michigan’s 50 largest companies by market capitalization. Of those, 16 were in the Fortune 500 and 10 were in the Fortune 5011000. Women held six, or 12 percent, of the general counsel positions out of the total 50 companies. Women held three, or 30 percent, of the general counsel roles at Michigan’s 10 public companies in the Fortune 501-1000 list. At the other 24 Michigan public companies not in the Fortune 1000, two women held general counsel positions. Inforum’s Women’s Leadership Index last year reported that women held 12.5 percent of all executive officer positions at Michigan’s top 100 public companies.

The number of women holding general counsel roles at Fortune 500 companies in the entire country was 105, according to last year’s survey from the Minority Corporate Counsel Association. That figure was down from 108 the year before but up from 92 in 2008. Another 84 women held general counsel jobs in the Fortune 501-1000 list, according to the MCCA report. The percentage of women holding general council positions in the entire Fortune 1000 was 18.9 percent. Spencer Stuart, a Chicagobased executive recruiting company, conducts an annual survey of CFO roles. Last year’s tally for women holding that role at Fortune 500 companies came to 11.4 percent.

spect to other operational functions like CFO, COO — the sures on a company at the time. pipeline just isn’t there yet.” Diehl was drawn to the work by Other executive roles could folher love of business. “I always was low lead of the general counsel attracted to being an in-house slot. Meyers said women students lawyer because I was a business make up almost half the students junkie,” she said. for his MBA courses. General counsels’ legal training “That’s new as of the last 15 to 20 gives them an edge in terms of per- years, more so in the last five to suasion, framing ar10,” he said. guments and quickWith rising ly learning new numbers of things, she said. women with “Lawyers the right educahave to do tion and experithat all the ence, other extime.” ecutive roles Diehl should begin to said she has open. seen women “I do not subapproach scribe to the atin-house titude that it’s work bebias holding it cause they down. I don’t think it’s 9-to-5 deny there’s work — but she’s bias, but that’s seen men do that, overcome by too. In reality, her competence,” work means travelMeyers said. ing 60 percent of the It also has to time and working be said that “partners’ hours” of while women 16 to 17 hours a day. might be showAleksandra Miziolek, Anecdotally, she ing progress in Cooper-Standard hears from other general counsel women in her field jobs, the numthat they don’t always find the law bers are still pretty low. firm life to be fulfilling, especially Those doing the hiring tend to those who prefer more collabora- go with what they know — themtive work. “Law firm life is not al- selves, Barclay said. ways welcoming,” Diehl said. “I do not believe for a second Aleksandra Miziolek took her po- that anybody at a company wakes sition as general counsel and vice up and says, ‘I’m going to discrimipresident at Novi-based Cooper-Stan- nate today’,” she said. “We tend to dard Holdings Inc. in February after hire and promote mini-mes. We’re spending three decades at Dykema most comfortable around people Gossett PLLC, where she directed the most like us.” automotive industry practice. Since it takes extra effort to overHer industry experience was a come that tendency, the result is exbig selling point, as was her M&A actly what one would expect. “It experience. That experience also tends to get more homogenous as means she moves easily in the you go up the ladder, and the nummale-heavy world of automotive, bers back that up,” Barclay said. so she hasn’t felt out of place workWomen now make up 58 percent ing among guys at her new job. of undergraduate degree and 60 Miziolek said there’s little mys- percent of graduate degree stutery behind the women general dents at Michigan schools, Barclay counsel numbers. said. As businesses compete for “It’s really pretty straightfor- talent, it would make sense that ward,” she said. “There are just they start looking at previously many more women candidates left-out groups. that have gotten the experience “I like to think we’re at a tipping necessary in order to really per- point where we see even more form well in a role like the general women step into these roles,” she counsel role. The pipeline with re- said. From Previous Page

are just “ There many more

women candidates that have gotten the experience necessary to really perform well in a role like the general counsel.

”

C O N G R AT U L AT I O N S T O

Yvette VanRiper FOR BEING RECOGNIZED AS A

Crain’s In-House Counsel Rising Star Finalist Y O U R F R I E N D S AT

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CRAIN'S LIST: LARGEST LAW FIRMS Ranked by number of attorneys in Southeast Michigan Top local executive

Total local attorneys Jan. 2014/ 2013

Honigman Miller Schwartz and Cohn LLP

David Foltyn chairman and CEO

205 188

162

238

BlackEagle Partners LLC, Detroit Institute of Arts, General Motors Co., Huron Capital Partners LLC, Kellogg Co., RamcoGershenson Properties Trust, Rock Financial/Quicken Loans Inc./Rockbridge Growth Equity LLC, Taubman, Trinity Health, and Village Green

Dickinson Wright PLLC

William Burgess CEO

165 157

133

205

369

N/A

Dykema Gossett PLLC

Peter Kellett chairman and CEO

159 160

190

358

Ford Motor Co., General Motors Co., Chrysler Group LLC, Compuware, Bank of America N.A., Citizens Bank, Oakwood Healthcare Inc, Fifth Third Bank, Internation Transmission Co.

Miller, Canfield, Paddock and Stone PLC

Michael McGee CEO

141 169

189

230

Chrysler, Comerica, Ford, Detroit Edison, Meritor, Siemens, Borg Warner

Bodman PLC

Ralph McDowell chairman

132 132

136

Comerica Bank, Bank of America, Archdiocese of Detroit, Blue Cross Blue Shield of Michigan, Lear Corp., Ford family, Grede Holdings LLC, Key Plastics LLC, Caraco Pharmaceutical Laboratories Ltd.

Clark Hill PLC

John Hern CEO

126 124

153

295

Butzel Long PC

Justin Klimko president and managing shareholder

109 NA

133

Plunkett Cooney PC

Henry Cooney president and CEO

108 104

145

155

Bank of America, Huntington National Bank, First American Title Insurance Co., Beaumont Health System, Liberty Mutual Insurance Co., Michigan Municipal League, PNC Financial Services Group. The Travelers Cos, Frankenmuth Mutual Insurance Co.

Jaffe Raitt Heuer & Weiss PC

Bill Sider CEO and managing partner

100 100

100

Sun Communities, Strength Capital Partners, Redico LLC, Oppenheimer and Co.

Kitch Drutchas Wagner Valitutti & Sherbrook P.C.

Mark Wisniewski managing principal

84 81

100

AIG, Ascension Health, Coverys, CVS Caremark, Detroit Medical Center, HCR Manor Care Inc, Henry Ford Health System, Motor City Electric, Utica Insurance

11.

Trott & Trott PC

Executive committee

73 NA

12.

Brooks Kushman PC

Mark Cantor president

72 65

Giarmarco, Mullins & Horton PC

Executive committee

70 70

14.

Howard & Howard Attorneys PLLC

Mark Davis president and CEO

67 67

122

BASF Corp., BMO Harris Bank N.A., Chrysler Group LLC, Dow Corning, Konami Gaming Inc., Magna Mirrors of America, Sears Holdings Corp., ThyssenKrupp

15.

Harness Dickey

Executive committee

62 60

105

16.

Garan Lucow Miller PC

John Gillooly chairman of executive committee

59 58

1000 Woodbridge Place, Detroit 48207 (313) 446-1530; www.garanlucow.com

Kerr, Russell and Weber PLC

Executive committee

55 54

AVL Test Systems Inc., Michigan State Medical Society, Quantum Fuel Systems Technologies, Shanghai Zhongli Automobile Parts Co. Ltd, Volkswagen Group of America, Wade Trim Associates Inc.

Secrest, Wardle, Lynch, Hampton, Truex and Morley P.C.

Mark Morley and Bruce Truex co-chairmen, executive committee

54 NA

Sullivan, Ward, Asher & Patton PC

Anthony Asher president and CEO

50 48

Consumers Energy Co., City of Pontiac Policy & Fire, Health Pro/CNA, Iron Workers' Local No. 25, Level One Bank, MEEMIC, Nautilus Insurance Group, ProAssurance Insurance Co., Smithgroup LLC, Tenet Health Systems

Maddin, Hauser, Roth & Heller, P.C.

Mark Hauser CFO; Michael Maddin president emeritus and Steven Sallen president

46 51

Hall, Render, Killian, Heath & Lyman PLLC

Kimberly ComminsTzoumakas managing partner

41 39

165

St. John Providence Health System, Wayne State University Physician Group, Genesys Health System, St. Mary's of Michigan

Collins, Einhorn, Farrell & Ulanoff PC

Neil MacCallum chairman and Michael Sullivan president

41 NA

4000 Town Center, Suite 909, Southfield 48075 (248) 355-4141; www.ceflawyers.com

Zausmer, Kaufman, August, Caldwell & Tayler P.C.

Mark Zausmer managing shareholder

37 37

Ally Financial Inc., city of Dearborn, Electric Insurance Co, EMC Insurance Co, ITC Holdings Corp., Pall Life Sciences, Philadelphia Ins Co., State Farm Mutual Auto, Wal-Mart Stores Inc., SMART

Warner Norcross & Judd LLP

William Jansen executive partner

37 34

181

Amway Corp., Borg Warner, Consumers Energy Co., Dow Chemical, Fifth Third Bank, Mahle Industries Inc., MercedesBenz Financial Services USA, Stryker Corp., Robert Bosch Corp., Whirlpool Corp.

Kotz Sangster Wysocki PC

Gregory Wysocki CEO and managing partner

35 34

BMT Aerospace USA Inc., Detroit Economic Growth Corp., Olga’s Kitchen, Peerless Steel Co., Skanska USA Building, The Salvation Army, Trico Products, TTi Global, Virginia Tile Co., ZF North America Inc.

Company Address Rank Phone; website

8. 9. 10.

13.

17. 18. 19. 20. 21. 21. 23. 23. 25.

2290 First National Building, 660 Woodward Ave., Detroit 48226-3506 (313) 465-7000; www.honigman.com

500 Woodward Ave., Suite 4000, Detroit 48226 (313) 223-3500; www.dickinsonwright.com 400 Renaissance Center, Detroit 48243 (313) 568-6800; www.dykema.com 150 W. Jefferson Ave., Suite 2500, Detroit 48226-4415 (313) 963-6420; www.millercanfield.com Sixth Floor at Ford Field, 1901 St. Antoine St., Detroit 48226 (313) 259-7777; www.bodmanlaw.com

500 Woodward Ave., Suite 3500, Detroit 48226 (313) 965-8300; www.clarkhill.com 150 W. Jefferson Ave., Suite 100, Detroit 48226 (313) 225-7000; www.butzel.com 38505 Woodward Ave., Suite 2000, Bloomfield Hills 48304 (248) 901-4000; www.plunkettcooney.com

27777 Franklin Road, Suite 2500, Southfield 48034-8214 (248) 351-3000; www.jaffelaw.com

Partners 2014

Of Associates Counsel Paralegal Michigan Worldwide 2014 2014 2014 Jan. 2014 Jan. 2014 Representative clients

1 Woodward Ave., Suite 2400, Detroit 48226-5485 (313) 965-7900; www.kitch.com 31440 Northwestern Hwy., Suite 200, Farmington Hills 48334 (248) 642-2515; www.trottlaw.com 1000 Town Center, 22nd Floor, Southfield 48075 (248) 358-4400; www.brookskushman.com 101 W. Big Beaver Road, 10th Floor Columbia Center, Troy 48084-5280 (248) 457-7000; www.gmhlaw.com 450 W. Fourth St., Royal Oak 48067 (248) 645-1483; www.howardandhoward.com 5445 Corporate Drive, Suite 200, Troy 48098 (248) 641-1600; www.hdp.com

500 Woodward Ave., Suite 2500, Detroit 48226 (313) 961-0200; www.kerr-russell.com

2600 Troy Center Drive, P.O. Box 5025, Troy 48007-5025 (248) 851-9500; www.secrestwardle.com 25800 Northwestern Hwy., 1000 Maccabees Center, Southfield 48075-8412 (248) 746-0700; www.swappc.com 28400 Northwestern Highway, Southfield 48034-1839 (248) 354-4030; www.maddinhauser.com

201 W. Big Beaver Road, Suite 1200, Troy 48084 (248) 740-7505; www.hallrender.com

31700 Middlebelt Road, Suite 150, Farmington Hills 48334 (248) 851-4111; www.zkac.com 2000 Town Center, Suite 2700, Southfield 48075-1318 (248) 784-5000; www.wnj.com

400 Renaissance Center, Suite 3400, Detroit 48243-1618 (313) 259-8300; www.kotzsangster.com

This list is an approximate compilation of the largest law firms in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Total number of attorneys does not include "of counsel." It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the law firms. Firms with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. LIST RESEARCHED BY CAMILLE ROBINSON-PIPPEN

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More ‘smart’ vehicles join UM accident prevention study – walkers, too BY DAVID SEDGWICK CRAIN NEWS SERVICE

The University of Michigan plans to triple the number of study vehicles outfitted with vehicle-to-vehicle communications, in the next phase of a road test of equipment designed to prevent accidents. The school’s Transportation Research Institute is expanding the 18month test that has involved near-

ly 3,000 cars, trucks, motorcycles and bicycles in the northeast part of Ann Arbor. Phase 2 will be conducted during the next two years throughout Ann Arbor with a fleet of 9,000 vehicles. This time, some pedestrians also will be given transmitters to see whether vehicles can spot their locations. James Sayer, a research scientist at the institute, said the com-

munications system has worked well so far. For example, vehicles were able to pick up signals from traffic lights and other vehicles at a greater distance than expected. That suggests that fewer roadside transmitters would be needed, which would reduce costs if the system is adopted for real-world use, Sayer said. However, it is not yet known whether the cars and trucks

B UILT

equipped with communications devices had a lower accident rate. In theory, vehicle-to-vehicle communications could help prevent rear-end crashes, accidents caused by lane changes and intersection crashes. Researchers are studying the data to assess the safety impact, Sayer noted. The road test, which the university is conducting for the U.S. Department of Transportation, is ex-

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pected to help federal regulators determine whether all vehicles should be equipped with transponders to transmit their location to any nearby car or truck. The vehicles emit signals 10 times per second via a short-range communications channel similar to Wi-Fi. They have a range of 900 feet. Ford Motor Co., Mercedes-Benz AG, General Motors Co., Toyota Motor Corp., Honda Motor Co., Nissan Motor Co., Hyundai-Kia and Volkswagen contributed vehicles for the test. Although researchers still are poring over data gleaned from Phase 1, regulators and automakers have been cautiously upbeat. On Feb. 3, the National Highway Traffic Safety Administration issued a statement that it will begin taking steps to enable vehicle-to-vehicle communication technology. “By helping drivers avoid crashes, this technology will play a key role in improving the way people get where they need to go,” said U.S. Transportation Secretary Anthony Foxx. Meanwhile, automakers and suppliers view vehicle-to-vehicle communications as a key technology for autonomous vehicles. A Chicago supplier of navigation maps called Here is preparing to introduce detailed road maps that are accurate within a few centimeters. Such maps could make use of vehicle-to-vehicle data to help an autonomous vehicle’s computer anticipate potential hazards. From Automotive News

IF YOUR WORKPLACE IS COOL, NOMINATE IT Crain’s biennial Cool Places to Work in Michigan awards returns this year, and once again Crain’s is working with Best Companies Group of Harrisburg, Pa. The competition has two parts: one questionnaire for employers, another for employees. The combined, weighted results will determine who qualifies for Cool Places designation. Best Companies supplies all participating companies — regardless of whether they win the Cool Places recognition — with a Best Companies Group employee feedback report based on employee responses to the 72question survey. The report can help company executives identify strengths and weaknesses in their company culture and practices. To be considered for Cool Places to Work in Michigan, companies must register at www.coolplacestoworkmi.com by May 23. Other important dates, samples of the surveys and other information are on the website. Once registered, companies will be invited to participate in the surveys. Businesses and nonprofits can apply. Applicants must have a minimum of 15 employees working in Michigan and have been in business at least one year, among other criteria. Companies pay a fee based on company size to Best Companies to cover survey costs. The cost ranges from $610 to $895 for online surveying, and $765 to $1,660 for paper surveying.

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ProNAi Therapeutics closes on state’s largest VC funding round BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Plymouth Township-based ProNAi Therapeutics Inc., a maker of cancer drugs, has closed on what is believed to be the largest single round of venture capital funding in state history, a Series D round of $59.5 million. The previous record is believed to have been set by Ann Arborbased QuatRx Pharmaceuticals Co., which raised a round of $44 million in 2007. No official database of venture capital funding exists. ProNAi is expected to be gearing up for an initial public offering later this year. Company President and CEO Mina Sooch declined comment about an IPO. The U.S. Securities and Exchange Commission frowns on company executives talking about possible public offerings. The round was led by Vivo Capital of Palo Alto, Calif., one of nine new investors in the company. The oversubscribed round included previous investors Milwaukee-based Capital Midwest Fund, Apjohn Ventures of Kalamazoo, the Amherst Fund of Ann Arbor and the Grand Angels of Grand Rapids. “This financing is a transformative milestone in ProNAi’s 10-year history and follows the clinical results recently reported by the company and its clinical investigators,” said Sooch. “We are pleased

LON HORWEDEL

Mina Sooch, president and CEO of ProNAi Therapeutics, calls the latest round of VC funding “a transformative milestone in ProNAi’s 10-year history. ... This financing will allow us to execute our plans with greater speed and broader reach.”

to have attracted such an experienced and well-regarded group of investors. Their support of this financing will allow us to execute our plans with greater speed and broader reach.” In January, ProNAi raised a VC round of $12.5 million. At the time, Sooch told Crain’s that the company would soon raise another round, with a target of $30 million

that was easily surpassed. She said then that the plan was to raise the bigger round and then do an IPO before the end of the year. That’s all dramatic news for a company that had struggled for funding for years and was considered on its deathbed more than once. “This is an impressive round and probably the biggest venture

capital round ever raised by a state company. Congratulations for Mina and her perseverance. This is a company that coulda, woulda, shoulda died several times,” said Jim Adox, chairman of the Ann Arbor-based Michigan Venture Capital Association and managing partner of the Ann Arbor office of Wisconsin-based Venture Investors LLC. Adox is not an investor in ProNAi. The funding flurry and the possible IPO grew out of a presentation the company made in December at the annual meeting of the American Society of Hematology, a major conference that drew 30,000 to New Orleans. The presentation was on results of Phase 2 U.S. Food and Drug Administration human trials of ProNAi’s lead product, a molecule with the working name of PNT2258. Twelve patients had been enrolled who had non-Hodgkin lymphoma that had been treated unsuccessfully with conventional therapies, including radiation. At the time of the presentation, four of the 12 were in remission, and in 10, the tumors shrank. One of those in remission was a woman in her late 60s who had tumors in her abdomen, neck and chest. Another was a 40-year-old man whose tumor was so aggressive it had fractured his spine and packed his

bone marrow with cancer cells. Both had life expectancies of between six and 12 months before treatment. After six months of treatment, both appeared to be disease-free. And, unlike chemotherapy and radiation, PNT2258 appears to have few side effects. After the conference, the New York City research and brokerage firm Sanford C. Bernstein & Co. LLC issued a report on the conference that included ProNAi on its list of four emerging companies to watch. The “NAi” in the name comes from “DNAi,” a biotech shortcut for DNA interference, which refers to a way of using single strands of DNA to target specific disease-causing genes. In this case, PNT2258 targets the gene BCL2, which produces a cancer-causing protein. ProNAi was founded in 2004, though it traces its history to 2001 and to the work of Reza Sheikhnejad, a scientist at Wayne State University and the Detroit-based Barbara Ann Karmanos Cancer Institute. WSU and Karmanos declined to pursue patents on Sheikhnejad’s work, so he funded a patent himself and assigned it to ProNAi, an early portfolio company of Apjohn Ventures. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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Did You Know? Munder committed to region despite In a recent survey... sale, likely job losses, president says agement, and that’s a sweet spot project in two weeks. I don’t know for our industry. Being larger will if the layoffs will be over six make us so much more attractive months or a year. We have good The proposed sale of Birming- in terms of buying other firms.” people, and I’m sure some of them ham-based Munder Capital ManageThe deal won’t be without its will be offered jobs in Cleveland if ment Inc. to an Ohio company will costs. In addition to its money they are willing to move.” result in some job losses locally, managers, Munder has about 80 Last November, a proposed sale but the wealth management firm employees who work in various of Munder was called off after offers remains committed to the region, back-office positions, including fell short of expectations. According according to President Jim human resources, information to published reports then, FitzGerald. technology Crestview had hoped to sell the FitzGerald will beand phone company for as much as $400 milcome vice chairman of support. lion, or about 10 times EBIDTA a new company with FitzGerald (earnings before interest, depreciathe expected said half of tions, taxes and amortization), but close of the them or only got offers for as much as seven deal by the end more could times EBIDTA, about $280 million. of the third lose their Crestview bought Munder, quarter. jobs or be which traces its roots to 1985, from “I’m staying asked to take Comerica Inc. in 2006 for $302 milhere in Dejobs in lion. Victory Capital is another of troit. I’m not Cleveland, Crestview’s portfolio companies. moving to where VictoSenior executives and investCleveland,” ry Capital ment management personnel from said FitzGeremploys Victory, Munder and Integrity will ald. “We’re talking about 140. own about 20 percent of the new about opening an of“When you entity. fice in downtown Deput together Crestview will own about 60 pertroit. It won’t be big, two compa- cent, with New York City-based but it will be impornies of simi- Reverence Capital Partners LLC and Jim FitzGerald, Munder Capital tant. We want to build lar sizes, the State Teachers Retirement Systhis into a first-class there will be tem of Ohio owning the remaining wealth management firm, and De- overlap of similar positions. We 20 percent. troit and Southeastern Michigan don’t know yet what that will Tom Henderson: (313) 446-0337, are a big part of that.” mean,” said FitzGerald. thenderson@crain.com. Twitter: The sale was announced April “We’ll start our transformation @tomhenderson2 16. Munder will be bought by Cleveland-based Victory Capital Holdings Inc. and merged with its subsidiary, Victory Capital Management Inc., into a new company whose name has yet to be determined. Terms of the deal were not disclosed, but the deal value is expected to approach the $400 million that New York City-based Crestview Partners, a private-equity firm that is the majority owner of Munder, was asking last fall. The new company will have A business degree from about $37 billion under manageWayne State University ment. does more than Munder has about $18.1 billion provide an academic under management, with more than $4.5 billion of that by its subfoundation for success sidiary, Integrity Asset Management — it helps open doors. LLC of Rocky River, Ohio. Our graduates join a Victory, acquired from Key Bank last year for $246 million, has strong network of more about $18.6 billion in assets under than 31,000 successful management. alumni across Metro FitzGerald told Crain’s his firm will continue to operate under the Detroit and worldwide. Munder brand and that it will reWhether you’re landing tain its office in downtown Birmthat ﬁrst job or making ingham. More importantly, he said, all of the firm’s 45-50 investyour way to the ment managers will retain their executive suite, there’s jobs and their investment indepenlikely a Wayne State dence. Thomas Nantais, MBA ’82 “They will be able to run money alum nearby, ready Chief Operating Ofﬁcer without any corporate involveto help. Henry Ford Medical Group ment,” he said. FitzGerald said his focus as vice chairman of the new firm will be to grow the company through acquisition. “I’m excited to be vice chairman of a firm with a strong focus on growth. The M&A side of the game is what I really enjoy and what I School of Business Administration want to spend my time on,” he business.wayne.edu said. “We’re really excited about this AIM HIGHER combination. This creates a firm with nearly $40 billion under man-

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PulteGroup winding down move to new Atlanta headquarters BY KIRK PINHO CRAIN’S DETROIT BUSINESS

The end is near for PulteGroup Inc.’s time as a Bloomfield Hillsbased company, as it readies for a shift to Atlanta this summer. PulteGroup, one of the largest homebuilders in the nation, is moving into the 475,000-squarefoot Class A office building called One Capital City Plaza, according to Washington, D.C.-based real estate information service CoStar Group Inc. The building features a coffee shop and deli, newsstand, an auto detail shop, security desk, under-building parking and a conference center, according to CoStar. The building’s main tenant is Blue Cross Blue Shield of Georgia, at 228,480 square feet of space. PulteGroup will be its second-largest tenant. The company will have 101,000 square feet total, said Jim Zeumer, vice president of investor relations and corporate communications. The company already occupies 24,000 square feet, into which it moved March 21, according to Zeumer. The lease of the remaining square footage begins June 1. “A limited transition to the new office space has started, but the process will accelerate over the summer as the building becomes fully available in June of this year,” Zeumer said. PulteGroup announced last May that it was moving south to “bring us closer to our customers and a larger portion of our investment portfolio,” Richard Dugas Jr., the company’s chairman, president and CEO, said at the time of the announcement. PulteGroup said at the time that, when fully staffed, it expects to have 300 to 350 employees based in Atlanta. The company’s homebuilding operations will continue to be based in Bloomfield Hills, Zeumer said, with 54 employees there unaffected by the move. “Corporate offices are moving to Atlanta, but all of the functions associated with building homes in Michigan remain here in Bloomfield Hills. We built over 500 homes in Michigan in 2013, so all of the people associated with sourcing land, selling homes and managing construction will still be here.” Zeumer said. PulteGroup has 166,000 square feet in a 225,000-square-foot Pulte Building at 100 Bloomfield Hills Parkway, south of East Long Lake Road and east of Woodward Av-

enue in Bloomfield Hills. It’s not known how much space the company will continue to occupy. The average lease rate there is $23.69 per square foot, according to CoStar. A voicemail left Thursday morning with Dennis Kateff, managing director of leasing for Bloomfield Hills-based Kojaian Management Corp., had not been returned. Koja-

ian owns and leases out the building. At One Capital City Plaza in Atlanta, the average lease rate is $30.50 per square foot. Orlandobased Parkway Properties Inc. bought the building for $78.6 million in 2004, according to CoStar. During a PulteGroup earnings call Thursday morning, Dugas said “less than a couple million

bucks” were spent this quarter on the relocation. The Pulte family has not been involved in the leadership or operations of PulteGroup since William Pulte retired as chairman in 2010 at age 77, according to his grandson, Bill Pulte, managing partner of Bloomfield Hills-based private equity firm Pulte Capital Partners LLC and the founder and

chairman of the Detroit Blight Authority. PulteGroup formed in 1950 when William Pulte, then 18, built a fiveroom home near Detroit City Airport; that home sold for $10,000. In 1969, William J. Pulte Inc. became Pulte Home Corp. and went public. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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Biz gets to ask feds about export rule changes

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A workshop in Detroit next month will offer a rare chance for export businesses in the Midwest to ask questions directly of federal export officials about changes to U.S. regulations. Significant changes to regulations take effect in June, including moving many controls over military items from the State Department to the Department of Commerce’s Bureau of Industry and Security. Exporters, trade and intellectual property lawyers, accountants involved in international business, university officials and logistics professionals are among those being encouraged to attend the May 13-15 seminar. The event, “Complying with U.S. Export Controls and the Export Control Reforms,” is being hosted by the East Michigan Export District Council at the Gem and Century theaters, 333 Madison Ave. The cost to attend the entire workshop is $495. For those who want to attend just the first two days, which are focused on complying with U.S. export controls, the cost is $375. Those attending just on May 15, to attend an export control reform workshop, will pay $175. All speakers will be from the Washington, D.C., headquarters of the BIS, the Office of Foreign Asset Control and U.S. Census — all responsible for different aspects of export control. This gives participants the opportunity to meet the regulators in person and ask questions that might relate to specific issues at their own companies. Examples of problematic scenarios, according to conference organizers: Understanding the repercussions of sending documents to colleagues who are traveling overseas, a U.S. subsidiary sending sensitive information to a foreign parent company, and prohibitions on selling certain products to buyers in certain countries because of trade sanctions. The deadline to register for the event is May 9. Topics on the agenda include licensing and record-keeping requirements, export clearance, enforcement, changes under the Export Control Reform initiative, and developing an export compliance program. Attendees who complete the workshop will receive a Department of Commerce/Bureau of Industry and Security certificate of training. The event has also been approved for continuing legal education credit by the state of Ohio, and for credit by the National Customs Brokers & Forwarders Association of America. For more information, visit www.eastmichigandec.org.

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Henry Ford among hospitals diversifying boards; more must do same, experts say BY MELANIE EVANS CRAIN NEWS SERVICE

The Henry Ford Health System’s hospitals and its health plan operate in the racially and ethnically diverse area of metro Detroit. But until about seven years ago, the board members of the system and its subsidiaries were largely white, despite leadership’s desire to boost diversity. “We weren’t making progress, frankly,” said Nancy Schlichting, Henry Ford’s CEO since 2003. In 2007, the Detroitbased system launched what Schlichting is now a routine review of how closely the makeup of its boards reflects the communities it serves. Two years later, it established CEO compensation incentives tied to increased diversity in recruiting and hiring throughout the organization. Only 10 percent of the 900 hospitals and health systems surveyed by the Institute for Diversity in Health Management in 2011 tied executive pay to diversity goals. Now, Henry Ford’s system-level board meets annually with the chairs and nominating committee members for each subsidiary board to review how closely membership reflects community diversity and how recruiting may address gaps. “We were really very intentional,” said Sandra Pierce, board chairwoman for the Henry Ford Health System Pierce and president and CEO of FirstMerit Bank. As a result, across all of its boards, roughly 27 percent of Henry Ford’s trustees now are nonwhite, compared with 19 percent in 2005. The share of female board members has remained fairly steady at a little more than onethird. But at many other nonprofit hospitals and health systems, not much has changed, governance experts say. Last year, 47 percent of nonprofit hospital governing boards lacked even a single racial or ethnic minority member, according to the Governance Institute, a consulting group. While only 3 percent of boards lack female members, the median board makeup is three women among 13 board members. Two of the most recent American Hospital Association triennial governance surveys found that minority board members accounted for 9 percent of hospital directors and trustees in 2009 and 10 percent in 2011. The latest survey is currently underway. Boards “in no way” reflect their communities, said Dr. John Combes, president of the AHA’s

tion has called for boards to reflect Center for Healthcare Governance. Over the next three decades, the the diversity of their communities U.S. will become a “nation of mi- within the next six years. Besides addressing health care norities,” with no one racial or ethnic group making up a majority disparities, having a more diverse of the population, federal projec- board strengthens overall hospital tions show. Minorities accounted operations. “The whole point of diversity is for 37 percent of the U.S. population in 2012, and that will increase diversity of perspectives that will allow a richer mix of viewpoints to 57 percent by 2060. As the nation becomes more di- and sometimes differing views to verse, hospitals’ lack of diverse enhance the quality of deliberaleadership grows more troubling, tions and quality of decisions,” Schlichting said. “It’s like we’re said Lawrence Prybil, a professor not paying attention to the world of health care leadership and associate dean at the University of Kenwe live in,” she said. Henry Ford’s systematic ap- tucky College of Public Health. One reason for the sluggish proach to greater diversification of its governing boards is widely en- progress on diversity nationally is dorsed but too rarely practiced slow turnover among board memacross the industry, governance bers, Combes said. Trustees and experts say. Board diversity as- directors hold longer tenures than sessments, formal diversity poli- hospital CEOs — an average of cies and measures to track nine years, compared with four years for CEOs. progress are More imporneeded among tantly, boards too hospital boards often do not idenand industrytify diversity as a wide, they argue. major goal, unlike “If you never targets for finanhave a metric, cial performance then you’re never and quality of held accountcare. In 2011, two able,” said Conout of three hospinie Curran, tals surveyed by founder and CEO the Institute for of Best on Board, a Diversity in national health Health Managecare board educament and the tion and certificaHealth Research tion company. and Educational Explicit financial Connie Curran, Best on Board Trust had no forincentives for exmal goal for their ecutives to exboards to reflect pand diversity the diversity of also help. their patients. “No. 1, you get Experts say boards should inwhat you measure,” Curran said. corporate diversity goals into the “No. 2, you get what you reward.” The issue is about far more than annual self-assessment, bylaws just numbers. Homogeneous and committee charters and tools boards that fail to reflect the demo- used for trustee and director regraphics of the communities they cruitment. The Center for Healthserve — by gender, race, ethnicity, care Governance encourages hosage, geography and socioeconomic pitals to include diversity of race, status — risk excluding knowledge ethnicity, gender, profession and and experience that will better in- age in board member selection criform policies to improve patient teria. Schlichting said she worked to care and provide services commuexpand her own professional netnities need, experts say. Increased diversity in gover- work by meeting with a broader nance and management is one of group of diverse board candithree strategies critical to elimi- dates. “I did a lot of lunches,” she said. nating health care disparities, according to a 2012 report issued by It’s a little like rolling a boulder the AHA, the Association of Ameri- downhill. As Henry Ford’s boards can Medical Colleges, the American become more diverse, the recruitCollege of Healthcare Executives, the ing network grows broader and Catholic Health Association and more diverse. “There are always talented peoAmerica’s Essential Hospitals. That report recommended that ple,” she said. Still, limited board diversity hospitals develop formal recruiting strategies, establish and track across the country won’t change as metrics, and promote cultural long as board members remain competency throughout the orga- comfortable with a largely honization to retain diverse re- mogenous membership and they don’t establish clear diversity tarcruits. “Support and acknowledgment gets, Best on Board’s Curran said. So far, pressure for change from by the board and senior leadership are required, and incorporating di- leadership has been lacking. versity efforts as part of an organi- “Mostly, I think that ignorance is zation’s strategic mission is criti- bliss,” she said. cal,” the report said. From Modern Healthcare The American Hospital Associa-

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New Senate bill proposes minimum-wage alternative As Democratic activists gather $5.15 an hour. That vote led supsignatures to place a measure on porters of a ballot measure at the the November ballot to time to scrap their efraise the minimum wage forts to ask voters to not in the state to $10.10 an only raise the minimum hour, a separate effort to wage, but to enshrine anraise the wage, but by nual cost-of-living adnot nearly as much, is bejustments into the state ing led by a Republican constitution. state senator. Michigan State AFL-CIO Sen. Rick Jones, President Karla Swift R-Grand Ledge, ancalled Jones’ bill an innounced Thursday he sult that will fail to keep plans to introduce a bill working families out of to raise the minimum poverty at the level he is Chris Gautz wage from $7.40 an hour proposing, and will stifle to $8.15. It would also the attempted ballot raise the tipped minimum wage by measure. a dime, up from the current rate of Danielle Atkinson, a member of $2.65 an hour. the Raise Michigan Coalition, which The ballot measure would also is behind the ballot measure, said raise the tipped minimum wage, Jones’ bill would amount to only but to the same $10.10-an-hour lev- an extra $30 a week for someone el. Jones’ argument is that raising making the minimum wage. Swift the tipped minimum wage so high noted that the 10-cent increase in could cause restaurants to lay off the tipped minimum wage would workers — or close — due to the put just $4 more in the pocket of a higher labor costs. waiter or waitress. Opponents see Jones’ bill, which has not been officially introduced, as a way to counteract the ballot Grand Rapids-based public relameasure, which he opposes. When there was an attempt to raise the tions firm Lambert, Edwards & Assominimum wage in 2006, Republi- ciates announced last week its accan lawmakers relented and voted quisition of Lansing-based public to raise the wage to its current lev- policy firm Sterling Corp., staking a el, over a period of years, from claim as the largest public affairs

Capitol B r i e fi ng s

Lambert Edwards acquisition

firm in Michigan by billings. Founded in 1999, Sterling is most well-known for its behindthe-scenes work on Senate Republican campaigns. Last year, Sterling won a Telly Award for its film honoring Gerald Ford that was shown at the 2012 Republican National Convention. Under the acquisition, Sterling will remain a separate company and operate under its existing brand, led by Managing Partner Steve Linder and Partner and Political Director Mark Pischea. It has six employees. Terms of the deal were not disclosed. According to Lambert Edwards, the acquisition of Sterling will increase its revenue and staff by 20 percent. Lambert Edwards was established in 1998. This is the company’s fifth acquisition, and secondlargest, since 2004. The largest took place in 2009 when it acquired Troy-based John Bailey & Associates, which brought the firm into the Lansing market due to its public policy work. Lambert Edwards now has offices in Grand Rapids, Lansing and Detroit.

Economic optimism A quarterly survey from the Business Leaders for Michigan found its members are optimistic about the state’s economic potential, but less so about the national economy. According to the survey, 54 percent expect the state’s economy to grow during the next six months, with just 34 percent holding that same belief for the U.S. economy. Not one of the 80 executives who are members of the group indiBLM survey cated they expected the economy to worsen in the next six months. Over the next 18 months, 71 percent of respondents said they expected the state’s economy to grow, with 46 percent expecting the national economy to grow. The survey also found that more than half of the respondents are projecting their companies will add jobs and make capital investments in the state. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

54 percent of Business Leaders for Michigan members expect the state’s economy to grow during the next six months.

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State legislation would tighten controls on compounding pharmacies BY CHRIS GAUTZ CAPITOL CORRESPONDENT

Compounding pharmacies in Michigan may soon operate under a system of tighter controls and regulations, and employees could face felony charges and prison sentences if patients are injured or die because the new rules are not followed. The aim behind Senate bills 704 and 904, sponsored by Sen. Joe Hune, R-Hamburg, is to prevent the kind of injuries and deaths suffered in the state two years ago when the Framingham, Mass.based New England Compounding Center allegedly sent tainted medicine to clinics around the country. Michigan was the hardest hit when the tainted steroids were delivered to clinics in the Hune state, resulting in 264 infections and 19 deaths. Nationwide, the death count hit 64 with 751 cases of fungal infections or meningitis, according to the Centers for Disease Control and Prevention. “Hearing from constituents that have been so adversely impacted by these tainted steroids, it’s the least we can do,” Hune said. Compounding pharmacies mix and assemble pharmaceuticals to create a drug or form of medicine needed by a patient. Hune’s bills would add a series of requirements for these businesses, including that accurate records of its procedures are maintained, that the pharmacies are subject to a physical state inspection once every two years and that all compounding pharmacies designate a “pharmacist-in-charge” responsible for making sure the business follows the state regulations. The criminal penalties for violating the rules that result in personal injury include a maximum of a four-year prison sentence. A violation that resulted in a patient death would carry a maximum 15year sentence. The legislation would also give the state the ability to immediately suspend the pharmacy license of the business if notice was received by the CDC or the Food and Drug Administration of imminent risk to public health or safety. Attorney General Bill Schuette’s office has been working with Hune on the bill, and supports the legislation he says will protect patients and hold pharmacists accountable “We can never undo the damage experienced by the vicSchuette tims of this meningitis tragedy, but we have a responsibility to find justice and ensure this never happens again,” Schuette said in a statement to Crain’s. “There is nothing more important than patient safety, and our laws should reflect that commitment.”

The bill received its first hearing Thursday before the Senate Health Policy committee, and several organizations testified in support of it. No one voiced opposition. Kelly Elizondo, state assistant attorney general, said she has handled a half-dozen licensing actions involving compounding pharmacies, and the legislation could save lives. Compounding pharmacies currently do not have to create or keep records of the calculations or formula used to fill a prescription, she said. A recent case she worked on involved a pharmacist at a compounding pharmacy who made an error when mixing components of the medication. The pharmacist was supposed to include 0.6 grams of the active ingredient of the drug, and instead included 6 grams of the ingredient, resulting in great harm to the patient, who had to be hospitalized, she said. The record-keeping requirements in Hune’s bills would have made a difference, she said, because it would require the pharmacist to record the strength, quantity and dosage of the compounded pharmaceutical, the formula used and the mixing instructions, all ingredients, the date of preparation and the name of the person who conducted the compounding.

“If that pharmacist had the formula and had been writing down what he was doing, I firmly believe he would have caught his error, and this gentleman would have been spared hospitalization,” Elizondo said. “This is a very good bill that could save patient lives.” The record keeping also would assist investigators if there was an outbreak of illness, so that it could be traced back easily to the source. Part of the problem with the tainted steroid case in 2012 was that the company in Massachusetts was allegedly acting as a manufacturer of compounded pharmaceuticals — making batches of steroids and selling them to clinics across the country — rather than making a specific drug linked to a prescription for a specific patient. That practice was also found to be going on in Michigan after the Department of Licensing and Regulatory Affairs inspected every compounding facility in the state after the news came out about the tainted steroids. Those pharmacies changed their practices, and many compounding facilities updated their facilities to make sure they were compliant with state and federal laws following the inspections, according to LARA, which supports Hune’s bill. Larry Wagenknecht, chief executive officer of the Michigan Phar-

macists Association, whose organization includes those working in compounding pharmacies, said he supports the bill as do the vast majority of compounding pharmacies. However, he said there could be unintended consequences, if some of the compounders feel the penalties are not worth the risk of oper-

ating in the state, and may get out of the business. Sen. James Marleau, R-Lake Orion, chairman of the Health Policy Committee, said the legislation could be approved and sent to the full Senate at next week’s hearing. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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BUSINESS DIARY Gentherm Inc., Northville, a developer of thermal management technologies, announced that it has acquired all stock of privately held Global Thermoelectric Inc., Calgary, Alberta, in a cash transaction. Global Thermoelectric provides industrial thermoelectric generator systems and remote power generation for remote industrial applications. The company’s 2013 revenue was about $34 million. Additional terms of the transaction were not disclosed. Website: gentherm.com.

CONTRACTS Your People LLC, Southfield, was named the agency of record for the Walsh Institute, Troy, the professional services arm of Walsh College; Irene’s Myomassology Institute, Southfield, an accredited massage school; Chef Johnny Prep, Bloomfield Hills, a culinary brand; and Rebecca Abel, Southfield, a certified financial planner and certified divorce financial analyst. Website: yourppl.com. Maestro Media Print Solutions LLC, Bloomfield Hills, a print management company, selected AutoCom Associates, Bloomfield Hills, as its public relations agency of record. Websites: maestromps.com, usautocom.com. Rubicon Genomics Inc., Ann Arbor, added new distributors to expand the availability of its DNA library preparation products. The distributors are GenoMax Technologies, Singapore, for Singapore and Malaysia; BioChemMack, Moscow, for Russia, Ukraine, Belarus and Kazakhstan; and D-Mark Biosciences, Toronto, for Canada. Website: rubicongenomics.com. Qualitech, Bingham Farms, a technology integrator and software reseller, was selected by Owner Builder Loan Services LLC, Ann Arbor, to provide hardware upgrades. Website: qualitech.net. Embark Digital LLC, Farmington Hills, a digital and social marketing agency and part of Duffey Petrosky, was named the agency of record for BraunAbility, Winamac, Ind., a manufacturer of wheelchair-accessible vehicles and wheelchair lift systems. Websites: embarkdigital.com, braunability.com. Greenlancer Energy Inc., Detroit, a Web-based engineering company that designs and engineers cloud-based green energy systems, signed a master service agreement with Pure Energies Inc., Toronto, a solar company, to supply blueprints and permit drawings for all residential systems being installed by Pure Energies in California. Websites: greenlancer.com, pure-energies.com. Plumbing Professors, Canton Township, a plumbing, sewer repair and epoxy pipe-lining company, was awarded a sanitary-sewer pipe-lining contract by Ram’s Horn Restaurants, Farmington. Website: plumbingpro fessors.com. MiPro Consulting LLC, Milford, specializing in implementing and upgrading Oracle’s PeopleSoft suite, completed the implementation of maintenance management and inventory modules at three pilot facilities for Covanta Energy Corp., Fairfield, N.J., a sustainable-waste management and renewable-energy company. Covanta also retained MiPro for the rollout of the software to an additional 35 sites throughout 2014. Websites: miproconsulting.com, covanta.com. Domino’s Pizza Inc., Ann Arbor, announced a 15-year master license agreement with Taste Holdings, Johannesburg, South Africa, to develop the Domino’s brand in seven southern African countries. Taste Holdings operates nearly 150 restaurants under the Scooters Pizza and St. Elmo’s Pizza brands in South Africa, Lesotho, Swaziland, Namibia, Botswana, Zimbabwe and Mozambique. Franchisees of both brands will be offered the opportunity to operate under the Domino’s brand. Websites: dominos.com, tasteholdings.co.za. RFT Staffing LLC, Farmington Hills, a search firm for nonexecutive-level positions, selected WSI-Jungling Consult-

ing and Education LLC, Rochester Hills, to redesign and launch its new website, rftstaffing.com. LLamasoft Inc., Ann Arbor, a provider of supply chain design software services, announced that Lund University, Lund, Sweden, selected LLamasoft Supply Chain Guru as its supply chain modeling technology of choice for research and teaching. The university is being supported by LLamasoft alliance partner Optilon, Stockholm. Website: llamasoft.com. Roco Real Estate Inc., Bloomfield Hills, awarded property management contracts to Broder & Sachse Real Estate Services Inc., Birmingham, including Gale Gardens Apartments, Melvindale; Huntington Club Apartments, Warren; and Midtown Square Apartments, Wayne. Websites: rocore alestate.com, brodersachse.com. CKC Agency, Farmington Hills, added clients Von Maur Inc., Davenport, Iowa; family law firm Annette J. Benson & Associates PC, Bingham Farms; and Shanbom Eye Specialist, Berkley. The firm is handling public relations strategy and publicity for the Motor City Comic Con (May 16-18) in Novi and the Trenton Summer Festival (June 27-29) in Trenton. Website: ckca gency.com. Art Van Furniture Inc., Warren, is integrating Art Van World of Floors as a wholly owned brand of the company. Art Van Furniture’s agreement is to purchase the balance of the business interest previously held by Emil Pedick, who was 50 percent owner of World of Floors, Sterling Heights. Art Van World of Floors headquarters will be relocated to an area west of Art Van Furniture’s corporate campus. Website: artvan.com.

EXPANSIONS Yoga Shelter LLC, West Bloomfield Township, opened a studio at the Arbor Lofts, 20300 Civic Center Drive No. 1118, Southfield. Telephone: (248) 7967574. Website: yogashelter.com. Allure Medical Spa, Shelby Township, a vein therapy, cosmetic enhancement and anti-aging medical practice, opened a location at 7300 Dixie Highway, Suite 200, Clarkston. Telephone: (800) 577-2570. Website: alluremed icalspa.com.

NEW PRODUCTS Burroughs Inc., Plymouth, a provider of check scanners for the financial community, announced the addition of the SmartSource Micro Elite check and document scanner to its portfolio. Website: burroughs.com. Saphran Solutions Inc., Franklin, a developer of management software, is introducing a capacity and asset planning system to help companies more accurately forecast product demand and reduce costs. Website: saphran.com. Total Grinding Solutions Inc., Warren, launched its TGS-CL-6020 centerless grinder, configured for through-feed grinding and in-feed grinding, and designed for large-batch production. Website: totalgrindingsolutions.com.

STARTUPS The Zenith restaurant opened on the first floor of the Fisher Building, 3011 W. Grand Blvd., Detroit. Telephone: (313) 972-1135. Website: thezenithatthefisher.com.

DIARY GUIDELINES Email news releases for Business Diary to cdbdepartments@ crain.com or mail to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207-2997. Use any Business Diary item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

Business

Computers

Engineering / Technology

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Health

Human Services

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CRAIN’S DETROIT BUSINESS

PEOPLE ARCHITECTURE

HEALTH CARE

John Polsinelli to director of operations, Norr LLC, Detroit, from manager

ident and CEO, Communication for Social Change Consortium Inc., South Orange, N.J. Benjamin Carter to executive vice president, finance, and CFO, CHE Trinity Health, Livonia, from executive vice president, finance.

Henry Ford West Bloomfield Hospital, West Bloomfield Township, has named Betty Chu, M.D., chief medical officer and vice president – medical affairs. She succeeds CMO Bruce Muma, M.D., who remains with the Henry Ford Physician Network as the Chu medical director of utilization review. Chu, 43, is a partner in Clinton Women’s Healthcare PC, Clarkston and Utica, and an associate professor of obstetrics and

INSURANCE

MARKETING

of architecture.

CONSULTING Steven Szura to project manager, environmental engineering and sciences practice,

Civil & Environmental Consultants Inc., Novi, from environmental scientist, Barr Engineering Co., Ann Arbor.

Szura

FINANCE

IN THE SPOTLIGHT

Gray-Felder

Carter

Denise Gray-Felder to chief communications officer, University of Michigan Health System, Ann Arbor, from pres-

Stephen Ruschak tee Co. of North America USA, Schiller

Southfield, from senior vice president and COO.

Stubbs

Jacqueline Schiller to senior vice president, Chelsea State Bank, Chelsea, from human resource officer. Also, Jessica Stubbs to vice president, from assistant vice president and compliance officer. Busch Susan Busch to senior wealth adviser, Executive Wealth Management LLC, Brighton, from senior account executive, vice president, Fidelity Investments, Birmingham.

MANUFACTURING Dan Yaung to genRuschak

eral manager, turbocharger and friction materials aftermarket business, North America, Honeywell

Transportation Systems, Troy

Yaung

and Plymouth, from director of market and business development, Honeywell Transportation Systems, Rolle, Switzerland.

Baskin

SERVICES Roberto Valdez to marketing director, Mango Languages, Farmington Hills, from vice president of clinical integration and practice management, Integrated Healthcare Systems LLC, Southfield.

MEDIA

to managing director, CKC Agency, Farmington Hills, from public relations manager, Lowe Campbell Ewald, Warren. Sharon Trudell to account director,

John Cook to new business/digital sales manager, WDIV-Channel 4/ ClickOnDetroit.com, Detroit, from ac-

MVP Collaborative LLC, Madison

Brent Mikulski to president and CEO, Services to

Pat

to president and COO, The Guaran-

gynecology at the Oakland University William Beaumont School of Medicine in Rochester Hills. She is the former president of the medical staff of Beaumont Hospital, Troy, and a former board member of Beaumont Health System. Chu was named to the Crain’s Detroit Business “40 under 40” in 2010 and is a member of the board of directors of the Michigan State Medical Society. She earned her medical degree from the University of Michigan Medical School, completed her residency in obstetrics and gynecology at William Beaumont Hospital, Royal Oak, and earned an MBA from the University of Michigan Ross School of Business.

Stefanie Denby to sales, leasing and marketing manager, from marketing manager. Thomas Schoenberger to managing director of brokerage services and business development, Core Partners, Birmingham, from vice president, partner. Also, Bob Waun to vice president, business development, from CEO, Vacation Finance, Birmingham. Jay McMaken to director of veteran affairs and operations, Ross Mortgage Corp., Royal Oak, from senior loan officer, Wells Fargo Home Mortgage, Brighton, a division of Wells Fargo Bank NA.

Baskin

Heights, from director of marketing, the Wit-A DoubleTree by Hilton Hotel, Chicago. Julie Prior to national sales director, automotive, Jun Group Productions LLC, Ann Arbor, from account executive, Midwest region, Martini Media Inc., Birmingham. Justin Rose to creative director, Quell Group Inc., Troy, from lead designer, consumer marketing group, Detroit Media Partnership, Detroit.

count executive. Tony Lamerato to local sales manager, Fox Sports Detroit, Southfield, from local sales manager, WDIV-Channel 4, Detroit.

NONPROFITS

Enhance PotenDearborn, tial, from resource director.

REAL ESTATE Jennifer Goldobin Mikulski born,

from

to sales and leasing manager, Ford Land , Dearlease analyst. Also,

Valdez

PEOPLE GUIDELINES Announcements are limited to management positions. Email them to cdbdepartments@crain.com or mail notices to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 482072997. Releases must contain the person’s name, new title, company, city in which the person will work, former title, former company (if not promoted from within) and former city in which the person worked. Photos are welcome, but we cannot guarantee they will be used.

CALENDAR TUESDAY APRIL 29 Nonprofit Management Conference. 8 a.m.-3 p.m. Troy Chamber of Commerce. A day of seminars designed for nonprofit professionals, board members and volunteers, including social media for nonprofits, accounting best practices, fundraising and effective speaking. Walsh College, Troy. $50 Troy Chamber members, $95 others. Contact: Jody House, (248) 641-3694; email: jody@troychamber.com; website: troychamber.com. Health Care Conference. 8:30 a.m.5 p.m. Michigan Association of Certified Public Accountants. Receive updates on topics relevant to the current dramatic health care industry overhaul, including health care reform, the global market of health care and fair market value. With JoAnne Purtan, anchor and reporter, WXYZ-TV, moderator; and CEOs Joseph Mullany, Detroit Medical Center; Nancy Schlichting, Henry Ford Health System; and Douglas Strong, University of Michigan Hospitals and Health Centers. Laurel Manor, Livonia. CPA members $195; others $325. Contact: (888) 877-4273; email: cpe@michcpa.org; website: www.michcpa.org.

WEDNESDAY APRIL 30 Small Business Unlocked: Meet the Purchasers. 8-10 a.m. Detroit Regional Chamber. Network with purchasers; learn the basics of purchasing and procurement protocol and how to cut

through red tape and get your business on public-sector RFP lists. Greektown Casino, Detroit. $30 DRC members, $70 nonmembers. Contact: Marianne Alabastro, (313) 596-0479; email: malabast@detroitchamber .com; website: detroitchamber.com.

Inner Circle Southeast Region 2014. 6-8 p.m. Inforum. Celebrate women in the inner circle of the business community at a forum where they can share and inspire leadership. With Lisa Dancsok, vice president, Rock Ventures LLC; Smiti Gupta, professor, Department of Nutrition & Food Science, Wayne State University; Amy Peterson, associate counsel, Detroit Tigers; Lisa Howze, chief of staff for Detroit Mayor Mike Duggan; Carol Hofgartner, executive director, Art Road; and others. 42 Degrees North, Detroit Marriott at the Renaissance Center, Detroit. $40 Inforum members, $55 nonmembers. Contact: (877) 633-3500; email: cthompson@inforum michigan.org; website: inforummichi gan.org.

THURSDAY MAY 1 Social Media: Effective Use. Noon-1:30 p.m. Washtenaw Contractors Association. Social media marketing works differently from traditional marketing, and to be effective, companies need to consider goals, objectives and measurements. With Aaron Velthoven, vice president of marketing, Detroit Media Partnership. Weber’s Inn, Ann Arbor. $30 WCA members, $60 nonmembers. Late fee will apply to regis-

CALLEY TO SPEAK AT INFRASTRUCTURE CONFERENCE Lt. Gov. Brian Calley will be the keynote speaker for a conference next month on the connection between infrastructure improvements and business attraction and redevelopment opportunities in the state. The 2014 Michigan Infrastructure Conference will Calley be 8 a.m.-4 p.m. May 8 at the Kellogg Center on the campus of Michigan State University in East Lansing. The conference is co-sponsored by the American Council of Engineering Companies of Michigan, Urban Land Institute Michigan and the American Society of Civil Engineers Michigan. Cost for members of any of those organizations is $175, or $250 for nonmembers. Admission for government agency representatives is $85. The price includes breakfast, lunch and an evening reception. For more information, or to register, visit www.acecmi.org or call (517) 332-2066.

trations made after April 28. Contact: Gretchen Waters, (734) 662-2570; email: gwaters@wcaonline.org; website: wcaonline.org.

FRIDAY MAY 2 11th Annual Awards Dinner. 6-10 p.m. Chaldean American Chamber of Commerce. Event honors area business and community leaders. With keynote speaker Gov. Rick Snyder; honoring Rep. Frank Wolf, U.S. House of Representatives, Virginia’s 10th District; Sister Philip Kirma, general superior of the Chaldean Sisters, Daughters of Mary Immaculate, Baghdad, Iraq; and Saad Abbo, founder and owner, U.S. Ice Corp., Detroit. With special guest Lukman Faily, Iraq’s ambassador to the U.S.; and master of ceremonies Mojo, radio personality, Channel 955 WKQI-FM. Shenandoah Country Club, West Bloomfield Township. $175; $1,500 table of 10. Contact: (248) 996-8340; email: info@chaldean chamber.com; website: chaldean chamber.com.

SATURDAY MAY 3 Medical Career Fair. 9 a.m.-1 p.m. U.S. Medical Management. More than 200 opportunities in medical billing, finance, information technology, customer service, human resources, payroll and other areas; also seeking nurses, physicians and other medical professionals. U.S. Medical Management Corporate Campus, Troy. Preregister by submitting resume by

May 2 to careerfair@usmmllc.com. Contact: (248) 824-6000; website: usmmllc.com/careerfair.

UPCOMING EVENTS Cybersecurity, Data Breaches, Your Practice & You. 11:30 a.m.-1:30 p.m. May 14. Women Lawyers Association of Michigan – Wayne region. Learn how to protect your practice and clients against data breaches. With Barbara McQuade, U.S. attorney, Eastern District of Michigan; David Miller, chief security officer, Covisint Corp.; and Susan Asam, attorney focusing on cybersecurity, Dykema Gossett PLLC. Hilton Doubletree Fort-Shelby. Detroit. $25 law students, $30 others. Register by May 8 at womenlawyers.org/node/709. Contact: (517) 372-3320; email: info@womenlawyers.org; website: womenlawyers.org.

Matrix Awards Celebration. 5:30-9 p.m. May 15. The Association for Women in Communications Detroit Chapter. Platinum-level sponsor: Crain’s Detroit Business. AWC Detroit will honor three women or organizations that make significant differences in people’s lives through a communications medium. With keynote speaker Anne Doyle, consultant, Anne Doyle Strategies for Leaders, and author of Powering Up: How America’s Women Achievers Become Leaders. She completed work for the U.S. Department of State in Spain regarding women’s leadership. The Dearborn Inn, Dearborn. $50 members, $60 nonmembers, $35 fulltime students. Contact: (866) 385-1784; email: info@womcomdetroit.org; website: womcomdetroit.org.

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Belle Isle fountain cleanup becomes crusade for caretaker BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

Far, far below Belle Isle, in a domed-ceiling building few know exist, Robert Carpenter keeps watch, switching levers, hitting buttons and adjusting valves like a modern-day Wizard of Oz. But his motions aren’t designed to produce an apparition. They’re focused on producing a plume of water that jets 20, 30, 40, 50 feet or higher into the air, along with countless other smaller bursts of water. Carpenter Carpenter is the unofficial caretaker of Belle Isle’s massive, antique James Scott Memorial Fountain. It’s not a paying gig for him, but, truly, a labor of love.

It’s personal Though his background is in electrical engineering, Carpenter, 56, fell into his “wizard” role quite by accident. Carpenter, manager of data quality for DTE Energy Co. who also has oversight of the company’s student interns, had been instrumental in launching the Clean Downtown initiative, created in 2005 by the Downtown Detroit Partnership and businessman Roger Penske during the run-up to Super Bowl XL in 2006. Following the big game, Carpenter and his crew were enlisted to help with cleanup efforts at Belle Isle in preparation for the Grand Prix. It was then, as Penske and then-DTE President and COO Bob Buckler walked past Scott Fountain, that Carpenter was first hooked. Their request was simple: Clean up the fountain. Carpenter and his team did, restoring the pearly sheen to its marble basin, sculpted faces, animals and all five tiers. Being the engineer he is, Carpenter couldn’t stop there. He began scrutinizing the antique valves, pipes and drains — practically living in the domed structure under the fountain as he prepared it for operation through maintenance that included gingerly flushing its corroded, cast-iron pipes and rushing to clean the resulting red water from the fountain’s marble bowl. Without any sort of hydraulic blueprints, Carpenter had to get to know the fountain through trial and error — and very concise instruction from the city of Detroit. He quickly learned he could turn the valves up and down and make things happen. But to his dismay, the fountain’s upper and lower cascades were not something he could initially bring to life. Carpenter began searching the massive system, some of it embedded in 2-foot-thick concrete walls, for the mechanical failures that had prevented the cascades from flowing for more than a decade. After countless hours and help from trusted student interns and a handful of others, Carpenter met his goal at 4 a.m. on a Friday — the

free public opening day for the Grand Prix. “We stepped back ... me, a contractor and a security guard, looking at this majestic fountain, water rushing down for just the three of us,” he said, with a faraway look in his eyes. He was proud that summer to bring his father — who had watched the fountain constructed as a very young boy — and his mother, wife and family back to the fountain for a picnic. It meant the world to his father, Carpenter said, to see the entire fountain, with its upper and lower cascades, operating one last time before he died and realize the role his son was playing in its revival. Efforts that first summer have led Carpenter on a personal crusade to restore parts of the marble fountain as needed, to keep it operating while retaining its historic integrity. He’s been on hand every year before the Grand Prix to get the fountain up and running again with inkind support from DTE and Penske’s team, and in 2012, $75,000 in DTE Energy Foundation grants made through the Downtown Detroit Partnership. Carpenter is so intent on his work that he moves his travel trailer to Belle Isle during the runup to the Grand Prix so he can dedicate nights and weekends when he’s not working at DTE to restarting the fountain and cleaning it just in time for the big race.

DNR gives repairs a boost Though there are “on” and “off” switches for the fountain, Carpenter said it’s not advisable to run the fountain unattended, given that it’s nearly 90 years old. During the race, he and his student intern delegates are on hand at all times in the domed room to prime a 60-100-horsepower water pump to ensure it doesn’t burn out because of faulty foot valves. They also check water intake levels and adjust water pressure to every fixture through dedicated valves and monitor the multicolored lights. This year, Carpenter will mentor a delegate from the Michigan Department of Natural Resources, which now operates Detroit’s island park as a state park. With no reserve funds in hand, he isn’t sure how he’ll fund fountain repairs that arise this summer, but the DNR is already voicing support for his efforts. During a private tour of the domed building below the fountain Thursday, Michael Terrell, metro district supervisor for the DNR’s parks and recreation division, told Carpenter the agency could cover the estimated $5,000 cost to repair a leaky foot valve in one of the pumps that will drain the water and burn out the pump if not monitored. Carpenter can’t help but wonder the role he’ll play going forward. For now, he has plenty of work, including searching for 1920s-era light fixtures to replace modern fixtures installed at some point in all but two spots in the domed building below. When you visit Belle Isle and see the Scott Fountain operating this summer, pay no attention to that man behind the curtain. He’d rather you smile at the upper and lower cascades.

DAVID HALL

Belle Isle’s massive, antique James Scott Memorial Fountain has had the pearly sheen restored to its marble basin, animal images and five tiers, but the work isn’t over for its devoted caretaker.

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CRAIN’S DETROIT BUSINESS

Fastest-growing companies in Detroit sought

Snyder, lawmakers at odds over eased charity gaming rules ASSOCIATED PRESS

LANSING — Gov. Rick Snyder and lawmakers remain at odds over how much to rein in the charitable gambling industry, after the state Senate voted unanimously last week to ease regulations that could go into effect next month. All sides agree there should be criminal background checks and licensing of poker rooms that run popuSnyder lar Texas Hold ’Em and blackjack fundraisers for charities in exchange for a cut of the profits. But they differ over how profits should be split, caps on the number of charities hosting the casino-style events concurrently at a single location and how many days a year poker rooms can operate. The Senate’s approval of legislation came less than a week before tighter rules proposed by the Michigan Gaming Control Board will take effect unless a legislative committee objects. The bill sponsor, Republican Sen. Rick Jones of Grand Ledge, said service organizations, churches, veterans’ groups and school foundations that depend on

charitable gambling for fundraising are concerned. “I think it’s extremely unfair for the gaming commission to suddenly say, ‘We’ve allowed this for over a decade and now we’re going to change the rules,’ ” Jones said. “So I’m hoping that the House takes this and we get it to the governor, and I hope we can keep this form of revenue for the little charities.” However, Snyder remains committed to putting in place the administrative rules. Snyder aides expect the legislation to die in the House and the 10-lawmaker Joint Committee on Administrative Rules to not act by Wednesday’s deadline, allowing the administration’s regulations to take effect in May. “We believe these reforms — which incorporated legislative and stakeholder feedback and changes along way after numerous public hearings and comments — are vital and necessary to ensure the integrity of the process, stem abuses and put safeguards in place for charities so we can continue to allow charitable gaming,” Snyder spokesman Dave Murray said. Messages seeking comment were left Thursday with leaders of the legislative panel considering the rule changes. While legislation would let poker rooms host charity games 365

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days a year, the rules would allow them to operate 208 days. The bill would allow four charities to host games in a poker room at one time — with the potential for eight or more events to be held onsite per day — while the rules would authorize no more than two parties per location in a day. Other differences remain over how many members of a charity must be on hand to help run the games and keeping intact a $15,000 limit per event on chips or raising it to $20,000 to let charities make more. Poker rooms could continue taking a 50 percent cut under the legislation; the rules would lower their take to 45 percent. Tension has built ever since Snyder in 2012 transferred oversight of the charitable gambling from the Lottery Bureau to the Gaming Control Board and its regulators familiar with monitoring highly regulated operations at casinos. The agency cracked down on some larger bars that contributed to a 22 percent drop in licenses issued for millionaire parties through the first half of last year. Revenue from the events reported to the state was only $7.9 million in 2002, but surged to a peak of $197 million in 2011 and dipped to $184 million in 2012. Charities’ profits rose from $3.6 million in 2002 to $19.2 million two

years ago before leveling at $15.8 million. The state says charities got 81 percent of the proceeds a decade ago but now receive half under profit-sharing agreements never envisioned when the charity games were authorized in a 1976 update of the Bingo Act. Charities say that while they are taking less of the cut on a percentage basis, they are still raising much more money than previously. Richard Kalm, the Gaming Control Board’s executive director, said he will lift a moratorium on new charitable gambling sites once the rules are in place, opening up opportunities for bars and Kalm restaurants to host millionaire parties. Twenty-two sites have been closed for illegal gambling since 2010, and in recent days, authorities found a poker hall where two of four dealers were felons, he said. “We want to inject licensed suppliers back into the process ... and get away from this quasi-casino environment where profits and volume are driving what’s going on,” Kalm said.

Annual Mackinac Edition

The Detroit Economic Growth Corp. and Initiative for a Competitive Inner City are looking for the fastestgrowing companies in Detroit. Each year, ICIC recognizes the country’s 100 fastest-growing companies found in economically distressed urban areas. This year the Roxbury, Mass.-based organization is seeking 10 businesses in 10 industries, and the winners will be featured in Fortune magazine. The industries are: construction, manufacturing, food/beverage, retail, professional services, software/IT, transportation/logistics, health care/biotech, media/advertising and arts/entertainment/recreation/tourism. To qualify, businesses must be for-profit; headquartered in an inner city; have at least 10 employees; and have a five-year operating sales history with at least $1 million in revenue in 2013 and $200,000 in 2009. Past local winners have included Edibles Rex Inc., Powerlink LLC, FutureNet Group Inc. and Computech Corp. To apply for the Inner City 100, visit icic.org. Applications are due May 9.

ISSUE DATE: June 2 | AD CLOSE: May 15

Does your company have an immigration success story? SHARE IT with an ad in this special section of Crain’s Detroit Business. The Detroit Regional Chamber Mackinac Policy Conference, May 27–30.

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Business Education Directory: New Business Education Programs in Southeast Michigan LIST: Michigan Graduate Business Degree Programs The next president of Wayne State faces a rigorous learni ng curve, with priorities that include increasing enrollment and graduation rates, and managing the cultur e clashes of academia

LIST: Largest Private Companies in Southeast Michigan

Page M13

Degree of difficulty

BY CHAD HALCOM | CRAIN’S DETRO IT BUS

INESS he 12th president of Wayne State University, named soon, faces expected to be a challenge versing several performanc over a decade in the making — ree declines, including ment and a six-year falling enrollgraduation rate that recently tumbled low 30 percent. beFall enrollment numbers also have declined 2009, the Michigan each year since Legislature is growing mance, and an often weary of underperfor adversarial internal culture persists.

Current President Allan Gilmour, who retires June 30, said he wishes he had done more with some of More transfer in tech those issues, but State pushes Wayne transfer: office to pull more of its R&D has accomplishe d weight, a lot in his three Page M16 years at the post. That includes setA chemical reaction at lab: ting the groundResearcher Greg work for imAuner (right) proved goes from top graduation rates, Gilmour dog to the improved doghouse; retention and rounding student university says more than $212 million up it’s about in funding commitment s toward money, Page M17. versity capital campaign. a uniDiane Dunaskiss, cation with the board a Republican member of the on the issue. WSU board “We had a sense of governors who that the admiswas on the sion process and programs that search committee, said continserve students were uing improvemen not t in tomer-focused, people very cusand graduation rates retention helped or approached weren’t being has been a top priority in about what selecting the they needed from the new president. succeed, and as Allan university to “That’s been the came in he validated that we key were not incorrect tion for every candidatequesabout that,” she we’ve said. interviewed, and anyone who’s “There’s still room involved in the search to improve. It’s not where it commitneeds to be, but tee process knows that retenthere is progress. And, hopefully, tion is something we think this we can grow our student base with group has the skills students who are and the inacademically pretent to address,” she said. “Or pared or attracting we wouldn’t be interviewing more people to some of our graduate them.” and professional schools.” Debbie

R&D CHALLENGES

Sponsored By: WAYNE STATE STUDENT RETENTION

, GRADUATION RATES

Student retention and graduation rates for Wayne State University *Based on tracking since the 2000-01 an academic year. who began as freshmenincoming class from six years earlier. For example, the in fall 1996 who had 2001-02 graduation students who return graduated on or before rate is the percentage the next academic Aug. 31, 2002. Retention year. rates are the year-over-yearof those students comparison of 80%

77.7

For information, contact Marla Wise at mwise@crain.com or (313) 446-6032.

70%

76.1

70.6

60%

50%

40%

crainsdetroit.com 30%

20%

Michigan public universItie

s, 2011-12 76.9 75.0 77.1 77.0 73.5 71.7 6-year Retention 69.2 1. UM-Ann Arbor graduates 69.7 96% 1. UM-Ann Arbor 68.9 2. MSU 90% 91% 2. MSU Retention 3. Michigan Tech 77% 83% 3. Michigan Tech 4. Grand Valley 65% 82% 4. Grand Valley 5. UM-Dearborn 63% 82% 5. Western Mich. 6. Wayne State 56% 77.0% 6. Central Mich. 7. Central Mich. 54% 76% 7. Northern Mich. 6-year graduates 8. Eastern Mich. 51% 76% 8. UM-Dearborn 9. Western Mich. 49% 74% 9. Ferris State 35.9 10. Northern Mich. 47% 34.5 33.7 73% 10. Eastern Mich. 33.6 31.7 11. Oakland U. 40% 73% 33.1 32.3 30.9 10. Oakland U. 31.0 12. Ferris State 40% 31.7 71% 12. Saginaw Valley 28.1 13. Saginaw Valley 38% 70% 13. UM-Flint 26.4 14. UM-Flint 37% 70% 2000- 2002 14. Lake Superior 2004 2 15 L k 35% 75.6

Dingell, the Democratic chairman of the board at

The seeds of the slump The performance issues at WSU ha

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Pistons among pro teams hiring exec search firms BY BILL SHEA CRAIN’S DETROIT BUSINESS

The Detroit Pistons are the latest professional sports team to use a corporate headhunter to find a top executive. Team owner Tom Gores’ California-based private equity firm, Platinum Equity LLC, has retained Los Angeles-based Korn/Ferry International (NYSE: KFY) to aid the basketball team in finding a new president of basketball operations/general manager. Joe Dumars resigned from that role on April 14 after 14 years in the role. He’s now an adviser to the team, which has missed the playoffs the past five seasons and experienced a significant dip in attendance, season ticket sales and revenue. Korn/Ferry was involved in the University of Michigan’s hiring of Brady Hoke and David Brandon, and has a sports practice dedicated to finding executives for college athletic departments and professional teams. Leading the search internally for Dumars’ replacement are two of Gores’ Platinum lieutenants: Phil Norment, senior executive responsible for evaluating investment initiatives, and Robert Wentworth, a former Ernst & Young CPA and former CEO.

Gores

Dumars

Norment and Wentworth have had oversight of the Pistons and Palace Sports & Entertainment as business entities since Gores bought them for $325 million in 2011. They were Gores’ on-site senior executives in charge at the Palace during the ownership transition, and they led the analysis of PS&E’s business practices. The team said a list of candidates has been developed. No names were disclosed, but several have emerged in media reports. Among those mentioned have been Scott Perry, a former Pistons executive and current assistant general manager/vice president of the Orlando Magic, and former Detroit players Isiah Thomas and Grant Hill. Dumars’ role in the interim is being handled by Ken Catanella, director of basketball operations, and Assistant General Manager George David.

Korn/Ferry’s role is to vet candidates, create profile work-ups of them, and assist in hiring. How much the firm is charging Platinum hasn’t been disclosed. The University of Texas paid $267,000 to Korn/Ferry for its help in hiring Charlie Strong as the Longhorns’ new football coach, according to USA Today. Public university spending must be disclosed. Colorado State University paid Chicago-based Spencer Stuart $250,000 for a football coaching search that ended with Jim McElwain’s hiring in 2011, according to Forbes.com, and Florence, Mass.based Alden and Associates Inc. charged the University of Connecticut $50,000 for the search that produced football coach Paul Pasqualoni in 2011. Other major search firms with sports practices include Chicagobased DHR International and Oak Brook, Ill.-based Witt/Kieffer. The University of Michigan didn’t responded to a request from Crain’s for what Korn/Ferry was paid to aid in the search that resulted in David Brandon being hired away as athletic director from Ann Arbor-based pizza giant Domino’s Inc. in 2010, and in football coach Brady Hoke being hired from San Diego State in 2011. The Detroit Regional Chamber

used Korn/Ferry to find CEO Sandy Baruah in 2010 when it hired him away from the U.S. Small Business Administration. Executive head hunting is lucrative. Korn/Ferry had $43.8 million in operating income on $812 million in 2013 revenue, according to its annual report. It didn’t specifically break out revenue for its sports practice. That practice is run by Jed Hughes, a former pro football coach who has a Ph.D. in organizational behavior. “I can pick up the phone and call almost every head coach in any sport and get them to return my call and get better insight than an owner could because I’ve paid the price of being a coach,” Hughes told Bloomberg Businessweek for a profile in January 2013 after New York Jets owner Woody Johnson hired him to search for a replacement for fired General Manager Mike Tannenbaum. “It’s been in my DNA, assessing people.” The Jets hired Seattle Seahawks vice president of football administration John Idzik to fill the GM role. Hughes previously did thirdparty psychological testing and assessments for the San Francisco 49ers and Green Bay Packers, Busi-

Contract: Planterra Corp. loses airport business ■ From Page 1

Terminal through a direct contract with Delta Airlines Inc. The large trees in the terminal are artificial and don’t require maintenance, but Planterra handles Delta’s club lounges and some of the airline’s concessionaires. Rentokil was incorporated as a British pest control company in the 1920s and expanded into other business services in the 1990s, including interior landscaping. (It originally called that division Rentokil Tropical Plants but later rebranded as Ambius.) In 2006, Rentokil bought Pennsylvaniabased J.C. Ehrlich Co. for $141.8 million to “build up its U.S. bugkilling business,” according to Bloomberg News. That gave the British company a foothold in the U.S., and it soon expanded its interior landscaping business here, too. Ambius has been involved in the renovation of the Robert and Arlene Kogod Courtyard in the Smithsonian’s National Portrait Gallery in Washington, D.C., and the African pavilion of the Lincoln Park Zoo in Chicago. It was Ambius — doing business under the name of its sister company, J.C. Ehrlich — that bid against Planterra. It scored the three-year contract for $127,053. Planterra bid $167,416. When the issue came before the Wayne County Airport Authority Board on Thursday, only Chairman Alfred Glancy III voted no. Before the vote, the authority’s lawyers confirmed that Rentokil scored contracts several years ago with Gadhafi. British newspaper

accounts suggest would the airthose contracts port authority came in exchange knowingly grant for Britain releasthis contract ing the Lockerbie when they have bomber at Gadlegitimate local hafi’s request. alternatives?” In 1988, Pan Am Because the Flight 103 was bid was lower, scheduled to fly explained Confrom Frankfurt to way, reiterating Detroit with stops that neither in London and Rentokil nor New York City. A J.C. Ehrlich is terrorist bomb deflagged by the stroyed the flight State Departover Lockerbie, ment. Scotland, killing “The contract Michael Conway, all 243 passengers expired and we Wayne County Airport Authority and 16 crewmemput it out to combers. petitive bid,” he A Libyan citizen was convicted said. “We just rebid the retail venof carrying out the terrorist act. dors, for example, and some existHe spent more than two decades ing retailers didn’t win the bid bein prison, until, in 2009, the Scot- cause there was another bidder tish government set him free, call- who generated more revenue for ing it a humanitarian nod to his ill the airport authority.” health. The airport authority relies on But Gadhafi’s son claimed, in revenue from the airlines and The Telegraph, the release was what it generates from retail, linked to trade deals the British parking, car rental and taxi congovernment had arranged with cessions to make its budget. Libya for British companies. One The authority charges airlines of those companies was Rentokil, to land planes, based on a particuwhich in 2009 signed a contract lar aircraft’s maximum gross with Gadhafi for pest control, in- landing weight. cluding on the leader’s personal Any budget deficit is contracturanch, according to the newspa- ally made up by the airlines that per. use Metro, and they, in turn, lean “It makes we wonder, does any- on the authority to further trim one have a backbone? Real peo- costs. Conversely, any budget surple died in the Lockerbie bomb- plus is refunded to the airlines. ing,” said Pliska, 33. “Michigan Pliska said the bulk of the tervictims were on that flight. Why minal landscaping contract is ac-

The contract “ expired and we put

it out to competitive bid. We just bid the retail vendors ... and some existing ventors didn’t win.

”

tually labor costs, so he suspects Planterra’s bid was higher because he pays higher local wages than J.C. Ehrlich. For maintenance workers, Planterra pays an hourly wage of $11-$17 after training. Neither J.C. Ehrlich Co. nor Ambius would comment for this story. “Labor is our biggest expense,” said Pliska. “We invest in our people. We’ve had one horticultural technician with us since 1976. He’s taken care of the GM Tech Center that entire time.” Losing the contract will not hurt Planterra’s bottom line, however, Pliska said. The terminal represents one of the company’s larger interior landscape-maintenance accounts, but only a small fraction of its annual sales. “We are fortunate to be diversified,” he said. The bulk of Planterra’s business is its corporate interior landscaping, but that is followed by its onsite events service, which designs everything from food to décor for weddings and other celebrations in the company’s conservatory. The company has 55 employees. The glass-encased botanical garden is frequently rented for corporate events, as well. Finally, it does off-site events and special displays, such as the current Easter-themed plantings for the Somerset Collection. Amy Haimerl: (313) 446-0416, ahaimerl@crain.com. Twitter: @haimerlad

nessweek reported. Hughes joined Korn/Ferry in January 2012. He previously was involved in the hiring of Green Bay Packers CEO Mark Murphy, Pac 12 Commissioner Larry Scott, and the Seattle Seahawks top three positions: coach Pete Carroll, General Manager John Schneider, and CEO Peter McLoughlin. Korn/Kerry was used last year by Maple Leaf Sports and Entertainment, owner of the NBA’s Toronto Raptors, in the hiring of Masai Ujiri as the basketball team’s president. He had been the Denver Nuggets’ general manager and 2013 NBA Executive of the Year. The Raptors returned to the playoffs this season after a fiveyear absence. Korn/Ferry’s other notable basketball placements have included Portland Trail Blazers President Chris McGowan and USC basketball coach Andy Enfield. The firm recently was involved in the Houston Texans hiring Bill O’Brien, the Kansas City Chiefs hiring Andy Reid and USC hiring Steve Sarkisian. On the sports executive side, Korn/Ferry said it was hired in the searches for Big 12 Commissioner Bob Bowlsby, Pro Football Hall of Fame President David Baker, and Arizona State University Athletic Director Ray Anderson.

Redevelopment of Cass Corridor buildings kicks off After years of planning, the $16.7 million redevelopment of two buildings in Detroit’s Cass Corridor began with a ceremonial groundbreaking last week. Plans for the redevelopment of 3350 Cass Ave., built in 1924, and 149 Davenport St., built in 1918, have been in the works for seven years, since Cass Corridor Neighborhood Development Corp. took control of them, said Patrick Dorn, CCNDC executive director. The buildings will be renovated into 47 low-income housing units; the project is expected to be complete next May. Funding for the redevelopment project comes from a variety of sources, including grants and tax credits. One of the largest investors is Great Lakes Capital Fund, which invested nearly $9 million in equity by financing housing tax credits for the buildings. Other funders include the Michigan State Housing and Development Authority, Midtown Detroit, Detroit Economic Growth Corp. and a range of others. The project developer is Novibased Ginosko Development Co. Kentwood-based Rohde Construction Co. is the general contractor and Farmington Hills-based Fusco, Shaffer & Pappas Inc. is the development architect. KMG Prestige will serve as property management company. Robert Zinser Housing Development Consulting helped lead the team as a consultant. — Bridget Vis

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Avegant: Headset startup

Robots: Can humans keep up?

■ From Page 3

■ From Page 1

ward Tang, CEO. Avegant — pronounced AH-vuh-GAHNT — is a mash-up of his last name and the last name of his co-founder, chief technology officer Allan Evans. Tang said calls are coming in from investors, and from other companies who could be strategic partners.

Building buzz Since it was formed in 2012, Avegant has been working to build its technology, its funding and its profile. The company’s headset, called Glyph, was one of just 40 out of thousands of products on display to win Editor’s Choice Awards at the influential Consumer Electronics Show in Las Vegas in January. It also won a business plan pitch at South by Southwest in Austin, Evans Texas, in March, and at Macworld/iWorld in San Francisco the same month, the Glyph was named as one of six “About to Break” emerging tech devices. On Jan. 22, Avegant launched a Kickstarter campaign, which went far beyond anything company officials were hoping for. They had a target of $750,000, which Tang said was hit in 3 hours and 56 minutes. The campaign is now at $1.5 million. Positive reviews for the Glyph have appeared in online publications, praising both the visual quality of the images projected and the sound quality of the earphones, which can be used as regular and noise-canceling headphones when no video is being watched. “The projected image was exceedingly bright and vivid, lacking any sense of pixilation. A deep-sea 3D movie looked like it was projected in a tiny little movie theater in front of my eyes,” wrote Scott Stein on cnet.com. “The colors were insanely rich and bright. The image was ridiculously clear,” wrote a reviewer at roadtovr.com. “I would love to wear something like this whenever I need to block out the real world and immerse myself in something distracting,” said a reviewer at anewdomain.net. “We want to give a premium experience back to the mobile user,” said Tang.

Retinal research Prior to Avegant’s founding in 2012, Tang was a researcher at the University of Michigan, working on projects for the U.S. Defense Advanced Research Projects Agency, which funds research at the cutting edge of science. Tang worked on projects involving his specialty in electrical engineering: MEMS, for micro-electromechanical systems. Evans, who got his PhD in electrical engineering from the University of Michigan, was working as an engineer at the Pacific Northwest National Laboratory, a U.S. Department of Energy research lab in Richland, Wash. At some point, Evans showed Tang the work he was doing on retinal displays. “I peered into this optical contraption and I said, ‘Allan, you gotta quit your job. We have to start a company,’ ” recounted Tang. Avegant formed late in 2012 after the technology was licensed from the national lab. In January 2013, Tang and Evans began raising $500,000 from friends and family to begin working on a prototype. Their first device, to prove the concept of being able to deliver HD images to the retinas was, according to Tang, “a huge benchtop prototype. It worked, though, and it allowed us to raise some more money.” Eventually, they raised $1.9 million last year, including money from the Michigan Angel Fund and other angel investors, and their first sliver of venture capital, $50,000 from

the Detroit-based First Step Fund. The next prototype resembled a real headset, but was awkward to use and too heavy to be comfortable.The prototype that followed — the one that has won all the accolades — looks more like a polished consumer product. Tang said it will be refined and made a little smaller before it begins shipping to the 3,000 Kickstarter customers who funded Glyph, which will retail at $499. At the heart of the Glyph are two components from Texas Instruments, MEMS devices that use 1 million micro-mirrors each to deliver a resolution of 1,280 by 720, meaning 1,280 vertical lines and 720 horizontal lines.

The next level Avegant, which has 11 employees, including four engineers in Redwood City, Calif., has applied for six patents to cover its technology, including one for a better way to deliver 3D imaging. Last August, Adrian Fortino was one of the early investors in Avegant. He is vice president of Invest Detroit and director of its two early-stage investment funds, the First Step Fund, which typically invests $50,000 in companies, and the new Detroit Innovate Fund, which will invest up to $300,000 in fundraising rounds. Fortino said he will invest at least another $50,000 from First Step and likely more from the Detroit Innovate Fund in the next round of fundraising. “If they continue to raise money, we’ll absolutely be an investor,” he said. “Ed and Allan are really smart. They are two of the most accomplished entrepreneurs I’ve met,” said Fortino. “They know this industry and this market. Their industry intelligence was unmatched — combine that with their product expertise, and it was a natural for us to invest. “They had a prototype that worked. It wasn’t pretty, but who cares? You could see this was a product that could get to market really quickly.” Chris Rizik, president and fund manager of Ann Arbor-based Renaissance Venture Capital Fund, described Avegant’s perception in the local venture capital community as “smoking hot” and likely the recipient soon of a large venture capital round. But he cautioned that there are still concerns for a would-be investor. Having a nice prototype is one thing, he said, but can the company ramp up largescale manufacturing at a finished price? “The big challenge is to move from a Kickstarter campaign, where you have enthusiasts willing to pay a higher price, to a market where gamers and movie fans want a better price,” he said. And with early-stage consumer products, the worry is about competition no one knows about, yet, “people over the horizon working on similar things or the next-generation thing. “You don’t know they’re out there, and you don’t know what they are working on.” Differentiation is key, said Sonali Vijayavargiya, founder and managing director of Ann Arbor-based Augment Ventures Management Co. LLC. “The market they’re in is cool and growing, but there are a lot of big players out there,” Vijayavargiya said. Terry Cross, a veteran angel investor, heard a presentation by Tang at an Automation Alley event last year. He now regrets passing on an opportunity to invest. “I grilled him pretty good and he stood up to it,” said Cross. “I probably should have invested then and there. “Avegant is in a position to get acquired for a very big number. Maybe one with a B.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

In 2012, manufacturers sold 26,269 industrial robots in North America, a figure which is expected to rise to more than 31,000 by 2016, according to data by the International Federation of Robotics. That figure is expected to rise to near 200,000 industrial robots sold in 2016 globally. The global population of robots exceeded 1.3 million last year, according to the IFR, and there’s no sign of things slowing down. The automotive industry makes up about 40 percent of the global supply of industrial robots, but use is growing in other sectors. Rochester Hills-based Fanuc America Corp. and its Japan-based parent company have manufactured more than 250,000 industrial robots over the past 30 years. James Vaughan, general manager of paint shop automation sales for Fanuc America, said robot sales make up one-third of its supply, but its largest growth sectors are aerospace, agriculture and pharmaceuticals. Robot orders for the food and beverage industry grew by 4 percent in 2012 and are expected to rise sharply along with the pharmaceutical industry, according to the IFR. Vaughan said the use of robots will continue to change — and enter more industries — but this will ultimately create jobs, thanks to higher efficiency and reduced labor costs. “We’ve seen technological changes in the past; we’ve moved from hunting and gathering to mass production — and jobs always find a way,” Vaughan said. “Because of automation, the U.S. is more competitive with Mexico and Asia, so we’re really strengthening the market by having these companies bring back manufacturing.” In 2013, U.S. manufacturers increased 3 percent and productivity increased 1.9 percent over 2012, according to data from the U.S. Bureau of Labor and Statistics. However, labor costs decreased 0.1 percent.

Local jobs at risk? Despite lower labor costs, largely due to automation, Michigan is adding manufacturing labor right now. Manufacturing employment in the state increased 2 percent in 2013, adding 13,084 jobs, according to the 2014 Michigan Manufacturers Directory. The city of Detroit recorded its first gain since the recession, up 1.8 percent in 2013. Other cities with increases included Auburn Hills, up 5.8 percent; Sterling Heights, up 3.6 percent; and Warren, up 1.8 percent. But the economy is still in recovery mode, experts say. Frank Levy, professor emeritus at Massachusetts Institute of Technology and a longtime researcher of technology’s impact on employment, said people often looks for something to blame for employment shortfalls — and robots are easy targets. “People have a short memory; the economy is still recovering from the financial collapse,” Levy said. “That was no ordinary recession, and people are looking for things to get better, but it takes time and it’s not due to technology.” Oftentimes, the traditional workforce scoffs at technology, Vaughn said. “Sometimes workers are fearful when we enter a plant because of the union or because they feel their jobs are in jeopardy, but they should know that the company is investing in that facility, and that’s job security,” he said. “The old-school plants that see (robotics) as a threat, well, those plants won’t be around for long.” Levy co-authored a 2013 study, “Dancing with Robots,” which studied how education must change to meet technological demands . While more processes are becoming automated, robots still can’t function like the human brain. “Over time, we’ve seen more and more robots take over the assembly

line, but they can’t replace all jobs,” Levy said. “Robots don’t respond quickly to change, and computers are strongest when there is a repetition of a single action, so humans still have roles in the workplace; they just may be a little different in the future.” Stephen Spurr, economist and interim chair of the economics department at Wayne State University, said despite a hollowing-out of low-skilled jobs due to automation, there is no reason for alarm. “We know more and more jobs are going to be automated,” Spurr said. “The huge increases in technology always cause concern that people will be out of work, but we’ll never get to the point where our wants will taper. Our wants increase exponentially with our output. People will have jobs, just different jobs.”

Terminating misperceptions Robots have brought fear and paranoia to the American worker since the first robot entered the factory floor. General Motors Co. installed the first robot, a 4,000 pound Unimate, at its plant in Ewing Township, N.J., in 1961. The robot, a six-axis arm attached magnetically to a steel drum, welded and moved parts weighing up to 500 pounds. The Unimate performed a job deemed dangerous to workers. In March 1964, President Lyndon Johnson received a memorandum from a group of professors, technologists and activists, warning him that computers and automation would cause unemployment. However, the U.S. has added more than 74 million jobs since 1964. For their part, computers and robots have changed the skills and wages of the workforce. Fast-forward 50 years, and robots are part of nearly every facet of manufacturing. At Prism Plastics LLC in Chesterfield Township, only three employees work on the plant floor in the 26,000-square-foot factory. Prism, which produces injection-molded automotive components, is the model of modern manufacturing — fewer humans, more machines, higher efficiency, increased productivity. The focus should be on training for these new skills, Levy said. Dearborn-based engineering society SME acquired Cleveland-based online training nonprofit Tooling University LLC, now called Tooling U, to boost manufacturing skills across the globe. Tooling U works with manufacturers and community colleges to create updated manufacturing skills, including operation and maintenance of increasingly more complex robotics, said Jeannine Kunz, director of Tooling U. “The part of the robotics story that gets missed is the jobs they create,” Kunz said. “A lot of low-skilled jobs went overseas years ago, but the ones that didn’t are now higher-skilled jobs working with robots, and they are much higher-paid.” Thousands of people take Tooling U’s online courses daily, Kunz said. The center recently launched a 14-course program for global employees of Siemens AG. However, community colleges continue to struggle filling classes on robotics, said Phil Callihan, executive director of Ann Arbor-based National Center for Manufacturing Sciences. He fears the state could miss out on the jobs of the future. “As robotics and autonomous vehicles make their way into society, there is a huge opportunity for trade schools and community colleges,” he said. “We need to set up an environment for the jobs robots are creating, because someone has to work on those robots and maintain those robots; there will always be jobs for workers that get their hands dirty.” Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh

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Default: On mortgages

1001: Financing deal

■ From Page 3

Detroit. We are focused on continuing to do our part to build positive momentum in Detroit, specifically the New Center and Midtown areas.” A.J. Weiner, executive vice president in the Detroit office of Jones Lang LaSalle, called the default “unfortunately, a natural course of commercial real estate in this region.” FK is not in a unique position by defaulting on its loan in the Detroit market, where the default rates are significantly higher than national averages, according to New York City-based loan data service Trepp LLC. In March, there was a 12.68 percent default rate in the metro Detroit market on $5.44 billion of outstanding commercial mortgage-backed securities debt, according to Trepp. The national average was 6.54 percent. In March 2013, there was a 15.3 percent default rate on $5.99 billion of debt in the Detroit market. The national average was 9.5 percent, according to Trepp. Other landmark metro Detroit buildings have also faced default. New York City-based 601W Cos. confirmed it planned to buy the 2.2 million-square-foot Southfield Town Center out of foreclosure for $177.5 million after Blackstone Group LP, its New York City-based owner, defaulted on a $235 million mortgage, owing $138 million. That sale is expected to close in early May. Nemer Property Group, owner of the 1 million-square-foot Galleria Officentre in Southfield off Northwestern Highway west of Telegraph Road, owes more than $84 million on its original $89.6 million GE Capital mortgage for the four-building complex, for which it purchased majority rights in 2007, according to Bloomberg. The value of the property dropped from $112 million in October 2006 to $47 million as of July 2012. A loan modification is in process by loan servicer LNR. “It touches all types of buildings and, as iconic as the Fisher and Kahn are, that’s the story. I’m sure Farbman did as much as they could with them,” Weiner said. Matt Farrell, executive principal/partner of Bingham Farmsbased Core Partners Associates LLC, said the 2005 loan was originated “in a different marketplace, when times were better.” Rents at the Fisher and Kahn buildings “were then and still are today above the perceived market rates.” At the 86-year-old Fisher, rent is $16 per square foot, according to Washington, D.C.-based real estate information service CoStar Group Inc. At the 83-year-old Kahn building, it is $17 per square foot. “With the debt-carry and operating expenses, it makes mathematical sense” for FK to reposition the buildings, Farrell said. “It’s not inconceivable that (ownership) changes but some of the existing players on the table remain in the project at the end of the day,” he said. “It’s also not inconceivable that the lender uses this as a strategy to get an evalua-

about 65 percent during metro Detroit in the the recession and 75 to last several years has 78 percent “during the fluctuated. boom times,” said Joe In 2005, $1.65 bilMcBride, research analion in CMBS debt lyst for New York Citywas issued in metro based loan data service Detroit, according to Trepp LLC. Trepp. That tapered Six out of the seven off during the next lenders that toured the few years as $1.44 bilcity offered 70 to 75 perlion was issued in cent of the 1001 Wood2006 and $1.22 billion ward building’s value, in 2007. Bernard said. Last year, $1.05 bil“They loved it,” lion in debt from Bernard said. “We commercial mortshowed them what gaged-back securities works, what doesn’t was issued, accordwork, what the issues ing to Trepp. That are, where the growth marked a sharp is. Then we showed uptick from the prethem with numbers.” vious two years. In The $24.5 million COSTAR GROUP 2012, there was $454 deal equates to a loan Bedrock financed 1001 million and in 2011, worth $82 per square Woodward at 75 percent of $216 million. There foot. At 75 percent of the building’s value. was $142 million in the value of the 28-story 2010 and none in building, that makes the building 2009, according to Trepp. worth $33 million, or $110 per Jim Ketai, CEO and managing square foot, which still compares partner of Bedrock, called the new favorably to the estimated $140 per loan “another indication of the square foot or more it costs to con- growing confidence the financial struct a new building over eight markets have in our downtown.” stories tall. “The commercial real estate Paul Choukourian, managing market in Detroit has improved director of the Southfield office of significantly since we purchased Colliers International Inc., said that 1001 Woodward just over a year doesn’t include things like land ac- ago, and we see this trend not only quisition, interior finishes and continuing but gaining momenother expenses. tum in the period ahead.” “It could be $200-plus per foot” McBride, however, said lenders for a new building downtown, he speaks with are still wary overChoukourian said. all about Detroit. In 2012, the 250,000-square-foot “Anecdotally, I’ve talked with One Kennedy Square was refi- some people who just weren’t alnanced for $27.3 million, or $112 lowed to look (at lending) in Deper square foot. That loan was at 65 troit,” McBride said. “It just waspercent of the Redico LLC-owned n’t part of the footprint that banks building’s value, placing the price were willing to go in.” of the office building at $170 per The 1001 Woodward building is square foot. one of more than 40 properties Still, the lenders were skeptical Gilbert has purchased. He has at first about the 1001 Woodward spent more than $1.3 billion buyre-fi because of lots of negative fi- ing and renovating buildings, nancial news about Detroit. largely in the city’s central core. “We kept saying, ‘What you read Gilbert bought the 1001 Woodin the paper doesn’t match up with ward building and an attached what you see on the ground,’ ” parking structure with 730 spaces Bernard said. from Dimitrios “Jim” Papas in “Here we are: Our city is in March 2013 on a land contract, bankruptcy. Our main industry Bernard said. Bedrock is now the went through bankruptcies. But sole owner. we are rapidly approaching the naBernard said the building is 94 tional norms out there for lending, percent occupied. Employees of both in the suburbs and downtown Gilbert’s Quicken Loans take up 21 and Midtown,” Bernard said. percent of the building, according Adam Lutz, principal of Birmto Bernard. ingham-based Q10 | Lutz Financial Other tenants include GalaxE SoServices LLC, said he believes nalutions (27,000 square feet), Meridian tional perceptions are improving. Health Plan (41,000 square feet), the “Detroit is not a bad word anyUniversity of Phoenix (25,000 square more,” he said. “People are interfeet) and the Southeast Michigan ested and want to hear the story. Council of Governments (28,000 Two national lenders took tours square feet), according to Washthis week. They want to see propington, D.C.-based real estate inerties downtown and get their formation service CoStar Group Inc. arms around them. The lending Livonia-based Schostak Bros. & markets are pretty favorable right Co. plans to build a new 320,000now. Three years ago, this would square-foot headquarters for Dehave been very difficult.” Last week’s loan for Gilbert, the troit-based Meridian Health Plan founder and chairman of Quicken downtown, with construction beLoans Inc. and Rock Ventures LLC, ginning late this year or early next shows lending standards for De- year. The project is expected to troit properties improving from cost $111 million. Lutz said the diversified rent roll just two years ago. In 2012, Southat 1001 Woodward likely helped field-based Redico LLC refinanced the 250,000-square-foot One grease the skids for the new loan. The 23-story building was 68 perKennedy Square building for $27.3 cent leased when Gilbert bought it. million at 65 percent of its value. Total commercial mortgage- Papas bought the building in 2008 backed securities debt issued in for $5.5 million.

COSTAR GROUP

The Fisher Building is among several high-profile buildings in the region in mortgage default.

tion of the property and still get a settlement with the current borrower.” Weiner said New Center has not yet had the dramatic office market improvement that has touched Detroit’s central business district. LNR Properties declined comment. Farmington Hills-based Friedman Integrated Real Estate Solutions LLC has toured the two buildings, according to real estate sources. FK bought the New Center buildings, north of West Grand Boulevard between M-10 (The Lodge Freeway) and Woodward Avenue, in 2001 from TrizecHahn Corp. for $31 million ($33.51 per square foot). FK inked a deal in 2002 to sell five floors (133,000 square feet) of office condo space and about 7,000 square feet of concourse space in the Fisher Building to Detroit Public Schools for $24.1 million along with $17 million in build-out construction to be performed by Huntington Construction Co., a division of the Farbman Group. A real estate source said DPS is not affected by the default or a possible sale. That deal came under criticism from former DPS Emergency Financial Manager Robert Bobb. Steve Wasko, assistant superintendent of community relations, did not return calls last week. The Fisher Building is 635,000 square feet and 81 percent occupied, according to CoStar. Major tenants are Girl Scouts of Southeastern Michigan (27,000 square feet), DaVita New Center Dialysis (16,000 square feet), New Detroit Inc. (25,000 square feet), Total Health Care Inc. (22,000 square feet) and WJR-AM 760 (20,000 square feet), according to CoStar. The nonprofit Gateway Community Health moved from 18,000 square feet at the Fisher in February into 26,000 square feet in Phase I of Brewery Park. The Kahn building is 290,000 square feet and 51 percent occupied. Key tenants are Albert Kahn Associates Inc. (56,000 square feet) and UAW Legal Services Plan (40,000 square feet), according to CoStar. In 2001, the Fisher was about 80 percent occupied; the Kahn building, 92 percent. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or mkramer@crain.com ASSOCIATE PUBLISHER Marla Wise, (313) 4466032 or mwise@crain.com EXECUTIVE EDITOR Cindy Goodaker, (313) 4460460 or cgoodaker@crain.com MANAGING EDITOR Jennette Smith, (313) 4461622 or jhsmith@crain.com MANAGER, DIGITAL STRATEGY Nancy Hanus, (313) 446-1621 or nhanus@crain.com MANAGING EDITOR/CUSTOM AND SPECIAL PROJECTS Daniel Duggan, (313) 446-0414 or dduggan@crain.com SENIOR EDITOR/DESIGN Bob Allen, (313) 4460344 or ballen@crain.com SENIOR EDITOR Gary Piatek, (313) 446-0357 or gpiatek@crain.com WEB EDITOR Kristin Bull, (313) 446-1608 or kbull@crain.com WEST MICHIGAN EDITOR Matt Gryczan, (616) 9168158 or mgryczan@crain.com WEB PRODUCER Norman Witte III, (313) 4466059, nwitte@crain.com EDITORIAL SUPPORT (313) 446-0419; YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 4461687 TIP LINE (313) 446-6766

REPORTERS Jay Greene, senior reporter: Covers health care, insurance, energy utilities and the environment. (313) 446-0325 or jgreene@crain.com Amy Haimerl, entrepreneurship editor: Covers entrepreneurship and city of Detroit. (313) 4460416 or ahaimerl@crain.com Chad Halcom: Covers litigation and the defense industry. (313) 446-6796 or chalcom@crain.com Tom Henderson: Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho: Covers real estate, higher education, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor: Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Dustin Walsh: Covers the business of law, auto suppliers, manufacturing and steel. (313) 4466042 or dwalsh@crain.com Sherri Welch, senior reporter: Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com LANSING BUREAU Chris Gautz: Covers business issues at the Capitol and utilities. (517) 403-4403 or cgautz@crain.com

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CRAIN’S DETROIT BUSINESS

RUMBLINGS Crain’s earns citation from high court .S. Supreme Court Justice Sonia Sotomayor referenced Crain’s Detroit Business in her 58page dissent last week to the high court’s decision that affirms Michigan voters’ 2006 decision to ban race-based public university admissions. Sotomayor, in a dissent joined by Justice Ruth Bader Ginsburg to Schuette v. The Coalition to Defend Affirmative Action, Integration and Immigrant Rights and Fight for Equality By Any Means Necessary, notes a Crain’s story from Sept. 18, 2000, “UM policy may hang on election,” by Jeffrey Kosseff. The dissent uses Crain’s and a Detroit Free Press article to dispute Justice Stephen Breyer’s assertion in a separate concurring opinion about whether two court precedent cases were applicable to the Michigan Civil Rights Initiative, or Proposal 2, of 2006. Kosseff’s article in Crain’s at the time recounted contrasting views between some University of Michigan board members and political opponents in the 2000 election, about whether affirmative action was discrimination and whether the university should continue to defend itself in litigation over the admissions practice. Kosseff, then an intern at Crain’s and a UM student, now is an associate attorney at Washington-based Covington & Burling LLP after seven years reporting for The Oregonian. He covered Congress and technology for the paper in D.C. and was a 2007

Pulitzer Prize finalist for national reporting.

Resale ticket prices soar for Man U-Real Madrid Want to be in the stands when soccer titans Manchester United and Real Madrid clash at Michigan Stadium on Aug. 2? You’ll have to try the secondary ticket market. The globally televised match — part of the eightteam, 12-city Guinness International Champions Cup round-robin exhibition tournament — is sold out, organizers said. More than 100,000 tickets were sold. There were more than 2,200 tickets available on StubHub.com on Friday, ranging from $225 to $1,652. Face value ranged from $45 to $189. The tournament is a product of Relevant Sports, a division of New York City-based RSE Ventures investment firm that was co-founded in 2012 by noted University of Michigan alumni Stephen Ross, the billionaire real estate investor and owner of the Miami Dolphins who has donated $313 million to the university over the years. The university sold 11,000 tickets to donors, students, staff and other universityrelated people. Relevant Sports sold the rest. It reportedly may put a small number of tickets on sale some time before August. The stadium’s normal capacity is 109,901. Relevant didn’t provide a specific ticket sales total. UM’s athletic department

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF APRIL 19-25

isn’t keeping any money from ticket sales or concessions. Instead, it’s getting a lump sum lease fee from Relevant Sports.

ULI to honor Gilbert Dan Gilbert will receive an award from the Urban Land Institute Michigan for his real estate investments, placemaking initiative and bringing thousands of workers to downtown Detroit. A sold-out May 15 event at the Westin Book Cadillac Detroit is expected to draw more than 500 people, including business and real estate executives. An hourlong reception will begin at 6 p.m.; dinner will follow. Gilbert, founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, has spent more than $1.3 billion to purchase and renovate more than 40 buildings, mostly in the central business district, according to ULI Michigan. Past recipients of ULI awards include A. Alfred Taubman (2005), Wayne Doran (2006), the late Robert Larson (2007), Jerome Schostak (2008), Edsel Ford II and Peter Karmanos Jr. (2010), and Sidney Forbes (2012), according to a press release.

E&Y names award finalists Ernst & Young LLP announced the 34 finalists for its Entrepreneur of the Year in the accounting agency’s Michigan and Northwest Ohio Region awards last week. After a nomination period, a panel of local judges picked the finalists from the overall pool of nominees. This current group will now be winnowed down to a list of winners, to be announced at a black-tie gala June 5 at the MGM Grand Detroit. A full list of finalists is at ey.com/us/eoy/mnwo. Regional award winners are eligible for consideration in the firm’s national award program.

BEST FROM THE BLOGS READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS

Tigers smarter on player spending Next best to backyard gardening

“

The Detroit Tigers rocketed up 46 spots to No. 51 in this year’s player payroll efficiency index of the teams in the four major U.S. pro sports leagues, published by Bloomberg Businessweek.

A backyard garden is probably not in my immediate future. So I opted for a share in the harvest of ACRE Detroit, a sustainable farm in North Corktown.

Bill Shea’s “Shea’s Stadium” blog on the business of sports is at www.crainsdetroit.com/sheasstadium

Amy Haimerl’s “Small Business” blog can be found at www.crainsdetroit.com/section/blogAmyHaimerl

”

Madonna president to retire in ’15 adonna University President Sister Rose Marie Kujawa will retire on June 30, 2015, after the completion of the Livonia-based school’s $50 million capital campaign and construction of a new science and media building. Kujawa, 71, announced Kujawa her intention to retire at a university trustees meeting last week, according to a news release. Next year will be her 14th as president.

ON THE MOVE Ford Motor Co. is ex-

pected to name COO Mark Fields, 53, its next CEO and announce soon when current CEO Alan Mulally, 68, will retire from the Dearborn-based automaker, Bloomberg reported. Chacona Johnson was named Wayne State University’s vice president for development and alumni affairs and president of the Wayne State University Foundation. She had been WSU’s interim vice president for development and alumni affairs and replaces David Ripple, leaving to become vice president of development at Ohio State University. Wayne State University named Stephen Lanier its vice president of research. He has been associate provost for research and professor of cell and molecular pharmacology and experimental therapeutics at the Medical University of South Carolina, Charleston. Lanier will replace Hilary Ratner, who, after a year’s sabbatical, will take a new position at WSU. Gwen MacKenzie, CEO of Sarasota Memorial Hospital in Florida, was named senior vice president and Michigan market leader for Novi-based Ascension Health Michigan, effective June 2. She spent 25 years at Detroit Medical Center as COO and president of several hospitals. Patricia Maryland, COO of St. Louis-based parent Ascension Health, had been CEO of Ascension Michigan. The Novi-based Fifth Third Bank Michigan State Fair hired Steve Masters, 46, former executive director of the Bays de Noc Convention & Visitors Bureau in Es-

canaba, as its first full-time executive director. Southfield-based advertising agency Doner Partners LLC hired Elizabeth Boone, 48, as chief marketing officer and executive vice president. A former Doner senior vice president, Boone most recently was a vice president at San Francisco-based Federated Media Publishing LLC. As CMO, she replaces James Ward, promoted in December to chief strategy and integration officer. Troy-based Automation Alley named Kelly Kozlowski, 30, as senior director. Kozlowski succeeds retired Thomas Anderson, 66, and continues to lead the public affairs team for the nonprofit. Tom Kelly, a tech business consultant for the Michigan Small Business Development Center, was named Automation Alley’s first director of entrepreneurial services. The alt-weekly Detroit Metro Times hired Valerie Vande Panne as editor-inchief. She has written for The Daily Beast, Salon.com and Crain’s Detroit Business. John Latessa, senior managing director for the Southfield office of CBRE Inc., will add Indianapolis, St. Louis and Kansas City operations to his portfolio, which includes Detroit, Cincinnati, Cleveland and Columbus, Ohio.

COMPANY NEWS The Michigan Strategic Fund board approved a $2.3 million state grant to help Troy-based Molina Healthcare of Michigan consolidate its Midwest operations into Michigan, which Molina said will bring 462 new jobs to Troy and Detroit. Live radio broadcasts of Detroit Pistons games will move to Greater Media Inc.owned WMGC 105.1 FM next season in a three-year deal. Games had aired on WXYTFM 97.1, owned by CBS Sports Radio Inc. Also, Pistons owner Tom Gores hired executive search firm Los Angeles-based Korn/Ferry International to help find a new president of basketball operations/general manager following Joe Dumars’ resignation. Ann Arbor-based Truven Health Analytics named Providence Hospital and Medical Center, Southfield, and St. Joseph Mercy Hospital, Ann Arbor, as best in their fields in its 2014 Top Hospitals list. Spirit Airlines Inc. added daily nonstop service between Detroit Metropolitan Airport and Kansas City International Airport beginning Aug. 7.

OTHER NEWS Detroit was one of 15 cities invited by the Democratic National Committee to make a pitch to host the presidential nominating convention in 2016. U.S. Bankruptcy Judge Steven Rhodes, overseeing Detroit’s bankruptcy, selected experts from Boston and New York to advise him on the city’s plan to exit Chapter 9. Representatives from the Metropolitan Atlanta Rapid Transit Authority, the police department that oversees that city’s public transportation system, will travel to Detroit May 16 to recruit at military bases and colleges, AP reported. U.S. Treasury Secretary Jacob Lew visited Detroit to explore ways to promote job creation and economic growth, AP reported. The $16.7 million redevelopment of two buildings in Detroit’s Cass Corridor began with a ceremonial groundbreaking. The buildings, at 3350 Cass Ave. and 149 Davenport St., will be renovated into low-income housing units by next year. The Council of Great Lakes Governors said it is teaming with former U.S. Treasury Secretary Henry Paulson to attract foreign manufacturing investment, and is planning a “competitiveness forum” this summer in Detroit, AP reported. Diego Rivera’s Detroit Industry murals at the Detroit Institute of Arts were designated as national historic landmarks by the National Historic Landmarks Program, AP reported. The Belle Isle Conservancy enlisted volunteers to clean up Belle Isle and transfer koi from the aquarium to an outdoor pond between the Detroit aquarium and the Anna Scripps Whitcomb Conservatory. Michigan Treasurer Kevin Clinton signed a consent agreement with Royal Oak Township’s supervisor following negotiations on managing the community’s financial emergency confirmed last month by Gov. Rick Snyder. Kenneth Flaska of Grosse Pointe Park, a former partner and litigator at Bloomfield Hills-based Dawda, Mann, Mulcahy & Sadler PLC, pleaded guilty to federal allegations he defrauded the firm and its clients of more than $2.5 million in the past decade. Comerica Bank’s Michigan Economic Activity Index fell 2.1 percentage points in February to a level of 123.4, its fourth straight month of decline.

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