Crain's Detroit Business, Feb. 3, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 5

FEBRUARY 3 – 9, 2014

$2 a copy; $59 a year

NEI focus: City creatives LARRY PEPLIN

Page 3 Budget cuts put defense contracts in line of fire

Amid financial emergency, Highland Park’s hopeful Calif. firm poised to buy vacant American Axle land Inside Horse tracks bet future on thoroughbreds, Page 4 Belle Isle hotel? Canadians float boat club plan, Page 5

This Just In Priority Health to move local office to American Center

NEWSPAPER

Priority Health is renovating 20,000 square feet on the 13th floor of the American Center in Southfield to prepare for a mid-May move from the Arboretum II office complex in Farmington Hills. The Grand Rapids-based nonprofit insurer opened a customer service center at the American Center last fall. Priority Health currently employs about 130 and expects to hire 25 additional customer service employees and other staff in Southeast Michigan over the next several years, said Don Whitford, senior vice president of Priority’s east region. Priority Health has occupied space in Arboretum II since 2007, when it acquired the former Care Choices health maintenance organization from Livonia-based Trinity Health, Whitford said. The 25-floor American Center, at 27777 Franklin Road, is a 508,000-squarefoot Class A office building managed by Southfield-based Redico Real Estate Development. It was the headquarters of the now-defunct American Motors Corp. — Jay Greene

2nd funding round to target innovation, entrepreneurism BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

After seven years and nearly $100 million in investment, the New Economy Initiative has figured out the types of projects that will give it the most bang for its buck. In its second round, NEI plans to direct new funding primarily to agencies providing supportive services to spur innovation and entrepreneurism in the city of Detroit — areas it honed in on two years ago.

“Entrepreneurship and innovation, as stand-alones, are valuable in growing the economy,” said NEI Executive Director Dave Egner. “But the more we can connect them, the greater we can accelerate each. “In the end, without innovation, there are no new ideas to commercialize. And without entrepreneurs at the ready, there’s Egner no one to commercialize them.” NEI’s initial funders and one new foundation have committed a second-round investment of $33 million toward a $40 million target, Egner told Crain’s last week. NEI spent two years studying different approaches to building the regional economy before focusing See NEI, Page 18

Geared for play

BY CHRIS GAUTZ CAPITOL CORRESPONDENT

BY BILL SHEA CRAIN’S DETROIT BUSINESS

RUSH IN?

See Warrior, Page 16

Here are the 10 funders of the New Economy Initiative, round two. 䡲 The John S. and James L. Knight Foundation (Miami): $5 million 䡲 Ford Foundation (New York): $5 million 䡲 The Kresge Foundation (Detroit): $5 million 䡲 W.K. Kellogg Foundation (Battle Creek): $5 million 䡲 The William Davidson Foundation (Troy): $5 million 䡲 Hudson-Webber Foundation (Detroit): $2.5 million 䡲 Charles Stewart Mott Foundation (Flint): $2 million 䡲 Community Foundation for Southeast Michigan (Detroit): $1.5 million 䡲 The Max M. and Marjorie S. Fisher Foundation (Southfield): $1.5 million 䡲 McGregor Foundation (Detroit): $750,000 䡲 Skillman Foundation (Detroit): TBD

For budget, Snyder must resell plan on Medicaid

Olympics, soccer help Warrior build global brand hen the men’s ice hockey competition begins at the Winter Olympics next week in Russia, nearly a hundred players — including Detroit Red Wings Henrik Zetterberg, playing for Sweden, and Jimmy Howard, playing for the United States — will be using equipment from Warren-based Warrior Sports Inc. Outfitting pro athletes and teams is the latest step the sporting goods manufacturer is taking to beAs Games begin, suppliers come a global brand. The company — consider investing in launched in founder David Russia, Morrow’s Princeton UniverPage 15 sity dorm room in 1992 as a manufacturer of handmade titanium lacrosse sticks — has grown into a retailer of equipment, footwear and apparel for lacrosse, soccer, ice hockey and general lifestyle wear. At the Olympics, players on 12 national teams will use Warrior sticks, gloves, hel-

ROUND-TWO FUNDERS OF NEI

JOHN SOBCZAK

Warrior Sports Inc. began in the dorm room of David Morrow, who played lacrosse at Princeton University. Morrow’s company now is making a global push, using the English soccer team Liverpool FC.

Hey! Get your own copy!

LANSING — When Gov. Rick Snyder unveiled his state budget proposal last year, it included two big-ticket items — a $1.2 billion increase to improve the state’s roads and bridges and the expansion of Medicaid. The transportation proposal never hapSnyder pened. And while Medicaid expansion was approved, it will be of significant interest in the new budget that Snyder will present to the state Legislature on Wednesday. One of Snyder’s selling points for Medicaid expansion was that it would save the state $206 million this fiscal year, and Snyder planned to put half of that amount in a special savings account. That money See Budget, Page 17

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS ConAgra to close snack food plant near Grand Rapids, idle about 260 ConAgra Foods Inc. will close its plant in the Grand Rapids suburb of Kentwood next year, costing about 260 people their jobs, MiBiz reported. The Omaha, Neb.-based food processor will wind down production starting in April and end most operations by summer. Products made at Kentwood include cereal and nutrition snack bars. In a Sept. 9, 2013, story in Crain’s on Grand Rapids’ growing snack food industry, ConAgra said it intended to spend $73 million on new equipment, relocate a research and development lab and improve efficiencies on production lines in the plant. The company has received state and local tax breaks at the plant. Kentwood has given breaks worth about $40 million, Rich Houtteman, Kentwood’s deputy city administrator, told MLive.com. The city is likely to get some of that back.

Wi-Fi pay more? Meijer stores offer connection to their coupons All 204 of Meijer Inc.’s stores in the Midwest now have free Wi-Fi, MLive.com reported. Wi-Fi is expected to make it easier for shoppers to access the Walker-based retailer’s mPerks coupon redemption mobile app while shopping and save them from depleting their smartphone data plans.

Amid heat from investor to split up, Dow posts profit Midland-based Dow Chemical Co., facing pressure from the New York City-based investment fund Third Point LLC to break itself in two, tripled a share buyback program to $4.5 billion and raised its dividend while posting better-than-expected fourth-quarter earnings and sales last week. Dow Chairman and CEO Andrew Liveris defended his strategy of integrating commodity chemicals with specialty products after Third Point called for the company to spin off its petrochemicals assets. Dow only makes commodity chemicals, such as ethylene and propylene, to provide ingredients for its higher-value products in agriculture, electronics and plastics, Liveris said last week during the company’s earnings conference call.

Also last week, Meijer announced that it planned to start a $100 million dairy production plant in Tipp City, Ohio, north of Dayton, the Grand Rapids Business Journal reported. Meijer already has a distribution center there and has 42 stores in Ohio. The plant is expected to employ 103.

MICH-CELLANEOUS 䡲 FireKeepers Casino Hotel plans to

host a new women’s golf event June 3-8 at the Battle Creek Country Club, The Associated Press reported. Organizers said the FireKeepers Casino Hotel Championship will be a competition on the Symetra Tour, whose top players get to play on the LPGA Tour.

Third Point, founded by billionaire Dan Loeb, said last month that Dow is its top holding and could add billions of dollars to earnings by spinning off commodity chemicals and plastics. Liveris said Dow can realize more from the commodity business with projects such as its $4 billion plan for U.S. Gulf Coast plants to take advantage of cheap natural gas. While Dow has plans to divest as much as $4 billion worth of subsidiaries to concentrate on moreprofitable operations, Argus Research Co. said the chemical producer should consider a full breakup. Dow’s disparate businesses, from plastics to genetically modified seeds, make it difficult for shareholders to value the company, according to Barclays plc. — Bloomberg

䡲 Jackson-based Consumers Energy Co. plans to purchase a power plant on the east side of the city for $155 million — a move that would move to the back burner plans to build a $700 million natural-gas plant in Genesee County, MLive.com reported. Construction of the 750-megawatt Genesee plant was expected to create an estimated 600 jobs along with 30 permanent jobs once the plant was running. 䡲 Gov. Rick Snyder said he will continue exempting motor carriers and drivers hauling propane from hours-of-service regulations to help ease a shortage of the heating fuel brought on by heavy demand during an abnormally cold winter. The shortage is particularly acute in northern Michigan.

䡲 Passenger traffic continued to rebound at Flint’s Bishop International Airport in November and December, increasing 8 percent compared with the same two months one year earlier, MLive.com reported. In Grand Rapids, more than 2 million people flew through Gerald R. Ford International Airport in 2013, its second-best year ever. 䡲 Valhalla, N.Y.-based USI Insurance Services will acquire the

Grand Rapids office and 41 more offices of Wells Fargo Insurance, part of San Francisco-based Wells Fargo & Co., the Grand Rapids Business Journal reported. 䡲 Randy Thelen, who has run the economic development organization Lakeshore Advantage for the past decade, is leaving to take an economic development job in Omaha, Neb., MLive.com reported. The resignation comes less than a week after Lakeshore Advantage said it would merge with the Ottawa County Economic Development Office, the other major economic development agency in the county. 䡲 Mott Community College President Richard Shaink plans to retire this year, he wrote last week in an email. Shaink has been president of the Flint-based school since 2000. 䡲 Grand Rapids ranks No. 7 on Amtrak’s list of “10 Best Places to Visit in 2014,” the Grand Rapids Business Journal reported. 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 9 of the Jan. 20 issue should not have implied that

all nurse midwives working at the Detroit Medical Center are staff; some are employed by the Wayne State University Physician Group and are still practicing at DMC hospitals.

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CRAIN’S DETROIT BUSINESS

February 3, 2014

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Focus: Executive Education

Defense contracts in Michigan took a major hit during the last recession. 2012 $4,676 9,569 2011 $4,581 10,484 2010 $4,503 11,744 2009 $6,050 11,528

Ground Combat Vehicle, 150 workers in peril

2008 $6,529 11,031 2007 $5,513 10,610 2006 $4,220 7,981

BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

2005 $4,128 8,434 2004 $2,749 4,293 2003 $2,616 3,460

Contract dollar amount

2002 $2,273 2,577

Number of contracts

2001 $2,340 1,984 2000

Budget cuts put defense contract jobs in jeopardy

$1,567 1,984

Source: governmentcontractswon.com

More than 150 contracting jobs in Southeast Michigan could be on the chopping block in the next few months now that a last-minute slash in budget funding has all but eliminated the Ground Combat Vehicle program. Sterling Heights-based General Dynamics Land Systems and the nearby offices of BAE Systems Inc. are wrapping up pre-production development on the GCV under contract extensions of $180.5 million and $159.4 million, respectively, which expire in June. An evaluation of their work would have followed this year with initial production orders to follow, but a new budget reduction will relegate the program to a back-burner study project instead

after funding was slashed by nearly $500 million to $100 million. Hundreds of local engineering, logistics, program management and other defense contracting jobs are connected to Ground Combat Vehicle. The two contractors could mitigate their losses this year with other contract opportunities, like the Armored Multi-Purpose Vehicle, where contractors expect to submit proposals to the U.S. Army by Feb. 24. But analysts also expect elevated competition for AMPV and other new contracts as federal budgets tighten, making that prospect more of a long shot. “We will be making some decisions over the next 30 days about how to go forward (with job cuts). This was all a huge surprise to us, and kind of a curveball,” said Mark Signorelli, vice president and general manager Signorelli See Defense, Page 17

ROBERT CHASE

A FAREWELL TO ARMS?

With recession over, firms head back to school, Page 9

Company index These companies have significant mention in this week’s Crain’s Detroit Business: American Axle & Manufacturing Holdings . . . . . . . . 3 Automotive Industry Action Group . . . . . . . . . . . . . 11 BAE Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Becharas Brothers Coffee . . . . . . . . . . . . . . . . . . . 18 Budco Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Colliers International . . . . . . . . . . . . . . . . . . . . . . 16 Curis Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . 18 Detroit Boat Club . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Detroit Economic Growth . . . . . . . . . . . . . . . . . 5, 18 DialogDirect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Dialogue Marketing . . . . . . . . . . . . . . . . . . . . . . . 18 DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Eastern Michigan University . . . . . . . . . . . . . . . 9, 10

Calif. company near deal on American Axle vacant land

Federal-Mogul . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 General Dynamics Land Systems . . . . . . . . . . . . . . . 3 Glencoe Capital Michigan . . . . . . . . . . . . . . . . . . . 18 Great Lakes Employee Benefit Services . . . . . . . . . 15 HMS Manufacturing . . . . . . . . . . . . . . . . . . . . . . . 11 Hartman and Tyner . . . . . . . . . . . . . . . . . . . . . . . . . 4 Highland Park Business Association . . . . . . . . . . . 18 Integrated Manufacturing and Assembly . . . . . . . . 18 Keystone Commercial Real Estate Services . . . . . . 18 KPMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Kresge Foundation . . . . . . . . . . . . . . . . . . . . . . . . 18 Magna Seating of North America . . . . . . . . . . . . . . 18 Marsh & McLennan Agency . . . . . . . . . . . . . . . . . . 15 Max M. and Marjorie S. Fisher Foundation . . . . . . . 18 McGraw Wentworth . . . . . . . . . . . . . . . . . . . . . . . 15

BY KIRK PINHO

Michigan Harness Horsemen’s Association . . . . . . . 4

CRAIN’S DETROIT BUSINESS

Michigan Horsemen’s Benevolent & Protection Assn. 4 Michigan Human Resources Development . . . . . . . 18

Two years ago, American Axle & Manufacturing Holdings Inc. decided to close most of its 2.5 millionsquare-foot Detroit Manufacturing Complex after a collapse in labor negotiations with the UAW. Then last June, the company announced that almost all the complex was going to be demolished. Now, after the last 300 jobs at the complex were terminated and 1.9 million square feet of it were razed last year, an out-of-state buyer is close to purchasing about 72 acres of vacant land at the 111-acre site at I-75 and Holbrook Street. Stuart Lichter, president and chairman of the board for California-based Industrial Realty Group LLC, confirmed to Crain’s he expects to close on the purchase this week and plans build-to-suit industrial projects there. Lichter said he has at least one tenant lined up for a build-to-suit building but would not identify who it is. Lichter’s company website says Industrial Realty has developed more than $1 billion in corporate and governmental properties and has more than 80 million square See Axle, Page 16

Michigan Manufacturers Association . . . . . . . . . . 18 Michigan State University . . . . . . . . . . . . . . . . . . . 10 New Economy Initiative . . . . . . . . . . . . . . . . . . . . . . 1 Newmark Grubb Knight Frank . . . . . . . . . . . . . . . . 16 Oakland University . . . . . . . . . . . . . . . . . . . . . . 9, 10 Presidents Council, State Universities of Michigan 17 LARRY PEPLIN

Mark Hackshaw, chairman of Highland Park’s Tax Increment Finance Authority, said the TIFA will be issuing requests for proposals on TIFA-owned sites on Woodward Avenue, such as the vacant Highland Appliance store.

A city ‘ready to rise’

PricewaterhouseCoopers . . . . . . . . . . . . . . . . . . . 15 Priority Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recycling Depot . . . . . . . . . . . . . . . . . . . . . . . . . . 18 TI Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 TRW Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . 15 University of Michigan . . . . . . . . . . . . . . . . . . . 9, 10 Visteon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Walsh College . . . . . . . . . . . . . . . . . . . . . . . . 10, 11 Warrior Sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Wayne State University . . . . . . . . . . . . . . . . . . . 9, 11

With state control looming, Highland Park sees signs of hope BY GARY ANGLEBRANDT SPECIAL TO CRAIN’S DETROIT BUSINESS

Portions of the lettering on the distinctive Highland Appliance sign along Woodward Avenue are missing, and the red words have faded to pink. Memorable to many metro Detroiters from the store’s TV commercials, the Highland Park store closed its doors after the 1993 bankruptcy of Highland Superstores Inc. The sign still hangs, but in a way that does little to kindle nostalgia about the store, or Highland Park, the city. A drive by the now-vacant site, at first glance, could cause assumptions about the state of things in Highland Park.

THIS WEEK @ WWW.CRAINSDETROIT.COM

The Michigan Department of Treasury on Jan. 24 declared the Detroit enclave city to be in a financial emergency, putting Highland Park one step closer to having a state-imposed emergency manager in charge. This followed a review last October by the Treasury’s Local Emergency Financial Assistance Loan Board. Gov. Rick Snyder reaffirmed the decision last week. But upon closer inspection, Highland Park mirrors Detroit in more ways than deeply troubled city finances. At the same time the city faces deep financial distresses, there are private and public investments and development emerging at a steady clip. See Highland Park, Page 18 We put the log in blog When a tree falls on Belle Isle, you can bet that Tom Henderson hears it. Read Tom’s blog and others from Crain’s staffers at crainsdetroit.com/blogs. NATHAN SKID/CDB

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 4 BUSINESS DIARY . . . . . . . . . . . . . . . . 13 CALENDAR . . . . . . . . . . . . . . . . . . . . 14 CLASSIFIED ADS . . . . . . . . . . . . . . . . 15 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 6 MARY KRAMER . . . . . . . . . . . . . . . . . . 7 OPINION . . . . . . . . . . . . . . . . . . . . . . . 6 OTHER VOICES . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 12 RUMBLINGS . . . . . . . . . . . . . . . . . . . 19 WEEK ON THE WEB . . . . . . . . . . . . . . 19

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Hazel Park, Northville mount thoroughbreds to escape closure BY SHERRI WELCH CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

The return of thoroughbred racing to Hazel Park Raceway and its advent at Northville Downs, the tracks say, is a desperation move aimed at staving off closure. Without it, both say itâ&#x20AC;&#x2122;s just a matter of time. The Michigan Gaming Control Boardâ&#x20AC;&#x2122;s executive director, Rick Kalm, on Jan. 21 authorized the tracksâ&#x20AC;&#x2122; request for the shift from standardbred â&#x20AC;&#x201D; or harness â&#x20AC;&#x201D; racing under a tentative five-year contract agreement with the association representing Kalm thoroughbred horsemen, the Michigan Horsemenâ&#x20AC;&#x2122;s Benevolent and Protective Association. Harness racing will see a shorter season this spring before the tracks convert fully to thoroughbred. The shift will mark the return of thoroughbred racing to Hazel Park Raceway for the first time in 30 years and its arrival for the first time ever at Northville Downs, which has operated as a harness racing track since its 1944 opening. Operators are hoping the move will buy time in the face of declining interest in the sport and competition from casinos, Internet betting and racinos in nearby states. â&#x20AC;&#x153;Call it a Hail Mary,â&#x20AC;? said Dan Adkins, vice president of Hartman and Tyner Inc., whose principals own the Hazel Park Raceway. â&#x20AC;&#x153;The positive impact of this is the fact that weâ&#x20AC;&#x2122;re not closing the track.â&#x20AC;? Pari-mutuel betting has been declining nationwide for years, he said. And the industry has been unsuccessful in legalizing in Michigan other options such as instant gaming or instant online or smartphone wagering where bettors get certain pari-mutuel information but donâ&#x20AC;&#x2122;t know which race theyâ&#x20AC;&#x2122;re betting on. â&#x20AC;&#x153;Without being able to add slot machines or other gaming, weâ&#x20AC;&#x2122;re going to go for thoroughbred,â&#x20AC;? which attracts more wagers and, traditionally, more fans, Adkins said. The raceway also believes nighttime thoroughbred races could give it an edge in attracting national

BANKRUPTCIES

CORPORATEEAGLE.COM

The following businesses filed for protection in U.S. Bankruptcy Court in Detroit Jan. 24-31. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. Mixed Entertainment LLC, 1500 E. 10 Mile Road, Apartment 3, Ferndale, voluntary Chapter 7. Assets: $257,500; liabilities: $1,032,967. Brunoâ&#x20AC;&#x2122;s Dive Shop Inc., 21655 Vermander Ave., Clinton Township, voluntary Chapter 7. Assets and liabilities not available. â&#x20AC;&#x201D; Bridget Vis

simulcast agreements with live broadcasts of its races at tracks around the country, given less competition in that market, he said. According to a Michigan Gaming Control Board report, Hazel Park Raceway received $9.7 million of the $67 million wagered on simulcast and live races at the track in 2012. But the track has lost close to $1 million a year for the past 10 years, Adkins said, noting revenue last year fell 18 percent from the year before.

Harness talks break down The new deal with the thoroughbred association follows a breakdown in negotiations last summer between the tracks and the Michigan Harness Horsemenâ&#x20AC;&#x2122;s Association. At issue was the tracksâ&#x20AC;&#x2122; desire to restructure the simulcast purse pool, said Executive Director Phil Stommen. The simulcast purse pool is the 40 percent of the net commission thatâ&#x20AC;&#x2122;s deposited by the tracks into a pool shared by the standardbred, thoroughbred and quarter-horse horsemen racing at the stateâ&#x20AC;&#x2122;s tracks. The tracks take a gross commission of 20 percent to 22 percent on average on the simulcast wagering at their track, according to the Michigan Gaming Control Board. Out of that comes a host fee for the tracks hosting the live races being simulcast and a state tax amounting to 3.5 cents on every dollar wagered. The remaining net commission is split, with tracks retaining 60 percent and 40 percent going to the horsemenâ&#x20AC;&#x2122;s pool, which is then split between thoroughbred, standardbred and quarter-horse racing at Michigan tracks. Thoroughbred horsemen, however, pay an entry fee that standardbreds do not, Stommen said.

Offer for survival The thoroughbred association approached Northville Downs with

B UILT

an offer that was better for the longterm survivability of the track, said John Carlo, director of operations. In the short term, the new contract will shore up a lot of the trackâ&#x20AC;&#x2122;s losses, he said. Northville Downs received $7.2 million of the $52.3 million bet at the track in 2012, according to its state reporting. That was down from $8 million in revenue on $56 million in wagers the year before. Operations Manager Michael Carlo said the track had a net loss of $92,000 in 2012. Heâ&#x20AC;&#x2122;s projecting revenue for 2013 was down about 10 percent, and the trackâ&#x20AC;&#x2122;s net loss will have widened to nearly $300,000 when the numbers are final. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re running on a real short rope at this point,â&#x20AC;? John Carlo said. â&#x20AC;&#x153;We had to take a new approach to keep Northville Downs open.â&#x20AC;? Based on the simulcast business the track does, itâ&#x20AC;&#x2122;s clear fans wager more on thoroughbred races than standardbred, he said. The track plans to hire another 15-20 employees to care for and handle the horses and to invest more than $250,000 to convert its racing surface. Northville Downs expects an initial spike in interest from local fans. But to survive, it will need to keep them coming back, John Carlo said, so itâ&#x20AC;&#x2122;s brought in a new concessionaire with a new menu and dining room. Thoroughbred is a higher-cost proposition, Adkins said, with more people needed to care for, lead and line up the horses at the starting gates. Hazel Park Raceway, which currently employs about 80, plans to hire another 20-40 employees to help care for and handle the horses. It also plans to invest between $600,000 and $1 million this year to convert the track from a limestone base to a sand track, and to more than double its local advertising budget to about $500,000, from $200,000, Adkins said.

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Canadian hotel plans meetings on Belle Isle boat club

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The CEO of a Canadian hotel group that wants to spend $40 million to turn the Detroit Boat Club on Belle Isle into a luxury hotel and conference center met with city and state representatives last week and said he will come back this week for further meetings. Bob Jackson said the Vintage Hotels group, based in Niagara-on-theLake, Ontario, has bought 7 acres of waterfront property on Detroit’s far east side next to Mariner Park and plans to develop it as the first residential property in the group’s portfolio. He said that it hasn’t been decided whether to build houses, Jackson condominiums or a combination and that the project would stay on a back burner while he pursued the boat club deal. He said the best scenario would be to open the hotel, which will have up to 120 rooms, in 18 months. Jackson said his group, owned by Hong Kong-based developer Jimmy Lai, decided last year that it was time to look into Detroit real estate, and he made a trip here in September, which included a tour of Belle Isle and a look at the boat club. “The property struck me as a real gem. We like the natural setting,” he said. Vintage has four hotels in Niagara-on-the-Lake, two in Toronto and expects to close this week on a hotel in Stratford, Ontario. “We want to turn this into a fouror five-star hotel. It’s a historic building, so you have to do it right. You want to be respectful of the property and its history,” said Jackson, who has had renderings made into a booklet that shows how the hotel might look when done. “There will be a lot of banquet space on the property, and we don’t think there’s a better place for miles to shoot wedding photos.” He said the property would also continue to be the base for the Detroit Boat Club Crew, which has been rowing on the Detroit River since 1839. Jackson said the deal isn’t contingent on financing or tax credits. When asked about the project, Robert Rossbach, a consultant to the Detroit Economic Growth Corp. said: “Representatives from DEGC meet regularly with many representatives from many organizations, but they generally do not discuss or even confirm those meetings unless they are presenting something to one of the public authorities that DEGC staffs.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2 Video: Bob Jackson talks about plans for Belle Isle hotel, crainsdetroit.com/video

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CRAIN’S DETROIT BUSINESS

OPINION

OTHER VOICES

NEI effort shows key Immigration, education role of philanthropy reform go hand in hand P

hilanthropy to the rescue! Southeast Michigan is blessed not only by major foundations that reinvest in the community, but wealthy private individuals who give back, too. The same week that the Detroit Institute of Arts pledged $100 million toward resolving its part in the city’s bankruptcy proceedings, the New Economy Initiative was retooling for its next generation of grant-making. The NEI made history when it was formed in 2007 by 10 foundations. With an endowment of $100 million, it was considered the largest fund of its size focused on a single geographic area and with a mission to spend itself out of existence by investing in people and projects to jump-start an ailing economy. As Sherri Welch reports on Page 1, the first $100 million (some money that’s earmarked for existing commitments will roll into the new fund) produced tangible results: 115 grants since 2009, $76 million awarded, 675 companies created, and a new awareness and focus on starting and building new businesses of all stripes and sectors. The second fund, with a goal of $40 million, is focused almost solely on entrepreneurship and innovation, and in building diversity — geographic, ethnic, gender and racial — within our region.

A salute to departing consul Roy Norton is perhaps the best known consul general to Detroit in decades. That’s because he was right in the middle of the firestorm over the Canadian government’s desire to build a new bridge to connect Detroit to Windsor. Canada is Michigan’s greatest trade partner. Yet that did not stop some lawmakers from making insulting comments and insinuations at the height of the debate over the new crossing. Throughout, Norton always kept his cool. Even under fire by supporters of the Detroit International Bridge Co.’s attempt to maintain its privately held border monopoly. Norton arrived in Detroit in 2010, after serving as a minister in charge of congressional, public and intergovernmental relations. He certainly needed all the diplomatic skills he could muster while weathering the assault on the plan for Michigan to partner with Canada on a new international crossing that would be paid for by Canada. (Our favorite: his turn in a “news” segment about the bridge controversy on “The Daily Show”; well worth finding on YouTube.) Now Norton has been appointed Consul General in Chicago. He’ll still be connected to Michigan by a Great Lake.

President Barack Obacollege grads willing to ma’s take on immigration major in that lucrative reform during the State of field. Immigrant stuthe Union address is in line dents, however, do. with what Gov. Rick SnyArmed with knowledge der said during the auto of where the jobs are, the show. Both say policy students come to the U.S. change is necessary to alto study nuclear energy, low foreign-born students medicine and engineerto stay in the U.S. once they ing, not philosophy, theearn their advanced deater or liberal arts. Alexandra LaCombe grees here. To help ensure that We already know that immi- U.S. residents also leave their unigrants create jobs, greatly vitalize versities with both a degree and a neighborhoods and boost the econ- well-paying job opportunity, it is omy. Both Obama and Snyder rec- time for educational reform. Startognize it, and now few can argue ing in K-12, local students need exthat reform is necessary. It is time posure to high-tech fields. There is that reform embraces immigrants a disconnect between the majors and that public attitudes evolve to offered at universities and the ardo the same. eas of high-growth, high-scale Immigrants creating jobs in jobs. Our educational advisory high-tech fields are changing the system does not adapt to the job face of Michigan as the state is market. third nationwide in new jobs in A graduate with a bachelor’s descience, technology, engineering gree in petroleum engineering and mathematics (STEM). These earns an annual average salary of individuals launched 39 percent of $130,000, and jobs are more than high-tech startup companies from plentiful, according to the U.S. Bu1995-2005. reau of Labor Statistics. On the Highly educated immigrant stu- other end, a literature major could dents fill great voids in careers earn $46,000 if a job were available, that U.S.-born university students but the job growth is minus 1 perare not focused on. For example, cent. Still, most of us know more the demand for engineers here far liberal arts students than petroleexceeds the number of American um engineering majors.

Not aiding the improvement of the U.S. economy is the federal government. We as immigration attorneys are told how many foreign nationals can enter the U.S. every year. The number does not adjust with the needs of the economy. Obama told the nation that immigration reform could reduce the U.S. deficit by $1 trillion in two decades. While we want to see sweeping reform, change will more likely come in smaller bills that deal with one issue at a time. Snyder’s State of the State address was a good start to open doors for immigrants who will launch jobs in Michigan and help our economy. The idea of a Michigan Office for New Americans to attract educated immigrants and create a path to citizenship for those with an entrepreneurial goal (who also have $500,000 to invest in business here) is a step in the right direction. Education reform would ensure that U.S.-born students have the same edge so that everyone has the opportunity to win. Alexandra LaCombe is a partner at Fragomen, Del Rey, Bernsen and Loewy PLLC in Troy. She is a member of the American Immigration Lawyers Association.

TALK ON THE WEB From www.crainsdetroit.com Re: Gov. Snyder: Start U.S. immigration reform in Detroit Giving them the chance to be proud Americans is a blessing to our economy, especially in Michigan. The dumbest thing to do this year is to allow this golden and bipartisan opportunity to fix our dumb immigration system slip out of our hands. Stylo

Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity. What about all the highly skilled people in Michigan who are unemployed or have run out of employment benefits? Do they get to apply for these jobs before the immigrants? Karen Holeva

Re: Detroit lighting board approves LED lights, new timeline This is great news. The decision to utilize LED lighting will provide the city great savings in the long term. I imagine it may also allow them to use lower copper content wiring, where installation is needed, to decrease the attractiveness to thieves. Matt Parnell See Talk, Page 7

KEITH CRAIN: Let’s hope everything in Detroit works Detroit seems to be entering a period of critical decisions. Retirees and the city have come to an agreement on health care. Detroit has a proposed plan of adjustment for its bankruptcy. And it looks like the Detroit Institute of Arts has a long-term solution to preserve its art collection. Mayor Mike Duggan is settling into the challenging job of being COO of the city. It was an extremely smart decision to lower property taxes. Let’s hope it pays off in investment and support. We are going to be seeing a lot of

changes in the next few months as both Emergency Manager Kevyn Orr and the mayor make and execute decisions that will impact the city over the next few years. It will be interesting to see whether the emergency manager is able to conclude his work in the time allotted or will need an extension. Meanwhile, as I write this on Friday, Gov. Rick Snyder was planning to take advantage of the

high ratings of the Super Bowl to announce his re-election campaign. Not a surprise. For some reason, the governor has a great interest in using the Super Bowl for campaign announcements. (Remember the “One Tough Nerd” spots from 2010?) The next few months are going to be a busy time in terms of economic development. The departure of George Jackson,

the head of the Detroit Economic Growth Corp., is a disappointment for many. He has done a remarkable job in what has to be a challenging environment. Here’s hoping for a worthy successor. There is no doubt that it is imperative that many city departments are overhauled. Meanwhile, while costs and expenses are being closely monitored, it’s equally important for economic development to continue to attract jobs to the city. As Detroit continues to survive the winter weather and all the in-

conveniences associated with that, it is an exciting time with lots of changes and opportunities ahead. Let’s hope everyone keeps the best interests of the citizens of metro Detroit in mind as we go forward. Detroit needs to make sure that all of its services are being handled well for its citizens at the same time everyone is encouraged to expand and invest within the city. Let’s just make sure that the city is able to take advantage of its new opportunities.

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MARY KRAMER: Adults need to put kids first in education We’re halfway through the school year, and too many adults are still exhibiting the most incredibly juvenile behavior. Case in point: the continued assault against the Education Achievement Authority, the collection of the 15 worst-performing schools in Detroit carved out separately to try new methods and technology to help the most disadvantaged children make big gains in learning. Teachers in EAA schools are not unionized. Hence, teachers’ unions hate the EAA. Union leaders have pressured the authority’s sole higher-education partner, Eastern Michigan University, to drop its affiliation, a call seconded by EMU’s faculty union. Late last year, Ann Arbor teachers announced they would not work with student teachers from EMU. Kind of the adult equivalent

of when things don’t go your way, you take your marbles and go home. Here’s a lesson for future teachers attending EMU: Education is really a political game, and a hardball game at that. It’s all about adults, not kids. The EAA isn’t perfect, its outgoing chair, Carol Goss, concedes. But in less than two years, it is showing promising gains in academic achievement. “It presents a huge opportunity to change results for kids,” said Goss,

the recently retired CEO of the Skillman Foundation. In the beginning, about 11,000 students attended those 15 poorperforming schools. That shrank to about 9,000; some parents didn’t like the “state takeover” aspect, some high school students didn’t like a year-round school year, others don’t like the EAA’s structure (traditional grades 1-8 are replaced by achievement “levels” in specific subjects).

But because of the erosion from the original 11,000, rumors abound that the EAA is trying to recruit new students from the traditional city schools, which is not what was intended when Gov. Snyder signed on to support the authority. Today, if you looked at education in Detroit like automakers think of selling cars, traditional Detroit Public Schools have 42 percent market share and the EAA has 7 percent. And charter schools now dominate at 51 percent. But not all charters are alike. Many are terrible — as bad as or worse than the traditional public schools. Check out the website ex-

cellentschoolsdetroit.org. Twelve of the 20 top-performing K-8 schools on its scorecard are traditional DPS schools. It seems like there should be plenty of room to try new things because the majority of children in Detroit are at the bottom academically. What future can children have if they are ill-prepared for college or technical schools? Mary Kramer is publisher of Crain's Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com/kramer. E-mail her at mkramer@crain.com.

PRESENTING

TALK CONTINUED ■ From Page 6

I hope they are only putting lighting on streets where there is a critical mass of occupied homes. We need to stop paying for infrastructure in sparsely populated areas of the city. We need to incentivize people to move. The cost will be less than maintaining and improving infrastructure. As those areas redevelop down the road, we can upgrade. Krain

Re: Chuck Gaidica to step down as WDIV-Channel 4 meteorologist

Mike Duggan DETROIT MAYOR

Although study after study show that the ROI on these projects is always less than is sold to the public, if there’s nothing fun to do in Detroit eventually everyone who can will leave, like Comerica. Let’s just refrain from saying that any of these stadiums were privately funded. Christopher2011 Absolutely amazing! A man (Mike Ilitch) worth roughly $3 billion wants us to pay for his new arena. If we pay for it, do we get in for free? Like the DIA fiasco. What exactly is Gov. Snyder smoking to say that Detroit is on the comeback path? All kinds of money is put into the downtown area and nothing is invested in the surrounding neighborhoods. Joseph Coppola

Re: Hotel development planned for former Statler Hilton site in Detroit Great move for Duggan to make as mayor of Detroit that he can fill the hole we have in such prime location. 263729

For turning the improbable into what, in retrospect, now seems to have been inevitable, Detroit Mayor Mike Duggan was selected for Crain’s Newsmaker of the Year.

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A CONVERSATION WITH WSU GETS INTO EXEC ED Biz school aims to help local companies move employees into management, enhance skills, Page 11

King Yang, Wayne State University

Executive education King Yang is director of the Wayne State University Bioengineering Center, which marks its 75-year anniversary this summer and conducts auto collision research using human cadavers and 3-D digital simulations, as well as military and sports injury research. He spoke with Chad Halcom about educational resources for professionals. Your program typically uses a dozen human cadavers a year in crash tests, for data on automotive injury tolerance and body movement. Does demand for that data vary with car production levels or as more sophisticated test dummies enter the market? Research into crashworthiness was never really reduced despite the economic downturn because of federal regulations that have to be followed. ... Much of the industry still uses the dummy for frontal testing that was developed in 1972 and was never really updated. That is changing. We use the cadaver here to generate more humanlike movement data, so you can then use the data to create a better and more humanlike dummy. Then companies use that more advanced dummy to create data to build better vehicle safety systems. We not only do the cadaver testing, we provide that kind of data from testing for industry and government. Some dummies are good at gathering single-direction data like a frontal crash, but if you crash at an angle it doesn’t necessarily produce the best data. Do many major employers in Southeast Michigan send their executives to Wayne State to get training through the center? Many industries send their engineers here for training, or research, that helps them build toward a promotion or new job duties. Right now, taking a snapshot, we have one person here from General Motors Co., two from Ford Motor Co., one from Toyota North America and four from TARDEC (the Tank-Automotive Research, Development and Engineering Center in Warren). What other changes and new programs have you been part of to help keep up with the industry, or to help local executives be informed about it? Much of the research in the past was on passive safety, to protect human occupants in a crash or vehicle expulsion. The industry is working more now on active safety, or on sensors and electronics that help avoid crashes. There is a fairly recent new program at Wayne State called the Automotive Safety Group, which I’m also in charge of for now, to develop ideas that reduce crashes and injury. The idea is to integrate the active and passive safety systems together. If you know someone interesting in law, manufacturing or defense in Oakland or Macomb counties Chad Halcom should interview, call (313) 446-6796 or write chalcom @crain.com.

Back to school ROBERT CHASE

“It’s definitely in full swing now,” Melanie Weaver Barnett of the University of Michigan’s Stephen M. Ross School of Business says about executive education.

Schools see exec education resurgence from doldrums of downturn BY CHRIS GAUTZ CAPITOL CORRESPONDENT

s the recession hit the region in 2008, some of the first things businesses trimmed or cut altogether were travel and training budgets, causing a contraction in executive education classes at universities across the state. But schools offering those classes on campus, or in tailored courses they take on the road to company boardrooms, are seeing a resurgence as businesses that made it out of the economic downturn are investing again in executive education for their employees. Melanie Weaver Barnett, chief executive education officer at the University of Michigan’s Stephen M. Ross School of Business, said that although both types of courses are increasing, more interest has been in custom programs. “It’s definitely in full swing now,” Barnett said. One of UM’s newest programs is with Detroit-based DTE Energy Co., in which employees come to the Ann Arbor campus in six cohorts throughout the year, she said. “We love it when they come to us because we like to show off the campus and Ann Arbor,” Barnett said. But more often, the professors take their class to the company itself. And about half the time, those companies are not based in the U.S., Barnett said. UM professors often travel to places like India, Hong Kong and Malaysia

A BORN MADE LEADER When local companies ask local universities to craft executive education courses for employees, the most common request is for classes on leadership, Page 10 to teach executive education courses, which typically last a week or two, she said. The international travel and individualized classes for many companies were just the type of things that businesses pulled back on during the recession. Michael Tidwell, dean of the College of Business at Eastern Michigan University, said that when the economy has trouble, the training and development arms of most companies are seen as expenses that do not generate revenue and are often the first to go. “The training and development opportunities are just starting to come back,” Tidwell said. He said that at Eastern, professors are engaged in several custom programs a Tidwell year with companies in the state. But he also has seen an increase in applications for MBA programs. In addition, enrollment in the five graduate degree programs in the College of Business is up 2 percent. At Oakland University, the story is the same

in terms of increased interest again, post-recession, but also because business education itself has changed, said the university’s dean of the School of Business Administration, Michael Mazzeo. Businesses previously thought an MBA was the route to take for their employees, and while some still need that, more often now employers are seeking to craft these specialized training programs with a Mazzeo local university. “We have had strong demand for (Oakland’s custom programs),” Mazzeo said. DTE was one company that discontinued such classes during the downturn, said Scott Simons, senior specialist for media relations. “The recession prompted us to curtail discretionary spending throughout the company, including executive education,” he said. But now, DTE is working again with UM and by 2015 will have had 125 leaders go through the university’s customized program that focuses on business acumen, financial analysis, customer satisfaction and strategic thinking. “We believe that strong leadership is a differential for organizational success,” Simons said. “And that starts at the top and works its way down.” See Education, Page 10

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Focus: Executive Education

What local firms seek from schools: Leadership lessons BY CHRIS GAUTZ CAPITOL CORRESPONDENT

When companies across Southeast Michigan ask local universities to craft executive education courses for their employees, the requests range from highly technical to broad corporate skills. But the most common request is for classes on leadership. Melanie Weaver Barnett, chief executive education officer at the University of Michigan’s Stephen M. Ross School of Business, said leadership and business acumen are the two main requests she receives from businesses. “Within those categories, there are a lot of paths,” she said. One company her office helped recently faced having 40 percent of its vice presidents ready to retire. The company, which she declined to identify, had a great set of director-level employees, but they were unprepared to step up to those

soon-to-be-open positions. UM was asked to get them ready. Barnett said businesses also look to train their managers in employee engagement to help employees find meaning in their work. Tara Miceli, director of the Walsh Institute at Walsh College, said she has seen a strong desire across the board in requests for leadership courses. Companies have come to her office with needs regarding strategic decisionMiceli making, finding ways to keep bright talent on board and bringing middle management up to speed and improving their abilities in working with other departments. Miceli said she also has seen a

strong interest in communication skills, both for new and current employees and for both internal and external communications. Most often, the interest is in improving written communication skills, particularly constructing a proper message when talking with a client. “As you move managers to other roles, leadership skills are very important,” said Michael Mazzeo, Oakland University’s dean of the School of Business Administration. For those managers, financing and accounting becomes crucial, Mazzeo said. “Those are always in need,” he said. Requests for general information technology courses have declined a bit, he said, and are now more in conjunction with other areas of a business. Data mining and analytics are two other areas where Mazzeo also sees growth.

Dave Frayer, director of executive development programs at Michigan State University’s Eli Broad College of Business, said the capabilities of the university often drive the types of requests for courses that businesses have. Frayer “Organizations buy based on expertise,” he said. Frayer said MSU is known for its work in supply chain management, so he has seen a lot of interest in recent years around so-called big data and predictive analytics. “That whole area has been a big growth area,” he said. Businesses also want Frayer’s professors to provide instruction surrounding the link between supply chain strategy and business

strategy, he said. Lean techniques were all the rage a few years ago, and Frayer still receives requests for such classes, he said — but not as much — as well as requests for courses in hospitality management. Michael Tidwell, dean of the College of Business at Eastern Michigan University, said business analytics and search engine optimization are attracting greater interest from businesses. He said Eastern has several faculty members who specialize in search engine optimization, and they are often sought out for their expertise. The vast majority of the faculty at Eastern, Tidwell said, are practical in hands-on types of disciplines. “We are always looking for what’s next,” he said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

Education: With recession over, companies go back to school ■ From Page 9

Dave Frayer, director of executive development programs at Michigan State University’s Eli Broad College of Business, said MSU’s executive education offerings are getting back to pre-recession levels, running between 35 and 40 custom programs annually. Frayer said

during the height of the recession, only a handful of programs had to be cancelled, but the enrollment in all of the remaining programs saw a noticeable decline. In some classes where there used to be as many as 50 students, there were no more than 20 attending, he said.

And like UM, often those programs take place overseas in places like Turkey, Saudi Arabia and India. “We follow our clients wherever they go in the world,” Frayer said. Sometimes it is because a domestic company conducts busi-

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ness in another country, he said, or a foreign company has heard about MSU’s custom programs and reaches out for training. EMU’s Tidwell said that lately, when companies request his professors to come teach a specific topic, it is not meant to be part of a course to earn credit toward a degree. Businesses, he said, will say they have a particular challenge and want someone to help them solve it or at least expose the company’s leadership team to new ideas. “The answer to every question is not an education program,” Tidwell said. “Sometimes it’s helping an organization think through an issue.” Barnett said that at UM, these are called action learning projects. “They come to us with ‘we’ve got this big challenge and we need help,’ ” she said. UM professors and Barnett’s staff help craft a learning experience that almost always includes some level of capability building, but a significant portion involves working on the most pressing challenges the business has. While Barnett could not identify the companies the university was working with, she said that in recent years her programs have helped companies develop more innovation in their global supply chain, establish a supplier base, learn about a new market and improve their customer relationship management. “The company’s strategic priorities are woven into the program,” she said.

Dual benefits It’s not just the employees taking the executive education courses that benefit from the experience, said Barnett, who last year was board chair of UNICON, a global consortium of business-school-

based executive education organizations. Having her professors in the field working in these businesses and helping them solve problems gives the professors fresh, real-world experience to take back to campus and apply to their other courses. “It enhances all the classrooms,” Barnett said. Tidwell said the higher education community often hears the criticism that it doesn’t have a strong connection with the business community. Executive education classes help erase that perception, he said. “Ultimately, what the faculty member is doing is disseminating knowledge, but learning about the business, too,” Tidwell said. Students also can benefit from job placements, using the connections the professors have made with companies, Mazzeo said. But also, he said, the companies that have worked with those schools have a familiarity with and respect for the institution because of the positive experience they had in working with the school. “The real value is when you work with the company,” Mazzeo said.

Compensation The executive education arms of the universities can provide valuable revenue streams at a time of declining investment in higher education from state government and other sources. But they also can be lucrative for the professors themselves. Some institutions across the country have noticed a trend of companies cutting out the university as the middleman and contracting directly with a professor to train employees, Barnett said. But at UM, she said, the faculty largely understands the importance of having a strong institution. Their See Next Page

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Focus: Executive Education

New WSU exec program aims to help firms fill knowledge gaps BY BRIDGET VIS SPECIAL TO CRAIN’S DETROIT BUSINESS

Wayne State University’s School of Business Administration plans to launch an executive education arm in the coming months to help local companies train employees to move into managerial and executive ranks or enhance their skills. Marcus Dickson, the business school’s director of education, said he has been working with an executive education task force of faculty members since November to identify what courses would best match the expertise of the school’s faculty Dickson with the desires of the Detroit business community. “Two things that have frustrated me in the past are that we haven’t had more connections with the companies located around us and that our extremely talented faculty hasn’t been able to contribute more to the local business scene,” Dickson said. Although the business school has offered executive education programs before, Dickson said, those programs were largely custom programs for individual businesses or industries. The goal of the new arm is to offer a consistent set of openenrollment and company-specific courses, he said. “We don’t want to start at zero every time a company approaches us about offering a course,” Dickson said. “That’s why we are talking with many organizations now so we can structure our curricu-

From Previous Page

loyalty to the university causes them to run any requests they receive from a business through the Ross School rather than try to do it themselves. Professors make far less when they go through the university because they receive a small percentage of the contract with the company or a previously agreed upon amount for such assignments. Some professors who do nothing but executive education for their university would not receive any additional compensation for their work, aside from travel expenses. At Michigan State, Frayer said no hard-and-fast rules exist for when a professor should run such a program through the university. Typically, though, if a company just wants someone to give a lecture or speak during a lunch event, the professors can do that on their own. But where learning is the outcome, materials are needed or the business wants employees to receive course credit or some type of certificate, Frayer’s office wants to get involved. “There is a lot of flexibility,” he said. Despite it being more lucrative to

lum in a way that responds to their needs on a regular basis.” Because many other business schools already have executive education programs, Margaret Williams, interim dean of Wayne State’s business school said, the new arm will keep the university competitive with those schools as well as be relevant in the Detroit community — where, she said, Williams a void exists in executive education offerings. “It’s critical for us as a business school in Detroit to meet the needs of the businesses here and continue to meet the needs of those businesses for years to come,” said Williams, who appointed the executive education task force. She said the executive education unit also will help spread the word about the expertise of the business school’s faculty and help them stay up to date on what is happening in the world of business. Although Williams said the task force is still planning potential course topics, offerings such as leadership and negotiation, which appeal to employees across all industries, have interested many organizations with which task force members have talked. Dickson said the preliminary curriculum offerings would be completed in the next six months. The costs for the programs will depend on the length — from afternoon workshops to yearlong courses — and resources required for them, he said. The first program to fall under the executive education branch is

do the work without going through the university, Frayer said, MSU professors more often than not go through his office, if only because of the large amount of front-end work done to design the course. UM’s Barnett said the design of an individualized program sometimes can take several months of back-and-forth with the company. Senior staff members and faculty sit down with company officials to learn what outcome they hope to achieve, come up with some design ideas and work from there, she said. Debra Knill, human resource manager for Troy-based HMS Manufacturing Co., which designs, manufactures and markets houseware products, said that for the past two years, her company worked with officials at Troy-based Walsh College to develop a program for its managers. Knill said the classes dealt with communication, managing team dynamics and empowerment. The ideas for the classes came from top management but also from talking with managers at the company to determine what skills they thought they were lacking. “Education,” Knill said, “is a part of our core values.” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

a nondegree certificate program that Wayne State has created with the Southfield-based Automotive Industry Action Group in supply chain management. The program consists of 24 weekly class sessions at AIAG’s headquarters and will begin Thursday. They are taught by university faculty and supply chain professionals. The sessions cover topics such as risk management and procurement strategy. There also will be a company-related project and opportunities to study abroad over the summer break, said John Taylor, director of supply chain programs at WSU. The cost is $3,495 per student. Registration, at AIAG’s website (www.aiag.org), ends Wednesday.

WSU to offer certificate in info systems Wayne State University’s School of Business Administration has launched an online for-credit, post-bachelor certificate program in information systems management for people who want to advance their job skills or switch careers. The program will be the first of its kind in Michigan, although universities in other states offer similar programs, said Toni Somers, interim chairwoman of the department of management and information systems and a professor of information systems management. The curriculum consists of five required courses on topics such

as introduction to business information systems and software tools for business applications, plus three specialized elective courses in information systems that can be completed over two semesters. The courses will be a combination of theory and handson practice. The cost will be around $11,000 for all eight courses; discounted rates possible for companies enrolling multiple employees, Somers said. The first program begins this fall. Find more information at business.wayne.edu/certifi cates/ism.php. — Bridget Vis

WE’RE SHAPING THE FUTURE OF BUSINESS IN MICHIGAN. Our award-winning programs and innovative research in cutting-edge fields help students make an impact and allow our corporate partners to thrive. Together, our talented faculty, students and alumni make University of Michigan-Dearborn a leader in business education.

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PEOPLE EDUCATION Ta’Shun White to president, Everest Institute, Southfield, from director of education.

FINANCE Iuliana Keyes to

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nancial Group LLC, Troy, from client relations manager. Daniel Willard to executive director, Pointe Capital Management LLC, Grosse Pointe Farms, from equity research analyst, T. Rowe Price Associates Inc., Baltimore, Md.

HEALTH CARE Michael Mithen to president and CEO, CarePatrol

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SERVICES Matthew Weaver to vice president of sales, Certified

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BUSINESS DIARY ACQUISITIONS iRule LLC, Detroit, maker of mobileand tablet-based control systems for home entertainment centers, acquired On Controls, Salt Lake City, Utah, a control and automation system for professional dealers and installers. Financial terms were not disclosed. Websites: www.iruleathome.com, www.oncontrols.com. Rainbow Child Care Center, Troy, acquired Little Red School House, an early childhood education company with 11 locations in Kentucky and two

in Ohio. Rainbow plans to retain the current Little Red School House staff of 350, as well as add additional positions as enrollment increases. Website: www.rainbowccc.com.

CALL FOR NOMINATIONS The Engineering Society of Detroit invites entries for its Alpha Awards for Innovation in Engineering and Technology to recognize members of those professions who develop innovative solutions to benefit the needs of the general public, business or academia.

Deadline for nominations is Feb. 28. See ww2.esd.org/awards/alpha_ awards.htm for specifics. Submit entries to Leslie Smith, lsmith@esd.org. The Engineering Society of Detroit also invites entries for its Construction and Design Awards, which honor owners, designers and builders and recognize team achievement and innovative use of technology. Deadline for nominations is Feb. 28. At least one of the primary members of the project team must be an ESD member. Submit entries at ww2.esd.org /awards/construction-design.htm.

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specializing in the development and commercialization of nucleic acid library preparation products used in research and clinical testing, announced distribution agreements to expand availability of its products in Europe, Asia and Australia/New Zealand. AmpliTech SARL, Compiegne, France, will provide distribution for France; HPST sro, Prague, Czech Republic, for Czech LuBioScience GmbH, Republic; Luzerne, Switzerland, for Switzerland; Recenttec Inc., Taipei, Taiwan, for Japan; Pisma Biotech Corp., Taipei, for Taiwan; S.M. Chemical Supplies Co. Ltd., Bangkok, Thailand, for Thailand; and Custom Science Ltd., Auckland, New Zealand, for Australia and New Zealand. Website: www.rubicon genomics.com. Beaver Aerospace & Defense Inc., Livonia, a manufacturer and designer of custom ball screws and broad-range actuation products for the aerospace and defense industries, and a subsidiary of Phillips Service Industries, announced two contracts with Parker Aerospace, Irvine, Calif., a business segment of Parker Hannifin Corp., in which Beaver will supply horizontal stabilizer ball screw assemblies for the Bombardier Global 7000 and Bombardier Global 8000 ultra-longrange jets. Website: www.beaver-on line.com. Coldwell Banker Weir Manuel, Troy, signed a strategic marketing agreement with Talmer Bank and Trust, Troy. Talmer will provide mortgage services to clients across all of Coldwell Banker’s offices in Southeast Michigan and in West and Mid-Michigan. Websites: www.cbwm.com, www.talmerbank.com. Plumbing Professors, Canton Township, was awarded an epoxy pipe-lining contract to line storm sewers at the Chrysler Proving Grounds, Chelsea. The project manager will be Barton Malow Co., Southfield. Website: www.plumbingprofessors.com. JTEKT Corp., Nagoya, Japan, with North American headquarters in Plymouth, a supplier of automotive steering systems, all-wheel-drive couplings and bearings, announced it will invest $91 million to build a manufacturing facility in San Luis Potosi, Mexico. Construction of the 204,500-squarefoot plant is expected to begin in spring 2014 and operations to start at the end of 2015. The plant will employ 300. Websites: www.jtekt-na.com, www.jtekt.co.jp/e/. Domino’s Pizza Inc., Ann Arbor, finalized a multiyear beverage supplier contract with The Coca-Cola Co., Atlanta, Ga., continuing their long-term relationship. Websites: www.dominos .com, www.coca-colacompany.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 482072997. 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.

EXPANSIONS Mobile Care Group Inc., Sylvania, Ohio, opened a Michigan sales and operational office at 29200 Southfield Road, Suite 204, Southfield. Phone: (248) 809-6398. Website: www.mobile caregroup.com. SVS Vision Optical Centers, Mount Clemens, opened a location in the Gateway Marketplace shopping center, 2023 W. Eight Mile Road, Detroit. Telephone: (313) 365-3300. Website: www.svsvision.com. Art Van Furniture Inc., Warren, announced the addition of its seventh Chicago-area location, 1021 Butterfield Road, Downers Grove, Ill. The store is scheduled to open in January 2015. Website: www.artvan.com. Integral Technologies Inc., Bellingham, Wash., and its subsidiary Elec-

triPlast Corp., Fort Washington, Pa., opened a technology center at 7546 Baron Drive, Canton Township. Phone: (734) 354-6683. Website: www.electriplast.com. Denso International America Inc., Southfield, the North American headquarters for Denso Corp., Kariya, Aichi prefecture, Japan, is investing $55 million and adding more than 130 new manufacturing jobs at its manufacturing facility in Athens, Tenn. Website: www.globaldenso.com.

NEW SERVICES ProQuest LLC, Ann Arbor, announced that its collaboration and document management tool Flow is now accessible free for researchers. Website: www.proquest.com.

Job Openings for the General Retirement System and the Police and Fire Retirement System of the City of Detroit The Retirement Systems of the City of Detroit are seeking applicants for Accounting / Financial professionals. Interested individuals are invited to review the requirements and specifications for a Head Accountant position and a Valuation Analyst position online at www.rscd.org and www.pfrsdetroit.org . All correspondence and inquiries concerning both positions should be directed solely to Angela Keeler at ackeeler@rscd.org

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7KH URDG WR WKH FRUQHU RIÀFH

CALENDAR

STARTS HERE. A business degree from Wayne State University does more than provide an academic foundation for success — it helps open doors. Our graduates join a strong network of more than 31,000 successful alumni across Metro Detroit and worldwide. Whether you’re landing that ﬁrst job or making your way to the executive suite, there’s likely a Wayne State alum nearby, ready to help.

TUESDAY FEB. 4 The Super Bowl: Mega Opportunity or Marketing Quicksand? 8-10:30 a.m. Marketing & Sales Executives of Detroit. With Mike Bernacchi, professor of marketing, University of Detroit Mercy, presenting a marketing analysis of the 2014 Super Bowl and how it affects brand building and sales growth. Michigan State University Management Education Center, Troy. $20 MSED members, $60 nonmembers. Contact: (248) 643-6590; website: www.msedetroit.org.

Detroit Economic Club Meeting. 11:30 a.m.-1:30 p.m. Detroit Economic Club. With Charles Evans, president and CEO, Federal Reserve Bank of Chicago. Westin Book Cadillac, Detroit. $45 DEC members, $55 members’ guests, $75 nonmembers. Contact: Detroit Economic Club, (313) 963-8547; email: info@econclub.org; website: www.econclub.org.

Matthew J. Simoncini, BS ’85 President and CEO, Lear Corporation

AIM HIGHER

Join Crain’s Detroit Business to hear our Newsmaker of the Year for 2013, Detroit Mayor Mike Duggan, address the Southeast Michigan business community. The event takes place 11:30 a.m.-1:30 p.m. Feb. 25 at MotorCity Casino Hotel. The luncheon also will honor the winners of Crain’s 2013 BestManaged Nonprofit and the Newsmaker Student Scholarship awardee. Tickets are $65 for individuals, $55 for students and $70 each to reserve a table for 10. For more information, call Kacey Anderson at (313) 446-0300, email her at cdbevents@ crain.com, or visit www.crainsdetroit.com/events. Join the conversation with #crainsnewsmaker. Building Your Tech Startup From the Ground Up. 6-8 p.m. TechTown Detroit.

FEB. 5

TechTown Detroit. $15. Contact: Diane Love-Suvada, (313) 879-5250; email: diane@techtowndetroit.org; website: www.techtowndetroit.org.

a.m. Southfield Area Chamber of Commerce, Comerica Bank. With panelists from Comerica Bank, the Center

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WEDNESDAY Getting Funding to Open, Grow and/or Sustain Your Small Business. 7:30-9

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February 3, 2014

for Empowerment and Economic Development, the U.S. Small Business Administration Michigan District Office and Hennessey Capital LLC. ITT Technical Institute, Southfield. $5 Southfield chamber members, $10 nonmembers. Contact: Tanya MarkosVanno, (248) 557-6661; email: tanya@southfieldchamber.com; website: www.southfieldchamber.com.

THURSDAY FEB. 6 Mexico’s Fiscal and Legal Reforms, Manufacturing Trends and Outlook for 2014. 8 a.m.-12:15 p.m. Automation Alley. Join the U.S.-Mexico Chamber of Commerce for a discussion on the changing dynamics of doing business

in Mexico. Automation Alley headquarters, Troy. $30 in advance, $50 at the door; preregistration closes Feb. 4. Contact: Blanca Berthier, (312) 404-9468; email: blanca.berthi er@usmcoc.org; website: www.au tomationalley.com.

FRIDAY FEB. 7 The State of Michigan Business: A Conversation with Gov. Snyder. 11 a.m.-1 p.m. Detroit Regional Chamber. The governor will outline his plans for 2014 and continued efforts to move Michigan forward as the nation’s comeback state. MGM Grand Detroit, Detroit. $45 Detroit chamber members, $150 nonmembers. Contact: Marianne Alabastro, (313) 596-0479; email: malabast@detroitchamber.com; website: www.detroitchamber.com.

UPCOMING EVENTS Macomb Business Awards. 8-10 a.m, Feb. 11. Sterling Heights Regional Chamber of Commerce & Industry. Recognizing Macomb County businesses that are leaders in workforce development, energy efficiency, diversification, corporate philanthropy and starting new endeavors. With opening remarks by Gov. Rick Snyder; keynote speaker Tom LaSorda, former CEO of Chrysler Group LLC and founder of IncWell LP; emcee Huel Perkins, WJBK Fox-2 Detroit; and awards presentation by Macomb County Executive Mark Hackel. Andiamo Italia, Warren. $20. Contact: Maria Zardis, (586) 4696489; email: maria.zardis@macomb gov.org; website: www.suscc.com.

What Gen Y Wants: Marketing to Millennials. Adcraft Club of Detroit. 11:30 a.m.-1 p.m. Feb. 13. With Lindsey Pollak, chairwoman, Cosmopolitan maga-

Financing Experience

In Your Corner.

■ Financing matters including asset-based and real estate loans ■ Mergers and acquisitions transactions, business and general corporate work ■ In Your Corner.

zine’s millennial advisory board. The Reserve, Birmingham. $35 members, $45 nonmembers, $25 junior and student members. Contact: (313) 872-7850; website: www.adcraft.org.

Grow Your Business Through MBE Certification and Minority Business Development Agency Services. 3-5 p.m. March 5. Asian Pacific American Chamber of Commerce, Michigan Hispanic Chamber of Commerce. With Diane Lee, project director, Detroit Minority Business Development Agency, providing information on becoming certified as a minority business enterprise; leveraging MBE status to compete for corporate and government contracts; and maximizing global business development and access to capital and markets through MBDA services. Free; open to APACC members and nonmembers. Register by March 4. Contact: Christina Mui, (248) 430-5855; email: christina@apacc.net; website: www.apacc.net.

CALENDAR GUIDELINES

Kristen Veresh Contact Kristen at kmveresh@varnumlaw.com

■

Metro Detroit

■

Grand Rapids

■

Kalamazoo

■

Grand Haven

■

Lansing

If you want to ensure listing online and be considered for print publication in Crain’s Detroit Business, please use the online calendar listings section of www.crainsdetroit.com. Here’s how to submit your events: From the Crain’s home page, click “Detroit Events” in the red bar near the top of the page. Then, click “Submit Your Entries” from the drop-down menu that will appear, and you’ll be taken to our online submission form. Fill out the form as instructed, and then click the “Submit event” button at the bottom of the page. That’s all there is to it. More Calendar items can be found on the Web at www.crainsdetroit.com.

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Suppliers consider expansion, investment in Russia BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

Days away from the XXII Olympic Winter Games in Sochi, Russia, it’s not just the world’s elite athletes vying for position. The country’s increasingly stable economy is gaining the attention of Southeast Michigan’s automotive industry. Rainer Jueckstock, co-CEO of Federal-Mogul Corp., said the Southfield-based brake and piston supplier believes Russia has a solid long-term future for suppliers. Russia is “a rich country with oil and gas resources, which is growing its midJueckstock dle class,” Jueckstock said. “It’s the largest country in the world with the need for more roads; there’s no doubt that Russia will develop.” Automakers and suppliers are making efforts to expand in Russia, but with measured caution as political uncertainty and corruption continue to plague its budding economy. Federal-Mogul operates piston plants in Naberezhnye Chelny and Togliatti, and entered an agreement to acquire Dimitrovgrad-based supplier DZV Bearings Co. in December. It employs roughly 750 in Russia. The supplier also operates a sales and administration office and is opening a warehouse soon, Jueckstock said. Jueckstock’s enthusiasm for the Russian market is backed by analyst expectations. The Russian automotive market is predicted to overtake Germany as the largest market in Europe by 2020, according to a 2013 study by Boston Consulting Group. The firm forecasts that Russia’s

auto market will grow by an average of 6 percent annually through 2020, reaching 4.4 million units in sales, up from 2.9 million in 2012. Small four-door sedans and sportutility vehicles are the most popular choices for Russian buyers. However, the Russian economy sputtered in 2013, leading to a 6 percent drop in new vehicle sales, according to a recent report by the Association of European Businesses. Rick Hanna, global automotive leader for PricewaterhouseCoopers LLP in Detroit, said a major driver of U.S.-based supplier growth in Russia is incentives. The government said last month that it Hanna would offer $8 billion in subsidies through 2016 for research and development to boost its domestic industry, Reuters reported. Of the 2.9 million cars sold in Russia in 2012, nearly 2 million of them were imported. Even more dismal is the Russian supply base; only 25 percent of parts of Russian cars are produced inside the country, Automotive News Europe reported. That figure, however, is expected to rise to 30 percent to 35 percent in the next 18 to 24 months, BCG analyst Nikolaus Lang said in an interview with ANE. “A global trend is for automakers to build cars where they sell them, and Russia is no different,” Hanna said. “The Russian government is providing incentives to get content built in Russia, which is attracting the supply base … .” Bill Kozyra, chairman and CEO of Auburn Hills-based TI Automotive Inc., called Russia a long-term market, but customers are asking the

fuel systems supplier to invest and expand in the country. TI Automotive operates a plant in St. Petersburg that supplies systems to Ford Motor Co., General Motors Co., Nissan Motor Co. and Volkswagen AG. “The fact that we currently have facilities in Russia has been advantageous, because some of our competitors do not.” Kozyra said in an email to Crain’s. “It’s a market we are watching closely, as with the other BRIC nations.” The BRIC Kozyra nations are Brazil, Russia, India and China. Van Buren Township-based Visteon Corp. strengthened its position in Russia in October when it increased its stake to 69 percent from 49 percent in its interior electronics joint venture with Russia’s Avtopribor. It made Visteon a majority shareholder in one of Russia’s largest cockpit electronics suppliers, Automotive News Europe reported. Livonia-based safety system supplier TRW Automotive Inc. is also interested in the market, but reluctant to put on a full rush into Russia. “We have no reason not to support manufacturing in Russia,” Peter Lake, TRW executive vice president of sales and business development, told Automotive News Europe. “It’s just a question of time.” Hanna said suppliers are capitalizing on Russia’s skilled labor workforce and high education rates. But the industry is approaching the market with caution due to political unrest and a renowned history of corruption, said Betsy Meter, partner and automotive audit leader for KPMG LLP in Detroit. “There’s reluctance from the industry because of the way Russia

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BY JAY GREENE CRAIN’S DETROIT BUSINESS

Marsh & McLennan Agency LLC, parent company of Troy-based McGraw Wentworth, has acquired Great Lakes Employee Benefit Services, also in Troy, for an unspecified amount. Great Lakes’ co-owners Jim Scoggin and Joseph Coan and their staff of 12 will move to McGraw Wentworth’s offices during the second quarter. Founded in 1997, Great Lakes reported annual revenue last year of $3.4 million. The company offers employee benefit consulting services to self-funded and fully insured midsized organizations, but is not a broker. “Our business has gone through an amazing three to four years with the Affordable Care Act,” said Scoggin, who along with Coan will become a McGraw Wentworth account director. “Prior to ACA we thought we could continue to offer our services to clients, but it would have been extremely difficult to bring clients the resources they need.” Scoggin said MMA and McGraw Wentworth’s resources will provide clients with more help in regulatory compliance, data analytics and actuarial service areas to assess benefit plan costs and best practices. McGraw Wentworth was founded in 1997 and has grown to 75 employees and $18.4 million in revenue last year. McGraw Wentworth is part of White Plains, N.Y.-based MMA’s Upper Midwest region. MMA (NYSE:MMC) also acquired Cambridge Property & Casualty of Livonia last December.

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BUSINESSES WANTED

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does business, which is not like Western Europe or the U.S.,” Meter said. “Most suppliers are at least looking at moving into Russia, but they want to invest wisely.” Russia’s recent and welldocumented corruption scandal involved the 2009 death of Sergei Magnitsky, an attorney for British hedge fund manager Bill Browder. Russian officials arrested and detained Magnitsky in 2008 following his complaints about corruption between Moscow energy companies OAO Gazprom and Surgutneftegas and government officials as well as an alleged $230 million tax fraud ring. Magnitsky died after 358 days in prison. A United Nations human rights group later determined he was severely beaten moments before his death, the Washington Post reported in 2011. Transparency International, an organization that measures perceptions of corruption worldwide, ranked Russia 127th out of 177 countries on its Corruption Perception Index in 2013. However, the Russian government, led by President Vladimir Putin, is moving to thwart corruption, Hanna said. In 2012, Russian Prime Minister Dmitry Medvedev signed The Organisation for Economic Co-operation and Development’s Anti-Bribery Convention. The organization works to reduce corruption by promoting policies with international governments. “The question remains whether you can trust the Russian government and court system to protect your business, but confidence is growing,” Hanna said. “Putin has been in power for some time and seems to be consolidating laws and working hard to address corruption to attract foreign investment.” Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh

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Warrior: Sporting goods company is geared to play globally ■ From Page 1 mets and masks. That’s just one world stage. Warrior made its first major move into global branding in 2011 when it signed a six-year contract to provide uniforms — known as kits — for the English Premier League soccer club Liverpool FC beginning in 2012. Warrior replaced German sporting goods giant Adidas AG. The deal pays Liverpool, one of the league’s long-popular teams despite a lack of recent championships, an average of $39 million a year. That fee allows Warrior to sell Liverpool merchandise globally — the backbone of the company’s effort to become a major brand player in sports apparel, footwear and equipment. “That’s how you fund those deals. It’s a prepaid royalty against sales,” Morrow said of the Liverpool deal. Warrior will provide up to 300 items for each Liverpool player, from underwear to socks and practice gear, three different game uniforms and apparel for variations in the weather, he said. “I was shocked at the amount of apparel it takes to outfit a soccer club,” Morrow said, chuckling. The cost of equipping the team is easily made up in the retail sales. Warrior sells hundreds of Liverpool-branded items, including 30 types of jackets, Morrow said. The main retail item, however, is the team jersey, which retails for $74 on the official team online store. “The jersey is the big driver, but they also buy lots of the other stuff,” Morrow said. He declined to specify how many jerseys Liverpool sells annually, other than it’s “several million.” Industry analysis shows that Liverpool is the fourth-best-selling jersey in the world among the 20 Premier League teams. “Our home kit is the best-selling in history of Liverpool,” Morrow said. Liverpool is owned by Bostonbased Fenway Sports Group, which also owns the Boston Red Sox. It was the proximity and ongoing relationship between Fenway Sports Group and Warrior parent

A LEG UP Warrior Sports says it currently has soccer uniform, or kit, deals with: 䡲 Liverpool FC of the English Premier League 䡲 Sevilla FC of Spain’s top soccer league, La Liga 䡲 Sagan Tosu of Japan’s top-tier J. League Division 1 䡲 Randers FC, which plays in Denmark’s top-flight Danish Superliga 䡲 Club Sport Emelec in Ecuador’s Primera Categoría Serie A 䡲 Shamrock Rovers of the League of Ireland’s Premier Division New Balance Athletic Shoe Inc., also based in Boston, that led to the Liverpool deal, Morrow said. “Basically, what built the bridge was New Balance had done a sponsorship at Fenway Park,” he said. “They approached us with the Liverpool deal.” When news of the Liverpool kit deal broke in 2011, the Warrior website crashed after getting 3.5 million visitors from 185 countries in 10 minutes, Morrow said.

Unexpected success Morrow, 42, said he didn’t expect Warrior to grow into a major sporting goods corporation. The Troy native was an AllAmerican lacrosse player at Princeton who founded the company after he and his father began crafting titanium sticks to replace the aluminum ones that kept breaking during games. Naming the company after his high school team, the Birmingham Brother Rice High School Warriors, Morrow launched Warrior Sports in 1994. His first year, he sold $300,000 worth of sticks, which are strong and less prone to snapping than aluminum. A decade later, Warrior’s success prompted the sale to New Balance. At the time of the sale, Warrior generated annual sales of $14 million. “They approached us. It wasn’t my intention to sell. It took me off guard,” Morrow said.

That was in 2002. The business relationship began with New Balance licensing lacrosse cleats under the Warrior brand name, Morrow said. “I realized that lacrosse was a great business; Warrior was growing, making money,” he said. “But it was a seasonal business. In the low season, there wasn’t really much going on. I needed more capital to buy or invest in new sports. “That led me to believe that to do that, I needed a strong financial partner.” He declined to disclose his sale price when New Balance bought Warrior in February 2004. Warrior employs 600 people globally. Its Warren operation is the headquarters and North American equipment distribution center for its products. Footwear and apparel are done out of other cities. Hockey design and development happens in Montreal. Hockey sticks are made in Tijuana, Mexico. Lacrosse sticks are made in Asia with some sourcing in Europe, Morrow said.

The revenue Warrior did more than $200 million in sales in 2013, Morrow said. That’s up from $100 million in 2010 and substantially more than the $14 million Warrior was doing annually when Morrow sold the company. As part of the sale, he remains president and CEO and is the beneficiary of a long-term incentive plan tied to the company’s performance. He does not have an equity stake. “It’s been a pretty rapid expansion,” Morrow said. That expansion was partially fueled by New Balance’s 2007 acquisition of a major Warrior competitor — Boston-based Brine Inc., a soccer, lacrosse and field hockey equipment company. Warrior’s soccer business is driven by retail sales of performance footwear, which accounts for 45 percent of sales, Morrow said. The remainder is apparel for players.

Name recognition Sporting goods industry insiders are impressed with Warrior’s effort to position itself as a major player.

The company is poised to become a major brand, with broader consumer recognition, said Marty Maciaszek, director of communications for the Mt. Prospect, Ill.Maciaszek based National Sporting Goods Association, an industry trade group. “Warrior, they’ve certainly established themselves as a recognizable name in the hockey industry,” Maciaszek said. “A big part of it is brand recognition. If you can get some big names or Olympic presence, that goes a long way to becoming a player in the market.” Consumers spent $175 million on ice hockey equipment in 2012, of which $64.4 million was sticks and $34.4 million helmets, Maciaszek said. Sales of $208.8 million for soccer footwear alone dwarf hockey, he said. Selling soccer apparel and footwear is critical for a global push, said Matt Powell, chief analyst for the Charlotte, N.C.based sporting goods consulting firm SportsOneSource LLC. “If you’re going to win interPowell nationally, you’ve got to win on the soccer pitch,” he said, adding that Nike Inc. didn’t pick up international credibility as a brand until it invested in soccer. Morrow said that is exactly Warrior’s business strategy. “Right now, we picked soccer because it’s global and gives us access to international markets,” he said. “It’s so massive, you have to develop business plans by country. It’s a big, big undertaking.” Helping Warrior stand out are the untamed color schemes and marketing of its soccer and lacrosse items, which Powell said are largely staid when produced

by other soccer and lacrosse suppliers. “They’re going to come at it with more of an attitude and edge than we’ve seen,” he said. “It’s a brand that’s going to appeal to a young, brasher consumer. That’s probably a winning position. They’ve been pretty effective in marketing to that consumer.”

The market The sporting goods, apparel and footwear market is crowded but dominated by just a few companies. Warrior corporate parent New Balance, founded in 1906, is in the second tier of the industry. It said in a company fact sheet that it generated $2.4 billion in 2012 global revenue and $1.2 billion domestically. The market, based on 2012 revenue, is dominated by Beaverton, Ore.-based Nike at $24 billion and Adidas at $19.6 billion. A major competitor for Warrior and its sister brand, Brine, in the lacrosse market is Kitchener, Ontario-based Bauer Performance Sports Ltd., a major supplier of ice hockey, lacrosse and other sports equipment. “Those two brands are very competitive in lacrosse,” said Bauer CFO Amir Rosenthal. “We’re also very keenly aware of the strength of those competitors.” Bauer had $374.8 million in 2012 revenue, largely derived from owning more than 50 percent of the ice hockey market. In the sporting goods industry, Maciaszek likened Warrior’s expansion effort to Baltimore-based Under Armour Inc.’s position in the early 2000s, when it was just beginning to emerge and gain endorsement deals as a supplier of moisture-wicking compression gear. Maciaszek said he sees Warrior’s deal with Liverpool as a major milestone toward that global expansion goal. “It’s something they can build on,” he said. “If they can get that brand recognition out there, there’s no reason they cannot corner a chunk of the marketplace.” Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

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feet under ownership or management. He said Detroit’s industrial market is primed for development because of a lack of modern space. He wasn’t available Friday to discuss details of the plans. Dan Labes, senior managing director in the Southfield office of Newmark Grubb Knight Frank, said he was pleased that Lichter plans build-to-suit projects on the site and called it a departure from Lichter’s usual strategy. “His M.O. is typically to buy buildings at a low price — usually larger, older industrial buildings, and he rents them out at a low cost,” Labes said. According to data from Newman Grubb, at the end of last year, Detroit’s industrial vacancy rate was

25.2 percent. About 305,000 square feet were vacated in the fourth quarter last year. According to Newman Grubb, the city’s industrial market has 44.6 million square Labes feet of space. Demand exists for new, highquality space in the city because much of the existing supply is obsolete, Labes said. Colliers International Inc. is the brokerage representing American Axle on the sales deal. Both Paul Choukourian, managing director of the Colliers Southfield office, and Brent

Beshears, the Colliers vice president who is representing American Axle, declined to comment. Beshears referred questions to American Axle. “We have had discussions in the past with several potential buyers and are in discussions with a potential buyer to explore the potential sale of the site,” Chris Son, director of investor relations, corporate communications and marketing for American Axle, wrote in an email to Crain’s. “No additional details are available at this time.” About 540,000 square feet of the 2.5 million square feet at the site remain standing, Son said. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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Defense: Budget cuts put contract jobs in jeopardy ■ From Page 3

of vehicle systems for BAE’s offices in Sterling Heights and its ranking site executive in Michigan. “This size of a cut effectively ends the program at the end of the technology demonstration phase in June,” he said. “We knew that the recent relief from (federal budget) sequestration this year didn’t restore the budget, and there were going to be cuts anyway, but my guess is we will have to start moving a number of people off the program.” BAE has about 330 employees in Sterling Heights, and Signorelli estimates nearly 300 of them have at least some job duties connected with Ground Combat Vehicle. Less than one-fourth of those are dedicated full time to the program, he said, and some might be able to adjust their duties or transfer to other projects — but the company still expects some reduction in force.

Numbers change A $1.1 trillion federal omnibus spending package signed by President Barack Obama last month includes just $100 million in 2014 defense appropriations for that program. That’s off from $592 million in Army’s budget request and in the previously adopted National Defense Authorization Act of 2014, which authorizes funding before

appropriations are made. A line-item change during negotiations between the House and Senate slashed 83 percent of the program’s funding before the final version of the spending bill reached the president’s desk. The funding reduction doesn’t eliminate the vehicle program, but Army officials and local experts have said it signals an end for now. Peter Keating, vice president of government relations and communications at General Dynamics Land Systems, said that company also expects the 2014 funding appropriation will allow it to fulfill the current contract, but then wind down the program later. He declined to comment on how many GDLS jobs are connected to the program or might be affected. GDLS has about 1,600 employees in Macomb County, across various contract programs. The news on Ground Combat Vehicle comes as it is also facing another revenue loss on the Namer, a tracked heavy personnel carrier assembled from GDLS components for the Israeli government. Media reports in January said Israel’s latest five-year spending plan calls for no more than 170 vehicles through 2017. That’s compared with more than 380 kits over eight years under a 2010 contract for GDLS.

Assuming GDLS resembles BAE in employees working on the Ground Combat Vehicle, more than 150 jobs could be affected. Analysts told Crain’s the recent vehicle contract losses could translate into cuts of 100 or more jobs at each company in Sterling Heights, as well as increased bidding competition from other contractors in the next few months for other programs. An Armored Multi-Purpose Vehicle contract decision could come in November. “I am very bearish on the outlook for the armored vehicle industry in the U.S. But for the war in Iraq, what’s happening right now would have already happened 10 years ago,” said James Hasik, senior fellow at the Atlantic Council in Washington, D.C., and a consultant to defense contractors. “Because there really are not any compelling developments among our adversaries that suggest there’s something wrong with most of the vehicle fleet capabilities we have now.” Hasik said the companies will likely wind down the program this year and salvage whatever research or new technology they can from it for other programs, and that the loss could be slightly worse for BAE, which suspended production on other tracked heavy

vehicles in the United Kingdom in recent years and may downsize those programs in the U.S. as well.

Finding alternatives Dean Lockwood, weapon systems analyst at Forecast International in Newtown, Conn., said both companies will likely contend for the AMPV, an alternative for the Army’s aging fleet of M113s, tracked personnel vehicles that entered production in the 1960s, he said. “That’s the sort of program, which in a way is higher-priority than GCV,” Lockwood said. “In the long run, yes, they would both like to have had a big, new contract, especially in this market, and this (Ground Combat Vehicle loss) is going to hurt. But it might not hurt that bad.” Signorelli said BAE expects to be a contender for the AMPV, but hopes to hear sooner on U.S. Marine Corps contract awards for the Amphibious Combat Vehicle and an upgrade to its Armored Amphibious Vehicle, before the GCV contract expires. If it has some success there, that might mitigate job losses as employees can transfer into new programs, he said. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

Budget: Snyder must resell plan on Medicaid ■ From Page 1

then would be used to begin paying the state’s share of the expansion when the federal government stops paying all of the cost after 2016. But there are now two problems with that plan: The total savings amounted to only $133 million because the Legislature did not give the bill immediate effect, pushing back its implementation by about three months. And the Legislature never created the savings account. On Wednesday, Snyder again will call for the creation of the fund and make a new recommendation for how much should be put into it. The governor’s budget is expected to be about $52 billion, of which about $10 billion goes toward the general fund, around $11 billion into the School Aid Fund and most of the rest flowing from the federal government into specific programs. In this budget, Snyder also will lay out his proposal for what he would like to see done with the more than $1 billion in surplus revenue projected for the state. In his State of the State address last month, Snyder said Michigan must first pay bills, put money toward paying off long-term liabilities but also use it to provide some type of tax relief for “hardworking folk.” The amount of that relief is not expected to exceed $100 million.

Tax relief Last week, the House and Senate moved forward with their own dueling plans for tax relief. The Senate plan, written by Sen. Jack Brandenburg, R-Harrison Township, and contained in Senate Bill 402, would drop the state

income tax rate to 3.9 percent by 2017. It now stands at 4.25 percent. A House package (House Bills 5265-5267) would lower the rate to 4.05 percent by 2016 and allow for further reductions of 0.1 percent annually if, in the preceding year, state income tax revenue increased by $300 million or more. Senate Majority Leader Randy Richardville, R-Monroe, and House Speaker Jase Bolger, R-Marshall, said they are not backing one proposal over another and are waiting to hear the governor’s plan. Regardless, the rate now is higher than it would have been if Snyder and the Republican-led Legislature had not halted a scheduled annual decrease in the rate in 2011.

Higher education Michael Boulus, executive director of the Lansing-based Presidents Council, State Universities of Michigan, hopes to be pleasantly surprised Wednesday with word that Snyder will put more money into higher education. In Snyder’s first budget, he slashed higher education funding 15 percent and in the following two years increased it by 3 percent and 2 percent, respectively. But the past two increases come nowhere close to recouping those cuts from the first year, Boulus said, and in total have been part of a decade of disinvestment in higher education in the state. “I think it’s time for a strategic reinvestment in our public universities,” he said. With each of the past three budgets, strings were attached regard-

ing performance metrics and tuition restraint. But as a Senate Fiscal Agency report last year found, as the state contributes less to higher education and universities rely more on tuition, the strings will mean less. Last year, for example, Wayne State University forfeited $534,700 in state aid by increasing its tuition more than 3.75 percent. Instead, its 8.9 percent increase brought in an estimated $14 million. Boulus said it’s unclear whether more universities will follow suit. “Each university is going to have to look at it and do the math,” he said.

Workforce development In last year’s budget, Snyder included a new $10 million skilled trades training fund to assist companies across the state. The state’s Workforce Development Agency has requested that the program continue this year at the same level. Patty Vanaman, a specialist at the agency, said awards for the funds went out Oct. 1 to help 177 companies with short-term needs for skilled labor. All the money has been disbursed, but requests totaling more than $15 million are pending, Vanaman said. Delaney McKinley, director of human resources for the Michigan Manufacturers Association, said the success of the program shows the need exists. If the companies that received the funds do as projected, the money will have helped train 10,881 existing workers and 1,773 new ones. As entry-level workers receive new skills and are promoted, the compa-

nies said, they plan to hire 1,357 more workers to replace them.

Rainy-day fund When Snyder came into office in 2011, the state’s rainy-day fund was down to $2.2 million. It now stands at $580 million. Last year, the governor recommended depositing $75 million into the fund, and a similar deposit is expected again. Kurt Weiss, a spokesman for the Michigan Department of Technology, Management and Budget, said a state having 6 percent to 8 percent of its general fund in a rainy-day account is considered a best practice by most states. The governor’s goal is eventually to build the fund back up to between $1.2 billion and $1.5 billion.

Detroit settlement offer The $350 million proposal that the governor unveiled last month to help support Detroit pensioners and the collection at the Detroit Institute of Arts requires legislation outside of the budget proposal. Snyder’s preference is to divert $17.5 million annually for 20 years from the state’s tobacco settlement fund. Michigan will receive $250.9 million from the tobacco settlement in the next fiscal year. Still, Snyder said he will take it into account in his budget proposal because he will have to decide whether to continue to fully fund any programs that the tobacco settlement money previously funded. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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Highland Park: Hope amid hard times NEI: Round 2 funding ■ From Page 1

■ From Page 3

Those plans even include new life for the Highland Appliance site. Mark Hackshaw, president of the Highland Park Business Association and chairman of the city’s Tax Increment Finance Authority, said real estate sites like the vacant store on Woodward Avenue have built-in value, namely, their location off a major regional artery. “It’s Main Street USA,” he said. The authority purchased the Highland Appliance property last fall, and the TIFA also now owns the old city hall, fire station and other properties on or near Woodward and is preparing request for proposals for them. The idea is to attract businesses such as restaurants, bars and entertainment venues. The city has plenty of retail; it now needs these kinds of quality-oflife businesses, Hackshaw said. “You’re not going to be able to go downtown without stopping somewhere in Highland Park,” he said. Conversations with other people in the local business community reveal optimism like Hackshaw’s — more than might be expected from a city that just emerged from financial management in 2009, a status it had since 2001. No one glosses over Highland Park’s problems. But they say there’s more going on than people realize. “You never like to hear that your city is going to be under control of a financial manager. But ... with all the negative that’s been in Highland Park for so many years with arson and fires and businesses leaving, I gotta tell you I’m optimistic,” said Nick Becharas, president of Becharas Brothers Coffee Co., a coffee roaster that’s been in business for 100 years and in Highland Park since 1961. “There’s business here,” he said. “It might not be as evident as what Dan Gilbert is doing downtown because there’s no real destination point here in Highland Park. But there’s business in the city.”

Corporate investment Companies, some of them on land vacated by Chrysler when it began its move to Auburn Hills in 1992, have hired hundreds of people in recent years. That might not make a big difference in Detroit. But in a city of fewer than 12,000 people, it can. “Every job makes a big difference. Highland Park is a city that’s really ready to rise,” said Mike Curis, president of Curis Enterprises Inc., a Detroit-based commercial real estate developer with business in Highland Park. Magna Seating of North America opened a plant in Highland Park in 2010 that now supplies seating to all three Detroit automakers and employs 600 people. It also has completed a $2.2 million expansion of the plant begun in 2012. Fort Worth, Texas-based call center operator Novo 1 Inc. last year invested about $3 million to build a call center at the headquarters of longtime Highland Park business Budco Holdings Inc., resulting in the addition of 200 jobs. And Birmingham-based Glencoe Capital Michigan LLC, which owns Budco and Novo 1, merged those two companies and Troy-based Dialogue Marketing Inc. into a new company called DialogDirect Inc., based at

the Highland Park location. The location now has about 700 employees in total, said Jack Wilkie, chief marketing officer of DialogDirect. Integrated Manufacturing and Assembly LLC, a joint venture of Lear Corp., closed its Brownstown operation last year and moved employees to Highland Park, increasing the employee count to 200 from 130.

Auto heritage The city’s automotive roots are proving valuable today, both for providing a ready workforce and for revving up plans for auto-related tourism. Cheryl Sanford is regional manager for Michigan Human Resources Development Inc., which operates the Highland Park Michigan Works office. Sanford said Johnson Controls Inc. hired at least 100 people last year, and a handful of other smaller manufacturers have increased their footprint. Highland Park’s unemployment rate has dropped to 20 percent now from 35 percent in 2009. Movement also is happening in a Model T-era Ford Motor Co. building on Woodward that’s been empty since the mid-1970s. The former administrative building near the Model T plant is in the final stages of a $550,000 purchase by the Woodward Avenue Action Association, using money that includes a $400,000 preservation grant from the Michigan Department of Transportation and $100,000 from the city’s TIFA. The nonprofit envisions an automotive welcome center where tourists would get information on automotive industry destinations, much as a national park visitor would go to a counter to pick up maps, said Executive Director Deborah Schutt. The building also would have a theater and displays. The association plans to launch a $7.5 million capital campaign in April, said Schutt, who’s been working on this project for a decade. Hackshaw said the coming M-1 Rail line project, which will run through Highland Park, and the city’s relative proximity to other hot spots are other selling points. “Midtown basically ends at Highland Park’s doors,” he said. “Ferndale basically ends at Highland Park’s doors,” Hackshaw said.

Retail activity The Highland Appliance site, and redevelopment efforts for it, is expected to provide a significant psychological boost for the stretch of Woodward, north of the Davison, which still has its share of shuttered and burned-out storefronts. Not that it’s all shuttered storefronts. The Model T Plaza shopping center opened in 1998 on former Model T plant property and remains almost fully occupied, said Ferris Hamama, senior sales associate at Keystone Commercial Real Estate Services in Farmington Hills, the leasing broker. The Shops at Woodward Place, a retail development opened in 2008 on a former Sears site, has been fully occupied for more than a year, said Curis, whose company manages the center. Theresa Johnson, who opened a Tim Hortons franchise in The Shops

at Woodward Place in July 2012, said business has grown steadily in the double digits, showing Highland Park can sustain more than dollar stores and fast-food restaurants, she said. “Just because we came into the city doesn’t mean we have to have a Dollar Menu,” Johnson said. With daily one-way traffic moving through at a clip of 31,000 vehicles a day, according to the city’s economic development office, Highland Park’s stretch of Woodward has the same potential as Midtown, said Lauren Hood, who served last year as community and economic development project manager.

Infrastructure The city last year opened a new fire station after years of firefighters working out of a warehouse. It doesn’t take long for residents to mention this sign of progress in a place where streetlights and water service are no longer taken for granted. In 2011, DTE Energy Co. removed 1,300 streetlights in a settlement with Highland Park over $4 million in unpaid energy bills. In 2012, the city shut down its water department because maintenance costs had grown too high. Paying Detroit’s water authority hasn’t helped much, though. The water and sewer fund went from $5.5 million to $12.5 million in the red from fiscal 2012 to 2013, a leading factor in the state’s decision to slap the financial emergency label on the city this month. The Detroit Water and Sewerage Department last November sued Highland Park for $16.9 million in unpaid sewerage bills and $800,000 in unpaid water bills accrued after Highland Park started getting water from Detroit. The city’s annual general fund revenue is about $11 million. Its long-term debt is nearly $58 million. Highland Park’s problems are by no means solved by a handful of real estate developments, observers agree. Like Detroit, it faces declining population and high unemployment. And it still has plenty of unused real estate: an estimated 2,500 properties remain off the tax rolls, by Hackshaw’s measure. The 2000 census pegged Highland Park’s population at 16,700. It dropped to 11,600 in 2012, according to the U.S. Census Bureau’s estimate.

Jobs for jobs Other developments serve as reminders that while it’s tough to get past a phase of hard decline, it pays to be patient. Automotive repair manual producer Helm Inc. moved to Plymouth from Highland Park in 2011 after 35 years, taking about 100 jobs with it, according to the Michigan Works office. And Chrome Craft closed in 2009 for a loss of 64 jobs. However, Plymouth-based Recycling Depot LLC began setting up operations in the Helm space last year and should have 200 employees there within two years, said Louis Starks, director of community and economic development. Said Becharas: “Obviously things have changed. But the city has got a lot of grit. We’re centrally located, we’ve been here forever and we’re not going anywhere.”

support in three broad areas: researching the region’s assets, developing its workforce and supporting entrepreneurism. In 2011, it narrowed its grants even further, funding entrepreneur and innovation services exclusively through grants made to organizations including the Henry Ford Innovation Institute, ProsperUs, Tech Town’s retail boot camp and Wayne State University’s tech transfer office. Over the past five years, those grants have spurred 716 patents and invention disclosures, 675 new Southeast Michigan companies and 8,000 jobs, according to NEI. Those results came despite the recent downturn that brought higher unemployment, less available capital and scrambling in the public sector to figure out safe investments, Egner said. NEI has a strong Detroit focus in its second round of grants. Egner said the majority of the new grants will go to agencies within a 4.3-square-mile radius of Detroit’s urban core. That area is becoming the new center of gravity for the region, where innovation, entrepreneurism, talent and investment are clustering, Egner said. But NEI sees itself playing a significant role in connecting that work with neighborhoods aligned with the Detroit Future City Strategic Framework and with innovation champions around the region, including Ann Arbor Spark, the Macomb-Oakland University Incubator and Automation Alley. NEI hasn’t yet made grant commitments from round two. But it’s rolling $10 million in first-round funding to continue its support of organizations working on innovation and entrepreneurism.

Power of 9 Nine of the original 10 foundations supporting the initiative and one newcomer, the William Davidson Foundation, are participating in the second round. The last of the initial funders, the Skillman Foundation, also plans to make a commitment but hasn’t yet finalized it, said Egner, who is also president of the Hudson-Webber Foundation, one of NEI’s funders. The other original funders are the Detroit-based Community Foundation for Southeast Michigan, Southfield-based Max M. and Marjorie S. Fisher Foundation, New York City-based Ford Foundation, Battle Creek-based W.K. Kellogg Foundation, Miami-based John S. and James L. Knight Foundation, Troy-based Kresge Foundation, Detroit-based McGregor Fund and the Flint-based Charles Stewart Mott Foundation. NEI’s early goal for the second round of funding was more than $40 million, but the foundations were more comfortable with three-year commitments that provide an opportunity to review the work that has been accomplished with funds from round two and whether future investments are needed, Egner said. Many of the NEI funders are the same ones participating in the fund to help shore up Detroit’s underfunded pension plans, protect the Detroit Institute of Arts’ collec-

tion and hasten the city’s emergency from bankruptcy. Egner said NEI is talking with local corporations to raise the balance of the funds. “Our learning said culture change is going to take more than diversifying the economy” beyond manufacturing and automotive, Egner said. “These next three years are about making the (entrepreneurial) ecosystem stick.”

Building, attracting talent A $2.5 million grant from NEI enabled the Detroit Economic Growth Association, a nonprofit affiliate of the Detroit Economic Growth Corp., to provide startup financing for 15 businesses downtown, said Olga Stella, vice president of business development at the DEGC. Through the Creative Corridor Incentive Fund, those grants helped attract both a range of companies — including Lowe Campbell Ewald; Lambert, Edwards & Associates; and GalaxE.Solutions — and the smaller creative businesses in the Madison building, she said. Collectively, the 15 companies occupied 457,000 square feet, created 1,400 jobs and leveraged $51 million in more investment to launch Detroit offices. During the grant period between 2009 and 2011, it was hard for creative businesses to get the conventional financing to make building improvements or bridge some of the other costs needed to move into downtown buildings, such as parking costs, Stella said. There’s still a need for this kind of funding, she said. “We’re definitely riding an upward momentum, but there’s still a gap in available capital.” The Fisher Foundation recommitted to NEI both in the spirit of collaboration and because “we feel strongly about how this work connects to the neighborhoods outside the central corridor,” said Executive Director Douglas Bitonti Stewart. Outside of its participation in NEI, the foundation has been supporting early childhood education and basic needs in Detroit’s Brightmoor neighborhood for the past six years. “There’s a recognition of the fact that for the city to continue this positive momentum, it’s going to take place both in the central core and in the neighborhoods,” he said. NEI demonstrated value in its first seven years, said Kresge President Rip Rapson. Its efforts are helping attract businesses and talent into Detroit, to create some of the preconditions those businesses needed to get anchored there and to create a broader network of innovation and creative activity throughout the city — not just in Midtown, he said. “The challenge going forward in the next round,” Rapson said, “is the extent to which we can take these successes and make them more broadly applicable to the rest of the city.” Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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February 3, 2014

RUMBLINGS Jackson exits DEGC; mayor seeks ‘clone’ hen Mayor Mike Duggan appointed Tom Lewand to head Detroit’s jobs and economic growth efforts, local developers, CEOs and real estate agents collectively came to heel. What did that mean for the Detroit Economic Development Corp. and its longtime leader? Was the center of political gravity shifting? That was on everyone’s minds last week when George Jackson resigned from the DEGC after 12 years to start his own consulting firm. He’ll be with the agency until March 31 Jackson — or longer if needed to wrap up projects such as the proposed Detroit Red Wings arena at Woodward Avenue and I-75. But his departure, Jackson said, has nothing to do with Lewand’s appointment. “I’ve been planning on doing something different for about five to six years, actually,” Jackson said. “I think there just comes a time that you decide that there are other things you want to do in life, including have a little more freedom.” And Duggan said he doesn’t intend to use the opportunity as a way to restructure the way economic development happens in the city. “In my mind, the division we have today is good,” he said. “The things that are at the city — planning, etcetera — they belong there. The

economic development that is at the DEGC belongs there. They have done a great job. I anticipate the same relationship as it has been under George.” Who’s on deck to lead the DEGC, a nonprofit that has been in charge of shaping Detroit’s future since 1978? A search committee has been formed — one that includes Lewand — and is led by Rod Gillum, chairman of the DEGC and a shareholder in the Southfield office of Jackson Lewis PC. But for the mayor’s money, he’d be looking “for a clone of George Jackson.” He chuckled, paused and then added: “Somebody with honesty, somebody with business sense like George Jackson.”

New UM chief paid well, but not quite like Coleman So how does the compensation package of University of Michigan President-elect Mark Schlissel stack up against that of outgoing President Mary Sue Coleman? Competitively, but still less than Coleman’s when things like retention incentives, deferred compensation and yearly bonuses are factored in. Coleman’s current total compensation package is $978,357, compared with Schlissel’s $850,000, according to figures provided by the university. Schlissel, 56, is a biochemist who is the Brown University provost. His compensation package: Base pay: $750,000

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF JAN. 25-31

Retention incentive: $100,000 Deferred compensation: None 2013 bonus: None Coleman, 70, the university president since 2002, will retire at the end of the academic year. Her compensation package: Base pay: $603,357 Retention incentive: $100,000 Deferred compensation: $175,000 2013 bonus: $100,000 Other perks: Both Schlissel and Coleman receive use of a car and driver and the president’s mansion, and the university pays their work-related expenses. The UM board of regents unanimously approved Schlissel as Coleman’s successor Jan. 24. His base pay can be increased at the board’s discretion.

Visit website, get culture In the mood to take in a play, attend an arts class or listen to a symphony? Ixiti.com, a website that will link patrons to metro Detroit arts and cultural entertainment events, tickets and educational programs, has gone live. The site, which launched Saturday, also offers opportunities to volunteer and make financial contributions. The site is under the umbrella of CultureSource, the association representing nonprofit arts and cultural organizations in Southeast Michigan. Ixiti.com also includes the events of forprofit companies, although only the association’s nonprofit members can host a profile page describing their organizations. Maud Lyon, executive director of CultureSource, said the hope is that Ixiti.com will become a goto place like yelp.com to see what’s happening in Wayne, Oakland, Macomb, Washtenaw, Livingston, St. Clair and Monroe counties.

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

A penthouse view, so to speak

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It’s a bird! It’s a plane! It’s … the Farbman Group? The company has purchased a DJI Phantom 2 Vision drone to use for photography and exploration of high-rise buildings.

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Kirk Pinho’s “Big City, Big Deals” blog can be found at www.crainsdetroit.com/section/blogKirkPinho

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A market classic in the making

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Erik Olson is not like the other entrepreneurs flocking to Detroit to capitalize on the entrepreneurial gold rush. Olson opened Thomas Magee’s Sporting House Whiskey Bar in Eastern Market.

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Nathan Skid’s “Table Talk” blog on area restaurants is at www.crainsdetroit.com/skid

Source: Detroit retirees to fare better in health benefits pact etroit’s more than 21,000 pensioners may have preserved a significant share of their retiree health care benefits under a settlement-inprinciple reached in mediation talks surrounding the city’s bankruptcy. Details of the deal, which runs through year’s end, were expected in a joint statement by the city and its Official Committee of Retirees. A source who asked not to be identified told Crain’s that the deal improves “by a significant chunk” the amount Detroit agrees to pay out on its health benefits, compared to the city’s original position.

ON THE MOVE Detroit-based Health Alliance Plan named James Connelly CEO to replace Bill Alvin. Connelly was CFO of HAP parent Henry Ford Health System and had been HAP’s interim CEO since October. The Wayne County Airport Authority board elected Alfred R. Glancy III as its chairman for 2014. Glancy is executive chairman of Seattle-based Unico Investment Group LLC and former chairman and CEO of MCN Energy Group Inc. and principal subsidiary Michigan Consolidated Gas Co. Troy manufacturing software supplier Plex Systems Inc. hired longtime financial executive Don Clarke as CFO. Clarke, 54, replaces Michael Twarozynski, who remains with the company. The American Heart Association named Catherine Smith, 39, executive director of the Southfield-based Southeast Michigan American Heart Association. She succeeds Kathy Kauffmann, now senior vice president of major metro markets for Detroit, Chicago and the Twin Cities. Novi City Manager Clay Pearson resigned, effective March 1, to become city manager of Pearland, Texas, a Houston suburb. Longtime Detroit weatherman Chuck Gaidica will step down as director of meteorology at WDIV-Channel 4 in August to become pastor of world outreach at Novi’s Oak Pointe Church. Grand Rapids businessman Bing Goei will head the new Michigan Office for New Americans, Gov. Rick Snyder announced.

COMPANY NEWS An Oakland County Circuit Court judge ordered nonbinding mediation to resolve the legal dispute between the Detroit Medical Center and Flint-based McLaren Health Care over the Detroit-based Karmanos Cancer Institute. Less than four months after Compuware Corp. terminated his consulting contract, Peter Karmanos Jr. has started Mad Dog Technology LLC, according to documents from the Michigan Department of Licensing and Regulatory Affairs. The website of the software company revealed few details except a Birmingham address. Bankrupt Revstone Industries LLC is suing former Chairman George Hofmeister in federal court in an attempt to recover more than $12.9 million. Chrysler and Fiat announced their combined company would be renamed Fiat Chrysler Automobiles NV and would be based in the Netherlands. Chrysler Group LLC had been headquartered in Auburn Hills. Troy-based Talmer Bancorp Inc. set the price range for its planned initial public offering in a filing with the U.S. Securities and Exchange Commission. The company said it plans to sell 15.6 million shares of stock at between $12.50 and $14.50 a share in the next two weeks. The new owner of Ann Arbor Web analytics company ForeSee Results Inc. announced layoffs that reports put at 50-75 of the company’s 300 employees. St. Louisbased Answers Corp. bought ForeSee in December. Editors at Patch, which includes 30 hyper-local news sites in Southeast Michigan, received word of companywide layoffs that put the sites at a standstill. Ivivva, an athletics store for girls by Lululemon, plans to move into Michigan with a store to open this spring at the Somerset Collection in Troy. The Detroit Lions said they are increasing regularseason ticket prices for 2014 and introducing a threetiered ticket pricing system. Detroit-based Futuramic Tool & Engineering Co. and Urban Science Applications Inc. will receive $1.3 million in state assistance and plan to add 229 jobs in the city, the Michigan Economic Development Corp. announced. Inventev, a Detroitbased company with technology that allows commercial trucks to generate electricity for equipment at job sites, won $5,000 for having the best business plan in the Annual Collaboration for Entrepreneurship awards. The event’s organizer, Ann

Arbor-based Great Lakes Entrepreneur’s Quest, earlier announced it had been rebranded as MiQuest after a merger with the Lansingbased Small Business Foundation of Michigan. The DTE Energy Foundation announced a $1 million grant to the Detroit-based Michigan Science Center for science, technology, engineering and math programs for children and families.

OTHER NEWS Gov. Rick Snyder announced he will run for a second term and is to kick off his re-election campaign Monday in Detroit. The Detroit Institute of Arts committed $100 million over 20 years to a fund that would protect its art collection and shore up Detroit’s underfunded pensions. In exchange, the DIA will be spun off from the city and transferred to the nonprofit that operates it. Detroit officials gave Bank of America Corp. and UBS AG a deadline of this past Friday to say how much they would accept to cancel interest-rate swaps that cost city taxpayers about $4 million a month or face a possible lawsuit, Bloomberg reported. Southfield Mayor Brenda Lawrence announced she is running for the 14th Congressional District seat to be vacated by Gary Peters, who is running for U.S. Senate. Organizers announced that attendance at the North American International Auto Show in Detroit was more than 803,000, the highest since 2003. The Public Lighting Authority of Detroit approved a plan to upgrade city streetlights on an accelerated timetable and use 150-watt LED lamps to replace existing 70-watt sodium lights. Andra Rush, CEO of Wayne-based Rush Trucking Inc., and Mary Barra, General Motors Co. CEO, were among the guests sitting in the viewing box of first lady Michelle Obama at the State of the Union address in Washington, D.C. The Raise Michigan ballot committee launched an effort to raise the state’s minimum wage to $10 an hour from $7.40 with a ballot initiative in November. Michigan’s creative industries paid nearly $3.6 billion in wages to 74,000 employees during the 2011 fiscal year, said an ArtServe Michigan report.

OBITUARIES Gino Polidori, a former state representative from Dearborn who also served on the City Council and as fire chief, died Jan. 26. He was 72.

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