Crain's Detroit Business, April 21, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 16

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Page 3 Car hauler United Road gears up for the long haul Bitcoin: What it is, how it works

Health Care

Continental Automotive named in recall lawsuit

Ficano

More disclosure for licensing boards BY JAY GREENE

The waiting game BY AND

KIRK PINHO CHRIS GAUTZ

CRAIN’S DETROIT BUSINESS

ny Crossroads Consulting Group. With everything from the county’s financial woes to the specter of state-appointed emergency management and a federal investigation into members of the Ficano administration, business leaders will largely sit on the fence until a clear front-runner emerges. One conspicuous exception: Ford Motor Co. Executive Chairman Bill Ford Jr., who hosted a fundraiser for candidate Westland Mayor William Wild last month. Overall, though, “the business community is notoriously risk averse,” said Steve Hood, a Detroit political consultant. “They can read the tea leaves. I imagine many of them will look at the polls. They will see who is the strongest and then support them accordingly.” Case in point: The Detroit Regional Chamber will not endorse a candidate

key question in the Wayne County executive race has been answered, but yet another remains: Who will be the horse the business community backs? Wayne County Executive Robert Ficano announced Friday he’ll run for re-election, but don’t expect business leaders to overwhelmingly rally around him or any candidate just yet, political consultants said. The county political landscape will remain volatile between now and the Aug. 5 primary election and the full candidate roster won’t be known until the Tuesday filing deadline, said Sheila Cockrel, a former Detroit City Council member and founder of Detroit government relations firm and advocacy compaSteve Hood,

The business “community is

notoriously risk averse.

”

See Waiting, Page 18

Detroit political consultant

CRAIN’S DETROIT BUSINESS

New state regulations that take effect July 1 aim to eliminate the ability of chairs of the Michigan Board of Medicine and 26 other healthlicensing boards to unilaterally end investigations of physicians, nurses and other health care professionals. The regulations now require the review and approval of at least three board members to authorize or stop a state licensing investigation. Under the new rules, the Michigan Department of Licensing and Regulatory Affairs can also overrule the deci- Michigan medical sion of a health-licensing discipline hits board’s disciplinary sub- new high, committee, if the board Page 21 chairman agrees public health and welfare are in jeopardy. The department investigates alleged licensing violations, but current law gives the disciplinary subcommittee final say on whether a provider’s license is suspended, revoked or modified. The codes in Senate Bills 575 through 578 — co-sponsored last fall by Sens. Tonya Schuitmaker, R-Lawton, and Rick Jones, R-Grand Ledge — were signed into law April 4 by Lt. Gov. Brian Calley. “We will now have the tools in place to effectively hold those people accountable and make sure that they do not pose any more danger to the public,” Schuitmaker said.

CRACKDOWN

See Doctors, Page 21

Chaldean Town housing project may move out of city BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

A $10 million-plus permanent housing project envisioned for Detroit’s Chaldean Town neighborhood may instead be headed for Madison Heights. The Chaldean Community Foundation has been talking with the Michigan State Housing Development Authority on financial incentives for a project that would bring 100 or more units of permanent housing to the neighborhood along Sev-

en Mile Road between Woodward Avenue and John R Road. But after two years of conversations and no firm direction from the state on the project or planning grants to help move it along, the foundation is reconsidering Madison Heights, the location it was looking at before MSHDA urged the group to consider locating the project in Detroit. “We’re looking at perhaps how we can go at this alone,” said Martin Manna, president of the foun-

dation and its parent organization, the Chaldean American Chamber of Commerce. “If we don’t have the assistance from MSHDA and Manna others, we’ll most likely have to look at Madison Heights.” There are already a large num-

ber of Chaldean residents in Madison Heights, Manna said, noting that Iraqi Chaldeans occupy 90 percent or more of the 800 units in the market-rate, Lexington Village Complex on Concord Drive between I-75 and John R Road. The Oakland County city also presents fewer security and schooling concerns than Detroit and would be less complicated and expensive from a development standpoint since it wouldn’t entail See Project, Page 17

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Auburn Hills-based Continental Automotive Systems has been accused in a lawsuit of supplying defective airbag systems for General Motors Co. vehicles recalled because of ignition-switch flaws. The complaint against Continental is the first among the dozens of lawsuits filed over General Motors’ recall of 2.59 million Chevrolet Cobalts, Saturn Ions and other models that name Continental Automotive Systems U.S. as a defendant. The lawsuit in federal court in Santa Ana, Calif., was brought by 25 buyers of GM cars who seek to represent a nationwide class of customers. Adding Continental to the litigation against GM creates an alternative avenue for plaintiffs to seek damages because GM’s 2009 bankruptcy reorganization may shield the carmaker from liability for the claims. The ignition-related recalls involve a defect that can cause the switch to shut off, which in turn can cause the engine to stall and the car’s airbags to be deactivated. At least 13 deaths have been linked to the defect. — Bloomberg News

McNamara

As candidates for Wayne County executive line up, who will get business backing?

Nursing homes prepare for wave of baby boomers, Page 11

This Just In

Cavanagh

Wild

New state rules seek to tighten doctor discipline

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MICHIGAN BRIEFS Virus fatal to piglets reported on 93 state farms; pork prices rising A virus that kills piglets has been found on 93 farms in the state, the Michigan Department of Agriculture and Rural Development says. Spokeswoman Jennifer Holton said porcine epidemic diarrhea doesn’t affect the safety of pork, nor is it a human health concern. But Holton told the Kalamazoo Gazette it’s a threat to the state’s swine industry. The effects already have raised pork prices, especially bacon. Sam Hines, executive vice president of the Michigan Pork Producers Association, expects that to continue.

Ice-bound Straits to delay start of Mackinac Island ferry service Shepler’s Mackinac Island Ferry said its season will start later than expected and has temporarily relocated its ferry starts to St. Ignace from Mackinaw City because of ice blockages still in the Straits of Mackinac, MLive.com reported. Misty Martinchek, Shepler’s group sales manager, said all local ferries are “in the same boat, literally.” Martinchek said nobody at Shepler’s can remember a ferry season being delayed because of ice. Icebreaking is expected to continue well into May, said Mark Gill, director of vessel traffic service for the U.S. Coast Guard in Sault Ste. Marie.

For office furniture suppliers, growth is, well, a problem The forecast for significant growth in the office furniture industry could bring some rewarding and potentially challenging times for the West Michigan base of suppliers, MiBiz reported. After growth of about 2.8 percent this year, the industry forecasts that to jump to 10.4 percent in 2015, when production is estimated to reach $10.6 billion, according to recent projections from the Business and Institutional Furniture Manufacturers Association. West Michigan suppliers are bracing for higher demand — and the challenges that come with growth in an era of a tight labor supply and capacity constraints. “The economy is doing much better, and offices are investing and expanding,” said Richard Perreault, CEO of Grand Rapids-based Gill Industries Inc.

MICH-CELLANEOUS 䡲 Days after being appointed the interim president of Kendall College of Art and Design in Grand Rapids, Oliver Evans received a no-confidence vote from the school’s faculty association and college senate, MLive.com reported. Evans, who led Kendall for 18 years before retiring in 2012, was chosen last week to be the temporary leader after the sudden resignation of David Rosen. 䡲 Attorney General Bill Schuette brought embezzlement charges against Richard Weishuhn, owner of R.O. Savage Funeral Chapel in Standish, north of Bay City. Weishuhn is accused of not submitting re-

“The challenge is that as the other industries are booming, everyone is complaining about being out of capacity.” This year, Gill added capacity by acquiring GR Spring & Stamping Inc. Other office furniture suppliers will look to ramp up capacity by investing in equipment, said Steve Waltman, vice president of marketing and communications at Grand Rapidsbased Stiles Machinery Inc. Even with capital investments and additional capacity, the office furniture supply chain will struggle to meet orders from this projected growth spurt without the right people, sources said. As such, talent and the availability of trained workers topped the list of concerns for manufacturing executives contacted by MiBiz.

quired yearly reports or maintaining escrow accounts for $600,000 from 174 funeral contracts. 䡲 Retired Steelcase Inc. CEO Jim Hackett was elected nonexecutive chairman of the board of directors of Cincinnati-based Fifth Third Bank. 䡲 Susan Borrego, a vice president at California State University-Dominguez Hills, is in line to become the new chancellor of the University of Michigan-Flint, MLive.com reported. 䡲 Holland-based Haworth Inc. says claims by House Democrats that it improperly benefited from a state contract because subcontractor DBI Business Interiors is co-owned by a cousin of Republican Gov. Rick Snyder are “baseless,” the Grand

Rapids Press reported. 䡲 Fred Keller, CEO of Grand Rapids-based Cascade Engineering Inc., will be the first executive-inresidence at the Center for Positive Organizations, a research arm of the Stephen M. Ross School of Business at the University of Michigan. 䡲 Kellogg Community College President Dennis Bona is returning to

work after an investigation into his interactions with college personnel didn’t find evidence of wrongdoing, the Battle Creek Enquirer reported. 䡲 The board of trustees of Delta College selected downtown Saginaw for a new area campus, The Saginaw News reported. Delta’s current Saginaw campus is in Buena Vista Township and its main campus is in Bay County. Other locations are in Bay City and Midland. 䡲 Visser Bros. Inc. plans to overhaul part of the six-story Waters Building, one of the oldest office buildings in Grand Rapids, after buying it from C-III Asset Management LLC, MiBiz reported. Visser is working with retail developer and manager EdMark Development Co. 䡲 Construction will start soon to complete a bicycle trail between Glen Arbor and Empire in the Sleeping Bear Dunes National Lakeshore, the Traverse City Record-Eagle 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 People item on Page 28 of the April 14 issue should have said Chris Thomas was named founder and partner from founder and managing director of Fontinalis Partners LLC. He and Laura Petterle should have been listed under the Finance category, not Law.

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

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United Road gears up for long haul Acquisition helps car hauler meet demand BY BILL SHEA CRAIN’S DETROIT BUSINESS

It’s a good time to be a car hauler. The post-recession automotive industry is churning out more vehicles than the trucking industry has the capacity to readily move, and the major over-the-road haulers are expanding to meet demand. Romulus-based new- and usedvehicle transporter United Road Services Inc. in December bought the auto hauling division of Billings, Mo.-based Waggoners Trucking Inc. for $225 million. The acquisition is a textbook example of how the handful of major vehicle logistics firms are handling increased car and truck production: It immediately adds tractor trailers, expands geographic

PHOTO COURTESY OF UNITED ROAD SERVICES INC.

United Road Services Inc. will haul more than 3 million vehicles for automakers in the U.S. and Canada this year, CEO Kathleen McCann said.

reach nationally and is a major revenue boost. Absorbing Waggoners is expected to give United Road $550 million in revenue this year, up from $335 million last year, United Road President and CEO Kathleen Mc-

Cann said. “With the acquisition of Waggoners, they’ve become the largest nonunion car hauler in the country,” said Bob Farrell, executive director of the Arlington, Va.-based American Trucking Associations’ Au-

tomobile Carriers Conference. The largest unionized vehicle hauler is Kansas City, Kan.-based Jack Cooper Transport Co. Inc., which will have an estimated $1 billion in annual revenue following its acquisition of mega car hauler Allied Systems Holdings out of bankruptcy for $135 million last year, according to a 2013 report from Transport Topics. Niche transporters are experiencing a resurgence, too. Tom Abrams, owner of Canton Township-based Reliable Carriers Inc., which specializes in high-value vehicle hauling, said the automotive and ancillary industries have hauling needs that have outstripped immediate truck and rail capacity. That’s because both general and premium vehicle sales have recovered faster than the trucking industry. His own segment has rebounded so much that he added 100 tractor-trailers last year. Reliable hauls vehicles such as the Dodge Viper and Rolls Royce, for retail sale and auction, and

Inside

Local firm wants fans to hear voices in their head, Page 5

Company index These companies have significant mention in this week’s Crain’s Detroit Business: Arab American and Chaldean Council . . . . . . . . . . 17 Athena Coney Island . . . . . . . . . . . . . . . . . . . . . . . . 3 Barbara Ann Karmanos Cancer Institute . . . . . . . . 14 Berg Muirhead & Associates . . . . . . . . . . . . . . . . . 18 Bronx Deli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Chaldean American Chamber of Commerce . . . . 1, 18 Chaldean Community Foundation . . . . . . . . . . . 1, 17 CHE Trinity Senior Living Communities . . . . . . . 11, 13

See Hauler, Page 19

Ciena Healthcare . . . . . . . . . . . . . . . . . . . . . . 12, 13 Citrin Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Crain’s Detroit Business . . . . . . . . . . . . . . . . . . . . 10 Detroit Medical Center . . . . . . . . . . . . . . . . . . . . . 14

WHATISISBITCOIN? BITCOIN? IT’S IT’SABOUT ABOUT CHANGE (AND CHANGE) AND IT’S HERE ... SORT OF WHAT

Detroit Regional Chamber . . . . . . . . . . . . . . . . . . . . 6 Dynamic Technologies . . . . . . . . . . . . . . . . . . . . . . 3 GMT Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Health Care Association of Michigan . . . . . . . . 11, 13

Making sense of noncents

ITC Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 LB3 Management . . . . . . . . . . . . . . . . . . . . . . . . . 18 Legacy DMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Live Sports Radio . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Main Street Strategies . . . . . . . . . . . . . . . . . . . . . 18 McLaren Health Care . . . . . . . . . . . . . . . . . . . . . . 14 Michigan Trucking Association . . . . . . . . . . . . . . . 19 Qualicare Nursing Home . . . . . . . . . . . . . . . . . . . . 13 Papa Romano’s . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Pulse220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Regency at Waterford . . . . . . . . . . . . . . . . . . . . . . 12 Reliable Carriers . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Rogers Mantese and Associates . . . . . . . . . . . . . . 21 Sanctuary at White Lake . . . . . . . . . . . . . . . . . . . . 11 Tony’s Ace Hardware . . . . . . . . . . . . . . . . . . . . . . . 20

BY ZACK BURGESS

United Road Services . . . . . . . . . . . . . . . . . . . . . . . 3

SPECIAL TO CRAIN’S DETROIT BUSINESS

Wayne State University . . . . . . . . . . . . . . . . . . . . . 19

he next time you grab a sandwich, order a pizza or pay for IT services, you may not have to reach for your wallet. Instead, you could have the option of paying the bill with bitcoins. Businesses including the Bronx Deli in Farmington, Dynamic Technologies in Livonia, Athena Coney Island in Novi and Papa Romano’s in Troy affirm the use of bitcoin currency. According to coinmap.org, a website that tracks the businesses using it, there are at least 10 in the area that accept bitcoin. Bitcoin isn’t regulated as a currency or security, though federal regulators, most recently the Securities and Exchange Commission, have raised red flags about it. In March, the SEC sent an inquiry and data request to the currency’s creator, an elusive person or group known as Satoshi Nakamoto. Nakamoto doesn’t believe the SEC has any legal grounds. Despite the inherent risks operating in an unregulated realm, bitcoin has a local following. “After working in financial services for 15 years, I’m not averse to taking so-called risk,” said Leonard Mazzola Jr., owner of the Bronx Deli.

“I found out about it playing cards with a buddy one night. He went

See Bitcoin, Page 20 BLOOMBERG

THIS WEEK @ WWW.CRAINSDETROIT.COM

Gridlock on 96? You won’t believe your I’s Dustin Walsh feared the worst for his commute after a stretch of I-96 was shut down. Yet he has been pleasantly surprised. Read his blog and see the video at crainsdetroit.com/blogs. DAVID HALL/CDB

Witzke Berry Carter & Wander . . . . . . . . . . . . . 12, 13

Department index BUSINESS DIARY . . . . . . . . . . . . . . . . 16 CALENDAR . . . . . . . . . . . . . . . . . . . . 17 CAPITOL BRIEFINGS. . . . . . . . . . . . . . . 6 CLASSIFIED ADS . . . . . . . . . . . . . . . . 17 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . 9 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 16 RUMBLINGS . . . . . . . . . . . . . . . . . . . 22 WEEK ON THE WEB . . . . . . . . . . . . . . 22

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Novi-based ITC Holdings Corp., the nation’s largest independent electricity transmission company, has released a new five-year capital investment plan that envisions spending more than $1 billion in Michigan and $4.5 billion overall from 2014-2018, according to company officials. “This is our updated long-term plan for the business, a comprehensive strategy going forward to build new transmission infrastructure,” said Cameron Bready, ITC CFO. “This investment plan is expected to drive compound growth 11 percent to 13 percent.” The new five-year plan reflects expected investments of about $2.2 billion in ITC’s four base operating companies, $1.2 billion in regional infrastructure projects, and another $1.1 billion in development projects that haven’t been yet identified, Bready said. “The $1 billion we plan to spend in Michigan doesn’t include about $200 million we still have to invest in the Thumb,” said Bready, noting that ITC already has spent more than $300 million to increase transmission lines to serve wind farm power projects. Brian Swanson, communications principal with San Francisco-based Pacific Gas and Electric, said annual upgrading of transmission lines is important to deliver safe and reliable services. “(Our) primary focus is to more fully utilize and expand the capability of our existing electric transmission infrastructure through continued reinvestment and replacement of aging assets,” said Swanson, noting that ITC and other transmission companies also fund capital projects based on market needs. Bready also said he expects ITC (NYSE: ITC) to continue adding employees at a 3 percent to 5 percent annual clip to match its growth. ITC employs about 1,040 workers, including a field workforce of about 500. By 2018, ITC could employ up to 1,300 workers. In 2013, ITC’s net income rose 24.3 percent to $233.5 million, or $4.42 per share, from $187.9 million, or $3.60 per share, in 2012. Revenue also grew 13.3 percent last year to $941.3 million from $830.5 million the previous year. ITC has projected annual dividend growth of 10 to 15 percent. Bready said ITC also announced a share repurchase program for up to $250 million through 2015 as part of a broader capital allocation plan. “The board authorized the repurchase to reflect the fact we are larger and able to invest this amount of capital in the business,” Bready said. “We have excess funding capacity and want to deploy a portion of that.” Bready said the company feels it should return more capital to shareholders. “Our capital allocation strategy also emphasizes maintaining a

strong balance sheet and credit ratings and finding opportunities to efficiently return capital to shareholders,” Welch said. Last December, ITC Holdings terminated its planned acquisition of the transmission business of Entergy Corp., a New Orleans-based energy company, after the Mississippi Public Service Commission ruled against the deal. The $1.8 billion deal would have increased ITC to 1,300 employees and projected net plant, property and equipment assets of more than $6.3 billion and doubled transmission miles to 30,000 in 12 states. “We felt very good about this transaction when we entered it” in 2012, Bready said. “We couldn’t see a path to success when we could not secure the state regulatory approvals.” Bready said the Mississippi commission did not want to relinquish its jurisdiction to the Federal Energy Regulatory Commission.

“We have been successful in the past in getting other regulators comfortable. This time, we were not,” Bready said. “We remain open-minded to mergers and acquisitions in the future.” Swanson there has been discussions with ITC Holdings about joint ventures for projects in California and in other markets. “When there’s a mutually beneficial opportunity, we’re open to working with an independent transmission company on competitive projects in our service area,” Swanson said. ITC owns and operates highvoltage transmission facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma. It serves a combined peak load exceeding 26,000 megawatts along 15,000 circuit miles of transmission line. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

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Live Sports Radio looks to tune in broader audience Live Sports Radio has gotten the ear of a lot of sports fans, such as this spectator at the U.S. Open golf tournament. After broadcasting at a medical conference, the Rochester Hills company wants to expand beyond sports.

BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

When fans enter Radio City Music Hall in New York City on May 8-10 for the National Football League draft, they won’t miss the copious commentary about this year’s picks, thanks to a local vendor. Rochester Hills-based Live Sports Radio LLC is supplying NFL-branded pre-tuned radios for the event so attendees can hear delay-free broadcast coverage by ESPN and the NFL Network. The personal radios with earbuds are designed to enhance the fan experience with in-venue broadcast coverage, bridging the gap between watching at home and in the stands. Live Sports has supplied radios to many of North America’s largest sporting events, including the Super Bowl and the U.S. Open golf and tennis tournaments. But after a successful broadcast at last year’s Transcatheter Cardiovascular Therapeutics conference in San Francisco and Howard Stern’s Birthday Bash in New York City in January, Live Sports is looking to expand beyond sports. Live Sports is considering a dba called Conference Audio Solutions to capitalize on the evergreen conference circuit, said Jim Knapp, president. “Sports have seasons, but there isn’t an offseason in the conference world,” Knapp said. “There’s

PHOTO COURTESY OF LIVE SPORTS RADIO LLC

a big opportunity for rapid growth.” Live Sports Radio, with nine employees, is expecting near $5 million in revenue in 2014 and has experienced 20 percent bottom-line growth since 2010. At the cardiovascular event, video and presentation materials for three different halls were projected into one main hall. Attendees could then use Live Sports’ radios, which are sourced from Asia, to listen to the presentation of their choosing. Craig Erlich, CEO of Ferndalebased meeting and event planning and marketing company pulse220, said conference attendees are demanding the personalized experience they currently receive in music, TV and other technology. “I think it’s brilliant because it personalizes the experience for the attendee and puts the control in their ear,” Erlich said.

The Live Sports concept was originated in 2000 when an English MBA student submitted the idea in a case study competition. Because most sports coverage in England comes from the BBC, Sound Decisions Ltd. was launched to carry ancillary sports coverage during rugby and soccer matches. In 2007, the University of Michigan requested Sound Decisions’ services for football games at Michigan Stadium. A year later, Troybased investment firm TMW Enterprises Inc. acquired the North American rights to the technology, rebranding it as Live Sports Radio. Live Sports built its college football client list to 25 teams, but it abandoned much of the effort due to the guaranteed revenue sharing with the universities, Knapp said. It has since created new contracts with the University of Alabama, Auburn University and the University of Southern California under

which the schools buy the radios from Live Sports and sell them to fans for $20 to $25. Using Live Sports’ radios, Alabama’s traveling fan base, as many as 10,000 strong, can hear Crimson Tide play-by-play broadcaster Eli Gold while attending away games, Knapp said. When terrestrial radio stations transitioned into high-definition radio, Live Sports Radio’s business model started to make sense to sports franchises, Knapp said. “More and more stations were switching to HD radio, which sounds amazing, but delay became an issue during live events,” Knapp said. “Sports fans were still bringing in transistor radios for various broadcast coverage, but with a 5- to 7-second delay, listening is intolerable.” Live Sports signed contracts with American Express Inc. to provide broadcast coverage for cardholding fans at the U.S. Open golf and tennis tournaments as well. “(American Express) wanted to provide premium content for their cardholders, which created cachet on the grounds for the identified members,” Knapp said. “ ‘Swipe your card, get a radio’ has become a staple for those events over the past few years.” Live Sports shipped 165,000 units to PGA events last year, including the Ryder Cup and PGA Championship, up from 10,000 in 2009.

How Ted Lindsay continues to inspire us off the ice. He began his career as a hero on ice. An iconic Red Wing whose jersey hangs proudly from the rafters for all to see. But now, Ted Lindsay is determined to achieve in another arena. He’s helping Beaumont ﬁnd ways to treat families affected by the epidemic of autism. Beaumont’s newly re-named Ted Lindsay Foundation HOPE Center is a leading edge facility – a part of Beaumont Children’s Hospital – that is teaching children to communicate and interact with others. His generous gift was described by the center director, Dr. Lori Warner: “He felt our passion and wanted to support us. His kindness has allowed us to make this the best possible facility in the area.” All of us at Beaumont are grateful to Mr. Lindsay. He reminds us that it doesn’t take a medical degree to change children’s lives. All it takes is a heart.

Its total work for American Express events topped 250,000 last year. At this year’s NFL draft, attendees will receive a Live Sports radio on which they can hear broadcast coverage while attending. “The draft can be a really boring experience live in between picks,” Knapp said. “The NFL wanted to get the fans the live stats and coverage to the fans so they can hear Mel Kiper like the fans at home.” The NFL also distributed radios to every fan at Super Bowl XLVIII in February. Radios have also been distributed during the Super Bowl media day, allowing fans to listen to interviews from six different player or coach podiums. “For the media day and draft, fans would be lost without them,” said Eric Finkelstein, director of events for the NFL. “We’re always looking for ways to integrate more technology for an enhanced fan experience, and this is really providing something our fans love.” Live Sports Radio is expected to ship 110,000 units to NFL events this year, up from 5,000 in 2008. “Most people would kill for our Rolodex of clients,” Knapp said. “We’ve become part of some of the largest events in the world; even with a small shop, we don’t plan on slowing down.” Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh

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Lawmakers lay the groundwork for bankruptcy plan As negotiations in the Detroit bankruptcy advance, the focus has begun to turn to the Legislature and whether it can come through with enough votes to contribute $350 million to resolve the city’s bankruptcy. That is a big unknown, but lawmakers are laying the ground-

B UILT

work, both in terms of talking with members about the benefits of the plan and getting the framework in place for any bills that will be needed. Top GOP leaders support Gov. Rick Snyder’s idea in concept, but are waiting until they receive official word from the court on what

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the state’s involvement would look like before introducing any legislation. Snyder’s original idea was for the state to contribute $17.5 million over Chris Gautz 20 years from a portion of the state’s tobacco settlement fund. A new twist is the possibility the state could borrow the full amount and offer it all up front, and then use the settlement money to pay it off. Ari Adler, press secretary for House Speaker Jase Bolger, RMarshall, said staff members and bill drafters are doing the necessary research now so that if the court does provide specific direction, “we can get a draft moving quite quickly.” The details are needed not just for the legislation, but also to help sell the plan to members and their constituents, Adler said. Having specifics to discuss will go a long way toward getting people on board with the plan that so many are already referring to as a bailout for Detroit. “Perception is a big problem. It

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is very easy for someone opposed to this to demagogue it,” Adler said. Adler said state money would not be a bailout, but an investment to get the city out of bankruptcy that will help the entire state. “If Detroit is not doing well, people will tend to think Michigan is not doing well, and we could lose the potential for people to come here and invest,” he said.

Mackinac conference update

Snyder

Duggan

There are still a few more speakers and panelists to be added to the agenda of the 2014 Mackinac Policy Conference, but the slate is nearly complete. Gov. Rick Snyder will again kick off the conference, which will also include keynote addresses from Detroit Mayor Mike Duggan and the city’s emergency manager, Kevyn Orr. Other speakers include author

Malcolm Gladwell and Mitch Daniels, president of Purdue University and former governor of Indiana. Joel Klein, CEO of the educational division and executive vice president for News Corp., and Jim Clifton, chairman and CEO of Gallup Inc., are also scheduled to give keynote addresses. Two events at the conference will require separate tickets. The first is an event for the Detroit Regional Chamber’s political action committee that will feature the two U.S. Senate candidates, former Land Secretary of State Terri Lynn Land, a Republican, and U.S. Rep. Gary Peters, a Democrat. The second will feature CNN hosts Paul Begala and S.E. Cupp for a discussion of the national political scene, Michigan politics and the 2014 midterm elections. The chamber’s annual event on Mackinac Island May 27-30 will be based around the three pillars of entrepreneurship, education and impact. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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Smart parking heading to Detroit garage BY AMY HAIMERL CRAIN’S DETROIT BUSINESS

Half of Detroit’s parking meters are broken and residents are bracing for $45 parking fines, but innovation is occurring when it comes to parking technology. “Local Detroit VCs are investing in really transformative transportation companies using their knowledge at the type of things that Detroit is so great at,” said Barney Pell, co-founder and chairman of Silicon Valley-based portfolio company LociMobi Inc. Pell, 46, originally started a mobile payments company, QuickPay Corp., that allowed people to pay for parking with their smartphones, whether they were at a meter or in a gated garage. It’s raised more than $9 million since it was founded in 2010, with Detroit-based Fontinalis Partners LLC as the lead investor. Last week, QuickPay acquired Toronto-based Nautical Technologies Inc., which was Ontario-based ANAi Global’s parking, transit and tolling technology division. That wouldn’t matter in Detroit, except that the first U.S. rollout of the company’s technology is happening here at the Trolley Plaza Garage. “The real reason for it happening in Detroit is connected with Fontinalis. They are not your typical VC who funds and forgets,” said Pell. “They are super involved, and we all really wanted to do whatever we could to do bring innovation to Detroit. “I came out and visited Detroit a couple of times and got to see everything. My eyes were just totally opened. I’m a huge fan of Detroit.” So what will be so special about this garage? Cloud-based license plate recognition. The technology — and corresponding infrastructure — costs about $80,000 to $100,000 to install, but it allows garage owners to track every customer who parks, and consumers to pay seamlessly by credit card. It’s like an EZ Pass for parking. No more lost tickets, no more getting caught at cash-only lots with just change in your pocket. “You come in, and you’re parked,” Pell said. “When you leave, you enter your license plate, it looks it up and calculates the total charge. This is the ideal parking experience for owners, the optimal system for the users. Owners see every car that comes in and out, and they make much more money; users get much more personalized service.” In the case of surface lots where you pay in advance, QuickPay’s mobile payment technology would be layered on, allowing users to get text or email alerts that they are running low and increase their time. The service also works on parking meters. Pell anticipates rolling out into at least 10 other garages this year, and LociMobi has hired a local dealer to sell its systems. Amy Haimerl: (313) 446-0416, ahaimerl@crain.com. Twitter: @haimerlad

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CRAIN’S DETROIT BUSINESS

OPINION

MARY KRAMER

Biz must wield clout Coleman linked UM to city on water authority L

ast week, U.S. Bankruptcy Judge Steven Rhodes ordered mediators to revive talks among area political leaders about creating a regional water authority. A key part of Detroit’s bankruptcy plan would create a revenue stream through one of its top assets — a sprawling water and sewage system that has spawned the region’s growth over past decades. Three federal judges are working on this. And there may be one more card they can play to get the parties to agree on a resolution: Corporate clout. Corporate leadership in this region might quietly weigh in on how they view the need for the region to act like a region. Too often, this fragmented region’s economic future is charted by elected and political figures who protect their own turf. Job creators, who also pay a big chunk of the taxes, are left on the sidelines. What does business think about a regional water authority? It’s time to hear from it on this hugely important issue. We’ve seen such clout work before. Kellogg Co. once told Battle Creek city and township officials that they had to merge for a stronger entity or the company would move its headquarters somewhere else. They merged. In February, the Mayo Clinic in Rochester, Minn., told state lawmakers they need to cough up $600 million over 20 years to pay for roads, transit and parking or risk losing the clinic to another region. Our sister publication Modern Healthcare said Mayo argued that the public support would augment its own plans to invest $3.5 billion in its flagship health center while it leveraged another $2 billion from other sources to boost entertainment, lodging and tourism options for this global medical magnet. Let’s hope the leading business and civic organizations with regional reach and clout will quietly make their opinions known.

Parking payment system a plus Parking isn’t always talked about as a factor in economic development, but it can be — especially if inconvenience leads people to go somewhere else. As Amy Haimerl reports on Page 7, a mobile payment system featuring cloud-based license plate recognition technology that charges parking directly to a credit card will be rolled out at the Trolley Plaza Garage in downtown Detroit this week. Investors in the technology include Bill Ford Jr. and Tom LaSorda. Anyone who has struggled to find change or dealt with tickets related to broken parking meters likely will find systems like these a welcome relief.

Back around 2009, when Michigan was hemorrhaging jobs and the future looked bleak for The Mitten, I remember asking one of Michigan’s leading CEOs what single action the state could take to pack a big economic punch. “I’d ask Mary Sue Coleman what she wants and give it to her,” he said, not missing a beat. And this guy was an alum of Michigan State. The University of Michigan president officially retires July 1. Her accomplishments — raising more than $3 billion in a major capital campaign, buying the old Coleman Pfizer campus to create an expanded research center, and rebuilding the university’s tech-transfer efforts, to name just three — really go beyond Ann Arbor’s city limits. Earlier this month, Coleman

and her political scientist husband Ken were feted at the Detroit Opera House on the opening night of “A View From the Bridge,” the operatic treatment of Arthur Miller’s play, with music by Pulitzer Prize-winning composer William Bolcom. Miller is a UM grad; Bolcom is a revered music professor. The tribute was perfectly tuned — and timed. No other president in UM’s recent history has brought the university closer to Detroit. Ironically, many top executives and professionals who work in metro Detroit choose to live in Ann Arbor. But the city — and the university — were largely an oasis, apart from Southeast Michigan, until Coleman started nudging UM closer. In 2005, she established the Detroit Center on Woodward Avenue in Midtown. The space serves as a landing pad for Ann Arbor programs and people; we recently filed a special video report on the Michigan Engineering Zone, a program that offers Detroit high school students the chance to

build robots with mentors from UM’s College of Engineering. Of the 40 MEZ students who graduated in 2013, 38 went on to college. Semester in Detroit is a partnership with Wayne State University, which houses UM students in a dorm while they work and learn in Detroit. (Ken Coleman, meanwhile, has gotten to know the city, too, in part as a member of the board of the RiverFront Conservancy.) Last summer, Coleman hosted a reception at Dan Gilbert’s Madison Building for more than 200 UM students and recent grads who were either working in or interning in Detroit. UM recently launched the Detroit Connector, a shuttle service that takes students, faculty and staff from Ann Arbor to Detroit, with several stops downtown and in Midtown. Let’s hope her successor shares the passion for connecting “this town” to “that gown.” 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.

TALK ON WEB Henderson blog: Class distinctions a bad idea at Belle Isle Class distinction? Give me a break. Having fresh eyes on the island is a good thing. And for four days? Big deal. It’s a very unique situation, and being that it’s an island, it affords them the opportunity to control access like they would if it were at Cobo. JMack Thank you for observing that entirely shutting down Belle Isle for four prime warm-weather days except for DYC members is a bad idea that reinforces class-privilege arguments and denies the public of public space. DetroitYES

KEITH CRAIN: Maybe we need a permanent overseer It’s not going to be too long before Detroit Emergency Manager Kevyn Orr finishes his work, folds his tent and returns to Washington to resume a normal life. The federal judge overseeing this bankruptcy seems to want to make sure that politicians continue to abide by any court-approved bankruptcy plan that’s approved in coming months. It appears the judge has a real concern that the folks who are elected and running our city might easily slip back into the evil or simply bad ways of their predecessors and

create another mess like the one that got us here in the first place. I think the judge is right. There is a horrible possibility that Detroit could end up just the way it was a few short years ago. The temptation is just too great. This is not to cast aspersions on our current politicians. But we don’t know how long they will be in office and who will replace them. Certain

members of the Detroit City Council have already proved to require oversight for their personal conduct. We don’t have any idea about financial conduct. It is time to consider a permanent, independent executive who permanently oversees city finances and operations. Perhaps a federal judge, someone who would be objective and save our elected officials from their own worst ene-

mies — themselves. Over the years, Detroit has had various kinds of oversight — a federal consent agreement and monitors for the police department and a federal judge overseeing the water department. Giving someone a specific responsibility for oversight might be the ticket for making sure that elected and appointed officials keep the city on track for many years. I have no idea how long such supervision would be required, but I would not remove it any too soon. Detroit is going through some

very tough times, but we hope it will prosper — not just survive — after bankruptcy ends. How sad it would be for the residents of Detroit if the city fell back into the same malaise as before. I have to admit that I will be very suspicious if I hear a lot of elected officials complain about having permanent oversight. It is a good idea and will protect the residents from ever having to go through this again. It simply makes very good sense for everyone — except those being supervised.

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OTHER VOICES: Employers must accept diverse abilities ees and customers. disability awareness. To take this Last fall, the U.S. DeAlso, more than 70 per- a step further, many organizapartment of Labor ancent of disabilities are not tions, including EY, have a profesnounced new regulations apparent. Two of our pan- sional network focused on those intended to improve job elists — Neil, who has with disabilities. The network emopportunities for people dyslexia, and Constant, powers people of all abilities to dewith disabilities and vetwho has a speech disfluen- velop personally and professionalerans. While the regulacy — are examples of the ly, give back to communities, tions’ quotas for hiring many people living with recruit other employees with disemployees with disabiliinvisible disabilities. abilities, and enhance client and ties have caused much They discussed the impor- customer relationships. discussion and debate, George Lenyo tance of creating a safe enOrganizations must also expect one thing I know for sure is that top talent comes in different vironment that allows people with growth from, and success for, peopackages. This means that smart disabilities to feel comfortable ple with diverse abilities. Panelists agreed that setting high exorganizations must value the con- “coming out.” Deb Dagit suggested identifying pectations and ambitions is tributions of people from all backgrounds and perspectives — in- allies within an organization who important for people with disabilicluding people with a range of can champion change and promote ties, the same way it is to your othabilities and disabilities. Recently, Ernst & Young LLP’s Detroit office convened a discussion on how organizations can win in the market by integrating people with diverse abilities into their workforce. Panelists included Deborah Dagit, former chief diversity officer and vice president at Merck; Neil Romano, former assistant secretary of disability policy with the Department of Labor; Steve Howe, the EY Americas area managing partner and the managing partner of EY; and Constant Djacga, assurance senior manager for EY. The dialogue resulted in some key takeaways that are relevant to Michigan businesses. First, the business case for including people with diverse abilities in the workforce is significant. More than 47 million people in the U.S. are living with disabilities, and the unemployment rate of this group is While our name may be different, the greater than when the Americans with Disabilities Act was signed names of the people who take care of into law almost 25 years ago. As we you, and the personalized service they look to reignite our economy, we cannot afford to ignore this segment provide, are still the same. So is our of population as potential employ-

er employees. Consider, for example, whether you are giving your employees with disabilities opportunities for challenging assignments, training for executive presence and direct feedback. Making internal communications, meetings, training and technology as accessible and easy to use as possible for people of all abilities is important. For instance, consider offering microphones in large group meetings to ensure everyone can participate equally and introducing larger computer monitors. Also, making accessibility a priority in your offices, at off-site meetings and in

client locations will help all people feel included. Encouraging your professionals to view disabilities as differences — not as impediments — is a wise first step to building greater understanding and awareness. By bringing out the best in people who think or act differently, your organization will be better positioned to attract and retain top talent, identify and address new business opportunities, and excel in the market. George Lenyo is the Detroit managing partner for Ernst & Young LLP, where he leads local diversity and inclusiveness efforts.

First Place Now proud Bank. to be Talmer Bank and Trust. strong commitment to this community.

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

In fact, the name “Talmer” is a tribute by the Bank’s two principals to their grandfathers (named Talmage and Merzon), who both dedicated their lives to community service. What’s more, Talmer Bank, just like First Place, is a Midwest-based community bank—and one with demonstrated ﬁnancial strength. So you can count on us to take care of your business needs for many years to come. Please stop by soon. You’ll quickly discover that we’re now an even greater asset to your community.

www.talmerbank.com | 855-882-8824

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Crain’s earns 21 awards at SPJ Detroit banquet CRAIN’S DETROIT BUSINESS

From left: First place, page one design and second place, feature photography

Crain’s Detroit Business earned 21 awards last week at the annual Excellence in Media awards event hosted by the Detroit chapter of the Society of Professional Journalists. Crain’s received the following honors in the category of newspapers with circulation of less than 100,000: First place, spot/breaking news: “Detroit bankruptcy’s next chapter: A velvet glove or an iron fist?” July 22. Winners were reporters Chad Halcom, Kirk Pinho and Dustin Walsh and Enterprise Editor and business

of sports reporter Bill Shea. First place, general news reporting: “A chemical reaction over lab: Researcher Greg Auner goes from top dog to doghouse, and it’s all about the money, Wayne State says,” June 3, reporter Tom Henderson. Second place, general news reporting: “The unmaking of the Beaumont-Henry Ford merger,” May 27, Senior Reporter Jay Greene. Second place, feature story: “Creative license: Detroit’s culture, history are selling points,” Sept. 2, Multimedia Editor Nathan Skid reported on music licensing. Third place, feature story: “Public,

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private groups unite to keep crowds safe,” April 22. In the wake of the Boston Marathon bombings, Senior Reporter Sherri Welch reported on Detroit’s public safety measures. First place, personality profile: “With ‘War Room’ over, what’s Granholm’s next act?” Feb. 11. Capitol Correspondent Chris Gautz took a look at former Gov. Jennifer Granholm’s future after the end of her Current TV talk show. First place, investigative reporting: “Revstone: As supplier empire falls, a money puzzle unravels,” Feb. 4, Dustin Walsh. First place, explanatory story: “Biz takes the stand: Key testimony against ex-Mayor Kilpatrick,” March 18. Chad Halcom explored the significance of testimony from members of the Detroit business community in the case against the former mayor. First place, localization of national story: Detroit bankruptcy coverage, Chad Halcom, Kirk Pinho and Entrepreneurship Editor Amy Haimerl. This award recognized multiple indepth stories over several months. First place, sports: “Who’s on deck? As Detroit sports team owners age, the future of their franchises remains uncertain,” Nov. 25. Bill Shea analyzed potential succession plans of the Detroit Tigers, Detroit Red Wings and Detroit Lions. Second place, sports: “Detroit soccer no free kick: Backers must win site bid, beat odds on profitability,” Oct. 21, Bill Shea and Dustin Walsh. First place, headline writing: Senior Editor Bob Allen. Second place, headline writing: Senior Editor Gary Piatek. Second place, feature photography: “Comerica has a field day,” Nov. 18, Nathan Skid. First place, page one design: Former Senior Designer Jeff Johnston. Second place, feature page design: “40 under 40,” Oct. 7, Nathan Skid and Digital Senior Producer Pierrette Dagg. First place, inside page news design: Bob Allen. Crain’s received the following honors in the online media category: Third place, online breaking news: “Campbell Ewald near deal on Cadillac account, sources say,” March 11, Bill Shea. First place, blogging: Amy Haimerl. First place, digital media presentation: “Detroit 2.0” supplement, Aug. 5, Amy Haimerl, Pierrette Dagg and Web Producer Norman Witte III. Second place, digital media presentation: “20 in their 20s,” April 29, Nathan Skid, Norman Witte and Pierrette Dagg. More than 240 awards were given from more than 400 entries in print, broadcast and online media. Judges for the Excellence in Journalism competition are working journalists from other SPJ chapters. Robert Snell of The Detroit News was named Journalist of the Year; Lindsey Smith of Michigan Radio was named Young Journalist of the Year. Lifetime achievement awards were given to Jane Briggs-Bunting, founder of the Michigan Coalition for Open Government, and Jerry Green, a longtime sports writer for The Detroit News who is one of three writers who have covered each of the 48 Super Bowls. For a full list of award winners, see spjdetroit.org.

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DMC SPENDING REPORT Meeting some obligations, needs to work on others, Page 14

People 䡲 Nadia Tremonti, M.D., medical director for palliative care at the Children’s Hospital of Michigan and medical director for the Kaleidoscope Kids program at the Henry Ford Health System, received a 2014 Hastings Tremonti Center Cunniff-Dixon Physician Award for her leadership in palliative care. The awards are funded by the Cunniff-Dixon Foundation. 䡲 Cynthia Bell, a nurse-researcher at Hospice of Michigan Institute and assistant professor in Wayne State University’s College of Nursing, received the Oncology Nursing Society Foundation Research Career Development Award, given to a junior researcher each year to build skills in research through Bell mentoring with a senior research scientist. The $20,000 award will go toward research in end-oflife communication with adolescents. 䡲 Beaumont Health System made the following announcements: Dana Cohen, early childhood psychologist at the Center for Human Development at Beaumont Children’s Hospital, was appointed to serve as an autism expert on the executive board of the National Fragile X Foundation; Rick Swaine, president, and Donna Hoban, physicianin-chief, Beaumont Hospital-Grosse Pointe, have been named to the board of Cass Community Social Services; Nancy Susick, R.N., president of Beaumont HospitalTroy, will receive an alumni achievement award from the Hoban University of Detroit Mercy; Michael Chancellor, M.D., director of neurourology at Beaumont HospitalRoyal Oak, received a lifetime achievement award from the Society of Urodynamics, Female Pelvic Medicine & Urogenital ReconstrucSusick tion; James Goldstein, M.D., director of cardiology research and education at Beaumont Health System, was selected by the Journal of American College of Cardiology to receive the Simon Dack Award for Outstanding Service; and Helena Balon, M.D., physician of nuclear medicine at Beaumont Hospital-Royal Oak, received the Steven M. Pinsky Distinguished Service Award from the Central Chapter of the Society of Nuclear Medicine and Molecular Imaging. 䡲 Don Powell, founder, president and CEO of the American Institute for Preventive Medicine, was chosen by the Governor’s Council on Physical Fitness, Health and Sports to receive its 2014 Lifetime Achievement Award.

GLENN TRIEST

Kelly Gasior, vice president of strategy and housing operations with CHE Trinity Senior Living Communities, chats with residents at Trinity’s Sanctuary at White Lake, one of the newer-styled Southeast Michigan nursing homes preparing for an influx of baby boomers.

The ‘silver tsunami’ Nursing homes prepare for wave of baby boomers BY JAY GREENE CRAIN’S DETROIT BUSINESS

lthough the oldest baby boomers won’t turn 80 until 2026, nursing home operators are getting ready now. “There is a silver tsunami coming” of baby boomers who first will require short-term rehabilitation care funded by Medicare and later require long-term and hospice care, said Kelly Gasior, vice president of strategy and housing operations with Livonia-based CHE Trinity Senior Living Communities. A wave of nursing home construction is designed to cover two trends — an aging population with expectations and a greater proportion of short-term rehabilitative stays. The oldest boomers will turn 68 this year, the youngest will be 50; most are some time away from nursing home care. But as they drift into their 80s and 90s, or require such specialized care as dialysis, stroke recovery care or services for

dementia, the nursing home they vowed to Nursing home works to balance Medicaid never enter is getpayments with keeping up ting ready for quality of care, Page 13 them, either as a short-stay rehabilitation patient or as a long-term, chronically ill resident. Where two seniors to a room used to be the norm, nursing homes are now moving toward private rooms, patient-centered social environments with exercise rooms and therapy pools, fast Wi-Fi, more food options and attractive surroundings. Offsetting the amenities are challenges to cost and profitability.

BALANCING ACT

Nursing home building boom In the past seven years, more than 70 certificate-of-need applications have been approved and more than $300 million has been spent for new or remodeled nursing homes to meet baby boomer expectations, said David LaLu-

mia, CEO of the Health Care Association of Michigan. “I believe Michigan leads the nation in new builds” of nursing homes, LaLumia said. “It is the anticipation of the aging of the population and the baby boomers who are coming.” During the next few years, state CON reports show 20 new nursing homes are planned, three replacement facilities contemplated and three more homes increasing beds, said LaLumia. Trinity’s Sanctuary at White Lake, a 92-bed long-term care skilled nursing and rehabilitation center, is one example of a newer styled nursing home of the future in Southeast Michigan. Opened in 2011, the 77,000-square-foot White Lake nursing home, which cost $19.5 million, features a therapy pool, fitness center, state-of-the-art rehabilitation gym, chapel, walking trails and spiritual and holistic healing options. See Homes, Page 12

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Health Care

Homes: Facilities prepare for a sonic (baby) boom of retirees ■ From Page 11

NURSING HOMES BY THE NUMBERS Nursing home trends in Michigan Year 2006 2014

Nursing homes 433 437

Hospices 4 10

Beds 48,216 46,987

Source: Michigan Department of Community Health, Certificate of Need bed inventory

New construction and remodeling, January 2007 to June 2013 Number Average cost Total construction

New nursing homes 26 $7.2 million $187 million

Rehabbed 30 $3.7 million $111 million

Source: Health Care Association of Michigan, Michigan Department of Community Health

Quality breakdown of nursing homes in Southeast Michigan* County Wayne Oakland Macomb Washtenaw Livingston

Total homes

5 star

4 star

3 star

2 star

71 40 26 10 3

20 13 6 4 1

14 7 6 0 1

10 9 5 4 0

18 6 5 1 0

1 star 9 3 2 1 1

* The five-star rating is based on health inspections, quality, and staffing. More stars indicate better quality. Star ratings for some homes were not available.

The White Lake nursing home — which features eight neighborhood-styled units complete with kitchen, fireplace and outdoor patio — is at full capacity with a waiting list for residents, Gasior said. Gasior said about half the residents at the Sanctuary at White Lake are short-stay Medicare patients who are rehabbing from strokes, hip replacements and other medical ailments. “They will go home, but may come back to stay long term in their 80s,” she said. “We have some people in their 90s saying they are not old yet. I will come back when I am old.” But Gasior said the seniors who are in long-term care are sicker and require more services than in the past. “They need help getting to the toilet, getting meals, taking showers,” she said. “Those who are less sick, they are in assisted living where it is less expensive.” Like most senior home companies, Trinity also operates a range

of senior living establishments in Michigan with 10 nursing homes, 11 independent and assisted living centers, and seven senior subsidized housing developments. One of Southfield-based Ciena Healthcare’s newest nursing homes is the 120-bed Regency at Waterford, which offers 40 private rooms, 40 semi-private rooms and six bariatric rooms. The $6 million home offers physical therapy, occupational therapy, a kitchen and gourmet dining, library, recreational area, lounge, happy hour, community outings and a salon. Founded in 1998, Ciena operates 39 nursing homes, including 34 in Michigan and five in Connecticut, with more than 3,500 beds. CEO Mohammad Qazi said there is a major need for capital spending to improve aging buildings and invest in information technology that improves patient care and reduces costs. “We are lookQazi ing at a new 147bed nursing home in Detroit, near the Eastern Market” that will offer a mix of Medicaid and Medicare beds, he said. “There is a need for quality nursing homes in Detroit, and we hope to start construction later this year.”

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But amenities come at a price. Today, nursing home care averages $84,000 a year, and most expect that annual cost to exceed $100,000 in the next decade. Contrast that with assisted living centers that can run about $40,000 per year. Right now, Medicaid pays 43 percent of the $144 billion annual bill for nursing homes. Medicare picks up 22 percent, a percentage that has been increasing with more short-term rehabilitation patients; private insurance 7 percent; and out-of-pocket funds covering the remaining 29 percent, according to the Centers for Medicare and Medicaid Services. As Medicare and Medicaid seek to hold down reimbursements, profit margins for nursing homes nationally have dropped to 1 percent in 2012 from 2 percent in 2010, according to a report for the Partnership for Quality Home Healthcare. The partnership has since merged with the Health Care Association of America. “Our profit margins haven’t increased that much. We are getting more Medicare and becoming more efficient, but those patients require higher levels of staffing, more RNs and LPNs, because the patients are sicker,” Qazi said. “We are always at the mercy of Medicare and Medicaid. There are always threats of reimbursement cuts, but that goes with the territory. We try to make a case that spares us from further cuts.” Over the next few years, Qazi said, Medicare will begin to change the way it reimburses from fee-forservice to bundled payments. Under bundled payments, hospitals, physicians, nursing home and other

providers will share a single monthly fee for patient care. “We don’t know how that will play out. We are in a period of transition. But we are investing in technology and staff and hope there will be a return on investment,” Qazi said.

Medicare payments rise Over the past several years, an increasing stream of Medicare patients are being discharged from expensive acute-care hospitals into less expensive, sub-acute skilled nursing homes. Requiring short-term rehabilitative care, Medicare patients are recovering from strokes, hip and knee joint replacements, a fall or injury that required hospitalization. Some also require wound care, IV therapy, respiratory, occupational or speech therapy. For years, Medicare represented less than 10 percent of total payments to nursing homes. But about five years ago, Medicare total payments started to rise to about 22 percent in Michigan to cover rehabilitation care for patients who were discharged from hospitals for short stays of 30 days or less, said the Health Care Association of Michigan. At Trinity Senior Living and Ciena, the percentages of Medicare payments are higher, 24 percent and 25 percent, respectively, than statewide averages. Over the next decade, Gasior said, Trinity expects short-stay Medicare payments to increase to 30 percent of revenue. Current payer mix at Trinity homes includes 60 percent Medicaid and 10 percent private pay, insurance or veteran’s benefits, she said. Gasior said providers need to begin preparing for when boomers begin turning 80 and need rehabilitation or long-term care. “We are rehabbing (our nursing homes for the boomers) because the numbers will definitely increase.” Qazi said Ciena is at 25 percent Medicare, 65 percent Medicaid, and 10 percent private pay with a small yet growing number of residents with veteran’s benefits. “We are doing a lot more Medicare the past few years. Some of our facilities cater more to longterm care and Medicaid (85 percent to 90 percent payer mix),” he said. “Our newer buildings are overwhelmingly Medicare” because of patient demand and the need to subsidize Medicaid underfunding, Qazi said. Chris Berry, an elder care attorney with Bloomfield Hills-based Witzke Berry Carter & Wander PLLC, said some nursing homes try to fill their beds with as many Medicare patients as possible because they are paid at the highest reimbursement level. “The industry is seeing an increase in baby boomers growing older. There are more Medicare dollars, and anyone putting together a project needs to build housing for the boomers and the growing Medicare patients,” he said. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

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Health Care

Nursing home aims to balance Medicaid payments, quality of care BY JAY GREENE CRAIN’S DETROIT BUSINESS

One of the biggest challenges in the nursing home industry is achieving high quality while generating enough of a profit for owners to reinvest in improvements or return to shareholders. At Qualicare Nursing Home, a 96-bed for-profit nursing home at 695 E. Grand Blvd. in Detroit, administrator Kamran Chaudhry, who was trained as an accountant, thinks he has the formula. “We do everything we can to keep our residents happy, (minimize the Chaudhry numbers of bed) pressure sores, offer good nutrition and reduce readmissions” to hospitals, said Chaudhry, who has held the job since 2005. Qualicare, one of 21 nursing homes in Southeast Michigan owned by Southfield-based Ciena Healthcare, is especially challenged to earn a positive margin because about 95 percent of its residents are funded by Medicaid. “We are paid about $240 per day plus quality bonuses for Medicaid,” Chaudhry said. “It covers our costs, but that is because we have an experienced staff, and we have done a good job at being efficient.” David LaLumia, CEO of the Health Care Association of Michigan, said Medicaid payment rates often do not cover nursing home costs. “It is a challenge with the low Medicaid rates,” LaLumia said. “Financing Medicaid and Medicare in Michigan will change to more managed care” administered by health plans and accountable care organizations in the next several years, he said. Chaudhry said Qualicare and Ciena are preparing for the new payment methods with quality incentives by spending millions of dollars rehabbing and building new nursing homes. “We renovated our halls and are going room by room to upgrade the entire facility,” said Chaudhry, noting that Qualicare is more than 40 years old. “We have a mix of private and semiprivate rooms. Long-termcare patients seem to like semiprivate rooms for company more than short-stay Medicare patients.” Over the past several years, the state has been increasing payments for home health services to keep as many patients out of higher-cost nursing homes, LaLumia said. “We are supportive of that,” he said. “Not everybody needs to be in a nursing home.” As a result, Michigan Medicaid payments to nursing homes have dropped to 63 percent of revenue from 67 percent, LaLumia said. Chris Berry, an elder care attorney with Witzke Berry Carter & Wander PLLC, in Bloomfield Hills, said he represents families on Medicaid who sometimes have a difficult time placing relatives in highquality nursing homes. “When a nursing home is need-

ed, we want our clients to get into the best one possible,” Berry said. “Some nursing homes play a little game. We accept Medicaid, they say, but we don’t have any Berry Medicaid beds available. But if it is private pay or Medicare, they have beds.” Kelly Gasior, vice president of strategy and housing operations

with Livonia-based CHE Trinity Senior Living Communities, acknowledged there often is a waiting list for Medicaid patients, especially those converting from Medicare after their 100-day annual benefits run out. But before making admission decisions, Trinity evaluates patients for appropriate care location, Gasior said. Chaudhry said Qualicare’s occupancy is about 92 percent. Michigan’s average occupancy for nursing homes is about 85 percent compared with the national average of 83 percent, the Kaiser Family Foun-

dation reported in a recent survey. Keeping patients healthy not only can garner higher payments through quality incentives but also can help reduce costs and increase referrals, Chaudhry said. He said several hospitals, including the Detroit Medical Center hospitals and St. John Hospital and Medical Center, base decisions on whether to refer patients to Qualicare based on monthly quality reports. According to Nursing Home Compare, which offers information on quality to consumers for the nation’s 15,000 nursing homes, Quali-

care has an overall rating of five stars, the highest number possible. In individual categories, Qualicare rates five stars for quality measures and state inspection results, but only two stars for staffing. For example, the number of minutes each day that registered nurses at Qualicare spent with patients totaled 34 minutes, compared with the Michigan average of 53 minutes. “We have challenges with staffing because of our location, but we have a well-educated and well-trained staff that is highly motivated,” Chaudhry said.

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CRAIN’S DETROIT BUSINESS

Health Care

Report: DMC meets some spending obligations, must work on others BY JAY GREENE CRAIN’S DETROIT BUSINESS

The Detroit Medical Center has spent $274.6 million in specified capital expenditures in the third year since the eight-hospital system was sold to a for-profit company, meeting its legal obligations, said Legacy DMC in its third annual report to the state attorney general’s office. Under its 2010 sales agreement, DMC is required to spend a total of $500 million in 15 specified capital projects by at least 2017. Legacy DMC is the nonprofit or-

ganization responsible for monitoring financial compliance of the 2010 agreement to sell DMC to for-profit Vanguard Health Systems Inc. Dallasbased Tenet Healthcare Inc. acquired Vanguard last September. But DMC could fall behind on its obligation to spend $350 million over five years on routine capital maintenance at its eight hospitals in Southeast Michigan, said the report on DMC prepared by Joe Walsh, Legacy DMC’s president. DMC has spent $150 million in the first three years on routine capital maintenance. However, the re-

port notes that DMC must increase spending on routine capital to $100 million per year in 2014 and 2015 — or double the yearly average during the first three years — to meet the required $350 million total by 2015. The sale agreement “does not provide a remedy, such as escrow, for failure to meet this spending commitment,” the report said. To address these issues, Legacy DMC said it will engage in a discussion this year with DMC officials to identify additional routine capital projects that could be engaged over the next two years. It also will dis-

cuss a solution to the legal problem if DMC misses the $350 million spending deadline in 2015. Last year, DMC completed or nearly completed three required projects. They include more operating room space for nine pre-op and post-op spaces at Detroit Receiving Hospital, emergency department expansion at Harper University Hospital and renovation of Harper’s surgical services department. This year, DMC expects to complete expansion of Sinai Grace Hospital’s emergency department, expand DMC’s south parking lot and

A PROMISE KEPT FOR 70 YEARS.

open DMC’s new heart hospital. However, the report said DMC has delayed completion of the new Children’s Hospital of Michigan patient tower until 2017. The sale agreement allows a two-year extension. “An update to the Children’s Hospital’s strategy led to substantial building design changes from the original project,” the report said. The five-floor, 226,000-square-foot children’s tower with 278 beds is estimated to cost about $163 million. The report also cautions there could be problems in the future related to the lawsuit between DMC, Barbara Ann Karmanos Cancer Institute and McLaren Health Care of Flint. Last December, McLaren completed its acquisition of Karmanos. DMC is challenging the agreement, alleging breach of a prior affiliation contract. When the DMC was sold to Vanguard, the sales agreement required it to support the historic relationship with Karmanos. In 2005, when the DMC sold its cancer business to Karmanos, it prohibited Karmanos from promoting its services in Oakland, Wayne or Macomb counties with anyone other than DMC, DMC said. “DMC has remained committed to its complex relationship with (Karmanos),” said the report, adding: “(Karmanos) purchases a number of services from DMC, i.e., emergency services, ICU services, imaging services, nursing services and IT services. In short, DMC has the same commitment to (Karmanos) today as it did prior to its acquisition by Vanguard.”

CON Report The following are selected certificate-of-need filings for a certificate of need from March 14-April 15.

In 1944, Anthony Filippis Sr. made a promise to people with physical disabilities. No limits. It’s a promise that has guided our company, Wright & Filippis, for 70 years. This year we are taking that promise to heart more than ever by taking a long, hard look at whom we serve and how we can serve them even better. We’re investing in technology to improve efﬁciencies. In addition, we’re investing in resources to strengthen and grow the business. It’s an exciting time. And it’s why we like to

Letters of intent 䡲 Ted B. Wahby Cancer Center, Mt. Clemens: Expand cancer services by adding a second Megavoltage Radiation Therapy unit and constructing vault; $18 million. 䡲 Harper University Hospital, Detroit: Renovate the ground-floor radiology department in five phases; $10.3 million. Applications received Havenwyck Hospital, Auburn Hills: Add 44 adult psychiatric beds; $2.5 million. Also, replace 34 adult psychiatric beds; $178,550.

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bor West, Ann Arbor: Begin operation of a 30-bed long-term acute care hospital in the University of Michigan Hospital; $9.7 million. Conditional approval. 䡲 Select Specialty Hospital-Detroit, Detroit: Renovate the fourth floor of Henry Ford Hospital to develop a 31bed, 21,806-square-foot long-term acute care hospital in Detroit; $10.4 million. Conditional approval. 䡲 University of Michigan Health System, Ann Arbor: Add one incremental operating room to the fourth floor of C.S. Mott Children’s Hospital; $4.5 million. Approved. — Bridget Vis

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C RAIN’ S DETROIT BUSINESS

CRAIN'S LIST: LARGEST METRO DETROIT EMPLOYERS Ranked by full-time employees Rank

Company Address Phone; website Top local executive

181,000

175,000

Automobile manufacturer

Fiat Chrysler Automobiles NV

Sergio Marchionne chairman and CEO

30,579

26,427

69,165

66,223

Automobile manufacturer

University of Michigan

Mary Sue Coleman president C

29,855

29,551

44,297

43,839

Public university and health system

General Motors Co.

Mary Barra CEO

29,837

26,843

219,000

213,000

Automobile manufacturer

U.S. government

19,010 D

19,274 E

1,947,465 D

1,982,829 E

Federal government

Henry Ford Health System

Nancy Schlichting CEO

17,949

17,831

18,098

Health care system

CHE Trinity Health

Richard Gilfillan president and CEO

13,687

14,056

87,813 F

58,014

Health care system

Beaumont Health System

Gene Michalski president and CEO

13,330

12,856

13,330

12,856

Health care system

Detroit Medical Center

Joseph Mullany CEO

11,869

11,931

14,031

14,379

Health care system for adult and pediatric care

U.S. Postal Service

Lee Thompson district manager, customer service and sales

11,600

12,050

300 Renaissance Center, Detroit 48265 (313) 556-5000; www.gm.com

Type of business

42,750 B

NA, Ann Arbor 48109 (734) 764-1817; www.umich.edu

Worldwide employees Jan. 2013

Alan Mulally president and CEO

1000 Chrysler Drive, Auburn Hills 48326-2766 (248) 576-5741; www.chryslergroupllc.com

Worldwide employees Jan. 2014

Ford Motor Co.

1 American Road, Dearborn 48126 (313) 322-3000; www.ford.com

Southeast Michigan Southeast Michigan employees employees Jan. 2014 Jan. 2013

477 Michigan Ave., Detroit 48226 (313) 226-4910; www.usa.gov

1 Ford Place, Detroit 48202 (800) 436-7936; www.henryford.com

20555 Victor Parkway, Livonia 48152 (734) 343-1000; www.trinity-health.org

3711 W. 13 Mile Road, Royal Oak 48073 (248) 898-5000; www.beaumont.edu

3990 John R, Detroit 48201 (313) 578-2442; www.dmc.org

10.

1401 W. Fort St., Detroit 48233-9651 (313) 226-8678; www.usps.gov

Postal service

This list of metro Detroit employers encompasses companies with headquarters in Livingston, Oakland, Wayne, Washtenaw or Macomb counties. Number of full-time employees may include full-time equivalents. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual revenue figures may vary. NA = not available. B Company estimate. C Coleman is to retire at the end of 2013-2014 academic year. Mark Schlissel succeeds her. D As of Sept. 30, 2013. E As of Sept. 30, 2012. F Figures are prior to the May 2013 merger of Catholic Health East and Trinity to form CHE Trinity Health. LIST RESEARCHED BY BRIANNA REILLY

■ An expanded version of this list can be purchased at crainsdetroit.com/lists.

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April 21, 2014

CRAIN’S DETROIT BUSINESS

PEOPLE CONSULTING

Mark Randon to judge, U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division,

tor of business development, Paragon Leadership International, Novi.

ENTERTAINMENT Steve Masters to executive director, Fifth Third Bank Michigan State Fair, Novi, from executive director, Bays de Noc Convention & Visitors Bureau, Escanaba.

HEALTH CARE

GOVERNMENT

Denise Lovat to owner, certified health coach, DLO2GO LLC, Troy, from direc-

Randon

Detroit, from magistrate judge for the U.S. District Court for the Eastern District of Michigan, Detroit.

MANUFACTURING

Robert Barrow to vice president of operations, Wright & Filippis Inc.,

Jan Griffiths to vice president, supply chain management, In-

Rochester Hills, from CEO, Doctors Hospital of Michigan, Pontiac. Also, Mark Burns to vice president of sales, from Midwest district manager, Fidia Pharma USA Inc., Farmington Hills; and Paul Turek to director of information technology, from network and infrastructure manager, Bosselman Inc., Grand Island, Neb.

INSURANCE

teva Products LLC, Troy, from

Griffiths

Dan Graf to chief investment officer, Amerisure

Corporate Center USA Inc., Plymouth, from vice presi-

dent of sales and marketing.

Mutual Holdings Inc., Farmington

MARKETING

Hills, from vice president of investments.

Kristin Calandro Tyll to senior vice president and partner, Stratacomm LLC, Southfield, from senior vice president.

LAW Michael Antovski to member, business law practice group, Bodman PLC, Detroit, from member, Clark Hill PLC, Birmingham. James Cunningham to partner, Dickinson Wright PLLC, Troy, from partner, Warner Norcross & Judd LP, Southfield.

vice president, purchasing and supply chain, Chassix Inc., Southfield. Steve Lietaert to president, Hella

Graf

SERVICES Kevin Duffy to global vice president of life sciences, global solutions, Kelly Services Inc., Troy, from senior vice president, global clinical operations, BioClinica Inc., Princeton, N.J.

Tyll

IN THE SPOTLIGHT Bartech Group Inc., Southfield, a workforce management and staffing provider, has named James Hanrahan its executive vice president and CFO. He succeeds Thomas Shea, chief administration officer and Hanrahan executive vice president, who retired after 19 years at Bartech. Hanrahan, 56, will be responsible for Bartech’s financial functions and oversee information services as well as legal and human resource administrative functions. Hanrahan had been executive vice president and general manager of a division of CDI Corp., Philadelphia. He earned a Bachelor of Science degree in chemical engineering from Cornell University, Ithaca, N.Y., and an MBA in finance from the University of Chicago.

BUSINESS DIARY ACQUISITIONS & MERGERS BorgWarner Inc., Auburn Hills, completed its acquisition of Gustav Wahler GmbH & Co. KG, Esslingen, Germany, a producer of engine thermostats and exhaust gas recirculation valves and tubes. Gustav Wahler will join the BorgWarner Emissions Systems business, and BorgWarner will maintain the Wahler name as a product brand in the aftermarket. Website: borgwarner.com.

EXPANSIONS New Balance Athletic Shoe Inc., Brighton, Mass., opened a store at 13307 Hall Road, Utica. Telephone: (586) 254-5500. Website: newbalancede troit.com. Motor City Carpet and Floor Covering, Warren, opened a showroom and design center at 28096 Woodward Ave., Royal Oak. Telephone: (248) 565-3186. Website: motorcitycarpet.com.

NEW PRODUCTS TRW Automotive Holdings Corp., Livonia, started production of its roof airbag technology on the Citroen C4 Cactus. The device replaces passenger airbags typically mounted in the instrument panel and can allow for improved interior design aesthetics, ergonomics and functionality while saving space in the instrument panel. Website: trw.com.

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April 21, 2014

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Project: Chaldean Town housing effort may move out of city â&#x2013; From Page 1

clearing abandoned structures and other intensive preparatory work, Manna said. And it wouldnâ&#x20AC;&#x2122;t require subsidies to attract Chaldean residents, said Eric Younan, director of strategic initiatives for the foundation. MSHDA Communications Director Katie Bach confirmed Friday the state had been talking with the Chaldean foundation about locating the housing in Detroit. The state agency is exploring opportunities to revitalize the community bordered by the Michigan State Fairgrounds, John R, Seven Mile and Woodward, she said. The neighborhood requires blight removal, demolition, rehabilitation of existing units, new housing units, commercial upgrades, retail, corridor upgrades, schools, parks, gardens and more. As part of that, it would consider all plans, Bach said. She said Friday she couldnâ&#x20AC;&#x2122;t respond directly on any financial assistance talks regarding the Chaldean foundation plan. But she said there â&#x20AC;&#x153;are no applications or deals pending for that site in Detroit by any entity, which leaves it open to redevelopment opportunities. â&#x20AC;&#x153;The authority is just one of many with a stake in developing the area, because it would be of great benefit to Southeast Michigan from both a cultural and economic standpoint.â&#x20AC;? Bach said the Arab American and Chaldean Council is the sponsor for coordinating activities in the Chaldean Town neighborhood and is working with stakeholders in the neighborhood revitalization, including MSHDA, the Michigan Economic Development Corp. Michigan Department of Human Services and Detroit Public Schools. The land in the area is controlled by several entities including MSHDA, the Michigan Land Bank, banks, faith-based entities, the private sector, the city of Detroit and others, she said. The housing development expands on the social services the

Chaldean Community Foundation provides for Chaldeans and others from sites in Dearborn and Sterling Heights. It would build on other efforts to repopulate a neighborhood that used to be known for Chaldean-owned bakeries, grocery stores, dry cleaners and other businesses during the 1980s and â&#x20AC;&#x2122;90s â&#x20AC;&#x201D; before many residents left to find safer neighborhoods and better schools. The area remains home to Sacred Heart Chaldean Catholic Church, which buses in 800 or more people for mass on Sundays. With adequate security and schools, Manna believes the neighborhood could again attract significant numbers of Chaldean residents and entrepreneurs. The foundation is operating on a $3 million budget for fiscal 2014, up from $2.6 million in 2013 and $1.6 million in 2012. Last yearâ&#x20AC;&#x2122;s revenue increase came from a near-doubling of its contract with the Michigan Department of Human Services to provide support services such as immigration assistance, English-language classes and assistance in securing housing, jobs, cars and health care through the Chaldean American Association for Health Professionals. The Lathrup Village-based Arab American and Chaldean Council has been providing similar social services and after-school programming in Chaldean Town and working to revitalize the area for more than a decade. Itâ&#x20AC;&#x2122;s built four new community/youth centers and worked with businesses to revitalize their buildings with funding from the state, said Bob Ghannam, director of special projects for ACC and its Seven Mile Project. MSHDA wants to ensure housing development in Chaldean Town is done in an organized fashion and coordinated with other projects taking place in the neighborhood. Ann Arbor-based Penrose Village Development Corp. has built 74 units of housing in Chaldean

Chaldean Foundation to add community centers While trying to advance its plans to develop permanent housing for Chaldean refugees, the Dearborn-based Chaldean Community Foundation is also expanding the supportive services it provides through new community centers. Last week, it secured the rezoning needed to move forward on construction of a $3 million, 11,500square-foot community center at 15 Mile and Ryan Road in Sterling Heights to replace its 2,500-squarefoot leased location at the same intersection. The City Council approved a zoning change to shift the two residential properties on 15 Mile just west of Ryan Road to business and professional office zoning. The foundation paid about $200,000 for the lots, which total just under 2 acres. Martin Manna, president of the

foundation and its parent organization, the Chaldean American Chamber of Commerce, said the plan is to tear down a home and garage on the properties so it can break ground on the new center by June and complete it by next spring. Saroki Architecture in Birmingham is serving as project architect. The foundation has yet to name a construction manager. At the same time, the foundation is on the hunt for an Oakland County building to serve as a third community center after negotiations for a West Bloomfield property fell through. It hopes to identify another Oakland County site within the next two to three months, Manna said. In March, the foundation launched a $5 million campaign to fund the new centers. â&#x20AC;&#x201D; Sherri Welch

Town since 2006, and Perfecting Church, which is constructing a new church at Seven Mile and Woodward, has plans to develop homes on vacant lots behind its church site, Ghannam said. Like the Chaldean foundation, ACC is also preparing to move into housing development. Itâ&#x20AC;&#x2122;s been talking with MSHDA for the past year and a half about development of 25 homes or multifamily dwellings, Ghannam said. The total cost of that project and the value of tax incentives the

state will provide are still being worked out, but the project has MSHDAâ&#x20AC;&#x2122;s support, he said. ACC hopes to break ground by fall. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve put together a game plan for that whole area,â&#x20AC;? Ghannam said. â&#x20AC;&#x153;MSHDA asked us if we were willing to work with the Chaldean Community Foundation, and we said our doors are open as long as theyâ&#x20AC;&#x2122;re working within the parameters of the project, (as far as) where housing should go and what type of housing.â&#x20AC;?

Thereâ&#x20AC;&#x2122;s a demand for both permanent housing and community center services, given that an estimated 130,000 Chaldeans are now living in the region, the foundation said, making metro Detroit home to the largest population of Chaldeans in the world outside of the Middle East. Many Chaldeans here are refugees living in apartment complexes that arenâ&#x20AC;&#x2122;t conducive to large families, Manna said, which is spurring the foundation to move into housing development.

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CRAIN’S DETROIT BUSINESS

Waiting: Biz takes a wait-and-see approach to county race ■ From Page 1

until around June or July. Brad Williams, vice president of government affairs, said the chamber will continue to evaluate the candidates before the 25-member political action committee board makes an endorsement. Among the chamber’s top issues for candidates are how they will provide core county services while addressing its fiscal situation, and maintaining or improving key transportation infrastructure like Detroit Metropolitan Airport. Ficano faces a number of political minefields. The county’s finances are tenuous, a number of former aides have been convicted or pleaded guilty of bribery or obstruction of justice, and the FBI is investigating Ficano’s administration on allegations of corruption. In addition, the county’s stalled and scrapped jail project on Gratiot Avenue could be a pressure point for voters. The county ended the last fiscal year on Sept. 30 with a $175 million budget deficit, according to a deficit elimination plan presented to the Wayne County Commission in February by Mark Abbo, the coun-

ty’s director of management and budget. The deficit is expected to grow by $30 million this fiscal year, according to the report. Martin Manna, president of the Chaldean American Chamber of Commerce, said one of the key issues for county exec candidates to address is safety. There have been five murders of employees at chamber member businesses since November, Manna said. Manna said the chamber will not endorse a candidate but its PAC will likely donate to most of them. “Pretty much everyone has asked for our support,” she said.

The field fills In addition to Ficano and Wild, two others have declared their candidacy: Wayne County Commissioner Kevin McNamara and State Rep. Phil Cavanagh, D-Redford Township. Wild, 45, is the mayor of Westland and owner of Wayne-based Scrap Busters Auto & Truck Parts LLC. He became mayor in 2007 and was re-elected in 2009 and 2013. McNamara, a Democratic coun-

ty commissioner from Belleville since 2006, is the son of longtime county Executive Edward McNamara, who held the office from 1987 until 2002. McNamara, 56, works part time as a community affairs representative for Detroit-based Inland Waters Pollution Control Inc. Cavanagh, 52, is an attorney who served four terms as a Wayne County commissioner prior to his election to the state House in 2010. He is the son of Jerome Cavanagh, Detroit’s mayor from 1962-70. Ficano was elected as Wayne County executive in 2002 after being elected Wayne County sheriff in 1984. Historically, he’s had strong support from unions and groups including Arab-Americans. The race could also become more crowded by Tuesday’s filing deadline. Along with Ficano, former Detroit Mayor Dave Bing is is considering a run. An email request for an interview was not answered. Stephanie McLean, president of Lansing-based GMT Strategies, a Democratic consulting firm, said the more candidates, the better Ficano’s chances. “When you split the field, it’s more helpful for an incumbent,” she said. “Ficano has had his issues. If it’s a one-on-one race, it would be more troubling.” But that depends, according to Hood. If someone like Wayne County Sheriff Benny Napoleon or former Detroit police chief and Wayne County sheriff Warren Evans enter the race, that would likely divide city and suburban voters and give the edge to the African-American candidate. “If that white vote is split between five candidates and the black candidate can take Detroit plus Inkster and River Rouge,” that wouldn’t bode well for the chances of Ficano, Wild, Cavanagh or McNamara, all of whom are white, Hood said.

Raising funds What’s known about the candidates’ fundraising this year is minimal. Pre-primary finance reports aren’t due until July 25. “We have raised well over $125,000 since the Jan. 26 announcement, without Kevin making any personal donations to the campaign,” said Brian Peckinpaugh, a public relations strategist who represents McNamara. “We are expected, based on commitments, to have sufficient contributions to get us through the Aug. 5 primary election, with much of the financial contributions coming in the next four to six weeks.” Cavanagh had raised $73,480 at the end of 2013; $50,100 of that came from a personal loan. Peter Van Dyke, a partner with Detroit-based Berg Muirhead & Associates Inc., which does public relations for the Cavanagh campaign, said initial endorsements will be released after the filing deadline. “Phil Cavanagh’s 25-plus years in public service have served his ability to garner significant support from the business and civic community in the early stages of his campaign for Wayne County executive,” the campaign said.

Wild had $241,000 on hand at the end of 2013 in his campaign account, which put him about $77,000 behind Ficano, who had $318,000. Vanessa Denha Garmo, of Denha Communications and a spokeswoman for Wild, said he has raised more than $500,000 to date. Wild gave $125,000 personally to his campaign. His mayoral committee gave $65,000.

Waiting game This year’s top-of-the-ticket races and possible ballot questions affecting the business community could determine how much that community will contribute in the executive race. McLean said she thinks many in the business community and others are holding out. With U.S. Sen. Carl Levin’s retirement, three congressional seats open due to retirements, another being vacated by Rep. Gary Peters so he can run for Levin’s seat and the hotly contested House race in the 11th Congressional District, where many are trying to unseat Rep. Kerry Bentivolio, there are plenty of other races on which people can spend their money. “There is a lot going on in Michigan,” she said. “People want to place their money smartly.” And that’s not taking into account the gubernatorial election and what could be several ballot measures, including a possible minimum wage increase. If minimum wage does hit the ballot, the business community is expected to spend heavily to defeat it. Joe DiSano, partner with Lansing-based Main Street Strategies, a Democratic political consulting firm, said the candidates will likely have to raise $750,000 to $1 million for a successful campaign. Wild will have to raise over and above that because he is not well known outside of Westland and his name doesn’t carry the same weight as Cavanagh’s, McNamara’s and Ficano’s, said Eric Foster, senior consultant and chief strategist for West Bloomfield Township-based LB3 Management.

The Ford factor Wild’s war chest is expected to grow with the support of Bill Ford Jr., who hosted a large fundraiser March 28. DiSano said Ford’s involvement in the race and support of Wild was “almost unprecedented.” Ford has shied away from getting involved in partisan politics, aside from his support of Gov. Rick Snyder in the 2010 gubernatorial campaign, DiSano said. Ford’s backing has given Wild some credibility and opened some doors to him that may have been closed before, DiSano said. DiSano thinks much of the business community support will eventually go to Wild, given that he runs a business and many voters have doubts about Ficano. “Businesspeople like certainty,” he said. Because there is some seriousness to the fiscal situation in Wayne County, DiSano thinks the business community will have some reluctance to support someone who hasn’t been in an execu-

WHO’S SUPPORTING WHOM Kevin McNamara, Wayne County Commissioner According to spokesman Bryan Peckinpaugh, these businesspeople have made $1,000 contributions: Frank Tymowski, president and CEO of Detroit-based engineering firm Wade Trim Inc. Carla Walker-Miller, president and CEO of Detroit-based WalkerMiller Energy Services LLC Avery Williams, co-managing partner of Detroit-based Williams Acosta PLLC Nicholas Aubrey, president of Detroit-based Park-Rite Inc.

State Rep. Phil Cavanagh According to 2013 campaign finance records, $3,400 contributors include: Joseph Lentine, president and CEO of Golden Dental Plans Inc. Sydney Ross, president and CEO of Great Lakes Wine & Sprits in Highland Park

William Wild, Westland mayor William Clay Ford Jr., Ford Motor Co. executive chairman, hosted a fundraiser for Wild last month. Business contributors in 2013 include: Michael Mihalich, president of Bloomfield Hills-based MJR Digital Cinemas ($1,000) Ken Buccilli, owner of Northvillebased Buccilli Group LLC ($3,300) Mike Yellen, COO of Birmingham-based Belfor Holdings Inc. ($3,400) Joseph Ciolino, Belfor CFO ($3,400)

Robert Ficano, Wayne County executive According to campaign finance records, business contributors in 2013 include: Clark Hill PLC PAC ($1,500) Comerica Bank PAC ($4,000) DTE Energy Co. PAC ($1,500) Aziz Abraham, president of Detroit-based Woodward Parking Co. ($1,900) Karen Ridgway, president of Detroit-based Applied Science Inc. ($2,500) Isadore King, president of Detroit-based Synergy Partners LLC ($2,000) Joseph Lentine, who also gave to Cavanagh ($2,500) Karoub Associates PAC ($3,000) tive decision-making position. “Ficano has had to make decisions, but almost all of them have been disastrous,” he said. Foster said Detroit Mayor Mike Duggan won’t support Ficano because of his scandal-plagued administration. If Duggan does endorse someone, however, that would turn that candidate into a front-runner with access to his political organization and contacts and give that person credibility. “Duggan is the 10,000-pound gorilla in the room,” Foster said. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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Hauler: United Road drives for future ■ From Page 3

moves test cars and vehicles for Hollywood. “It’s picked up immensely the last three years,” Abrams said. “The industry on a whole is on a comeback.”

The need Railroads typically have moved 70 percent of vehicles for automakers, said John Taylor, associate professor of supply chain management and chairman of the department of marketing and supply chain management at Wayne State University. However, railroads shifted to more oil industry and other work, which has fueled the growing need for additional capacity in the carhauling segment of the trucking industry, Taylor said. “That’s creating an opening for over-the-road trucking,” he said. “The auto volumes have grown from 10 million to 16 million over the past five years.” Railroads move cars from factories over long distances, while trucks are used for local and regional hauling. When the automakers slashed production during the recession, hundreds of trucking companies, many with just a handful of tractors, went out of business. Others were bought. Two major vehicle movers in metro Detroit went under during the recession: Howell-based Accurate Auto Carriers Inc.’s assets were sold in 2011 after the company went bankrupt, and Allen Parkbased Performance Transportation Services Inc. went out of business in 2008. Reduced competition benefitted the surviving firms once hauling demand began to recover. “The car hauling business is doing very well because there’s been a huge consolidation in that segment of the industry,” said Walter Heinritzi, executive director of the Michigan Trucking Association, a Lansing-based trade group for the logistics hauling industry. Heinritzi said consolidation has been much like the reductions and mergers in the airline industry. There were thousands of trucking companies that have been reduced to hundreds, and even fewer in some segments, he said. “Toward the beginning of the recession, we saw carriers going out of business because they couldn’t sustain their models. The ones in operation today are the survivors,” the ATA’s Farrell said. It’s not just new vehicles in need of truck and train transport. When the credit and lending markets eased up a few years ago, people began not only buying but also began leasing vehicles again, and that’s meant more used cars to move around after they are returned to dealerships. “We’re in the up-cycle of offlease vehicles coming back into the market,” McCann said. United Road moves cars for new and used-car dealers, rental fleets, auctions, individuals and repossessions. A specialty division, Pilot Transport, handles test cars, celebrity and entertainment industry vehicles, and other highpriced cars and trucks.

on a team of executives to manage the complex deal and subsequent merger of Waggoners into the United Road system. United Road spent months planning and modeling the transition of the company from a hand-crafted, Buying other haulers is one way paper-based load-management and to add immediate capacity. That’s personnel system to United Road’s quicker than buying new trucks. paperless digital system that hanHaulers can’t simply order a dles all scheduling, dispatch, loads, batch of new trucks and begin orders, delivery, claims and payhauling, Farrell said. And they’re ment via a smartphone app. not cheap: A typical rig and trailer “Manual load building has long costs $250,000. been in our rearview mirror,” said “There’s a big lead time in get- McCann, a Crain’s “Women to ting a piece of equipment,” Farrell Watch” honoree in 2011 who joined said. the trucking company as president Exacerbating the situation is that year after leaving an executhe ongoing shortage of truck dri- tive position at Detroit-based vers. The industry for years has Soave Enterprises Inc. She succeedstruggled to attract and retain ed United Road founder Michael qualified drivers Wysocki as CEO because of the in 2012. long hours away On the day the from home. Federdeal closed in al Motor Carrier December, WagSafety Administragoners drivers tion regulations and staff had the that rate drivers placards, licenspenalize compaes and insurance nies for not emin hand for their Kathleen McCann, United Road ploying the best. trucks so they’d United Road be legal under has both purfederal trucking chased equipment — $50 million laws. for 200 new trucks in 2011 — and United Road teams had disbought other firms. patched to welcome Waggoners emThe company already has opera- ployees to their new company, and tions in the Northeast, Midwest to transition and train them. Eduand West. Adding the Waggoners cating the new employees on United unit gives it coverage in the South- Road philosophy, company atmoseast and South Central U.S. and ad- phere, expectations and systems ditional capacity in the West. was a critical part of the planning. “When you fit those operations “We went into this with the old and routes into our already nation- adage of measure twice and cut al network, it created density in a once,” McCann said about planbeautiful way,” McCann said. ning and executing the transaction The acquisition didn’t give Unit- while still servicing all clients. ed Road any new customers to add “There are a million moving to its client list of more than 10,000, parts any time you do something but it did add 1.2 million more ve- like this,” she said. “The world hicles to its annual hauling. doesn’t stop turning when you do “When we combined our opera- an acquisition. You have to intetions, it reduced our customer con- grate in real time.” centration,” McCann said. The Waggoners unit will be comThe largest single client today is pletely absorbed into the United General Motors Co., followed by Ford Road system by end of May, she Motor Co. and BMW. said. United Road will move more McCann said any acquisition in than 3 million vehicles in the U.S. the near term would be on a much and Canada this year, McCann smaller scale. said. “We’re always in conversation The combined United Road- with folks interested in selling in Waggoners corporate and indepen- our industry,” she said. “(But) the dent-driver fleet will have more integration (with Waggoners) is than 1,500 tractors operating out of really going to take the lion’s 75 locations, 25 of which came share of our focus this year.” from Waggoners. It wasn’t a sudden marriage between the two companies. United Road’s owner thought “We had been flirting with Waggoners for many years. Ultimately, the Waggoners deal would be a it came down to the point we had a good one. Boston-based private eqwilling seller as well as a willing uity firm Charlesbank Capital Partbuyer,” McCann said. “They ners bought United Road in Decemreached the conclusion they were ber 2012 for an undisclosed sum. Charlesbank bought the hauler ready to sell their business, and they were thoughtful on who from Los Angeles-based private equity firm The Gores Group LLC, which would be the best fit. “This was a company that was had bought United Road for $110 founded and built up by an entre- million in November 2007 from preneur that’s highly respected in Charterhouse Equity Partners III LP and the industry. Those types of indi- KPS Special Situations Funds LP. United Road was founded in 1997 viduals don’t let their business go in Albany, N.Y. A steady series of lightly.” acquisitions led the company to base its operations in metro Detroit. Bill Shea: (313) 446-1626, McCann personally quarter- bshea@crain.com. Twitter: backed the acquisition and relied @bill_shea19 “We have a large presence in the new car space, but we also service every other type of customer that needs vehicles moved,” she said.

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Bitcoin: What it is, how it works: Making sense on non-cents ■ From Page 3

“I found out about it playing cards with a buddy one night. He wen through it with me, because I thought it was like a PayPal system. Once I understood it, I found it was completely amazing. This is not PayPal at all; this is something that is completely different. It’s basically a currency with no borders.” Bitcoin exists in the digital realm and requires the use of a digital wallet and online-only transactions. (For details on how it works, see the box on this page.) But since bitcoin is not backed up by any bank or government, using it comes without the consumer or business protections found with other forms of payment, like debit or credit cards. The steadily growing group of advocates who support bitcoin’s use say it still makes sense as an alternative currency that can pay for goods and services — partly because of cost savings. Joe Gomez, the CEO of Dynamic Technologies, which specializes in health care IT such as networking, emergency medical records system installation and data backup, said he sees bitcoin as the next big way to complete transactions. To understand this new form of money, he said, is to grasp humanity’s constant struggle with progress. For him, this is just a natural progression for the world of technology. There were personal computers in 1975, the revolution of the Internet in 1993, and bitcoin in 2014. At the root of it, bitcoin is a way for Internet users to transfer digital assets to each other, and Gomez said he’s comfortable it is a secure way to do business. “Being an IT company, it’s something we got into a long time ago,” Gomez said. “We started out doing ‘bitcoin mining’ first — it’s something that we think is a fast and easy way to transfer funds or use funds online. It was the next step for Internet transactions.” “Bitcoin mining” involves managing bitcoin transactions. Users who provide computing power verify and record payments into a public ledger in exchange for transaction fees and newly e-mint-

HOW BITCOIN WORKS 䡲 No banks, no bank fees. But also no liability protection if something goes wrong. 䡲 First, users have to install a digital wallet on their computer or mobile device. The wallet is a free open-source software program that will generate an initial and subsequent bitcoin addresses. 䡲 Each address has its own bitcoins balance. Using more addresses keeps transactions more secure. 䡲 Bitcoins can be used for online transactions with a company that accepts bitcoin as a payment mode. The company sends users the bitcoin address to which they send a bitcoin payment. 䡲 Transactions happen within seconds; however, verification can sometimes take 10 minutes or longer. 䡲 All bitcoin transactions are included in a shared public transaction log known as a “block chain.” This is to confirm that the party spending the bitcoins really owns them. It’s also meant to prevent fraud and double-spending. However, there are no consumer or bank protections regulating bitcoin use. 䡲 Bitcoin transactions are generally irreversible, and users could lose their principal if they hold onto bitcoins for an extended period of time. ed bitcoins. Critics of bitcoin question the currency’s long-term viability, given highly fluctuating values and lack of government or bank regulation. They deem it a currency fad. “I don’t think it has staying power,” said Jonathan Citrin, founder and executive chairman of Citrin Group, a Birmingham-based investment advisory firm specializing in portfolio management. “I think it’s really popular and has been politicized, and there are some major players who have invested in it from a business perspective. I think people saw an opening to challenge the current system.” Political climates have given bitcoin buzz, Citrin said, but it’s

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“I’m not averse to taking so-called risk,” says Leonard Mazzola Jr., owner of the Bronx Deli in Farmington, about his use of the new, unregulated bitcoin currency. He says he’s willing to try bitcoin as a draw for “a different kind of customer.”

buzz that he expects to pass. “What you’re seeing is a very unique set of circumstances that have enabled bitcoin to become more popular than it should be. … It shouldn’t even be in the conversation. It’s still a fad.” While electronic payments aren’t a new idea, bitcoin won’t earn credibility unless it is adopted for use by a wider range of service providers and traditional businesses, Citrin said. “The issue is that it has to establish itself to the point where you can walk into a doctor or attorney’s office, you have to have a tipping point, where you have an enough businesses that will use it, for other businesses to say, ‘I should get on there.’ We’re nowhere remotely close to that tipping point,” he said. “A simple question is to walk down the street and ask someone … what is bitcoin? Most people are going to say … what are you talking about? Most people work in real dollars.” Mazzola said he’s willing to try out a new transaction method, particularly as a draw for “a different kind of customer, most of them young people, who were looking

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Detroit Branch, considers bitcoin highly risky, especially for major transactions. “I understand fluctuating values between different economies and countries, but a fluctuating value of a currency inside the boundaries ... why would anyone ever want to run that risk? It sounds too risky.” Exchange rates between countries complicate the issue, Traub said, plus good, old-fashioned cash is still the preferred method of currency for many consumers and businesspeople. “I doubt that (bitcoin) could replace the American dollar. Much of the American dollar is used for international transactions. One of the most popular bills in the world today is the U.S. $100 bill.” For everyday transactions, Traub said, there’s going to remain a demand for some kind of hard currency, not just electronic coins. “As a replacement for currency ... I don’t know how that would take place,” he said. “Then there’s a technology issue for those small businesses that do transactions primarily in cash or credit cards and how they could adapt to that concept.”

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for a place to spend their bitcoin. “I just throw up a bar code, they pay me and I don’t have to pay the 3 percent that I have to pay to American Express, Visa and Mastercard. So really, there is no downside for me.” Conversely, there are those who have used bitcoin and then returned to traditional transaction forms. One of them is Matthew Abramsky, the owner of Tony’s Ace Hardware in Hazel Park, one of the first stores in the region to use bitcoin. “It’s just not ready for prime time, in my opinion,” Abramsky said. “It dawned on us how little security there was and how there really is no infrastructure that exists for small retailers. “For example, we had a question, and they didn’t take phone calls. I found that to be a huge turnoff. If I have a problem with my bank card, I can call my bank card company and they answer the phone. We ended it. It just wasn’t a good fit. Whatever percentage I pay for bank fees, I get security for that. It’s a small price to pay for a lot of protection.” Paul Traub, an economist from the Federal Reserve Bank of Chicago,

11:30 a.m. Michigan Hispanic Chamber of Commerce, Cadena Group. With Jeff Jorge, executive partner, Global Development Partners Inc.; Kyle Anne Sasena, vice president and international product specialist, Level One Bank; and Noel Nevshehir, director, international business services, Automation Alley. Level One Bank headquarters, Farmington Hills. $25 MHCC members, $35 nonmembers. Contact: Nilda Thomas, (248) 792-2763, ext. 103; email: nthomas@mhcc.org; website: mhcc.org.

WEDNESDAY APRIL 23 Breakfast of Champions — A Tale of Success. 7:30-9 a.m. Leadership Oak-

land. With Lori Blaker, president and owner, TTI Global, the 15th fastestgrowing woman-owned company in the United States. Michigan State University Management Education Center, Troy. $36. Contact: Chris Scharrer, (248) 952-6880 ext. 2; email: cscharrer@leadershipoakland.com; website: leadershipoakland.com.

Immigration Investment Opportunities for Detroit and Michigan. 3-6 p.m. Detroit Chinese Business Association. With Rafael Anchia, managing partner and co-founder, Civitas Capital Management LLC; Bing Goei, director, Michigan Office for New Americans; Steve Tobocman, director, Global Detroit; and representatives from the

Michigan State Housing Development Authority, managers of the new EB-5 Regional Center, one of two in the nation, aimed at attracting foreign investors who want to live, work and create jobs here. Speakers will address how Texas has created jobs and

new investment and what the regional center means to Michigan. Iroquois Club, Bloomfield Hills. $50 in advance, $75 at door if available. Contact: Angela Wang, (248) 918-0391; email: awang@dcba.com; website: dcba.com.

UPCOMING EVENTS Development and Transportation: Building Places to Go To. 11 a.m.-1:30 p.m. April 28. Commercial Real Estate Women Detroit. Hannah Pritchard, professional traffic engineer at Toole Design Group, Minneapolis, will talk about the recent move toward communities amenable to walking and biking, and share examples of how developments and traffic interact, including ongoing and upcoming projects in the Detroit area. Majestic Café, Detroit. $35 CREW members, $70 nonmembers. Contact: Norma Beuter, (248) 646-9629; email: beuter@ com cast.com; website: crewdetroit.org.

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April 21, 2014

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Michigan medical discipline rises to a new high BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

Suspensions and revocations reached new highs among Michigan medical professionals in fiscal 2013, according to a report this month from the Michigan Department of Licensing and Regulatory Affairs Bureau of Health Professions. The report doesn’t break out causes for discipline, but the trend appears related to a recent federal crackdown on fraudulent billing to Medicare and other health care insurers, which has landed dozens of doctors in court or in prison. The federal Detroit Medicare Fraud Strike Force and a locally organized Health Care Fraud Unit of prosecutors together brought charges in fraud schemes billing more than $380 million to Medicare in 2013, more than double any previous year. To improve coordination over fraud cases during the past year, LARA has increased communication with the health care fraud division of the U.S. Attorney’s Office in Detroit. In fiscal 2013, the Bureau of Health Professions reported a total of 954 disciplinary actions against medical professionals, up 30 percent from the previous year’s 735 actions and up 65 percent from a total of 577 actions in 2004. Total disciplinary actions were more or less constant after 2004 until 2009, when the U.S. Department of Justice deployed the Detroit Medicare Fraud Strike Force from Washington to begin prosecuting health fraud cases here. “We now get information when a person is indicted for health care fraud,” said Carole Engle, director of LARA’s Bureau of Health Care Services. “We are able to track the case when a conviction occurs and are ready” to take licensure action. Testimony last year before the state Senate committee on Reforms, Restructuring and Reinventing uncovered several Michigan health practitioners who were in jail for fraud or other violations but still held state licenses, a spokesman for state Sen. Tonya Schuitmaker said. Schuitmaker, R-Lawton, sits on the Senate committee. The names were passed on to LARA for investigation. Deputy Director Stephen Gobbo of Health Care Services said sometimes the bureau appears to take a while imposing discipline because the agency has its own process to complete before taking action, and won’t be notified until after the investigation is completed. Sometimes there is also a delay in reporting criminal prosecutions of a Michigan professional from other states, he said. But Health Care Services has also taken several steps in the past year to improve lines of communication with federal and state law enforcement agencies, he said. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

ROUNDUP OF DISCIPLINARY ACTION Bureau of Health Professions medical profession disciplinary actions: Reprimand Probation Fine Vol. surrender Limited lic. 2013 27 407 122 57 41 2012 16 339 76 30 40 2011 26 310 95 44 41 2010 15 297 91 31 48 2009 14 291 104 21 47 2008 5 210 67 20 43 2007 12 269 66 22 33 2006 22 238 52 26 26 2005 34 258 53 28 29 2004 40 217 54 14 33

Suspended 275 220 217 229 217 202 166 201 162 205

Revocation 25 14 16 10 11 12 13 20 21 14

Total 954 735 749 721 705 559 581 585 585 577

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

REPORTERS

Doctors: Rules to tighten discipline ■ From Page 1

The rules affect more than 400,000 professionals in 27 boards. Professionals include acupuncturists, audiologists, massage therapists, social workers, physician assistants and pharmacists. The changes are aimed in part at preventing licensing board chairs from stopping investigations because of conflicts of interest. They emerged in response to evidence that a former Michigan Board of Medicine chairman, George Shade, dismissed two investigations into Robert Alexander, a doctor who ran an abortion clinic in Muskegon shut down in 2012 by the Muskegon Fire Prevention Bureau for multiple violations of public health codes. After Alexander was released from federal prison in 1990 for illegally selling controlled substances to patients, Shade wrote letters to the medical board in support of allowing Alexander to get his license back and helping him get a job at a Detroit hospital, according to news reports. While some have called for more thorough and timely investigations of providers when complaints are lodged, the new regulations are not expected to increase the number of investigations of medical providers, said Carole Engle, director of LARA’s Bureau of Health Care Services. “We have made some internal changes to gather a lot of information before the case goes before the board for review,” Engle said. “Once we started doing that, gathering patient records and other additional information, it gives the committee better information, and the actual number of actual investigations has gone down.” Engle said LARA will continue to fully investigate complaints if the various board subcommittees authorize them. In Senate hearings last fall, testimony included information that at least one complaint was lodged in 2011 against Oakland County oncologist Farid Fata, who is in jail on charges he defrauded Medicare and prescribed unnecessary chemotherapy to patients who didn’t have cancer. Engle confirmed the department investigated an allegation against Fata. She said the investigation, which is confidential, did not result in an administrative complaint to bring before the Michigan Board of Medicine. News reports said the complaint

REGULATORY CHANGES 䡲 Public Act 95 (Senate Bill 575) requires a minimum of three board members to review every allegation. Before, a board chairman had the power to make decisions without consulting other members. The act also prohibits board members testifying as paid expert witnesses in malpractice suits over allegations that may later come before the board to investigate. 䡲 PA 96 (SB 576) requires board members to disclose conflicts of interest exist between them and the health care providers they are investigating. 䡲 PA 97 (SB 577) includes provisions that: (1) Automatically and permanently revoke the license of a health professional found guilty of criminal sexual conduct against a patient; (2) Failure to notify the Michigan Department of Licensing and Regulatory Affairs of a criminal conviction or disciplinary action may result in administrative action; (3) Remove community service as a possible penalty for most violations; (4) Require a fine of at least $25,000 if a violation resulted in a death; (5) Require license suspension for at least 180 days for any offense or revoke the license for an offense committed within two years after a previous offense of the same kind. 䡲 PA 98 (SB 578) includes provisions that: (1) If the department determines that an action taken by a subcommittee does not protect the health, safety and welfare of the public, it can, with approval of the licensing board chair, issue a different action; (2) Require that beginning July 1, 2015, the department must include on its website each decision where disciplinary action is taken. Source: Michigan Legislature

was filed by oncology nurse Angela Swantek of Shelby Township, who was interviewing for a job with Fata’s Michigan Hematology Oncology Centers and while doing so saw improper mixing of chemotherapy drugs and patients being mistreated. Under licensing rules, once LARA receives a complaint, it conducts an initial inquiry to present information on the case to the various health-licensing boards, Engle said. The new rules will require three board members to ask LARA to conduct a full investigation into the allegations against a licensed health provider. The investigation could result in an administrative complaint. A hearing is then held before an administrative law judge. The judge then issues recommendations to the board disciplinary subcommittee, which decides to either reject the findings, or accept them and determine penalties. Engle said LARA asked Schuitmaker and Jones to add a legislative provision that gives the department the authority to overrule a decision of a provider board’s disciplinary subcommittee if the board’s chairman concurs. “We asked for that change,” said Engle, “for the simple reason there have been occasions the department doesn’t agree with sanctions or decisions made by the disciplinary subcommittee.”

Engle said there could be times when the department might want harsher sanctions. “The department has ultimate responsibility (for public health), and 99 percent of the time (the disciplinary subcommittee) does an outstanding job,” Engle said. “But it is possible they could miss the boat and there could be a significant public outcry.” Under the new regulations, the state has 30 days to challenge a disciplinary recommendation by a board subcommittee. David Rogers, an attorney with Rogers Mantese and Associates in Farmington Hills, thinks the new regulations give the department too much power. “Even with board chair concurrence, this undercuts the (the subcommittee’s authority … because ultimately (the department) needs to convince only the board chair to get the decision it wants,” Rogers said. “Presumably this convincing could be done behind closed doors, without giving the (license holder) the ability to respond or to have any input at all,” said Rogers, who regularly represents physicians, nurses and other providers in licensure actions. Rogers said he would prefer the department to appeal to the full licensing board if it disagrees with a disciplinary panel’s decision. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

Jay Greene, senior reporter: Covers health care, insurance, energy utilities and the environment. (313) 446-0325 or jgreene@crain.com Amy Haimerl, entrepreneurship editor: Covers entrepreneurship and city of Detroit. (313) 4460416 or ahaimerl@crain.com Chad Halcom: Covers litigation and the defense industry. (313) 446-6796 or chalcom@crain.com Tom Henderson: Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho: Covers real estate, higher education, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor: Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Nathan Skid, multimedia editor: Also covers the food industry and entertainment. (313) 446-1654, nskid@crain.com Dustin Walsh: Covers the business of law, auto suppliers, manufacturing and steel. (313) 4466042 or dwalsh@crain.com Sherri Welch, senior reporter: Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com LANSING BUREAU Chris Gautz: Covers business issues at the Capitol and utilities. (517) 403-4403 or cgautz@crain.com

ADVERTISING SALES INQUIRIES (313) 446-6052; FAX (313) 393-0997 SALES MANAGER Tammy Rokowski SENIOR ACCOUNT EXECUTIVE: Matthew J. Langan ADVERTISING SALES Christine Galasso, Jeff Lasser, Sarah Stachowicz CLASSIFIED SALES Angela Schutte, manager, (313)-446-6051 DIRECTOR OF MARKETING AND EVENTS Elizabeth Buscher DIGITAL MARKETING MANAGER Jennifer Chinn AUDIENCE DEVELOPMENT DIRECTOR Eric Cedo EVENTS MANAGER Kacey Anderson SENIOR PRODUCER FOR DIGITAL/ONLINE PRODUCTS Pierrette Dagg SENIOR ART DIRECTOR Sylvia Kolaski SALES SUPPORT Suzanne Janik, YahNica Crawford PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Andrew Spanos

CUSTOMER SERVICE MAIN NUMBER: Call (877) 824-9374 or write customerservice@crainsdetroit.com SUBSCRIPTIONS $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. SINGLE COPIES: (877) 824-9374 REPRINTS: (800) 290-5460, ext. 125; (717) 505-9701, ext. 125; or lindsay.wilson @theygsgroup.com TO FIND A DATE A STORY WAS PUBLISHED: (313) 446-0406 or e-mail infocenter@crain.com CRAIN’S DETROIT BUSINESS IS PUBLISHED BY CRAIN COMMUNICATIONS INC. CHAIRMAN Keith E. Crain PRESIDENT Rance Crain TREASURER Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Vice President/Production & Manufacturing Dave Kamis Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) EDITORIAL & BUSINESS OFFICES: 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of August, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2014 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

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CRAIN’S DETROIT BUSINESS

RUMBLINGS

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF APRIL 12-18

Hantz Farms seeks planters to grow debut t may have taken five years to accomplish, but the largest urban tree farm in the nation is about to be planted. Volunteers will begin planting the 15,000 saplings that will populate Hantz Farms LLC on May 17. About 350 have signed up so far to plant the farm, the brainchild of John Hantz, CEO of Southfield-based Hantz Group LLC. The planting, which begins at 10 a.m., is expected to be done in three hours, said Tina Bassett, president and owner of Bassett & Bassett Inc., which does public relations work for Hantz. “All the holes are already dug, so there’s no digging,” she said. “Each tree should take no more than 5-10 minutes at most” to plant. Volunteers will meet at the corner of Belvidere and Goethe streets south of Mack Avenue. The project area is the square mile bounded by Mack and Jefferson Avenue and St. Jean and Van Dyke streets. Businesses can participate by signing up as a group. Bassett said those that have signed up so far include Dearborn-based Carhartt Inc., Shelby Township-based DeBuck Construction Inc., Romulus-based Alta Equipment Co., Lansingbased GreenStone Farm Credit Services, Hantz Group and Bassett & Bassett. The reasons for the delay of Hantz Farms included city bureaucracy and criticism from those who char-

acterized the effort as a land grab. To volunteer for the event, sign up at hantzfarmsdetroit.com.

Streetcars trump techno: Music festival delayed The reconstituted Detroit Electronic Music Festival has been rescheduled for 2015’s Fourth of July weekend because of construction of the M-1 Rail streetcar line on Woodward Avenue at the event’s Campus Martius location, organizers said last week. DEMF is unrelated to Movement, the annual electronic music festival at Hart Plaza on May 24-26. Organizers in November announced the relaunch of DEMF, which began in 2000 at Hart Plaza before financial and other troubles led to it being replaced by Movement. An associated DEMF event at Ford Field, the Federation of Electronic Music Technology showcase, also has been rescheduled for the same time in 2015. Tickets for FEMT/DEMF, which are $300 ($1,500 for VIP), are good for 2015 or can be refunded at the Ford Field box office. The events are the brainchild of producer Carol Marvin, who launched the original DEMF. She estimated last year the new events would cost up to $2 million, attract 100,000 attendees and inject $30 million into the local economy.

Ferndale-based Paxahau Promotions Group LLC created Movement in 2006, settling several years of disputes and confusion over the techno music festival, which was established in 2000. Techno music is widely considered to have been born in Detroit in the 1980s. M-1 Rail is a $137 million, 3.3-mile mostly curbsiderunning streetcar loop on Woodward Avenue, co-mingled with traffic with 11 stops between Grand Boulevard and Congress Street. The system is expected to be in service by 2016.

Asian chamber gala prize: Golf with MEDC exec Want to hobnob with Steven Hilfinger, the chief operating officer of the Michigan Economic Development Corp.? Then get in the winning bid at the silent auction at the 13th annual black-tie gala of the Asian Pacific American Chamber of Commerce on May 3 at the MGM Grand in Detroit. A round of golf with Hilfinger is one of the prizes up for auction. Other auction prizes include lunches with a wide variety of area business leaders. More than 600 are expected to attend the event, which begins at 5:30 p.m. with a private VIP reception. The public networking reception is at 6 p.m., with the dinner at 7 p.m. and afterglow and dancing until midnight. The keynote address will be presented by Juju Chang, a co-anchor for the ABC program “Nightline.” Cost is $200 per person or $350 per couple for APACC members, and $250 per person and $400 per couple for nonmembers. Tables for 10 are $1,750. For details, call (248) 4305855 or email Jen Spellman at jen@apacc.net.

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

Orr: Ticket hike sends a message

“

For Kevyn Orr, dropping $45 parking tickets on cars at expired meters isn’t about shoring up city revenue. Not entirely, anyway.

”

Chad Halcom’s “Laying Down the Law” blog on the legal business is at www.crainsdetroit.com/halcom

Stem cells to spinal cord cells

“

Crain’s Detroit Business is long overdue for a story or blog on Silly Putty. Better late than never, here we go.

”

Tom Henderson’s “Big Bucks, High Tech” blog can be found at www.crainsdetroit.com/henderson

Blue Cross pays $100 million to new foundation etroit-based Blue Cross Blue Shield of Michigan made a first payment of $100 million into the East Lansingbased Michigan Health Endowment Fund, created last year as part of Blue Cross’ conversion into a nonprofit mutual insurance company. The new foundation will receive $1.56 billion from Blue Cross over the next 18 years.

CRAIN’S M&A Awards

PEOPLE Joe Dumars, 50, was re-

moved as president of basketball operations for the Detroit Pistons, but remains as an adviser. He was succeeded for the interim by Ken Catanella, director of basketball operations, and George David, assistant general manager. Carmine Palombo, 61, director of transportation planning for the Detroitbased Southeast Michigan Council of Governments, was named deputy executive director, succeeding Kathleen Lomako, now SEMCOG executive director. Dan Dierdorf, a former University of Michigan AllAmerican and a member of the Pro Football Hall of Fame, was named radio analyst for UM football games. Dierdorf will work with Jim Brandstatter, the longtime analyst who will move to the play-by-play role, succeeding Frank Beckmann. Detroit Free Press Editorial Page Editor Stephen Henderson won the Pulitzer Prize for commentary.

COMPANY NEWS The Royal Oak Down-

town Development Authority board asked Livonia-based Schostak Bros. & Co. and Missoula, Mont.-based Farran Realty Partners to consider a joint venture to develop 4.15 acres north of I-696 between Main Street and Woodward Avenue. The firms proposed separate developments: Schostak’s $35 million, 100,000-square-foot Class A office building for Tata Technologies Inc. and Farran’s mixed-use plan. Sterling Heights-based General Dynamics Land Systems said it will not ask the U.S. Government Accountability Office to weigh in on a military vehicle bid request it claims is stacked in favor of rival BAE Systems Inc. — but it doesn’t yet consider the matter settled. Fuyao Automotive North

AARON ECKELS

Barry Shapiro, co-founder of Bloomfield Hills-based The Anderson Group LLC, accepted the lifetime achievement award Wednesday night at the seventh annual Mergers and Acquisitions Awards. Shapiro, 71, was honored for nearly three decades of deal-making at The Anderson Group. The event, which drew 314 people at the Troy Marriott, was hosted by Crain’s Detroit Business and the Association for Corporate Growth, Detroit chapter. America Inc., a subsidiary of China-based Fuyao Glass Industry Group Co. Ltd., is planning to invest $15.3 million in its Orion Township facility for an expansion that is expected to create 102 full-time jobs. Birmingham-based Munder Capital Management Inc. agreed to be acquired by Victory Capital Holdings Inc. and combined with its wealth-management portfolio company, Clevelandbased Victory Capital Management Inc., into a yet-to-benamed new company. Eastern Market Corp. hired Detroit-based Lowe Campbell Ewald to launch a new branding effort. Southfield-based Mars Advertising Inc. announced a corporate rebranding to The Mars Agency. An attorney suing Novi-based Lotus Bank asked an Oakland County Circuit Court judge to order the firing of bank President Neal Searle and CFO Richard Bauer over allegedly racist emails they sent. Monroe-based La-Z-Boy Inc. said it is firing about 100 workers as it closes plants in a restructuring, Bloomberg reported. Which Wich Superior Sandwiches, with 300-plus locations in four countries, opened its first local location in Grosse Pointe.

OTHER NEWS Walsh College an-

nounced that a $15 million renovation to its Troy campus building will begin this summer and take 18

months to complete. The Arab American National Museum in Dearborn received its first planned gift and its largest donation to date, a $2 million estate gift commitment from Russell Ebeid, retired chairman emeritus of Guardian Industries Corp. Detroit-based United Way for Southeastern Michigan raised just more than $40 million during its 201314 annual campaign, up 14 percent, the largest yearover-year percentage increase for the organization in 17 years. The city of Detroit reached tentative agreements to preserve pensions for retired police officers and firefighters but cut monthly payments for other former employees. The city of Detroit and Oakland, Macomb and Wayne counties were ordered to further explore creation of a regional water authority, AP reported. Downtown Detroit property owners voted to establish a Downtown Business Improvement Zone and voluntarily tax themselves at a collective rate of $4 million a year for cleanup, safety and beautification efforts. Officials launched website buildingdetroit.org to sell city-owned houses to fight blight. One home will be auctioned daily starting May 5. The New Economy Initiative announced it will give $500,000 in grants this year to small businesses in Detroit, Hamtramck and Highland Park. The Michigan Department of Natural Resources announced that Belle Isle will remain open during the Intelligent Transport Systems 21st World Congress Sept. 711. It was initially reported that the state park would close during the event. Basil Qandil, M.D., a Dearborn Heights doctor, was convicted of 34 crimes, from fraud to illegal drug distribution, in U.S. District Court, AP reported. Democrat Anil Kumar, M.D., joined the race to oust Republican U.S. Rep. Kerry Bentivolio in Michigan’s 11th Congressional District. Gov. Rick Snyder made his re-election bid official by turning in more than 26,000 signatures to election officials, AP reported. Separately, he released a plan to double recycling of household solid waste in Michigan.

OBITUARIES Ray Shepardson, who

was instrumental in the restoration of the Fox Theatre, Gem Theatre and Detroit Opera House, died April 14 in an apparent suicide in Aurora, Ill. He was 70.

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T WAYNE STATE STUDENT RETENTION , GRADUATION RATES

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

77.7

Michigan public universItie

s, 2011-12 76.9 76.1 75.0 77.1 77.0 73.5 71.7 6-year Retention 69.2 1. UM-Ann Arbor graduates 69.7 96% 1. UM-Ann Arbor 68.9 2. MSU 90% 91% 2. MSU Retention 3. Michigan Tech 77% 83% 3. Michigan Tech 4. Grand Valley 65% 82% 4. Grand Valley 5. UM-Dearborn 63% 82% 5. Western Mich. 6. Wayne State 50% 56% 77.0% 6. Central Mich. 7. Central Mich. 54% 76% 7. Northern Mich. 6-year graduates 8. Eastern Mich. 51% 76% 8. UM-Dearborn 40% 9. Western Mich. 49% 74% 9. Ferris State 35.9 10. Northern Mich. 47% 34.5 33.7 73% 10. Eastern Mich. 33.6 31.7 11. Oakland U. 40% 73% 30% 33.1 32.3 30.9 10. Oakland U. 31.0 12. Ferris State 40% 31.7 71% 12. Saginaw Valley 28.1 13. Saginaw Valley 38% 70% 13. UM-Flint 26.4 14. UM-Flint 37% 20% 70% 2000- 200214. Lake Superior 2004- 2006- 200815. Lake Superior 35% 2001 2003 70% 2005 2007 2009 201015. Wayne State 28.1% 2011 Academic year 75.6

70%

70.6

60%

Source: WSU Office of for Education Statistics)Budget Planning & Analysis, and IPEDS

For more local events, visit Crainâ&#x20AC;&#x2122;s Executive Calendar at crainsdetroit.com/executivecalendar

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

Degree of difficulty BY CHAD HALCOM | CRAINâ&#x20AC;&#x2122;S DETRO IT BUS

INESS he 12th president of Wayne State University, named soon, faces expected to be a challenge versing several performanc over a decade in the making â&#x20AC;&#x201D; ree declines, including ment and a six-year falling enrollgraduation rate that recently tumbled low 30 percent. beFall enrollment numbers also have declined 2009, the Michigan each year since Legislature is growing mance, and an often weary of underperfor adversarial internal culture persists.

Current President Allan Gilmour, who retires June 30, said he wishes he had done more with some of More transfer in tech those issues, but State pushes Wayne transfer: office to pull more of its R&D has accomplishe d weight, a lot in his three Page M16 years at the post. That includes setA chemical reaction at lab: ting the groundResearcher Greg work for imAuner (right) proved goes from top graduation rates, Gilmour dog to the improved student doghouse; retention and rounding university says more than $212 million up itâ&#x20AC;&#x2122;s about in funding commitment s toward money, Page M17. versity capital campaign. a uniDiane Dunaskiss, cation with the board a Republican member of the on the issue. WSU board â&#x20AC;&#x153;We had a sense of governors who that the admiswas on the sion process and programs that search committee, said continserve students were uing improvemen not t in tomer-focused, people very cusand graduation rates retention helped or approached werenâ&#x20AC;&#x2122;t being has been a top priority in about what selecting the they needed from the new president. succeed, and as Allan university to â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s been the came in he key validated that we were not incorrect tion for every candidatequesabout that,â&#x20AC;? she weâ&#x20AC;&#x2122;ve said. interviewed, and anyone â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s still room involved in the search whoâ&#x20AC;&#x2122;s to improve. Itâ&#x20AC;&#x2122;s not where it commitneeds to be, but tee process knows that retenthere is progress. And, hopefully, tion is something we think this we can grow our student base with group has the skills students who are and the inacademically pretent to address,â&#x20AC;? she said. â&#x20AC;&#x153;Or pared or attracting we wouldnâ&#x20AC;&#x2122;t be interviewing more people to some of our graduate them.â&#x20AC;? and professional schools.â&#x20AC;? Debbie

R&D CHALLENGES

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THE source for events in Southeast Michigan!

USINESS

The next president of Wayne State faces a rigorous learni ng curve, with priorities that include increasing enrollment and graduation rates, and managing the cultur e clashes of academia

(the Integrated Postsecondary

Education Data System,

KENNY CORBIN

crainsdetroit.com

at the National Center

Dingell, the Democratic chairman of the board at Wayne State, also said retention and graduation rates were persistent is- Dingell sues, but Gilmour made some progress with them, via admissions standards new that take effect this fall for first-time freshmen, and more communi-

The seeds of the slump The performance issues at WSU have many roots, including that admitted underprepar policies ed students, a culture not focused enough on students, a declining number of college-age students in the state and funding issues. Gilmour also noted that six-year graduation rates donâ&#x20AC;&#x2122;t story for universities tell the whole have a large number like WSU that of part-time students. See Wayne, Page

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Mary Ann Hynes Senior Counsel Dentons

EDUCATIONAL SESSIONS: Business Regulations Employment Intellectual Property (IP) International Leadership Mergers and Acquisitions

GENERAL AND IN-HOUSE COUNSEL AWARDS Program and Dinner MAJOR SPONSORS

TUESDAY, MAY 13 2-7:30 p.m. The Westin Book Cadillac, Detroit

Registʑr Woday crainsdetroit.com/events or (313) 446-0300

ADDITIONAL SPONSORS