Crain's Detroit Business, June 16, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 24

JUNE 16 – 22, 2014

$2 a copy; $59 a year

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5500 Kensington 159 bids: Winning bid: $27,300

4356 Harvard 133 bids. Winning bid: $28,100

Museum seeks to Wright the ship by boosting revenue Report says solar should pick up steam in Michigan Prime time for pump firm: New HQ, increase in biz

2081 Longfellow 130 bids. Winning bid: $53,900

Health Care

Will auction build value for housing? Sale prices high, but what happens with appraisals is the big question BY AMY HAIMERL CRAIN’S DETROIT BUSINESS

2000 Atkinson 151 bids. Winning bid: $23,200

Free clinics adapt to help more than uninsured, Page 11

This Just In Deputy EM Stacy Fox lines up her next job at DuPont

NEWSPAPER

Stacy Fox has found her post-emergency management gig. Starting Oct. 1, Fox will be the senior vice president and general counsel of Wilmington, Del.-based DuPont. Fox She has served as Detroit’s deputy emergency manager and chief of staff under Kevyn Orr since October 2013. Fox, 60, is the co-founder of real estate developer The Roxbury Group and on the executive committee of Downtown Detroit Partnership. She previously held executive or general counsel positions with Sonoco Inc. Visteon Corp., Johnson Controls Inc. and Collins & Aikman Corp. — Amy Haimerl

4184 Bishop 17 bids: Winning bid: $34,100

PHOTOS FROM BUILDINGDETROIT.ORG

n its first month, the Detroit Land Bank auctioned off 33 homes, allowing the public to bid on properties from cottages in East English Village to sprawling four-bedroom houses in West Boston-Edison. The Neighbors Wanted program, as Mayor Mike Duggan calls it, has drawn nearly $1 million in bids, with an average price of $22,000 per property. That’s significantly above the city’s median home price, which hovers around $11,000. “The whole thing has been surprising,” said Dekonti Mends-Cole, deputy director of the Land Bank. “We didn’t realize that there was such a level of pent-up demand. A lot of the

people who are bidding are either Detroiters or individuals living in inner-ring suburbs.” One historic property was such a hot commodity that it crashed the auction website — buildingdetroit.org — and forced the agency to reschedule the auction even after the virtual gavel crashed down at $135,000. The 3,000-square-foot home later sold for $97,900 to the original winner. Realtors and appraisers are cautiously optimistic that the auctions will help the city’s real estate market rebound. Detroit is one of RealtyTrac’s 10 hottest markets, with prices climbing in strong neighborhoods and inventory so tight that move-in-ready homes are snapped up within days and in all-cash deals. See Auctions, Page 24

Metals center weighs sites in Canton, Corktown BY KIRK PINHO CRAIN’S DETROIT BUSINESS

The American Lightweight and Modern Metals Manufacturing Innovation Institute slated for Canton Township — announced in February by President Barack Obama — may end up in Detroit’s Corktown instead. The institute — led by the University of Michigan; the Columbus, Ohio-based manufacturing technology 501(c)(3) nonprofit EWI and Ohio State University — is considering leasing space in the vacant 99,000-square-foot building at 1400 Rosa Parks Blvd. between Porter and Labrosse streets, a real estate source said. Alan Taub, a UM engineering professor who will be the chief technology officer of the institute, said the institute had identified property in Canton. But by the time Taub it received a $70 million, five-year contract from the U.S. Department of Defense, the landlord had leased the space to another tenant. “So we relooked at sites and have it down to two,” Taub said, adding that the institute will make an announcement on the location soon. See Metals, Page 25

$50M financing deal helps Plex move closer to IPO BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

Plex Systems Inc. has undergone a systems upgrade during the past 19 years, from a bootstrapped tech firm to an emerging competitor in the cloud computing market. The Troy-based company moved one step closer to a big initial public offering payday last week with a $50 million financing deal. Plex secured the financing from institutional and

hedge funds managed by T. Rowe Price Associates Inc. to accelerate sales and marketing of its product line and hire employees. The manufacturing-focused cloud provider is now valued at nearly $500 million, according to The Wall Street Journal. Plex also unveiled several new technologies last week to advance its cloud manufacturing services, including integration of Google Glass and a mobile functionality to

its product. Plex CEO Jason Blessing said an IPO is imminent as part of the company’s goal to dominate the $50 billion market for enterprise resource planning softBlessing ware. Enterprise resource planning, or ERP, is a suite

of software that allows businesses to manage and interpret data. “It’s a big market and we’re a mover in this market, and an IPO will certainly be a milestone along our journey,” Blessing said. “It will provide us more funds, and public companies tend to get more press, helping us with our marketing.” Blessing said the IPO is expected in the next 18-24 months. Plex had See Plex, Page 25

Salute your company’s recently hired veterans Ask us how: mwise@crain.com | (313) 446-6032

ISSUE DATE: JULY 14 |CLOSING DATE: JULY 3

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Kalamazoo Promise adds private colleges to free-tuition program The Kalamazoo Promise, an anonymously funded program that offers free college tuition to graduates of the Kalamazoo Public Schools, plans to expand from its current program covering 43 public colleges and universities in the state to 14 private colleges and universities starting in the fall of 2015, the Kalamazoo Gazette reported. The institutions, part of the Michigan Colleges Alliance, will pay the difference in costs between their tuition and what would be average undergraduate tuition and fees at University of Michigan’s College of Literature, Science and the Arts. The colleges joining the program include Adrian, Albion, Alma, Calvin, Hillsdale, Hope, Kalamazoo, Marygrove, Olivet and Spring Arbor. The original scholarship program, launched in 2006, has covered up to 100 percent of tuition and fees, depending on the number of years the student was in the district.

Varnum attorney Schneidewind named president-elect of AARP Eric Schneidewind, an attorney at Grand Rapids-based Varnum LLP, was named president-elect of AARP, the national nonprofit that advocates for people age 50 and

Party like it’s 2018: Brewery gets jump on higher wage Because of a recently passed law, the state’s minimum wage will rise to $9.25 an hour by 2018. But Bellaire-based Short’s Brewing Co. decided not to wait, the Traverse City Record-Eagle reported. “We just basically wanted to say we’re OK with this, and we think it’s a model that can work,” Short’s COO Matt Drake told the paper. Most Short’s workers already made more than the current minimum of $7.40 an hour. Laura Oblinger, COO of the Traverse City Area Chamber of Commerce, said the announcement could persuade other business owners in the area to increase wages. That was one reason Short’s took the older. Schneidewind will serve in that role until 2016, when he will become president. Schneidewind, who has practiced energy law in Varnum’s Lansing office for 28 years, was president of AARP Michigan from 2006 to 2012 and began serving on the national board of AARP in 2012, Varnum said in a release.

MICH-CELLANEOUS 䡲

The national Manpower Employment Outlook Survey says West Michigan could become the nation’s hottest job market this summer, MLive.com reported. The survey found that 32 percent of the employers interviewed in the Grand Rapids-Wyoming labor mar-

action. Drake said increasing wages shows other businesses that paying employees more than the minimum can be a good practice because investing in workers leads to success. “If we treat our staff well, if we reward them well for their hard effort, we’re going to cultivate a better staff and do better as a company,” he said. “If you stick with this career path, it can literally be a career. It can be a great job.” Oblinger said of the wage increases: “You’d have to do it anyway, but when you go ahead and make that move in advance, it’s more of a statement they make toward their employee relations.”

ket said they intend to increase staffing in the third quarter, while 4 percent said they intended to cut back. Manpower also reported that Michigan’s employment picture is the third-best in the nation after North Dakota and Delaware. 䡲 A jury awarded $183,000 to Yolanda Larry, who claimed she was unfairly fired from Hurley Medical Center after accessing a family member’s medical files, The Flint Journal reported. Larry said the Flint hospital should have used a discipline procedure outlined in its employee handbook. Hurley argued that Larry violated federal privacy rules. 䡲 “Exported From Michigan,” a 90-minute documentary about the state’s economic comeback, pre-

miered last week in Grand Rapids. The film received a grant from the Michigan State Housing Development Authority. 䡲 Tuition and fees at Western Michigan University in Kalamazoo and Eastern Michigan University in Ypsilanti are rising 3.2 percent in

the coming academic year, The Associated Press reported. The increases keep the schools within a cap set by the state Legislature. 䡲 Grand Rapids-based Spectrum Health plans to spend $24.5 million to expand and renovate its Rehab and Nursing Center, the Grand Rapids Business Journal reported. 䡲 WKW Roof Rail Systems, a German manufacturer of aluminum automotive parts, plans to bring 186 jobs to Battle Creek in a $23 million investment, the Battle Creek Enquirer reported. Battle Creek was chosen over sites in Alabama and one other state, the economic development agency Battle Creek Unlimited said in a news release. Find business news from around the state at crainsdetroit .com/crainsmichiganbusiness. Sign up for the Crain’s Michigan Morning e-newsletter at crainsdetroit.com/emailsignup.

CORRECTIONS 䡲

A story on Page M29 of the June 2 issue should have said BioMed Health Solutions LLC operates four Biomed Specialty Pharmacy locations, not two. Mohamed Sohoubah, president of BioMed Health, said revenue for those stores is about $20 million; an incorrect figure was given. 䡲 A June 9 Salute to Entrepreneurs winner profile of Beyond Gaming LLC incorrectly identified the company as Beyond Gaming of Michigan LLC. In addition, Noah Krugel’s title should have been chief technology officer.

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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MPSC report continues solar push for utilities BY JAY GREENE CRAIN’S DETROIT BUSINESS

The Michigan Public Service Commission is nudging DTE Energy Co. and Consumers Energy Co. toward providing options for more customer-owned solar programs. It’s less than a full push at this stage because the utilities are on track to supply the 10 percent of their electricity through renewable means as required by Public Act 295, which expires at the end of

Options include allowing customers to build their own solar projects and receive subsidies for the power generated. next year. But the options, contained in a draft report obtained by Crain’s Detroit Business, are expected to contribute to the debate in the state Legislature early next year

over how best to extend the 5-yearold renewable-energy law. Gov. Rick Snyder has said he would support legislation increasing the state’s 10 percent renewableenergy mandate to possibly 20 per-

cent over 10 years. He has not addressed solar power specifically other than to say increasing Michigan-based renewable-energy jobs is an important byproduct of his plan. The options in the draft report come from a 42-member work group commissioned by the PSC. It included representatives from the utilities, solar manufacturers, installers, environmental advocates and renewable-energy proponents. See Solar, Page 22

The Wright way to fund Museum seeks revenue, expertise to erase deficit BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

he Charles H. Wright

Museum of African American History is

once again at a turning point. The triggers may be different this time around, but the story is the same: The country’s largest African-American museum is not sustainable unless it can bring in more revenue. The museum’s funding from the city of Detroit, its owner, has dropped 63 percent over the past few years to just under $1 million this year. That, combined with recession-triggered cuts in corpo-

rate and individual giving, has decreased the museum’s budget by 27 percent, from $6.4 million in 2009 to $4.7 million this year. With just about two weeks left in its fiscal year, the museum is operating at a $200,000 deficit, President and CEO Juanita Moore said last week. That would mark its second consecutive year of operational deficits. A shift is needed to take the museum from “hand to mouth” operation to sustainable operation. And the museum’s board, executives and funders recognize that. Foundations have awarded well over $1 million in grants to help the museum strengthen its ability to bring in donations and grants through fundraising, whether through new hires, new strategies or contracted fundraising expertise. See Museum, Page 23

Inside

New digs, more clients boost firm that Crim started, Page 4 Company index These companies have significant mention in this week’s Crain’s Detroit Business: Altarum Institute . . . . . . . . . . . . . . . . . . . . . . . . . 15 ALMMMI Institute . . . . . . . . . . . . . . . . . . . . . . . . . 1 Center for Healthcare Research and Transformation12 Charles H. Wright Museum of African American History . 3 Charter One Bank . . . . . . . . . . . . . . . . . . . . . . . . . 22 Consumers Energy . . . . . . . . . . . . . . . . . . . . . . . . . 3 Continental Rail Gateway . . . . . . . . . . . . . . . . . . . 10 Corrosion Fluid Products . . . . . . . . . . . . . . . . . . . . 21 Delta Dental of Michigan . . . . . . . . . . . . . . . . . . . 15 Detroit Land Bank . . . . . . . . . . . . . . . . . . . . . . . . . 1 DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Fifth Third Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 FirstMerit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Free Clinics of Michigan . . . . . . . . . . . . . . . . . . . . 12 Gary Burnstein Community Health Clinic . . . . . 11, 14 Joy-Southfield Free Clinic . . . . . . . . . . . . . . . . 11, 14 Kennedy Industries . . . . . . . . . . . . . . . . . . . . . . . . . 3 Level One Bank . . . . . . . . . . . . . . . . . . . . . . . . . . 22 MCCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Michigan Future . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Michigan Primary Care Association . . . . . . . . . . . . 13 Plex Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 St. Frances Cabrini Clinic . . . . . . . . . . . . . . . . 12, 14 University of Michigan . . . . . . . . . . . . . . . . . . . 1, 15

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . 18 BUSINESS DIARY . . . . . . . . . . . . . . . . 20 LARRY PEPLIN

“The museum, and its role in the community, is too important to continue simply fighting for survival, year in and out,” said Juanita Moore, president and CEO of the Charles H. Wright Museum of African American History in Detroit.

CALENDAR . . . . . . . . . . . . . . . . . . . . 19 CAPITOL BRIEFINGS. . . . . . . . . . . . . . 18 CLASSIFIED ADS . . . . . . . . . . . . . . . . 21 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . . 8

Kennedy Industries primed for pump biz boost, new HQ

OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 20 RUMBLINGS . . . . . . . . . . . . . . . . . . . 26 WEEK ON THE WEB . . . . . . . . . . . . . . 26

BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

Lean-running auto plants, costconscious municipal customers and an increasing flow of sales and service calls from new markets are priming the business pump of Kennedy Industries Inc. The upsurge has led to a new headquarters building and a steady stream of hiring. The Milford Township-based pump system and valve service, re-

pair and distributor company has seen sales climb 50 percent and employees by 40 percent in the past five years — and its owners think that could be repeated by the end of the decade. Traditional lines of business such as servicing pump stations, balancing pump rotors and replacing pump systems for power plants or automotive plants have been flowing over in new directions lately. Clients are requesting Web-based data management tools and more

THIS WEEK @ WWW.CRAINSDETROIT.COM

sophisticated engineering — and that requires more highly skilled employees and more office space.

Business pours in Kennedy Industries broke ground this month on a 100,000square-foot headquarters building, which majority owner and President Jeff Nachtweih hopes to have ready for occupancy by spring.

KENNEDY INDUSTRIES INC. Where: Milford Township What it does: Services, repairs and distributes pump systems and valves. Customers: Automotive, energy, steel, chemical and other industries; municipal and state governments Employs: 70, up from 50 about five years ago. Expects to add 10-15 in next three years. Revenue: $25 million in 2013, up from $17 million in 2008

See Kennedy, Page 21 Jeepers! Shinola gets the Willys The Willys Detroit store has joined Shinola in Midtown, with vendors from Detroit, Michigan and beyond. Read more about it in the “City Moments” blog and view a gallery of photos at crainsdetroit.com/blogs NATALIE BRODA/CDB

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Downtown digs, growing client list boost MCCI profile Mort Crim firm settles into retro space BY BILL SHEA CRAIN’S DETROIT BUSINESS

Terry Oprea is optimistic about the future of his integrated marketing firm, thanks to a batch of new clients, new employees and growing revenue. And the company’s new downtown Detroit home was designed to reflect that spirit. Mort Crim Communications Inc. — which does business primarily as MCCI — has spent $500,000 to retrofit 9,000 square feet of the fifth floor of the Murphy-Telegraph Building, with a two-year option for an additional 5,000 square feet across the hall, said Oprea, president and CEO since buying the company from its namesake founder in May 2008. The agency signed an eight-year lease for the location at Congress and Shelby avenues — also home to the reopened London Chop House, where Oprea said he now holds client lunches and dinners. MCCI staff began moving in May 26 from its longtime, 5,000-square-foot Southfield office. The floors office are white epoxy, and the walls, pillars and ceilings

GLENN TRIEST

Mort Crim Communications Inc.’s post-recession turnaround began in 2011. “We got our sea legs back,” said Terry Oprea, president and CEO.

are painted white. The desks are white with orange accents, evoking a mod 1960s “Mad Men” feel but with Apple computers. Large windows bathe the office in natural light. The Detroit architectural firm D Met Design custom-created the open floor plan and its aesthetics, said Oprea, 62, a longtime TV journalist before moving into marketing.

In a few areas, there also are elevated wooden floors that come from Reclaim Detroit, which specializes in reconstruction materials collected from vacant houses in the city. A massive conference room table that seats 20, made from sustainable forestry lumber, came from Detroit’s Ali Sandifer Studio. In addition to studio space, edit-

ing bays, a sound-recording “dead” booth and glassed-in modules for private calls or conversation, there is an open kitchen and a large meeting area. The six-story building, at 155 W. Congress, was constructed in 1903 and is actually two buildings that now share a common set of floors. It once housed a Western Union office — hence, the telegraph name — and Oprea is delighted by that history tidbit about one of the early forms of mass communications. The building is owned by Maria Gatzaros, widow of longtime Detroit businessman and Greektown CasinoHotel co-founder Ted Gatzaros. “I wanted to have a developerowner where we weren’t going to get lost. They were very collaborative with us,” Oprea said. The Detroit Economic Growth Corp. spent months helping MCCI find a downtown space, Oprea said. No tax breaks or financial incentives were part of the deal, he said, just advice. Also instrumental in the move was Rick Ruffner, president and CEO of greeting card maker Avanti Press. Avanti moved into the building in 2000, and Oprea said Ruffner pitched the location to him over drinks. Locations in Birmingham, Royal Oak, Ferndale and Southfield were considered but eliminated for lack of contiguous space, cost, lack of walkability or other rea-

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sons, Oprea said. MCCI will keep a satellite office in Southfield and its multimedia in the Renaissance Center office that it serves its largest client, General Motors Co.

On the rebound When it opened in September 1993, the firm specialized in audio and video programming and services for broadcast, retail and corporate markets. By 1995, revenue was $3 million. In 1998, it was $4 million. The recession struck the marketing and public relations industry hard, and MCCI was no exception. It didn’t shrink during the recession, but everyone, including Oprea, took a pay cut, and open positions were not filled. As things have rebounded, he’s repopulated the ranks and added management. In the past 18 months, the firm has increased staff 25 percent to 25 full-timers, Oprea said. The turnaround began in 2011. “We got our sea legs back,” Oprea said. Revenue is improving. Last year, it was $3 million, and Oprea estimates it will be $3.5 million this year. In 2012, it was $2.8 million. MCCI has 44 active clients, including 13 new ones in the past 12 months. Among those are AtlantaSee Next Page

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based SunTrust Banks Inc.; Anklesaria Group, a San Diego-based international supply chain consulting and training firm; and auto suppliers Faurecia North America Inc. in Auburn Hills and Federal-Mogul Holdings Corp. in Southfield. Other new clients are in human services, workforce development and health care: Detroit Employment Solutions Corp., Runaway & Homeless Youth Alliance, Starfish Family Services, VFW National Home for Children and the Children’s Hospital of Michigan Auxiliary. After GM, the agency’s largest clients are the Tempe, Ariz.-based Institute for Supply Management; Henkel North America in Bridgewater, N.J.; and I-CAR, a Chicagobased national collision repair certification and training association. The firm also does work for the Wayne-based Rush Group family of companies, Detroit-based Ally Financial Inc., Troy-based Meritor Inc., the city of Southfield and the local social service organizations Focus: HOPE and Forgotten Harvest. Custom corporate videos put MCCI on the map, and video remains a large part of what the firm does. It creates 400-500 client videos annually, Oprea said. MCCI has added social media

The new Detroit offices of MCCI evoke a mod 1960s “Mad Men” feel but with Apple computers.

ADVISOR SPOTLIGHT

GLENN TRIEST

and digital services, along with traditional public and media relations services, a full range of advertising and branding options and whatever else a client might need. “The whole world is changing in the past 48 or 50 months,” Oprea said. “We like to think we are ahead of the curve on that.” Matt Friedman, a local TV veteran and co-founder of the Farmington Hills-based public relations firm Tanner Friedman, had kind words for his competition’s business philosophy: “Our industry has been hampered because of a collective bad reputation of big fees and low standards. Having a respected firm like MCCI in the Detroit area helps all of us here who strive to provide a high level of service to clients and operate with values and integrity.” Friedman said he’s impressed

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with how Oprea has run MCCI. “Before they were forced to by market changes, they made a bold strategic decision to diversify their scope of services far beyond their roots in high-end video production. That seems to have paid off for them,” Friedman wrote in an email. “When it comes to video production, they are still considered the gold standard, boasting some of the most talented and experienced producers anywhere. But now they are a credible firm in virtually every aspect of communications.” Oprea worked for many years in broadcast news, doing investigative and documentary pieces. He was a minority shareholder at Mort Crim Communications and became its president not long after joining the firm just after it launched.

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What’s in a name? Mort Crim, the longtime senior news anchor and vice president of community affairs at Detroit NBC affiliate WDIV-Channel 4, opened the firm in a 5,500-square-foot Harper Woods office in September 1993. Oprea, who started work at WDIV on the same day in 1978 as Crim, was Crim’s first hire in 1993. “He and I had discussed the prospect of creating a communications company for nearly a year before we did it,” said Crim, now 78 and retired to Florida. “I had such confidence in him that I’m not certain I would have launched the company had he not been available.” An increasing number of people are too young to remember Mort Crim on local TV news. That, and the company’s nationwide client base, made the transition to MCCI logical. The shift to the MCCI name was a good business strategy, Friedman said. “They have been smart in evolving their Crim name,” he said. “Mort Crim still enjoys a fabulous ‘Q-score’ but only with a segment of the audience. He has been off TV news since 1997, before many of today’s business decision-makers can even remember.” The firm’s logo was redesigned last year and almost exclusively uses MCCI. That’s not to suggest the company is abandoning its heritage. “We’re not going to hide the fact our company is Mort Crim Communications,” Oprea said. “Mort’s legacy as a high-integrity journalist is very reflective in our organization,” Oprea said. “But I think over the years, the name MCCI and the MCCI Integrated Marketing logo/brand has become great shorthand for what we represent in the marketplace.” Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

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Report: Higher taxes helped Minn. economy outpace Michigan BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Higher taxes — including those on business — are the key to Minnesota’s economic good fortune in recent years, according to a report issued Monday by Michigan Future Inc. that takes an in-depth look at why our neighbor state has so outpaced Michigan in economic fortune since 1990. For example, in 2012 Minnesota ranked 11th in the U.S. with per capita income of $46,227, the highest in the Midwest, while Michigan was 35th at $37,497. The difference was $8,730. In 1993, the difference

favored Minnesota by just $555. Other key statistics? As of last December, unemployment in Minnesota was 4.6 percent, the ninthlowest in the country. Michigan had the fourth-highest, at 7.3 percent. And in 2012, Minnesota had a poverty rate of 11.4 percent, compared with 17.4 percent in Michigan. The main reason for those statistics, said the report, is a willingness by residents and elected officials in Minnesota to pay higher taxes to support infrastructure and education. This, in turn, explains Minnesota’s rich mix of knowledge-based industries that

pay high wages and the state’s success in keeping and attracting college graduates. The state can document a willingness — or at least an acceptance — by businesses, too. Minnesota businesses paid $1.7 billion in taxes in 2013, making up 8.3 percent of the state’s tax revenue. Michigan businesses paid $735 million or just 2.6 percent of state revenue. Minnesota has long had a tradition of “taxing and spending priorities that reflect its long-held belief that support for education from preschool to the university level, and high-quality government services, are key ingredients in pro-

ducing prosperity for its citizens,” the report said. According to U.S. Census Bureau data, Minnesota collected per capita state tax revenue last year of $3,880, compared with $2,535 in Michigan. When it comes to combined state and local taxes, in 2011, the most recent year for which data were available, Minnesotans paid an average of $5,016, compared with $3,655 in Michigan. In 2013, taxes as a percentage of personal income totaled 8.3 percent in Minnesota, compared with 6.6 percent in Michigan. Higher taxes mean more to spend. In 2013, per capita spending

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in Minnesota was $4,443, compared with $2,813 in Michigan. Minnesota spent $242 per capita on higher education, compared with $172 for Michigan, and spent $2,067 per capita on K-12 spending, compared with $1,447 in Michigan. Minnesota spent $1,134 per resident on health and human services in 2013, compared with $617 in Michigan, and $502 per resident on transportation, compared with $223 in Michigan. Road improvements and repairs are funded by a tax of 28.6 cents a gallon in Minnesota, compared with repairs funded by 19 cents a gallon in Michigan. As for individual taxes, Minnesota’s income tax rate varied between 5.35 and 9.85 percent, while Michigan’s was a flat 4.25 percent; sales taxes ranged between 6.875 and 7.875 percent in Minnesota, compared with 6 percent in Michigan; and the corporate income tax was 9.8 percent there and 6 percent here. In buttressing its case that low taxes aren’t the answer to a state’s prosperity, the report cited Indiana — long praised by conservatives for its low-tax, small-government, anti-union philosophies. It ranked 39th in the country in per capita income in 2012 at $36,902, which trailed Michigan’s by $595. “Lawmakers and governors in many states, including Michigan, have focused on cutting taxes and shrinking the size of their governments as the path to prosperous economies,” read the report’s conclusion. “Minnesota has traveled a different path.” The report was written by veteran business journalist Rick Haglund and funded by the Detroit-based Hudson-Webber Foundation and the Battle Creek-based W.K. Kellogg Foundation. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

MICHIGAN VS. MINNESOTA: TALE OF THE NUMBERS 䡲 Per capita income (2012) Minnesota: $46,227 Michigan: $37,497 䡲 Unemployment (December) Minnesota: 4.6 percent Michigan: 7.3 percent 䡲 Poverty rate (2012) Minnesota: 11.4 percent Michigan: 17.4 percent 䡲 Business taxes (2013) Minnesota: $1.7 billion, or 8.3 percent of state tax revenue. Michigan: $735 million or 2.6 percent of state tax revenue. 䡲 State and local taxes (2011) Minnesota: $5,016 per capita Michigan: $3,655 䡲 Spending (2013) Minnesota: $4,443 per capita Michigan: $2,813 Start saving today, visit:

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䡲 Higher education (2013) Minnesota: $242 per capita Michigan: $172 䡲 K-12 (2013) Minnesota: $2,067 per capita Michigan: $1,447

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FirstMerit sets grand opening of Southfield HQ

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Akron, Ohio-based FirstMerit Corp. is scheduled to hold the grand opening of its new Southeast Michigan headquarters in the Two Towne Square building in Southfield on Tuesday. The bank is combining two area offices, in Novi and Troy, whose leases ended this year. They had housed bank executives, commercial lenders, mortgage bankers and financial advisers. FirstMerit (Nasdaq: FMER), the holding company for FirstMerit Bank, has a 10-year lease with two five-year options on 38,000 square feet on the fifth and sixth floors in the new building. “The way it’s configured, we have room for 150 colleagues. We’ve got 80 in there now,” said Sandy Pierce, Pierce the former president and CEO of Charter One in Michigan who became chairman and CEO of FirstMerit Michigan last year. “We wanted everyone in Southeastern Michigan under one roof. You just get much more powerful leverage by being able to see each other,” said Pierce, who will be based out of the new headquarters. She said the bank will retain its large presence in Flint and the new headquarters will not result in any layoffs or job transfers. FirstMerit entered the Michigan market in April 2013 when it acquired Flint-based Citizens Republic Bancorp Inc., a bank founded in 1871, for $912 million. At the time the deal closed, Pierce said the acquisition would mean the loss of some of Citizens’ IT and back-office support jobs, but that because the two banks’ branch footprints had no overlap, most of Citizens’ 2,000 employees would be retained. Last fall, FirstMerit laid off 135 employees in Citizens’ former headquarters building in downtown Flint. More than 400 still work in the building. Pierce said FirstMerit had hired more than 40 employees for its Southeast Michigan operations since the Citizens acquisition as it beefed up its commercial lending and wealth management here. FirstMerit, founded in 1845, was one of a handful of banks in the country that showed a profit in each quarter of the recent recession. It has $24.5 billion in deposits, which makes it the 29thlargest bank in the U.S. As of June 30, 2013, the latest date for which data are available from the Federal Deposit Insurance Corp., FirstMerit was No. 8 in deposit market share in Michigan, with a share of 3.28 percent. Chase Bank was No. 1 at 18.93. FirstMerit was also eighth in the number of branches, with 156. Chase was No. 1 with 305. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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OPINION

Wright Museum needs TLC like DIA’s W

hile preserving the DIA and its art collection has been the focus of much attention during Detroit’s bankruptcy, the smaller, more fragile Charles H. Wright Museum of African American History has been struggling. (See story, Page 3.) The latter got a shot in the arm last week when the W.K. Kellogg Foundation donated $1 million to help it improve its ability to raise money, known in the industry as “capacity.” The goal is that the money, combined with previous donations, can be used to help the museum build a more sustainable business model, which it sorely needs. When the museum moved into its building 17 years ago, about half of its $6.7 million budget came from the city. An additional 30 percent came from earned income, such as memberships, admissions and events. That left about $1.4 million to raise from other sources. Today, it receives less than $1 million from the city to help support a much-diminished $4.7 million budget. Just less than half — roughly $2.1 million — came from outside donations. Given the city contribution is more likely to decline than increase, the museum needs to consider a future in which essentially all of its income is earned or from donors. The June 6 Nonprofit Quarterly examines sustainability questions around African-American museums through the prism of the Wright and identifies issues of fundraising, sense of purpose and the importance placed on African-American culture. The article notes that although the Wright has received $21 million in foundation funding over the past decade, that pales in comparison to the nearly $370 million committed by local and national foundations to the “grand bargain” to shore up the Detroit pension plans as part of the bankruptcy case in exchange for spinning off the DIA from the city. Schroeder Cherry, a board member of the Association of African American Museums, puts the questions this way in the article: “Is African-American history and culture considered as important as the legacy of European culture in Detroit? … It’s a conundrum, whose culture is worth saving, whose culture is deemed important to save (and) who are the connectors within the museum” to the resources that can help build sustainability. Museums like the Wright are important in preserving history and culture. Its future depends on its ability to fundraise more broadly, geographically and demographically. Saving the DIA and its collection is critically important, but so are other institutions that represent our regional and national history. The museum also is getting aid through a foundation-paid contract with the DeVos Institute of Arts and Management at the Washington, D.C.-based John F. Kennedy Center for the Performing Arts. But it also could use a dose of executive volunteerism — through board service or other actions identified by the museum — to help it execute its plan.

MARY KRAMER Free tuition to grow talent? Michigan has more than 70,000 openings on the state job board, mitalent.org. About half, says Amy Cell of the Michigan Economic Development Corp., are STEM-related. The U.S. Bureau of Labor Statistics predicts a shortage of 274,000 STEM workers in Michigan by 2018 — a combination of an aging and retiring workforce and an uptick in the economy. At nearly every business forum — from the Detroit Regional Chamber’s Mackinac Policy Conference to last week’s The Big M Manufacturing Convergence, produced by the Society of Manufacturing Engineers at Cobo Center — finding talent is a headache for employers. Maybe Walter Maisel has The Big Idea. Maisel, a mathematician and electrical engineer, is CEO of Kostal North America, a Germanybased auto supplier with a local headquarters in Troy. As a panelist discussing shortages of workers in science, technology, engineering and mathe-

matics — commonly known as STEM — Maisel suggested Michigan do what the German state of Bavaria did during the period when Maisel was searching for options beyond his family business of farming: It offered free tuition for people studying to be engineers. Maisel took advantage of it. So did hundreds — thousands — of other Germans. And Maisel says two things happened: Bavaria became a magnet for companies that needed engineers, and the rest of the country adopted Bavaria’s model and offered free tuition for disciplines beyond engineering. “Students only had to pay living expenses,” Maisel said last week. “Why can’t we apply that program here?” It’s something that state policymakers and university decisionmakers might consider. But where would the money come from? Maybe we need a “Michigan Promise” for STEM fields — modeled on the college tuition guaran-

tees created by a community trust in Kalamazoo for graduates of Kalamazoo Public Schools. It could pay off for Michigan, Maisel says. “Now Bavaria has well-known European companies who choose to have facilities there. There are many engineers.” Two other relevant points from last week’s Big M summit: First, employers have become accustomed to hiring people “ready to work” without on-the-job training. Actually, the trend among manufacturers — the benchmark — is to spend more than 3 percent of budget on internal training. The second, made by the SME’s Jeannine Kunz, is that companies that are terrific at managing supply chains need to “manage relationships with schools and higher education like they would other suppliers.” If you got a faulty part or poor quality, you would take it up with the supplier — or choose a different supplier. Good advice for companies hiring interns and entry-level talent. 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.

TALK ON THE WEB From www.crainsdetroit.com Re: How one man’s vision helps Detroit land Islamic conference Kudos to (Syed) Mohiuddin; Detroit needs more young people with his talent and passion for the city. I have no doubt that eventually Mohiuddin will return to Detroit full time after his stint at McKinsey & Co. in Chicago. Our governor is right — success of Detroit is paramount to the success of our state. I’m sure Detroit will be a great host for the ISNA convention. Welcome to Detroit! Welcome to Michigan! Quaid Saifee If it’s going to be somewhere, why not here? It brings more money to Detroit instead of other cities they’ve used in the past, and I don’t see any issue with that. Brian Portelli See Talk, Page 9

KEITH CRAIN: A pox on all their houses for delay on roads The Michigan Legislature is afraid to raise taxes for road repair because, I assume, its members are convinced that it will be held against them on Election Day. There is no perfect tax that would be fair to all, but the consensus is that an additional tax on gas/diesel fuel would be the best. A user tax seems far fairer than a general tax that might impact people who don’t directly use the roads. But no, both Republicans and Democrats are too inept to get together and do something about this most basic part of our infrastructure.

I find it inconceivable that they are so devoid of leadership that they are unable to pass any sort of bill that would properly fund the necessary repairs and rebuilding of our dangerously ignored roads. Forget that historically they have never spent enough to do the job properly. Normally, repairs seem to last only a few months at best. Horrible, dangerous roads affect everyone. Commerce rides on

highways, and when trucks can’t operate properly, they will go somewhere else. Tourism also depends on smooth roads. I cannot imagine anyone wanting to travel here with the current shape of our roads. There are too many alternative destinations that don’t require driving over the bone-jarring roads that Michigan is becoming known for all over the country.

From a political point of view, I only hope that our voters have at least as much wrath for elected officials for not doing something about our roads as they would have about any potential tax increase. I have no doubt that many of our elected officials will simply lose their elected positions. The voters are not going to ignore or forget this basic inability on the part of our elected officials to do the most basic functions of state government. Voters can take so much and then they will react. Politicians ignore that at their peril.

It doesn’t matter what political persuasion your elected official is. I am sure that we will hear plenty of politicians claim they were in favor of funding road repair, but it was the other guy’s fault. That is a lame excuse that won’t hold much water when Election Day rolls around. Our system and our legislators have failed the business community and the public at large. It will be amusing to hear their alibis over the next few months. It will also be interesting to watch the carnage at the polls in November. We shall have to wait and see.

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Fifth Third’s curiosity leads to jobs program Fifth Third markets itself as the “curious bank.” Normally, I’m a bit leery of marketing slogans, but a little curiosity about customers in financial difficulty has turned into the launch of a six-week campaign called Reemployment. Jack Riley, senior vice president and marketing director in Fifth Third’s regional headquarters in Southfield, says the program grew out of the bank’s curiosity about what was the main reason mortgage customers fell behind on their loans. “What we found out was that they weren’t deadbeats. They wanted to pay their loans, but they had lost their jobs,” said Riley. Deciding it might be more cost-effective to help customers find a job than to foreclose on them, Cincinnati-based Fifth Third launched a pilot program in 2012, engaging NextJob, an online job-training company based in Bend, Ore., to help customers prepare themselves to land that next job, which included updating or improving résumés, learning how to use social media tools like LinkedIn, and coach-led weekly webinars. On average, the 28 participants had been out of work for 22 months. Within six months of completing the pilot program, 11 of them had landed jobs and were back to making timely mortgage payments. Last year, Fifth Third extended the program to all its mortgage customers. Now, it is extending it to noncustomers. Those wanting a job help can go to remploy.53.com and use a jobseekers tool kit to post their résumés. Fifth Third has just launched an ad campaign that utilizes the radio and social media tools like Twitter, Facebook, LinkedIn and YouTube to drive individuals and would-be employers to the website and to those résumés. Those visiting the site can also apply for the 53 one-on-one coaching scholarships that the bank is offering for help from professional job counselors. The bank will add one new scholarship for every 53 retweets that are made about individual job candidates’ stories. Katrina Holmes is one of those whose job history is up on the site, and she’s one of the stars of the ad

TALK CONTINUED ■ From Page 8

Re: Three outlet mall plans in battle over retail anchors I think there is a market for at least one on the east side and one on the west. I live on the east side and would probably not go to one in Canton, nor by the airport unless I had to be there for another reason. By the time I paid for gas to get there and back, I doubt that I’d save much money, if any. educator57 How do they think people are actually going to get to this place? Have they ever driven down Ford Road? It’s already nonstop gridlock from 6 a.m. to 9 p.m. Jordan Baker

campaign. A veteran of 18 years in health care with an MBA from Baker College in Flint, Holmes, now 47, was laid off in 2012 from her job as the manager of a physiTom Henderson cian call center when the parent organization decided not to run its own center anymore. She quickly fell behind on the

Big

Bucks

mortgage on her Southfield house. In April 2013, she says she got a letter from Fifth Third. “It said they knew I had been laid off and wanted to give Holmes me this opportunity. The letter said there’s some assistance we can offer you. At first I was like, ‘I don’t know. There’s got to be a catch. A bank is trying to help me?’ “But what did I have to lose? I

was out of a job, and if I didn’t get a job, I was going to lose my house.” So she signed up and soon was getting help with her résumé, learning the ins and outs of social media and taking part in webinars every Thursday. Subsequently, she managed to land a contingent position at a local health care company and is interviewing regularly for permanent work. Since the ad campaign was launched at the end of May, Holmes said she has received two job offers from out-of-state organizations but is set on keeping her

house and staying in Southfield. “I’m hearing from people who say they saw me on YouTube or on Pandora or on the radio. I’m very excited. Not just for me, but for everyone who has this opportunity,” she said. I’ll be curious to see how things play out as the program continues. And curious to see if Holmes lands that permanent job that keeps her in her house. This column originally appeared as a blog post on crainsdetroit.com. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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June 16, 2014

$10M in state funding ‘integral piece’ in construction of Detroit rail tunnel BY CHRIS GAUTZ CAPITOL CORRESPONDENT

Financing is closer to being secured for the $400 million construction of a double-decker rail tunnel under the Detroit River — a project that has been in the planning for more than a decade. Lawmakers agreed last week to include a $10 million appropriation in the state budget to show their support for the new tunnel, with backers saying that should be what is needed to leverage funding from the federal government. “This is a very integral piece for us,” said Marge Byington Potter, executive director of corporate affairs for the Continental Rail Gateway, the group behind the effort. The gateway is made up of the Windsor Port Authority, BoreByington Potter alis Infrastructure and Canadian Pacific. The group operates the existing freight tunnel, which is too small for some larger trains. It cannot be widened, even after an expansion in 1994, Byington Potter said. The current Detroit tunnel — its entrance is within the square created by 12th and 16th streets, Bagley Street and West Lafayette Boulevard — was built in 1909 and enlarged in 1994. Half of the funding for the new tunnel project is coming from the

partners in the group, with an additional $100 million coming from the Canadian government and $90 million from the U.S. government that will be added to the $10 million in state funding. Byington Potter said she is confident that the other government funding will fall into place now that the state has shown it has skin in the game. Tim Hoeffner, director of the Michigan Department of Transportation’s office of rail, said the state’s funding has not been designated for a specific purpose. That will be worked out later, and a contract will have to be signed Hoeffner with the state before the money is handed over. “It shows a commitment to the project,” Hoeffner said. He said the state views the rail tunnel as an economic development project. The state — and the existing tunnel — are missing out on traffic that ends up being rerouted through New York or some other route because trains that are double-stacked or that carry multilevel rail cars to transport vehicles cannot fit through the tunnel. Byington Potter said that sometimes, double-stacked train cars are removed from the rail lines and put onto additional rail cars that can fit through the existing

tunnel. But that takes time, and most just decide to avoid going through Michigan. “Because of this pinch point, more and more carriers will go to the south,” she said. So the plan is to build a new and larger tunnel next to the existing one so Detroit can handle these larger trains. Byington Potter said that the project would take about 18 months to complete and that almost all of the design, engineering and permitting work has been completed. The group still needs to seek a presidential permit from the U.S. Department of State, but the expectation is construction could begin this year and would result in about 1,700 construction jobs. During construction, traffic would continue through the existing tunnel. Upon completion, there are no concrete plans on what to do with the old tunnel, Byington Potter said. The possibilities range from using it for passenger rail service or to keep it available for redundancies during maintenance of the new tunnel. The current tunnel handles about 400,000 rail cars annually between Detroit and Canada. The volume with the new tunnel is expected to be about the same but will be done more efficiently with the use of double-stacked rail cars, Byington Potter said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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GOING THE EXTRA SMILE Grant aims to help doctors find kids at high risk for dental problems, Page 15

People 䡲 T. Jann CaisonSorey, M.D., MBA, a member of the Henry Ford Medical Group with a specialty in pediatrics and adolescent medicine, was installed as president of the Wayne County Caison-Sorey Medical Society of Southeast Michigan. Caison-Sorey serves on the Michigan State Medical Society board of directors. 䡲 Myral Robbins, D.O., FAAFP, FACOFP, was installed as Michigan Osteopathic Association president. Robbins has served as president of the Michigan State University College of Osteopathic Medicine Robbins alumni board and is a past president of the Michigan Association of Osteopathic Family Physicians. Also, immediate past President Michael Weiss, D.O., director of the Women’s Wellness Institute in Rochester Hills, was named as a Life Professional Award recipient. 䡲 Beaumont Health System made the following announcements: Edward Dabrowski, M.D., has joined Beaumont as system director of pediatric physical medicine and rehabilitation. At the Royal Oak campus, Linda Caurdy-Bess, manager of social work, was recognized as a 2014 Diversity Champion by The Community House’s Race Relations & Diversity Task Force; James Grant, M.D., chief of anesthesiology, has been elected president of the Michigan State Medical Society; and Alicia DeCaria, RN, administrative manager, radiation oncology, has won the Metro Detroit Oncology Nursing Society’s Outstanding Oncology Nurse Award. Also, Heather Lowry, nurse practitioner, Beaumont Breast Care Center, has received the society’s Outstanding Advanced Practice Oncology Nurse Award; and Debra GuidoAllen, RN, vice president and chief nursing officer, Beaumont Hospital, Troy, has been named president elect of the Michigan Organization of Nurse Executives. 䡲 Harris Mainster, D.O., chairman of the Department of Surgery at Botsford Hospital, has received the Walter F. Patenge Medal of Public Service from the Michigan State University College of Osteopathic Medicine for his work in developing countries offering teaching and medical/surgical care. He is active in several professional and Jewish organizations. 䡲 Dottie Deremo, executive emeritus of Hospice of Michigan, was awarded the 2014 Leadership and Innovation Award from the Hospice and Palliative Care Association of Michigan. While at Deremo Hospice, Deremo led the integration of 10 small and independent hospice organizations into one statewide organization.

LARRY PEPLIN

Sister Mary Ellen Howard, who recently retired as president of the St. Frances Cabrini Clinic in Detroit, and Kelly Herron, the clinic’s executive director, see an evolving role for free clinics in the era of health care reform, along with changes in the makeup of the people the clinics help.

Free – but flexible In era of health reform, Medicaid expansion, clinics evolve to care for more than just the uninsured

FREE CLINICS: DEFINITION AND DATA What is a free health clinic? Most free clinics are small organizations staffed by a few paid employees, with volunteer physicians, nurses and social workers offering care and assistance.

1,007 $287,810 Free clinics operating in the U.S.

BY JAY GREENE CRAIN’S DETROIT BUSINESS

any of the 75 free health clinics in Michigan are changing their business models to become more flexible providers as hundreds of thousands of previously uninsured people gain private coverage under the Patient Protection and Affordable Care Act and the expansion of Healthy Michigan Medicaid, clinic directors say. EEPING FREE Some free clinics, which historically have not treated CLINICS FREE patients covered by health insurance or Medicaid, are Donations of adopting new policies to take care of the underinsured — drugs, supplies people with high-deductible health plans who can’t afford and cash are to pay $1,500 to $5,000 in out-of-pocket expenses before non- lifeblood of clinics, Page 14 preventive coverage kicks in. Other free clinics are becoming hybrid operations to accept Medicaid, private insurance and self-pay based on income. Many people who use free clinics are employed but earn too much for Medicaid. Some — who recently have purchased a lower-cost, bronze-level private plan — are going back to free clinics after dropping coverage because they can’t afford to pay the deductibles, clinic directors say. One free clinic in Southeast Michigan, Joy-Southfield Free Clinic in Detroit, changed its business model when it merged its health care operations last fall with Covenant Community Care, a federally qualified health center now with six sites.

See Free clinics, Page 12

Mean annual budget last year

18 Average number of hours per week a clinic was open

Hours range from once a month in a small office to several times a week in larger operations.

WHAT FREE CLINICS TREAT Most free clinics emphasize primary medical care, but some offer other services, including dental, eye and behavioral health care. A breakdown on what clinics provide.

73%

81%

Provided care for chronic diseases

Conducted physicals

62%

87%

Provided urgent and acute care

Dispensed medications

In Michigan: Most free clinics have trained staff to help patients enroll in an expanded Healthy Michigan Medicaid or in private plans on the insurance exchange, according to Free Clinics of Michigan, a Grand Rapids-based nonprofit network of free clinics in the state. Each clinic reports that it has signed up 30-150 people for coverage since April. Source: Survey, Americares U.S. medical assistance program

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Free clinics: Prescription for health reform? New biz models ■ From Page 11

Free clinics in Petoskey and Traverse City also recently merged or converted into federally qualified health centers, the Ann Arbor-based Center for Healthcare Research and Transformation said in a recent report. The federally qualified designation means the clinic meets guidelines for staffing, services and quality. “We’re in the process of transferring clinical care to a co-located federally qualified health center (Covenant Community Care) that will dramatically enhance access,” said David Law, executive director of the Joy-Southfield Community Development Corp., the parent of the clinic. This month, Law said, Joy-Southfield will change its mission from providing clinic services to providing health care education, wellness promotion, community development and social health services. When Covenant Community is fully ramped up, Law said, it will “do 12,000 visits a year. We are doing aggressive enrollment (in Medicaid and private insurance on the exchange) and will see both uninsured and insured patients.” Pam Haratsis, executive director of the Gary Burnstein Community Health Clinic in Pontiac, said clinic leadership has talked about becoming a federally qualified health center to diversify its revenue base un-

der health care reform. “We couldn’t help any more people than we do now,” Haratsis said. “We are now covering the uninsured and those with private insurHaratsis ance as well. Some people have horrendous deductibles.” To accommodate higher demand, Haratsis said, Burnstein plans to expand this year into a 7,000-square-foot building at 45580 Woodward Ave. in Pontiac. The building was a donation from the Robert S. Peterson Family Foundation that will enable the clinic to see patients in Wayne, Macomb and Oakland counties. Haratsis said the clinic currently operates in 1,500 square feet with four medical rooms, four dental rooms, a dispensary and radiology. Each month, the clinic’s 100 volunteers and eight paid staff see 300 patients, about 60 of them new. It fills more than 700 prescriptions. “Most of our patients are employed,” Haratsis said. “They have to be uninsured. We don’t want to bill. We are a true safety net. When they get insured, we find them a

new home and transfer them over.” For example, she said, the free clinic works closely with nearby Doctors’ Hospital of Michigan and McLaren Oakland Hospital in Pontiac. “We send patients to the hospitals all the time,” Haratsis said. “The ERs send us patients after they stabilize them. We are always trying to work out something with them.” Kelly Herron, executive director of the St. Frances Cabrini Clinic in Detroit, said Cabrini also expects changes in the makeup of its clients over the next year. “We are offering more case management services to clients who qualify and supporting them until they get insurance on the exchange or go on Medicaid,” she said. Cabrini, which is helping people enroll in Medicaid or with private policies, still averages 22 new patients a month, Herron said. “We haven’t seen a decline yet,” she said. “The biggest need people have now is information on how to be a health care consumer. Most never had insurance before. We are providing them with information on how to get a prescription filled and how to work with providers.” Cabrini takes care of an average of 217 patients a month, including 42 for mental health care and 25 with Medicaid appointments for case management services, Herron said.

Like the Burnstein clinic, Herron said, Cabrini is considering a new policy to offer care to people who have private insurance with high-deductible coverage or who are on Medicaid. “We will stay a free clinic, maybe convert to a hybrid clinic and offer insured services,” Herron said. “We are talking about it. “There is still a need for free clinics. There are a lot of homeless, lost people who are uninsured or underinsured.”

Free clinic evolution Sister Mary Ellen Howard, president of Free Clinics of Michigan, said free clinics are evolving their missions in a variety of ways to keep up with patient demand. “Free clinics tend to provide more comprehensive services than other places,” said Howard, who recently retired as president of the Cabrini Clinic. “People who come to us need a lot of help besides medical.” For example, Howard said, Cabrini conducts an initial visit with a social worker to determine patient needs. “Do you have food in the house, heat? Are your utilities turned on?” she said. “We help them through the process. Many never had insurance before. We are enrolling them

every day, every hour.” Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation, said many free clinic directors and boards are concerned that fewer people will donate to free clinics. “Free clinics are worried that people assume (the Affordable Udow-Phillips Care Act) eliminates the need for free clinics. We know that is not true,” said UdowPhillips, noting that at least 400,000 people in Michigan will continue to be uninsured in 2016. “Many free clinics are changing their focus … they are still the clinic of last resort.” Howard also said some free clinics are developing billing capacity to provide health care for patients with Medicaid and maintain their relationships with patients. In Michigan, free clinics planning to accept Medicaid include Catherine’s Health Center, Grand Rapids; Faith Medical Clinic, Pinckney; Health Intervention Services, Grand Rapids; and Holland Free Health Clinic, accord-

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Health Care From Previous Page

ing to the Center for Healthcare Research and Transformation. But Leslie McGuire, director of AmeriCares’ U.S. Medical Assistance Program, which provides free clinics millions of dollars in supply assistance, said only about 8 percent of clinics are expected to start billing for services or accept Medicaid. Currently, only about 4 percent of the nation’s 1,007 clinics receive reimbursement from third-party payers, AmeriCares found in a survey taken last year. “(In) states that have expanded Medicaid programs, like Michigan, the problem shifts from the uninsured to the underinsured,” McGuire said. Underinsurance is commonly defined as out-of-pocket costs greater than 5 percent of income for someone earning up to 200 percent of the federal poverty level. “With the exchanges, you might have an insurance card, but you can’t afford copayments and deductibles,” McGuire said. “They may also have problems accessing affordable medications.”

Accepting patients with coverage Kim Sibilsky, CEO of the Michigan Primary Care Association, said federally qualified health centers are ramping up their efforts to collaborate with free clinics. “We have always collaborated with free clinics,” Sibilsky Sibilsky said. “An interesting dynamic now is the free clinics are becoming hybrids and starting to participate in Medicaid.” Still other free clinics will work with the health centers to coordinate care for the uninsured or those who now have health insurance. “They will help people with private health insurance or Medicaid enter the health care delivery system and find physicians or other providers, Sibilsky said. Over the past four years, health centers have become one of the primary care focal points for people lacking easy access to private physicians. The federal government has allocated more than $1.3 billion to health centers over the past four years to hire staff, purchase equipment and expand services. “We are seeing a lot of people with high-deductible plans coming in with a silver or bronze-level” plan purchased on the health insurance exchange, Sibilsky said. “If someone has a policy like that, it creates a major gap in coverage. We have a procedure for people underinsured like that, and a sliding fee can be established for those families.” In Detroit, five federally qualified health centers operate more than 23 individual clinic locations. They are Covenant Community, Detroit Community Health Connections, Community Health and Social Services, Western Wayne Family Health Centers and Advantage Health Centers. There also are three “look-alike” health centers: Wellness Plan Health Centers, Health Centers Detroit Medical Group and Oakland Integrated Healthcare Network, which operates at three locations and plans to ex-

pand to 10 sites. These centers provide many of the same services as federally qualified health centers. “We are growing into larger operations with the expansion of Medicaid, but we will still be a place the uninsured will go,” Sibilsky said. While some experts predicted declining need for free clinics, McGuire said many Michigan clinics are expected to see more patients under health care reform, especially if newly insured patients have difficulty making timely appointments.

Still needed, even after reform Last year, an AmeriCares survey indicated that 32 percent of free clinics nationally expect to see more patients as a result of the Affordable Care Act. “Free clinics will see you and help transition you to another clinic that accepts your insurance,” McGuire said. Udow-Phillips said health centers and free clinics also will continue to have an important role in delivering mental health and dental services, especially with ongoing changes under Healthy Michigan. From 2007 to 2011, free clinics’ mental health visits increased 128 percent and dental care visits 36 percent, said a recent report from the Center for Healthcare Research and Transformation. Udow-Phillips said dental care under Medicaid will improve under health care reform because reimbursement to dentists will increase to commercial rates. “Very few dentists took Medicaid

in the past because the reimbursement was so low,” she said. “Delta Dental now is using a commercial fee schedule, and dental access will be significantly enhanced.” But Howard also said recent policy changes in how Michigan funds mental health services have increased demand at some free clinics. “There has been a big influx of patients who were dropped by the county mental health system and are now showing up at free clinics,” she said. “These are really sick people. We need to find them help.” Udow-Phillips said some community mental health agencies have reduced funding because of state budget cuts. Those cuts have translated, in some instances, into lower levels of mental health care, she said. “This is a real problem that the state Legislature wants fixed,” Udow-Phillips said. “One of the problems is timing. The agencies used to be paid before services (were rendered). Now they are paid after. There is a cash flow problem.” As with mental health, Howard said, free clinics are watching to identify gaps in services and what people will need in the future. “We are not sure what will be met and not be met by the Affordable Care Act,” she said. “As we enroll patients, we are losing them, so we need to do other things. This doesn’t mean there won’t be many uninsured people to treat. Once the dust settles, there will be plenty of needs for free clinics.” Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

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Health Care

Donations of drugs, cash help keep free clinics free BY JAY GREENE CRAIN’S DETROIT BUSINESS

To make ends meet and expand medical care, Michigan’s 75 operating free clinics continue to rely on corporate, pharmaceutical and nonprofit agency programs for medication, equipment, supplies and cash. Since 2010, AmeriCares’ medical assistance program has been providing more than a dozen free clinics in Michigan millions of dollars worth of free pharmaceuticals, medical supplies and equipment, said Leslie McGuire, director of AmeriCares’ U.S. partnerships and programs. In 2013, Stamford, Conn.-based AmeriCares sent 195 shipments to 16 clinics in Michigan, providing more than $3.5 million in free medical goods. The clinics include the Gary Burnstein Community Health Clinic in Pontiac and St. Frances Cabrini Clinic in Detroit. AmeriCares is the nation’s largest provider of donated medical aid to the U.S. health care safety net, last year delivering $70 million in prescription and over-the-counter medicines and medical supplies. This year, AmeriCares added three clinics to its online ordering system, which enables clinic directors to place orders directly based on available supplies, McGuire said. “They can place their orders

like on Amazon, based on their eligibility for products,” McGuire said. Drugs include medications for the heart, asthma, allergies, stomach ailments and diabetes. Pam Haratsis, Burnstein’s executive director, said the clinic has received $450,000 in supplies annually from AmeriCares since 2010. Burnstein’s annual budget is $300,000. “It has been a godsend,” Haratsis said. “We receive lots of medications, inhalers for allergies, Nexium for stomach problems, eye medicine and syringes. They don’t charge us for shipping, as other similar services” do. While the Joy-Southfield Clinic in Detroit doesn’t participate in AmeriCares’ free drug program, David Law, its executive director, said the free clinic has received about $500,000 over the past eight years in free or discounted medications from pharmaceutical company programs. Most of the other clinics also participate in the more than 200 pharmaceutical patient assistance programs. “We also try to get prescription coverage for brand-name drugs through pharmaceutical programs based on our patients’ eligibility (income),” Haratsis said. Kelly Herron, executive director of the Cabrini Clinic, said the free

drugs through AmeriCares help hundreds of its patients deal with diabetes, high cholesterol and hypertension. “They provide all our insulin and syringes, which are pretty expensive,” Herron said. “It would almost be cost-prohibitive” for Cabrini to buy those drugs using its own financial resources, she said. Like most free clinics, Cabrini receives almost as much free medicine — $300,000 last year from AmeriCares — as its annual budget: $380,000. “We also participate in the pharmaceutical drug programs and have local hospital systems that support us,” Herron said. McGuire said AmeriCares also receives free donations of medications from pharmaceutical companies that it passes on to free clinics. “We give out medications, prescriptions, vaccines and over-thecounter drugs to clinics in the U.S. and around the world,” she said. David Barash, M.D., chief medical officer of the Fairfield, Conn.based GE Foundation, said the foundation’s $2.1 grant this year to AmeriCares reflects its belief that the agency makes a difference in the 10 million patients it assists with free supplies. “As a foundation, we look for places we think can make mean-

ingful impact,” Barash said. “With 40 million uninsured now, even with the Affordable Care Act in three years, we will still have 20 million uninsured. We need to leverage our resources to improve systems in primary care clinics.” Barash also said the GE Foundation has provided AmeriCares $3.5 million since 2010. Some of the funding will help AmeriCares expand its programs to help treat patients with depression and pre-diabetes, he said. The GE Foundation also works with a number of federally qualified health centers to improve their information systems, Barash said. Some other free clinics in Southeast Michigan include the Wyandotte Clinic for the Working Uninsured; Dr. Albert B. Cleage Sr. Memorial Health Center, Detroit; HUDA Clinic, Detroit; Order of Malta Medical and Dental Clinic, Detroit; St. Vincent de Paul Health Clinic, Detroit; Mapi Free Medical Clinic, Taylor; Mt. Clemens Regional Medical Center Medical Outreach Clinic; Mercy Place Clinic, Pontiac; Tri-County Dental Health Council, Southfield; St. John Providence Community Health Physicians Who Care, Warren; Hope Medical Clinic, Ypsilanti; and Wayne Hope Medical Clinic, Westland. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

CON Report The following are selected filings for a certificate of need submitted to the state May 13June 9: Applications received

䡲 University of Michigan Health System, Ann Arbor: Expand surgical service by adding one operating room on the fourth floor, Room 4-230, of the Kellogg Eye Center; $1.02 million. 䡲 Amica Park, Trenton: Begin operation of a new nursing home with 39 special pool traumatic brain injury and spinal cord injury nursing home beds in renovated space on the third floor; $3.12 million. 䡲 TCW Surgical Center LLC, Detroit: Begin operation of a new freestanding surgical outpatient facility with one operating room; $1.79 million. Decisions

䡲 Greenfield Imaging LLC, Southfield: Initiate an MRI host site on Mobile MRI Network 66. The space will accommodate a 53-foot trailer with an MRI unit, and will also include patient changing, waiting and registration areas; $2.48 million. Approved. — Natalie Broda

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Grant aims to help doctors find kids at risk for dental problems BY JAY GREENE CRAIN’S DETROIT BUSINESS

The Altarum Institute, an Ann Arbor-based nonprofit agency specializing in health care, is using a $9.4 million federal grant to develop an early identification system to help primary care physicians screen more than 1 million children in Michigan who may be at high risk for dental problems. Working with Delta Dental of Michigan, the University of Michigan School of Dentistry and the Michigan Department of Community Health, Altarum is focusing on improving dental health of children ages 1-17 enrolled in Medicaid or MIChild, said Dan Armijo, Altarum’s vice president and director of information and technology strategies. Of Michigan’s 2.3 million children, at least 1.2 million are covered through Medicaid or MIChild, the state’s children’s health insurance program. “While many young children make it to the doctor, considerably fewer make it to see their dentist,” Armijo said. “We hope to change that and improve the outcome for Michigan’s at-risk children.” Jed Jacobson, Delta Dental’s Armijo senior vice president and chief science officer, said because children are more likely to have a primary care physician visit than a trip to the dentist office, educating physicians about good oral health and the need to refer children to dentists is paramount. Armijo said dental decay is the most common unmet health care need, especially for children living in families under the federal poverty line. For example, of those children who go to preschool Head Start, only 20 percent have ever been to a dentist’s office, he said. “This will save tax dollars because there is evidence that receiving preventive dental care significantly reduces cavities, and earlier dental intervention costs far less than ending up in the ER of a hospital,” Armijo said. Armijo said the child dental project is designed to create an automated system to increase access to dentists by integrating care with pediatricians and family practice doctors. Since 2011, UM’s dental school has been developing a list of questions for a screening and software program to help physicians identify children with dental problems and assist in referring them to dentists, said Margherita Fontana, a UM dental school professor and co-coordinator with the department of cariology, restorative sciences and endodontics. The questionnaire is being shared with physicians, and the software is expected to be developed by 2017, Fontana said. Fontana said UM also will work with Delta Dental to create a dental referral network for pediatricians and family physicians. “There are pediatricians right

now that are doing oral health screening,” she said. “Part of the problem is many children don’t see their dentist unless they are in pain or need to be hospitalized.” Because the majority of the 25 percent of children with serious dental problems live in low-income families, Fontana said parents don’t have a lot of time or resources to bring their children to the dentist. “Part of the approach is to catch the risk behavior early on in pediatrician offices,” Fontana said. “We can save a lot of money and time by educating parents in (pri-

mary care) offices about dental care. … But once you have a hole in your tooth, a cavity, you must be referred to a dentist.” Jacobson said dentists in Michigan also will test a monitoring system using the American Dental Association’s oral health measures. They include use of hospital emergency departments, follow-up, use of general anesthesia, treatment following sealant use and early extraction of permanent teeth. “This is exciting because for the first time, we will use quality metrics to measure some of the things

dentists already do,” he said. Jacobson said Delta Dental has had experience administering children’s dental health through the state Medicaid program’s Healthy Kids Dental, which began in 2000. “We see this grant as an extension of that program,” Jacobson said. Under Gov. Rick Snyder’s 2015 budget recommendation, Healthy Kids Dental would increase the number of children covered to 600,000 in 2015 from 500,000 this year. If the Legislature approves, the cost to expand the program

would be $5.4 million. Jacobson said at least 80 percent of the state’s 6,000 physicians accept the Healthy Kids Dental program. The state pays dentists who participate in Healthy Kids higher reimbursement rates than they do for adults, he said. “The dental profession does a good job in taking care of kids they currently see. The deficit is kids who don’t go to a dental office.” The funding for Altarum’s threeyear project was provided by the Centers for Medicare & Medicaid Services’ innovation program.

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This list of physician organizations encompasses physician hospital organizations and independent practice associations and is an approximate compilation of the largest such groups in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. IPA = Independent practice association. PHO = Physician hospital organization. ACO = Accountable care organization. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the organizations. NA = not available. B Company estimate LIST RESEARCHED BY SONYA HILL

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Spin, blame follow inaction on roads funding the state’s roads. The Michigan Senate What was generated spent more than 25 hours was plenty of blame as to during the final two days why road funding went of marathon sessions trydown in such stunning ing to cobble together defeat and plenty of spin support for a major inas to why it’s “not that big crease in transportation a deal really,” as Senate funding that the business Majority Leader Randy community and many Richardville, R-Monroe, motorists have been deput it to reporters after manding. the failed vote Thursday But the votes could not night. be found, and lawmakers Chris Gautz So what’s next? left for a 12-week sumMore talking, more work groups mer break to go home and campaign without having generated a and more “relentless positive acsingle dollar in new revenue for tion,” as Gov. Rick Snyder put it

Capitol B r i e fi ng s

afterward, to try to arrive at a deal before year’s end. What some Republicans are hanging their hat on is that they previously approved about $286 million in the state budget that takes effect Oct. 1 to go toward roads. But not all of it actually does. Almost $15 million of that will go toward rail and transit programs, including $1.1 million for the Regional Transit Authority and $2 million for airport improvement grants. And $127 million of it is just to meet the federal match, which sup-

porters of a transportation funding increase say underscores the need for a long-term solution because the money the state raises now through gas taxes and registration fees isn’t enough to meet the bare minimum to draw down federal funds. The rest of that money — $144.5 million — will be filtered through the state’s funding formula, which gives 39.1 percent of it each to the state and county road commissions. The remaining 21.8 percent is spread among cities, villages and townships across Michigan. Lawmakers also point to the fact

WHAT MAKES HEALTHPLUS DIFFERENT FROM OTHER SELF-FUNDED PLANS? Graham Smith, HealthPlus Vice President, Sales and Marketing

that more than $300 million in new funding was earmarked for roads in the current fiscal year . “That gets us entirely through the construction season we have in front of us,” Richardville said. “We’ve got enough money in the pipeline to keep the planners and the road builders busy until we can address this.” Included in the $300 million is $115 million for priority road projects, as determined by Republican legislative leaders in Lansing. As Crain’s reported in March, the last time the Legislature allocated money for priority road projects, it spent it almost entirely in districts represented by Republicans. Of the 108 projects funded across the state last year, just two were requested by Democrats. Lawmakers say this time the funding will be handed out more evenly. Addressing the long-term solution might come later this summer or early fall, Richardville said. Even if the Senate had passed the overall plan before it left for break, it would not have helped the roads this year. The budget year doesn’t begin until Oct. 1, and the main revenuegenerating bills for increased road funding would not have taken effect until January. With all of the attention focused on roads during the last days of session, Richardville and Snyder noted that there was not much interest in talking about the passing of the state budget — which lawmakers did get done, with little fanfare, before leaving for break. “It’s kind of funny that … the budget has almost become a nonstory. It used to be the story all the way through the summer,” Richardville said.

Comings and goings

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Leigh Greden, vice president of government and community relations at Eastern Michigan University, is leaving to become chief of staff to retiring U.S. Rep. John Dingell. The State Board of Education seeks public input at its June 17 and Aug. 12 meetings on qualifications for a replacement for Superintendent Mike Flanagan, who is retiring next year. Input also can be emailed to statesuptsearch @michigan.gov. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit June 6-13. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. Heritage Collision Inc., 21501 Pinehurst, Trenton, voluntary Chapter 7. Assets and liabilities not available. Community Home Healthcare Inc. and JAP Consultants LLC, 28200 Orchard Lake Road, Suite 102, Farmington Hills, voluntary Chapter 11. Assets and liabilities not available. — Natalie Broda

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CALENDAR HONORING ENTREPRENEURS Join Crain’s Detroit Business in its 2014 Salute to Entrepreneurs, 7:30-10 a.m. July 24 at The Henry, Autograph Collection, Dearborn. Every year, Crain’s recognizes entrepreneurs for their innovation, problem-solving abilities or sheer relentlessness. In addition to the awards ceremony, hear stories of David vs. Goliath, first-hand accounts from business executives who find ways to compete against larger rivals. Featuring Eoin Commerford, CEO, Moosejaw Mountaineering; Marc Gardner, founder, North American Bancard LLC and PayAnywhere LLC; and Lydia Gutierrez, president and CEO, Hacienda Mexican Foods. Roundtable discussions will provide in-person advice from the experts featured in the Crain’s Small Business Strategies webinar series. Tickets are $50, or $45 if purchased in groups of 10 or more. Preregistration closes at 5 p.m. July 18. If available, walk-in registration will be $65 per person. For ticket information, call Kacey Anderson at (313) 446-0300, email her at cdbevents@crain.com, or visit crainsdetroit.com/events. Join the conversation with #cdbsalute.

WOMEN IN LEADERSHIP SUMMIT Join dynamic women from around metro Detroit for the 12th Annual Workplace Diversity Forum — Women in Leadership Summit, 9 a.m.-2:30 p.m. June 20 at the Oakland Schools Conference Center, Waterford Township. Keynote speaker is Nipa Shah, founder and Shah CEO of Jenesys Group LLC, a Novi-based online marketing company that is Woman Business Enterprise-certified and a minority company. The summit will feature a civil rights presentation by historian and author Judith Levin Cantor, author of Jews in Michigan: Discovering the Peoples of Michigan; Letter from the Jewish Community, included in the Detroit 300 Tricentennial Time Capsule; and the Michigan Jewry entry in the Encyclopedia Judaica. Cantor has served as president of the Jewish Historical Society of Michigan and as a board member of Preservation Wayne, the Historical Society of Michigan and the Michigan Women’s Historical Center and Hall of Fame. A panel discussion is scheduled with Laurie Van Pelt, director of management and budget for Oakland County; Brenda Lawrence, mayor of Southfield; and Elizabeth Carlson, president, management division, Beztak Properties. Topics are to include personal success stories, positive influences on the road to success, and helping others on their journey to success. Tickets are $50 each, $45 for five or more, or $400 for 10. Registration is open until the day of the event. For ticket information, call Joi Cunningham or Willetrea Washington at (248) 736-8865; email washlwocedc@gmail.com; or visit ocedc.net.

TUESDAY

onsite registration opens at 10 a.m.

June 17. Contact: Mary Nickson, (734) 615-4424; website: michigan-gcs.com.

JUNE 17 Doing Business with the Department of Defense. 9-11 a.m. Macomb-OU Incubator, Logistic Specialties Inc., Michigan Defense Center. Targeting small businesses, seminar will cover steps of doing business with the U.S. Department of Defense, from preparation, to taking action and completion. Macomb-OU Incubator at Velocity Collaboration Center, Sterling Heights. Free. Registration required. Contact: Joan Carleton, (586) 884-9324; email: macinc@oakland.edu; website: oakland.edu/macombouinc.

Michigan Growth Capital Symposium. 10:30 a.m.-6 p.m. June 17 and 7:30 a.m.2 p.m. June 18. University of Michigan Ross School of Business Zell Lurie Institute of Entrepreneurship. Venture capitalists and angel investors can meet executives of early-stage and emerging-growth companies seeking $1 million to $20 million in funding. With keynote speaker Kevin Conroy, CEO and president, Exact Sciences; Jack Miner, director, Venture Center, University of Michigan; Russ Straate, associate director, Venture Center, University of Minnesota; others. Ann Arbor Marriott Ypsilanti at Eagle Crest, Ypsilanti Township. Tickets $195-$425. Online registration closed;

WEDNESDAY JUNE 18 Beer & Builders. 6-8 p.m. Grand Circus, Detroit Young Professionals. Networking event for tech companies and startups across Michigan. The June theme is “Tell Your Story,” and featured startups are Zoom, MyFab5 and Backstitch. Grand Circus, Detroit. Free; registration required. Contact: Phill Coleman, (313) 806-5821; email: phill@grandcircus.co; website: eventbrite.com/e/junes-beer-builders -tickets-11906064359.

Business Matchmaking Summit. July 22. Pure Michigan Business Connect, Detroit Regional Chamber. Invitationonly supplier summit designed to help Michigan companies gain procurement opportunities with Chrysler Group LLC, Ford Motor Co., General Motors Co. and 42 of their tier-one suppliers. Michigan companies interested in attending must complete the online application and identify their qualifications based on the needs listed (puremichiganb2b.com/b2bweb/#DetroitThree). Invitations will

be sent to companies that are the best fit for specific opportunities. Each invited company will receive at least one private meeting to discuss potential opportunities with one of the procurement teams present at the summit. Cobo Center, Detroit. Priority application deadline is June 20. Applications received after that date will be considered only if needs exist that have not been addressed through the initial application window. Applicants will be notified by July 3 whether they have been selected.

UPCOMING EVENTS The Road to Reinvention. 7:30-9 a.m. June 26. Engineering Society of Detroit. With Josh Linkner, CEO and managing partner, Detroit Venture Partners, talking about his new book, The Road to Reinvention: How to Drive Disruption and Accelerate Transformation. ESD headquarters, Southfield. $25 ESD members, $40 nonmembers; join ESD for $114 and attend the program free. Contact: (248) 353-0735, ext. 222; website: ww2.esd.org/EVENTS/2014/2014-0626-linkner.htm.

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BUSINESS DIARY ACQUISITIONS & MERGERS Albireo Energy LLC, a portfolio company of Huron Capital Partners LLC, Detroit, announced the acquisition of Energy Options Inc., Edison, N.J., a provider of building automation systems and monitoring services. Websites: huroncapital.com, energy-op tions.com.

CONTRACTS Rubicon Genomics Inc., Ann Arbor, signed agreements with seven distributors in Europe to expand the availability of its DNA library preparation products. The new distributors are Cambridge Bioscience Ltd., Cambridge, United Kingdom; Biozym Scientific GmbH, Oldendorf, Germany; AB Analitica srl, Padova, Italy; Sopachem Life Sciences, Netherlands, Belgium and Luxembourg; Nordic Biolabs AB, Taby, Sweden; Immuno Diagnostic Oy, Hämeenlinna, Finland; and YBUX Co. Ltd., Slovak Republic and Czech Republic. Website: rubicongenomics.com.

EXPANSIONS Luna Entertainment LLC, Novi, owner of the Freedom Hill Amphitheatre, opened Freedom Hill Banquet & Event Center at 15000 Metropolitan Parkway, Sterling Heights. Telephone: (586) 795-2800. Website: freedomhill.net/banquet. Hungry Howie’s Pizza Inc., Madison Heights, opened a new location at 24265 Novi Road, Novi. Telephone: (248) 348-1111. Website: hungry howies.com. ITC Holdings Corp., Novi, announced that the Public Service Commission of Wisconsin approved its applications

PEOPLE

to become an authorized public utility holding company in the state and for its operating subsidiary ITC Midwest LLC to become a Wisconsin public utility. The approvals represent ITC Midwest’s first step toward developing its portion of a regional transmission project in Wisconsin and Iowa. Website: itc-holdings.com. Ross Mortgage Corp., Troy, opened an office at 37257 Mound Road, Suite D, Sterling Heights. Telephone: (586) 2644440. Website: rossmortgage.com. FEC Automation Systems, Shelby Township, a manufacturer and installer of fastening and assembly equipment for the automotive industry, opened an office in Chelmsford, England. Website: fec-usa.com.

MOVES Frush Financial Group from 115 E. Dunlap St., Northville, to 15550 Haggerty Road, Northville Township. Telephone: (248) 349-3837. Website: frush.com.

NEW PRODUCTS Ann Arbor Spark, a nonprofit economic development organization, Washtenaw County, and the Ann Arbor/Ypsilanti Chamber of Commerce joined with QLBS, Auckland, New Zealand, in launching the Virtual Business Advisor, a self-assessment tool to assist entrepreneurs and early-stage businesses as they work toward their next stage of growth. Website: virtualbusi nessadvisor.com.

ARCHITECTURE Kenneth Clein to higher education design studio leader, Harley El-

lis Devereaux Corp., Southfield, from principal and higher education market leader, Quinn Evans Architects Inc., Ann Arbor.

Clein

FINANCE Sheri Miles to marketing director, Huron Valley State Bank, Milford, from marketing manager, Fifth Third Bank, Southfield. Also, Susan Bowen to vice president of mortgage lending, from execuMiles tive vice president, Amera Mortgage Corp., Milford.

HEALTH CARE Gary Lalicki to executive vice president of quality, training and product design, Health

Management Systems of America, De-

STARTUPS Firehouse Pub opened at 23018 Greater Mack Ave., St. Clair Shores. Telephone: (586) 776-0062. Website: fire housepubshores.com.

Lalicki

troit, from vice president of clinical operations.

IN THE SPOTLIGHT McLaren Macomb, Mount Clemens, part of McLaren Health Care Corp., has named Andrea Phillips as vice president and chief nursing officer. She succeeds Susan Durst, who is retiring July 1. Phillips, 44, Phillips had been an ambulatory network administration director for St. John Providence Health System. Before that, she was with McLaren Macomb’s nursing management team and had served on active duty in the U.S. Air Force and as a reservist. Phillips earned an associate degree in nursing at Macomb Community College, a bachelor’s in nursing from Excelsior College in Albany, N.Y., and a master’s in health care leadership from Siena Heights University.

sales executive, Detroit Marriott Troy, and Emily Brandt to catering sales executive, from catering sales manager, Detroit Yacht Club, Detroit.

MANUFACTURING Mats Ceder to DeSta-Co Industries,

president,

Auburn Hills, from vice president and general manager, Genesis Attachments LLC, Superior, Wis.

Ceder

president of technical operations and product development, ChannelNet, Dearborn, from technical director, ForeSee Results Inc., Ann Arbor. Mark Vento to business development director, The Brandt Group, Waterford Township, from consultant.

NONPROFITS Katy Olsen to development direcMeadow tor, Brook Theatre, Rochester Hills, from major and planned gifts officer, Crittenton Hospital Medical Center Foundation, Rochester Hills.

HOSPITALITY Brett Montgomery to executive chef, Detroit Marriott Renaissance Center, Detroit, from executive chef, Renaissance Cleveland Hotel, Cleveland. Also, Kelsey Ramthun to senior catering sales executive, from catering

MARKETING Rex Timbs to vice

Olsen

Catherine Calvano to CFO,

Tamarack Camps, Bloomfield Township, from CFO, The Fisher Group LLC, Southfield.

“RETHINK” AND “RENEW”

ARE TWO WORDS

DETROITERS KNOW WELL. – MICHAEL WRIGHT

CHIEF OF STAFF, PRESIDENT’S OFFICE, WAYNE STATE UNIVERSITY BOARD EXECUTIVE COMMITTEE, DMCVB

America’s great comeback city is the perfect location for the 2014 Academy of General Dentistry’s annual meeting and exhibits themed “Rethink. Refresh. Renew.” taking place in June. That’s because Detroit is doing an amazing job of renewing its own enthusiasm and assets. So to all 4,000 attendees and their predicted spending of over $7.5 million, we say, bring it on. We know you’re going to feel as good about Detroit as we feel about ourselves.

Be part of America’s great comeback city. For more comeback stories, visit meetdetroit.com/comeback-stories.

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Kennedy: Surge primes company for pump biz boost, new HQ ■ From Page 3

The move will consolidate Kennedy’s 70 employees from a 30,000-square-foot repair center and corporate offices along Pontiac Trail on Technical Drive and a 40,000-square-foot warehousing and submersible-pumps center in New Hudson into one location along Pontiac Trail east of Old Plank Road, less than two miles from the current offices. The company, which employed 50 about five years ago, expects to add 10-15 in the next three years. Nachtweih said growth could continue at half a dozen new jobs a year until it reaches 100 employees at the new building. Brighton-based Brivar Construction Co. is general contractor on the new location, and Michael McKelvey of Ann Arbor is project architect. Kennedy serves a mix of customers in the automotive, energy, steel, chemical and other industries, along with municipal and state governments. Nachtweih and company Vice President Mark Hemeyer said new government demand for data management tools and cost controls in water and wastewater systems has added to Kennedy’s growth, along with the recovery of the automotive industry and new repair service business in other states. Revenue for Kennedy reached $25 million in 2013, up from $17 million in 2008.

Capacity building Engineering new pump systems, and new tools to monitor them, is in demand from cities and townships looking to manage water and waste-

water collection costs and from energy companies looking for efficiency in plant pumps as a means of lean process improvement. But Kennedy’s automotive sales are just a response to increased production. “We do get some growth along with automotive,” Hemeyer said. “Our products often go in plants, and if you get (conditions) like we’re getting now where plants increase use by 33 percent or 66 percent growth by adding a second or third shift, then some facilities will need service and maintenance sooner.” The company has added four engineers and two engineering students since 2010. About 30 employees work on the Kennedy shop floor machining or repairing pump components, a line of business that was just beginning when Nachtweih joined the company in 1988. Building new shafts, shaft sleeves, valves and other components can mean repairing a pump system in a fraction of the time and cost compared to ordering a replacement from the original manufacturer, he said. “It’s a collection of equipment that allows us to make one or two replacement units of a product, not large volumes of it, because that’s usually all our customer needs,” Nachtweih said. Municipal governments, in particular, have been a growing revenue source. Kennedy Industries launched a new Web-based monitoring and data management tool, KI System Master, about five years ago. Hemeyer said the data tool,

A lot of our “ competition in this market is a sales office based in someone’s basement or wherever.

”

Mark Hemeyer, Kennedy Industries Inc.

hosted on Kennedy’s own servers, allows municipalities to monitor water and wastewater systems and predict when flooding or pump failure will occur. That can help reduce repair and operating costs, an appealing feature for governments with smaller budgets and staff. This year, Kennedy signed a contract to develop a data management system for Battle Creek and already has provided the system for Northville and Northville Township. The company has water or wastewater contracts with Marshall near Battle Creek and Pittsfield Township near Ann Arbor and installed a wastewater collection system for Livingston County’s Genoa Township. “When a lift station has dual pumps and you lose one, the other would continue to operate, but you’d know that a lot sooner with (the data tool) and get a handle on it,” said Thomas Casari, director of the Northville Township Department of Public Services, which installed the System Master tool about six months ago. “But on the water side, we have a couple booster stations in the water tower, but we might want to know the tower is filling. If it fills on the wrong time and it happens to be a heavy-use day, we might exceed your capacity limits from Detroit (Water and Sewerage Department) and pay for that. Now you can see that happening and stop that or directly control what time it fills.” Kennedy Industries was founded in 1959 by Calvin Kennedy, who sold the business in 1985 to Ed Eberle and Darrell Underwood. Nachtweih became a co-owner in 1995 when he and fellow employees Dave Lake and Steve Sadler bought out the previous owners. About three years ago, Nachtweih bought out Lake and Sadler, although the two continue to co-own the Milford building and collect lease payments.

the economic recovery. Corrosion Fluid serves steel, energy, food and beverage and some pharmaceutical customers, and its PumpServe division has seen about 50 percent revenue growth since the 2008 market collapse, he said. Revenue peaked at around $100 million for Corrosion Fluid in 2012. “We’ve also invested substantially in pump repair; that’s one of the biggest areas of growth for our company,” Andronaco said. “But it takes a very large investment. “The big pump repair houses, like Kennedy and ourselves and a few others, we engineer some upgrades that give a (pump) strength to resist torque or (features that add) more flow efficiency. “Companies today will still go with their current pump until it crashes out, and to order a new one might take six months, but someone who specializes in replacement can turn it around in two to four weeks.” Nachtweih said that about 10 percent of Kennedy’s service business is now in other states, such as

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Kennedy Industries executives Jeff Nachtweih (left) and Mark Hemeyer show off the site of the company’s new headquarters in Milford Township.

Illinois, Wisconsin, Pennsylvania and New York. Among its larger customers for new pump components are DTE Energy Co. and the Michigan Department of Transportation, but Nachtweih said the company plans to grow its non-Michigan customer base substantially. On a local level, Hemeyer said, machining new parts is what gives Kennedy a competitive edge in sales against several out-of-state companies targeting the same manufacturing customers. “A lot of our competition in this market is a sales office based in someone’s basement or wherever,” he said. “And if you need a replacement part, they order it for you. “Because we can be a 24/7 service and repair center if we need to be, our customers appreciate if they have a problem at 3 in the morning, we can work on it at 3 in the morning. Because when does something usually break and need repair? At a very inopportune time.” Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

Out-of-state biz springs up

Strategies for Executives in Transition

Hemeyer will complete a fiveyear purchase plan to become a 25 percent owner of Kennedy at the end of this year, with Nachtweih retaining the rest. The two also will own half of the new building apiece. Kennedy receives queries routinely from private equity firms looking to buy a stake in the company, but the owners have had little interest. Joseph Andronaco, president and co-owner of Farmington Hillsbased Corrosion Fluid Products Corp., said his company doesn’t serve municipal customers but has seen growth of its own from manufacturing customers as well as from

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Solar: Utilities should offer more options, says PSC draft report ■ From Page 3

The options would increase the collective 28-megawatt solar power customer programs by at least 50 megawatts over the next 18 months. Options include allowing customers to build their own solar projects and receive subsidies for the power generated. Customers also could pay full electric rates minus newly designed credits for the solar power generated. Or they could choose some combination of the two options.

Public push The staff report said the main complaint about DTE’s and Consumers’ existing programs is the lottery method of awarding solar contracts to customers. The system is inefficient, leads to “boom and bust” cycles for installers and causes some customers to drop out because of cost and timing factors, the report said. Detroit-based DTE and Jacksonbased Consumers initiated the lottery system to ease their administrative burdens and spread the programs out over several years. For example, the utilities’ initial

solar programs were oversubscribed by customers much more quickly than expected. “A number of Michigan residents have expressed interest in installing solar projects or participating in a community solar project,” the report said. Brad Klein, a senior attorney with the Chicago-based Environmental Law & Policy Center, said eliminating the lottery system and moving to a more structured system can reduce costs and delays along with minimize customer and installer frustration. The report concludes that clear improvements “can be made to allow for greater market confidence, the elimination of boom-and-bust cycles and more responsiveness to the falling price of solar materials, labor and balance of system.” To address these issues, the staff report recommended three options the utilities should consider this year. Each of the options includes financial incentives or subsidies that would help to defray costs of installing residential solar rooftop panels or community solar programs.

HOW IS ELECTRICAL POWER MEASURED? The kilowatt-hour is the most common billing unit for purchasing electricity from power companies. It is equal to 1,000 watts per hour. For example, 1,000 watts of power produced over 60 minutes equals 1,000 watts per hour, or 1 kilowatt-hour or 1 kwh. One megawatt equals 1,000 kilowatts or 1 million watts — enough energy to power 200 average homes. The Michigan Public Service Commission’s recommendation that DTE Energy Co. and Consumers Energy expand their solar programs by 50 megawatts could power up to 10,000 additional homes.

Option 1: Tax credits Under this option, a residential utility customer would use a 30 percent federal tax credit available until the end of 2016 to install a 5,000-watt rooftop solar panel. Installing a 5,000-watt rooftop system costs the average homeowner about $17,500 before federal tax credits and $12,500 with the credits. Once installed, customers simply would enroll in Michigan’s 6-yearold net metering program, which allows customers to offset costs of electric power by using solar panels or other renewable-energy sources. DTE and Consumers would pay customers a net metering subsidy based on solar production. DTE estimates the subsidy currently is about 9 cents per kilowatt-hour. To fund the customer subsidy, DTE and Consumers could each use the $15 million they have banked in collected customer fees so far from a renewable-energy surcharge, said Klein, who is a member of the work group. “The staff’s recommended program expansions could easily be funded out of those resources alone without any increase in existing customer renewable-energy surcharges,” he said. Both utilities said they are taking time to evaluate the report before making final decisions regarding the report’s recommended options for expanding current programs.

Option 2: Meter and credit Under the second option, participating customers would pay full electric rates to utilities. Customers’ solar generation would be metered and credited at a special “value of solar” rate, yet to be developed for Michigan, plus given a “renewableenergy credit” on their bill. For example, the VOS credit could be equal to 10 cents per kilowatt-hour and the REC credit to 5 cents per kilowatt-hour to bring the total credit to 15 per kilowatt-hour. Those credits would be subtracted from the customer’s full electric bill. Customers also would pay a flat $75 interconnection fee to cover transmission and infrastructure repair costs.

Option 3: Hybrid Under option three, utility companies could offer customers a blend of the first two options. For example, the customer would use net metering, but any extra solar power generation sent to the utility electric grid would be credited using the VOS reimbursement system. For utilities, the staff report said, the benefit for option three is that transmission and infrastructure costs would be partially covered because customers are also paying retail rates for electricity they purchase. Customers benefit because

they can generate solar power and receive savings on their bills.

Market demand Under all three options, residential customers would be limited to a maximum 20 kilowatts of solar generation. Option one can be immediately implemented because utilities would have to revise their energy plans only slightly, said Doug Jester, a principal with 5 Lakes Energy LLC, a Lansing-based energy consulting firm. “In the long run, I prefer option three as being based on principles that will be good policy and workable even if solar takes off and is widely used in Michigan,” Jester said. The staff report said customers and solar installers favor all three options because it would eliminate the lottery system.

Mixed views Early reaction to the draft report was, as expected, mixed, depending on whether the expert represents a utility company or a solar advocacy group. The final report with work group committee comments is expected to be released to the public June 30. “We took part in a healthy conversation about options for solar energy, and we will look carefully at the options laid out in this report,” Brian Wheeler, Consumers senior public information director, said in a statement to Crain’s. David Harwood, DTE’s director of renewable energy, said DTE will provide comments to commission staff this week. “DTE Energy supports continued development of renewable energy in Michigan, and we look forward to working with the (commission) and Legislature to develop renewableenergy policies that are cost-effective and fair for all our customers,” Harwood said in a statement. Solar advocates generally praised the report, suggesting utility companies expand solar programs immediately so customers can continue to take advantage of the 30 percent federal solar energy tax credit before it expires at the end of 2016. “We’ll make some detailed recommendations to staff as part of our technical comments, but I think there are some very good ideas here,” Klein said.

Lighting the way If adopted — no vote is planned — these options would join programs for creating larger 20- to 500kilowatt community solar programs recommended by the commission late last year. A community solar program, an alternative to rooftop solar panel

systems, allows customers, investors or utilities build a large solar panel array on a neutral site to share power generation and cost savings. The draft offered three options under which utilities could begin to develop a community solar program: 䡲 Consumers and DTE could voluntarily fund company-owned community solar projects. 䡲 Customers could invest in a joint solar panel project. 䡲 A crowdfunded third-party company could create a community solar project, take customer investments and sell solar energy to DTE or Consumers. The report said that if the utilities agree with the recommendations, Consumers and DTE should move quickly to expand their solar programs because of the 2016 expiration of the solar tax credit. DTE officials have said the utility plans to produce 2 percent of its state-mandated 10 percent renewable-energy production through solar. Consumers plans to produce 0.7 percent of its 10 percent mandate from solar. Wheeler said Consumers plans to complete its solar program — called the Experimental Advanced Renewable Program or EARP. When completed next year, EARP will provide about 6 megawatts of solar power. Klein said the staff report clearly concluded that customer demand is sufficient to expand the utility solar programs in Michigan and that it can be done cost effectively, helping the state’s fledgling solar industry, without any further renewable-energy surcharge on electric customers. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene MPSC

Level One, Charter One start wealth units Two banks announced last week that they have launched wealth management divisions. Farmington Hills-based Level One Bank, which has seven branches, has launched its wealth management operation after recruiting two veterans in the field, said Timothy Mackay, senior vice president of retail and mortgage banking. Services include financial planning, Social Security analysis, business succession planning, college education planning, family wealth transfer strategies and insurance and investment advising. Also last week, Rhode Islandbased RBS Citizens Financial Group Inc. announced it was launching wealth management services for its Charter One Bank operations in Ohio and Michigan. Services are available to customers with investable assets of at least $500,000. Charter One will offer wealth management at 30 of its Michigan branches, most of them in Southeast Michigan, and at 33 branches in Ohio. Charter One has 102 branches in Michigan. — Tom Henderson

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Wright: ‘We have a revenue problem’ ■ From Page 3

And they’re funding the museum’s intensive capacity-building consultation with the DeVos Institute of Arts and Management at the Washington, D.C.-based John F. Kennedy Center for the Performing Arts. “The museum, and its role in the community, is too important to continue simply fighting for survival, year in and out,” Moore said. “We don’t have a spending problem, we have a revenue problem.” Over the past three years, the museum has cut its staff by more than half to 38 employees, among them just a single curator and one development person—something Ford Foundation President Darren Walker likened to “eating your seed corn.” Said Moore: “At the rate that we’re going, people are doing two and three different positions ... and that’s just not sustainable. “You either lose good people ... or the quality of what you’re producing goes down.” With the foundations’ support, the museum is looking at a number of methods and models to develop financial stability, Moore said. “We are not the (Detroit Institute of Arts); we are not the (Detroit Zoo). ...We don’t believe we could get a three-county levy for us,” she said. “But we know this institution is so important, ... we have to figure out how we sustain it.”

A lot to offer The Wright Museum, set to turn 50 next year, provides exhibitions, educational programs and events highlighting the history and culture of African-Americans and their African origins. It houses more than 30,000 artifacts and archival materials and is home to exhibits covering topics including the Underground Railroad, Harriet Tubman, Detroit’s labor movement — and its core exhibit, “And Still We Rise: Our Journey Through African American History and Culture.” In recent years, the museum also launched programming such as exercise classes aimed at improving patrons’ health and the museum’s relevance in the community. A total of 256,684 people came through its doors this fiscal year, which ends June 30, up from just over 215,000 in the 2013 fiscal year.

tions like those focused on AfricanAmerican history don’t necessarily have the same access to high-wealth donors that more mainstream museums have,” Johnson said.

Aid from elsewhere To help the Wright Museum look for ways to secure sustainable revenue, the New York City-based Ford Foundation made a three-year, $500,000 grant to the museum, and the Troy-based Kresge Foundation made a $400,000 grant last year. The two foundations also encouraged the museum to apply for an 18-month intensive capacitybuilding program with the DeVos Institute at the Kennedy Center, with funding from them and the Miami-based John S. and James L. Knight Foundation. The Wright Museum is a major cultural asset, said Kresge’s program officer, George Jacobsen. It’s “telling the story of Detroit’s majority population and in many ways, through (its) programming, trying to bridge some major cultural divides.” Kresge’s grant to the museum will help restaff its development department, develop a fundraising plan, institute technical projects to enhance the visitor experience and hire a consultant to help develop a sustainability plan, Jacobsen Jacobsen said. The Ford Foundation grant also will support the sustainability plan and cultivating long-term relationships with potential funders, said Joshua Cinelli, the foundation’s manager of strategic communications and media relations. Recently, the Battle Creek-based Kellogg Foundation came in with an additional $1 million to support fundraising capacity efforts, educational and youth cultural programs and other programs.

‘Provide a spark’

The new work will build on efforts the museum is already putting in place. Last year it launched a campaign to get 1,000 donors to give $1,000 every year. So far it has With its move to East Warren Av- raised $350,000, including $100,000 enue and Brush Street near Wayne gifts from the museum building’s State University in 1997, the museum architect, Howard Sims, founder faced new requirements for higher and chairman of Detroit-based SDG levels of staffing and support needed Associates LLC; and museum for the 125,000-square-foot space, trustee Jon Barfield, president and CEO of Tallahassee, Fla.which was nearly five times based LJ Holdings Investas large as its previous ment Co. LLC, which has space. The higher operating an office in Birmingham. costs have continued to “My gift was intended hamper the museum since. to provide a spark within “Nonprofits aren’t necour own community to essarily in the business of help ourselves,” Barfield operating buildings,” said said. His wife, Vivian Sharnita Johnson, a proCarpenter, president of gram officer at the W.K. the Birmingham-based Kellogg Foundation. Johnson publishing company Cuts in city funding and revenue declines driven by the re- Supreme Communications Group cession have compounded the in- LLC, rose to a challenge by Judge creased operating costs in recent Damon Keith of the 6th U.S. Circuit years. At the same time, access to Court of Appeals to save the museum a decade ago with a $100,000 new revenue has been a challenge. “Culturally specific organiza- gift.

Costly to operate

The museum “is one of the few institutions in Detroit that the African-American community can call (its) own,” he said. “For that and other reasons, it just must be preserved and sustained.” Barfield and other board members also have stepped up this year to help bring in new funders such as the Coca-Cola Co. and Johnson Controls Inc., Moore said. Recently, they met with Kennedy Center President Michael Kaiser to discuss ways that trustees could strengthen their individual fundraising for the museum. The training was needed, said Walker of the Ford Foundation. There are three elements that make a nonprofit strong: a strong leader, a strong board and excellent programs, he said. “Juanita Moore is an outstanding leader,” and the museum already has engaging programs that serve the public, he said. Its board, however, “has had to be enhanced and rebuilt over time,” and its ability to raise money still needs to be strengthened, Walker said.

Toward sustainability Last week, the museum brought in a new senior vice president of major gifts and planned giving, and itplans to hire another development employee soon, Moore said. She projects a $5.5 million to $6 million budget for fiscal 2015, but the goal is to get back up to the pre2009 $6.5 million budget, if not higher, she said. To strengthen fundraising, cultural groups need to do long-term planning, add development staff and “vastly deepen the bench of potential supporters,” said Brett Egan, director of the DeVos Institute, who has been working with the museum for the past six months. The Wright Museum is already making strides, he said. But like other arts groups, it has to diversify from a heavy reliance on public and corporate giving. This year, just under half of the museum’s revenue came from grants and donations. An additional 29 percent came from revenue earned from tickets, facility rental and the gift shop, and city funding made up 21 percent. Individual giving is the holy grail for arts groups and other nonprofits because the number of potential donors is limitless, Egan said, and individual giving holds the steadiest during hard economic times. Cultivating relationships with hundreds of individuals requires an culture shift, he said. It takes time and is especially difficult at institutions serving a community of color. Giving tends to be focused on social needs, education and religious institutions, Egan said. The challenges are many, but the mandate to strengthen fundraising capacity is clear, he said. “If we do not take action to dramatically increase the number of sources feeding the institution,” Egan said, “we can almost be assured we will face this same conflict, same crisis again.” Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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Auctions: Healthy Land Bank bids could bolster home values ■ From Page 1

“One thing for certain is that getting properties out of public ownership is a good thing,” said Brandon Boudreau, COO of Detroit-based Metro-West Appraisal Co. LLC. “That will help the market no matter what.”

ket right now is $77,000 — completely finished, according to Zillow.com. And the area’s median home price was just $7,500 in February, according to RealComp. “The only reason to do this is if you are in love with the city,” said Hollier, a professional DJ who tours with Xzibit and has spun for Public Enemy and Eminem.

Determining value Stalling that growth, however, is the appraisal values of Detroit real estate. The market has been based on rock-bottom foreclosure sales for the past seven years, so it’s hard for appraisers to know how to value a property. “In Detroit, 90 percent of a property’s assessed value is based on comparable sales,” Boudreau said. So even if a home is exquisitely renovated, a gem of a property, it still will only be valued against what has sold recentBoudreau ly nearby. “I sold a house in the University District last year,” said Austin Black II of City Living Detroit, a Detroit-based real estate firm. “It had brand-new windows, roof, completely done on the inside, new bathroom. It goes on the market for $189,000. “The first lender we went with got it appraised for $120,000.” Eventually, the sellers worked with another lender and got a better valuation, but there isn’t always a happy ending. There is hope that the Land Bank auctions will help create a bottom for the market — showing what people are willing to pay for unrenovated homes — and push up appraisals. “The auctions give a little bit of validity to the market,” said Boudreau, whose company has appraisers in 35 states and values 6,000 properties a month. “That will help everyone else out. Plus it gets one more publicly owned property off the market. It’s definitely going to help.” Whether the auctions will have an immediate impact on appraisal values is uncertain because the homes aren’t listed through RealComp, Michigan’s official Multiple Listing Service. “I don’t see it impacting the valuation market,” said Ryan Cooley, owner of Detroitbased O’Connor Real Estate. “More than anything, where I do see it making a difference is getting these abandoned houses activated. Many times people Cooley don’t want to buy when there is an abandon home next to them.” Boudreau agrees but said smart appraisers will use the auctions to help establish values. “Your regular Joe appraiser isn’t going to use these,” he said. “Technically, the appraiser has to know what’s going on in the public market. If he is a good appraiser and an expert in the market, he should

Finding the right bank

BUILDINGDETROIT.COM

Carl Hollier bought this 3,000-square-foot home at 115 Chicago Blvd. for $97,900 after its initial auction crashed the Detroit Land Bank auction website. Now he’s hoping to make the house livable: “I know what I’m getting into,” he says.

know about auctions and ascertain whether the price is an outlier or a price that is indicative of what is happening in the market.” Still, such little inventory remains on the market as foreclosures dry up — filings fell 61 percent since this time last year, according to RealtyTrac — that Cooley and Black are sending some clients to the auctions. “People are doing it; they are exploring it,” Cooley said. “There has been some mixed reaction. Some people are ready to take on a rehab; some people think they are ready to take on a rehab.” Boudreau’s brother-in-law considered bidding on a property in the Woodbridge neighborhood that eventually sold for $87,100. In the end, he wasn’t comfortable with the level of risk that the auctions brought. “They were too nervous about the amount of repairs,” Boudreau said. “They have the cash, but they didn’t know if it was $20,000 or if it was $50,000.”

A rebuilding task Winning bidders have 60-90 days to close on the properties and six additional months to repair and inhabit the homes (nine months for houses in historic districts). That’s no small task, considering that many of the homes require new electrical, plumbing, heating/cooling systems, roofs and more. “We typically ballpark $75 to $100 per square foot as a back-of-the-napkin estimate,” said Calvin Garfield, owner of Detroit-based Maxwell Construction LLC and a former building inspector for the city of Detroit. “And that’s without any major foundation repairs or surprises.” For the Woodbridge property on which Boudreau’s family considered bidding, that could have meant $235,000. For the 3,000square-foot Boston-Edison home that crashed the Land Bank’s website, the price tag could be $300,000. New owner Carl Hollier thinks he can get the latter home livable and winter-ready for $50,000, but he and his family will do much of the work themselves. They were lucky, he said, that only one of the home’s 60 leaded-glass windows is missing. Although the radiators are

missing, the boiler and much of the plumbing and piping are still intact. “I’m pretty handy; I grew up in a house that my parents had to tear apart and rebuild so that we could comfortably live,” said Hollier, whose entire family, including his brother and sister, own homes in Boston-Edison. “Thirty years later, they are still rebuilding things. So I know what I’m getting into.”

‘It’s a real gamble’ However, Hollier is still figuring out how to finance the $97,000 purchase price plus the improvements. He said he is preapproved for a mortgage, but houses must meet certain conditions before a bank will actually write the loan. That means Hollier must complete some of the repairs before he actually owns the house. It’s a conundrum he’s figuring out with the Land Bank. “Had they given the house to me for the original $135,000 and I couldn’t get the mortgage because it was so far gone, I’d be really jammed up,” Hollier said. “It’s a real gamble.” That’s not an unfamiliar refrain in the market. Finding financing — because of appraisals or the condition of the home — can make getting properties into new hands challenging. “People don’t realize that they cannot finance these properties until they meet the minimum level of habitability,” said Darralyn Bowers, owner of Southfieldbased Bowers Realty & Investments Inc. and a Detroit AssociaBowers tion of Realtors board member. “It’s going to take a lot of maneuvering because banks won’t make loans on properties that aren’t habitable.” The DAR went to the Land Bank and asked it to create a “more transparent” process so bidders would know the costs they face. The Realtor board suggested the Land Bank make the city-issued preinspection reports available to bidders. “We think the auctions should

be structured to properly inform the bidders about the consequences of their actions,” Bowers said. “It’s fine to get the hullabaloo of the auction; I congratulate the administration for doing something. They are creating an exciting atmosphere and trying to generate interest in Detroit. “But we don’t want it to go to chaos.” Initially, the Land Bank chose not to make those reports available until winning bidders arrived at closing. But it recently reversed that decision, providing a copy of the preinspection reports that potential bidders can review at open houses, said the Land Bank’s Mends-Cole. Having that information helped Hollier, although he would have bid anyway because he and his girlfriend and their seven children already had fallen in love with the house. Plus his extended family lives in Boston-Edison, with his aunt and uncle owning the property across the street and his brother working on his own fixer-upper a block away. “It’s such a gamble because when you walk through the house and look at the preinspection report, it is vague and terrifying,” Hollier said. “You walk through this house, and you get this gray piece of paper that says this is wrong, and it says all the lavatories need to be updated and/or repaired. The floor — singular — needs to be upgraded and/or repaired. So that’s part of the gamble. What does it mean?” Still, Hollier preferred having access to the information. And making it available may have helped stabilize the auctions. Eight of the first 12 homes that went on the block are either being reauctioned or were given to the next highest bidder because of qualification challenges. Since preinspection reports were added, the churn has calmed. Bowers thinks it will help get legitimate bidders in to the homes, bidders who understand the upside-down economics of many of these properties. For example, Garfield estimated that many of the smaller properties in East English Village need $100,000 worth of work. Yet the highest-priced home on the mar-

The price tag and economics are issues that Brian Hurttienne is only too familiar with in Detroit’s West Village neighborhood. As the executive director of The Villages Community Development Corp., he oversees the renovation of five properties using $2.83 million of Neighborhood Stabilization Program 3 money from the U.S. Department of Housing and Urban Development. That’s $566,000 per house to salvage the best of the area’s crop of blighted, fire-damaged homes. They will sell for far less than the investment because the market won’t support that price level and they are earmarked to be affordable for lowand moderate-income families. Those types of federally funded rehabs can co-exisit with the Land Bank auctions. “I think the auctions are fantastic,” Hurttienne said. “I think Mayor Duggan is doing the right approach to get houses that can be rehabbed into families’ hands. It’s not just ‘let’s clear everything and plant some grass.’ ” Still, the economics that Hurtienne faces prompted Duggan to create the Land Bank auctions, pushing the improvement costs on to buyers. “The rehab costs under the prior administration were astronomical, and there was no way we were going to do that for several hundred properties,” said Mends-Cole. One bright spot is that Troybased Talmer Bancorp Inc. created a $1 million fund to help people who buy auction homes in the Marygrove neighborhood. The bank will offer buyers $25,000 forgivable loans to offset some of the rehab costs. “Picking the right bank is probably the most important thing a buyer can do right now,” Black said. “The small banks, they seem to be the best ones to Black work with in Detroit. The big banks, no. They’re not lending for these projects.” Despite the challenges to rebuilding these homes, interest in the auctions hasn’t slowed. The real test will come early next year, when the first properties are scheduled to be completed. “I really think this is inching toward the right way to do it,” said Boudreau of Metro-West. “Getting these distressed properties into private ownership is a good thing. That will help raise up the market. “It’s the next sale that is going to make everything pop and make the rest of the area financeable.” Amy Haimerl: (313) 446-0416, ahaimerl@crain.com. Twitter: @haimerlad

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Plex: Firm grows cloud computing tech, eyes IPO ■ From Page 1

hoped to be ready for an IPO in 2012 but delayed it to ensure it had the right team, plan and backing, Blessing said. An IPO could pay off big for the company as the market continues to heat up for initial offerings. Kathleen Smith, a principal at the Greenwich, Conn.-based IPO research firm Renaissance Capital LLC, said investors have regained interest in newly public companies as the financial crises of the U.S. and Europe have subsided. The exchange-traded fund index for IPOs rose 54 percent in 2013, outperforming the Standard & Poor’s 500, which rose 30 percent last year. The strong returns led to skyrocketing valuations by March. Then IPO market cooled — specifically for Internet and cloud storage companies, Smith said. But valuations have since dropped, and tech companies such as Plex may have a window to take advantage of investor interest, she said. “This strong recent performance suggests that IPO investors will be receptive to the upcoming deals (investors are making money now), including cloud firms,” Smith wrote in an email. The success on an IPO planned for this month by the Los Altos,

Calif.-based online file-sharing company Box Inc. should be an indicator of investor interest in the market, Smith said. In the meantime, Plex plans to use the new funds to expand its presence in the market. It currently employs roughly 400, with 350 of those jobs in metro Detroit. Plex moved its headquarters from Auburn Hills to Tower Drive in Troy in 2012 and has room for expansion, Blessing said. Blessing, who was hired in 2013, said the company intends to double its staff in the next three to five years, reaching as many as 700 in metro Detroit. “This is a company that’s always had a strong product and engineering effort,” he said. “My job is to bring in new sales and marketing opportunities to continue to build this great technology company in Detroit.” Blessing previously was senior vice president of application development at Oracle Corp. and is a graduate of the University of Michigan. Plex also hired longtime financial executive Don Clarke as its CFO in January. Former CFO Michael Twarozynski was a Crain’s CFO of the Year award winner in 2010. Crain’s projects Plex’s annual

revenue at $75 million. The company generated $50 million in revenue in 2012. Plex makes software that monitors manufacturing production lines while tying that data to backend office functions such as accounting. The company was founded in 1995 as Plexus Systems LLC. Blessing said the company was bootstrapped by its former owners, Apax Partners LLP, until last year, when it was sold to Francisco Partners Management LLC of San Francisco for an undisclosed amount. Crain’s list of the biggest M&A deals for 2012 put the figure of that deal at more than $50 million. In December 2012, Palo Alto, Calif.-based Accel Partners invested $30 million for a minority stake in Plex. As it continues to grow, Plex is concentrating on new, advanced cloud computing software, strictly focused on manufacturing. Last week, it unveiled a planned software product that integrates Google Glass on the shop floor. The wearable technology, coupled with Plex’s cloud-based service, allows plant employees to see live data and shop-floor transactions. For example, a shop worker can see real-time information about a

part while remaining free to perform tasks. “We see manufacturing as the first killer app for Google Glass, providing seamless connectivity to systems, machines, information and transactions for workers on the shop floor, where hands-free is an imperative,” Jerry Foster, Plex’s vice president of research and development, said in a release. “The Plex Manufacturing Cloud is designed to provide universal connectivity to every component in the manufacturing supply chain, from materials to machines, people and information — making it easy to bring innovative new devices like Google Glass onto the shop floor.” Blessing said customers, like Troy-based Inteva Products LLC, choose Plex over its much larger competitors Oracle Corp. and SAP AG because of its cloud-only model. “We’re unique and the cloud architecture has been a catalyst for us and for the next generation of manufacturing,” Blessing said. “We only focus on manufacturing — and our competition, the legacy vendors, want to be all things to all people.” Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh

Metals: Canton, Corktown possible institute sites ■ From Page 1

He declined to provide addresses of the buildings the institute is considering but said the sites of about 60,000 to 100,000 square feet are in Detroit and Canton. He also declined to say where specifically in Canton the institute previously had planned to lease. However, a real estate source said the space lost was leased by German 3-D printing company Voxeljet AG in the Haggerty II Corporate Park, west of Haggerty Road and north of Michigan Avenue. The corporate park is owned by Troybased Frankel Associates. Taub said that in the short term, up to $10 million will be invested

The goal of the institute is to take innovations made in laboratories with lightweight metals and use them commercially in automobiles, aircraft and other industries. in building improvements and equipment for the institute. “We are going to have both offices and training centers, and we will be installing pilot-scale metals and processing equipment where

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we can do technology development,” he said. Canton Township Supervisor Phil LaJoy said he hasn’t heard anything from the institute that would suggest it is considering locations other than Canton. “Are we doing and have we done everything in our power to get them to stay in Canton? The answer to that question is yes,” LaJoy said. “We are operating under the assumption that they are coming.” Kevin Hegg, vice president of the Canton Township office of Ashley Capital LLC, said finding 60,000 to 100,000 square feet of high-quality manufacturing space in metro Detroit is difficult. This past winter, Obama announced a $200 million commitment from five federal agencies — the departments of Defense, Energy and Commerce; NASA; and the National Science Foundation. EWI led a consortium of 60 universities, businesses and organizations — including Focus: HOPE, Macomb Community College and the Southeast Michigan Workforce Intelligence Network — that applied for and won the right to locate the institute in Canton. The businesses involved in the consortium, according to the

White House, are leaders in aluminum, titanium and highstrength steel manufacturing. Along with UM, Michigan State University and Wayne State University are also part of the consortium. The goal of the institute, which would have about 20 full-time employees, is to take innovations made in laboratories with lightweight metals and use them commercially in automobiles, aircraft and other industries. The long-term goal of the institute is to expand the market and create new consumers for lightweight metals and alloys, according to the White House. Besides the $70 million in federal funds, the members of the consortium will contribute an additional $78 million and the Michigan Economic Development Corp. $10 million. The Rosa Parks building, constructed in 1965, was purchased from the city of Detroit in November for $712,000 by West Fort Street Properties LLC, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. West Fort Street Properties is registered to Neal MacLean. He also owns an 87,000-square-foot industrial building at Ford and Miller roads in Dearborn and bought that building for $825,000 in April, according to CoStar. The institute’s executive director will be Lawrence Brown, director of government technology programs at EWI, which develops manufacturing technology for the aerospace, automotive, defense, heavy manufacturing, light industrial, consumer product, energy and rail industries. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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 RESEARCH AND DATA EDITOR Sonya Hill, (313) 446-0402 or shill@crain.com WEB PRODUCER Norman Witte III, (313) 4466059, nwitte@crain.com EDITORIAL SUPPORT (313) 446-0419; YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 4461687 TIP LINE (313) 446-6766

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

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RUMBLINGS T City’s new star hire is a self-starter

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF JUNE 7-13

AKING A SIDE

etroit has a new #girlboss in town: Jill Ford. What’s a #girlboss? Well, for starters, it’s the name of a book by tech/fashion entrepreneur Sophia Amoruso, the CEO of online fashion site Nasty Gal. Who’s Jill Ford? A new star hire in Detroit entrepreneurism and the city’s administration. Ford is the city of Ford Detroit’s new head of entrepreneurship — she is not related to the family of Henry Ford. Ford is Mayor Mike Duggan’s latest high-profile catch. Earlier this year, he convinced Beth Niblock to come from Louisville, Ky., to be the city’s CIO. This time, he mined Silicon Valley to find Ford. Ford has a degree in computer science from Harvard University and an MBA from the Wharton School of the University of Pennsylvania. But it’s what she’s done outside of academia that excited Duggan. After graduation, she developed and funded new entrepreneurs in Ghana. She also has “intreprenuer” experience, heading up Disney Mobile’s worldwide distribution to mobile manufacturers. “She overheard some sort of conversation with some MIT students about teaching business development skills to people who live in Third World countries as a tool to get them out of poverty,” said Bryan Barnhill, the city’s chief talent officer. “So she started an organization in Ghana to teach people how to start businesses. It was so successful, she was recruited to Microsoft.” That led to a number of other corporate positions, but mostly she’s been an angel investor in Silicon Valley. Now, she will be working to create an entrepreneurship program in Detroit, building out innovation districts and developing small businesses. Like a #girlboss.

A sign many can read The brokerage team marketing the historic Hecker-

June 16, 2014

CRAIN’S DETROIT BUSINESS

Smiley mansion for sale in Midtown is taking a worldly approach to the process: sign advertising in multiple languages. The sign in front of the 27,000-square-foot mansion, built in 1892, says “For Sale” in English, French, Chinese and Arabic, said Levi Smith, principal of Southfield-based Principal Associates LLC. They chose Arabic because of the large local Arab population; Chinese because of visiting Chinese auto suppliers; and French because of the city’s history and the mansion’s style of architecture, which is French Renaissance. The Hecker-Smiley was once the home of industrial tycoon Col. Frank J. Hecker; housed the Smiley Bros. Music Co.; and, most recently, has been the home of the law offices of Charfoos & Christensen PC that since 2011 has been looking to sell and move out. The asking price for the estate is a cool $2.79 million.

Makeover for car museum One of the region’s local car museums is getting a custom makeover. The Ypsilanti Automotive Heritage Museum will become the National Hudson Motor Car Co. Museum in September after receiving funding to renovate. Hudson Essex Terraplane Historical Society will provide funding to the Ypsilanti museum where a Hudson dealership operated from 1933 to 1957. The amount of funding wasn’t announced. Renovations have already begun. The new museum will house a different Hudson model annually with era-appropriate signage. The museum’s other displays from General Motors Co., Kaiser-Frazer Corp. and others will remain. Hudson Motor Car Co. was founded in Detroit in 1909 and named after Joseph Hudson, founder of Hudson’s department stores, who provided the carmaker with startup funding. Hudson Motor Car continued until 1954, when it merged with Nash Motors Co. to form American Motors Corp., which was later acquired by Chrysler Corp. The Hudson name continued as a brand until 1957. A grand opening for the Hudson museum is scheduled for Sept. 21 to coincide with the museum’s Orphan

Are You a Human names tech veteran as CEO

CRAIN’S 20 IN THEIR 20S

en Trenda, a veteran technology entrepreneur, was appointed CEO of the Detroit-based tech company Are You a Human LLC. He replaced Tyler Paxton, a co-founder, who remains with the company.

ON THE MOVE 䡲 Ora Pescovitz, former

FIRSTMERIT BANK

A mural on Deandra Moss, a longtime volunteer for the Detroit Police Athletic League, can be seen on the side of a building on Adams Street downtown. The mural is one of five to be unveiled this week in a campaign by FirstMerit Bank to promote prominent local nonprofits. Other murals are on Washington Boulevard and Bagley, Broadway and Monroe streets. Each bears the slogan “Dedication to Detroit Merits Recognition.” Car Show at Riverside Park at Depot Town in Ypsilanti.

Samson goes to Digerati Danny Samson, the former CEO of Detroit-based Sterling Group, has taken a job in an entirely different field than real estate investment and consulting. He’s now president of Detroit-based software firm Digerati Inc. Samson, 43, who was named CEO of Sterling Group in 2009, said he joined Digerati last month. Samson will be responsible for developing organizational strategy and attracting new clients. “There are a lot of parallel skills that are involved” between technology and real estate, he said. “Really what we are talking about is people and community.” Samson learned about Digerati about Samson eight years ago when he met co-founders Brian Balasia and Joe Klecha when they decided to move the company to Detroit, according to a news release. At the time, Sterling Group managed the Guardian Building, where Digerati now has offices.

CEO of the University of Michigan Health System, will start in October as a senior vice president at the Indianapolis-based drugmaker Eli Lilly & Co. Pescovitz, 56, stepped down from the health system June 1.

COMPANY NEWS 䡲 Ford Motor Co., Chrysler Group LLC and General Motors Co. announced $26 million in grants to the Detroit Institute of Arts, bringing the DIA to 70 percent of its $100 million pledge as part of a deal that could give the museum independence from the city and shore up Detroit pensions. Later, the New York City-based Andrew W. Mellon Foundation and Los Angeles-based J. Paul Getty Trust pledged a total of $13 million to help the DIA meet its commitment. 䡲 Auto supplier Toyoda Gosei North America Corp. won a $250,000 Michigan Business Development Program performance-based grant for expansion of its North American headquarters in Troy, where it will invest up to $7.9 million and add 51 jobs. 䡲 Joey Jonna, founder of Birmingham-based Jonna Luxury Homes LLC, said he plans to demolish the Greens Art Supply building in downtown Birmingham and construct a $20 million, 49,000-square-foot building called The Forefront, with retail space and high-end condominium units. 䡲 Newsweek ranked Taylor-based Masco Corp. as the greenest Michigan company, Ford Motor Co. the state’s second-greenest and Comerica Bank the greenest of the publicly traded banks with a presence in Michigan. Criteria included energy and water use, carbon footprint and waste creation.

OTHER NEWS 䡲 The trial for approval

of Detroit’s debt adjustment plan will begin Aug. 14 and conclude by Sept. 23, under a revised schedule approved by Judge Steven

AARON ECKELS

Leading a panel discussion on “How Detroit Works” last week at the annual Crain’s 20 in their 20s event were (from left) moderator Craig Fahle, WDET 101.9 FM host; and 20s winners Bryan Barnhill (Class of 2014), chief talent officer, city of Detroit; Phil Cooley (Class of 2007), co-owner, Slows Bar BQ; and Veronika Scott (Class of 2013), founder and CEO, The Empowerment Plan. The event at the Garden Theater in Midtown honored metro Detroiters in their 20s for creativity and entrepreneurial spirit. Rhodes of U.S. Bankruptcy Court. Meanwhile, the board of Detroit’s largest single creditor, the General Retirement System, is urging members to support the city’s plan in creditors’ ballots due back by July 11. 䡲 Detroit plans to sell $185 million in bonds to improve street lighting, Bloomberg News reported. 䡲 Detroit Mayor Mike Duggan formally launched an Innovation District to promote small-business growth and create jobs. 䡲 The vacant 11,000square-foot CPA Building at Michigan Avenue and 14th Street in Detroit’s Corktown was sold to an undisclosed New York City investment group for $900,000. Farming-

ton Hills-based Howard Schwartz Commercial Real Estate LLC represented Ray Kouza, the building’s owner. 䡲 The Ann Arbor VA Healthcare System was targeted for an extensive audit under an ongoing federal investigation of veterans’ deaths resulting from long waits for appointments. 䡲 The Sault Ste. Marie Tribe of Chippewa Indians is seeking land in Lansing and near Detroit Metropolitan Airport to build gambling facilities, the AP reported. 䡲 Lawmakers finished sending Gov. Rick Snyder a $53.2 billion state budget, approving more aid for local governments and money to hire more state troopers and conservation officers.

HEALTH INSURANCE COMPANIES SEEK MARKETPLACE The state of Michigan said last week that it had received filing information from 14 health insurance companies that wanted to be included on Michigan’s Health Insurance Marketplace in 2015 — five more than participated last year. The Michigan Department of Insurance and Financial Services will submit recommendations for qualified health plans by Aug. 8 to the U.S. Department of Health and Human Services. Nearly 273,000 Michigan residents have selected private insurance plans under the federal health care law, exceeding initial projections by more than 100,000. Figures released a few weeks ago showed 468,000 eligible to enroll. The insurers new to the marketplace are: 䡲 Grand Valley Health Plan 䡲 Harbor Health 䡲 Physicians Health Plan 䡲 Time Insurance Co. 䡲 United Healthcare Community Plan/United Healthcare Life Insurance Co. Renewing are: 䡲 Blue Care Network of Michigan/Blue Cross Blue Shield of Michigan 䡲 Consumers Mutual Insurance of Michigan 䡲 Health Alliance Plan/Alliance Health and Life Insurance Co. 䡲 Humana Medical Plan of Michigan Inc. 䡲 McLaren Health Plan 䡲 Meridian Health Plan of Michigan Inc. 䡲 Molina Healthcare of Michigan 䡲 Priority Health/Priority Health Insurance Co. 䡲 Total Health Care USA More details can be found at michigan.gov/difs.

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2014 PARTNER EVENTS Coming Up from the SouthÀeld Area Chamber of Commerce SouthÀeld Area Chamber Golf Outing Join us for a day Àlled with relationship building, golf and opportunities to promote your business. Plum Hollow is one of our area’s Ànest courses and normally limited to members and guests. Designed by Donald Ross and home to PGA tournaments in the 40s, this course is a true delight to play. June 23 • Registration: 8:30 a.m. Plum Hollow Country Club, 21631 Lahser Rd, SouthÀeld Members: $130 • Non-Members: $150 Registration: southÀeldchamber.com/golfouting Oakland Chamber Regional Mixer Network with six Oakland County Chambers! Working in partnership with Asian PaciÀc American, Chaldean American, Greater Farmington Area, Michigan Hispanic and West BloomÀeld Chambers of Commerce, we expect a bigger turn out than ever. June 25 • 6-8 p.m. Hilton Garden Inn, 26000 American Dr., SouthÀeld Members: $10 • Non-Members: $25 Registration: southÀeldchamber.com

Look forward to 2015. Nobody knows what health care will look like, but everyone knows things will be different. Crain’s Detroit Business, in partnership with the Greater Detroit Area Health Council, presents a series of webinars for employers, employees and providers. Coming up in June:

EMPLOYER FACTS:

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Coming Up from the Troy Chamber CEO Series Luncheon featuring Mat Ishbia, CEO, United Shore Financial Services Mat Ishbia will speak about how lessons in business and basketball have helped him make United Shore one of the nation’s leading residential mortgage lenders and one of the nation’s Best Places to Work. He will explain why United Shore stresses a work/life balance and why the 1,200+ person team headquartered in Troy is comprised of “thumb pointers, not Ànger pointers.” June 24 • 10:30 a.m.-1 p.m. Member: $28 • Non-Member: $38 • Table Sponsor: $210 Mini Business Expo Exhibitor: $100 (members only, limited number) Registration: (248) 641-8151, theteam@troychamber.com or troychamber.com/events Outclass the Competition: Tips on Business Etiquette and Dining with Style and Grace In this rapidly expanding global economy, executives on all levels need to distinguish themselves from the competition. This workshop provides tools to give you an advantage in business situations. In the business etiquette portion, you will learn, and put into action, how to make an entrance, work the room, improve your mingling proÀciency and more. After the dining with style and grace portion, you’ll feel as if you’ve been dining with royalty your whole life! Presented by Josephine Dries, Insert Catchy Headlines Maggiano’s Little Italy, 2089 W. Big Beaver Rd., Troy Member: $25 • Non-Member: $35 Registration: (248) 641-8151, theteam@troychamber.com or troychamber.com/events

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Michigan Hispanic Chamber of Commerce 23rd Annual Golf Outing Don’t miss this fun event. There are still a limited number of corporate sponsor opportunities available. The golf event this year is going to be an exciting opportunity to network with fellow OEMs, Tier 1, Tier 2 supplier companies and Chamber members. Join us at three championship courses: Cherry Creek Golf Club, Greystone Golf Club and The Orchards Golf Club. Golf Committee Chairman: Grace Lieblein, vice president global purchasing and supply chain, General Motors August 18 • 7 a.m.-7 p.m. Registration: www.mhcc.org or Barbara Lange at (248) 792-2763 CEED Microloan Programs Did you know that CEED has made 5.5 million in loans and created more than 1,000 jobs? Now, after thirty years of providing access to capital, CEED is increasing their commitment to small business owners by reducing the interest rate on small business loans. Now offered at 5% interest rate, loans are available up to $50,000 for equipment, inventory, supplies and some working capital. To learn more and register for an upcoming loan orientation, visit miceed.org

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