Crain's Detroit Business - Feb. 11, 2019 issue by Crain's Detroit Business

Dingell’s unsung role as mentor. Page 8

FEBRUARY 11 - 17, 2019 | crainsdetroit.com

Pistons launch B2B networking Page 4

CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

RENAISSANCE ON THE RIVER

The Harrington Hotel in Port Huron. MICHAEL RABAUT

omentum keeps building in St. Clair County. The iconic St. Clair Inn is soon to reopen, and its California-based developer has snapped up more historic buildings in the area. Smart moves by local economic development organizations are helping small businesses grow. And a unique business partnership is bringing STEAM labs and skills training to Port Huron Public School students. Read more in our special report on page 10.

TECHNOLOGY

EDITOR’S NOTE

Rochester software firm builds demand far away from tech’s epicenter

OneStream nails $1B valuation By Dustin Walsh dwalsh@crain.com

An investment valued at $500 million has brought immediate attention to a software company far from Michigan’s tech nucleus of Ann Arbor. OneStream has grown rapidly from crainsdetroit.com

its Rochester base, with 137 percent revenue growth in 2018 alone, and its new private equity partner is likely to expand its name further. New York-based private equity firm KKR & Co. Inc. signed a deal last week with OneStream’s management Vol. 35 No. 6

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to take a majority stake in the corporate performance management software provider. OneStream and KKR declined to reveal the terms of the deal, but the Wall Street Journal reported the deal value last week. The deal puts OneStream’s value north of $1 billion, a large sum for a company that’s far from a household name — so far, anyway. “That’s kind of who we are,” CEO Tom Shea told Crain’s. “We’re purposefully stayed away from analysts and people like you because we were generating enough demand ourselves with that. We’re mission-critical for the CFO’s office, which is why we started to see an expansion of our name without the help of media or investors.” SEE ONESTREAM, PAGE 24

Introducing Crain’s Forum

rumbling roads, an educational system that’s falling behind, a talent gap that makes it tougher to do business: Michigan has no shortage of pressing issues affecting the economy. ¶ With new occupants in all the state’s highest offices and nearly half the Legislature, everyone wants to know where we’re going next — and where we should go. ¶ Today, we introduce a new feature, Crain’s Forum. Each month, Crain’s senior reporter Chad Livengood will take a deep look at a current policy issue that has big ramifications for Michigan’s economy and business community. ¶ The Forum will also add more perspectives in the Voices section, a collection of viewpoints from state thought leaders. ¶ For our debut, we look at some of the economic “potholes” that Gov. Gretchen Whitmer and the new Legislature will face — that go well beyond the roads — issues to keep in mind as Whitmer makes her first State of the State address Monday. ¶ If you have feedback on this new section or have an idea for an opinion column, please email me at malee@crain. com. — Michael Lee, Managing Editor

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MICHIGAN BRIEFS

INSIDE

From staff and wire reports. Find the full stories at crainsdetroit.com

House rejects Whitmer’s environmental order In a rare move, the House voted last week to reject Gov. Gretchen Whitmer’s executive order restructuring the Department of Environmental Quality and eliminating boards approved by Republicans last year to oversee aspects of the department. Gongwer News Service reported that the House voted 58-51, with all Republicans voting yes and all present Democrats voting no, to reject Whitmer’s order as Republicans oppose its abolishment of multiple boards enacted last year. Whitmer, immediately after the committee vote, requested an opinion from Attorney General Dana Nessel on the legality of the boards within the DEQ, asking if they violate federal requirements and law. Rep. Jim Lower, R-Cedar Lake, the sponsor, told the committee that Whitmer’s executive order, signed last Monday, amounted to a de facto veto of boards created by the Legislature to oversee permits and rule-making and play an advisory role to the administration. The rules review committee could result in rules taking up to two years longer to take effect than they do now.

The permit committee would hand ultimate authority over DEQ permit decision-making to an administrative law judge. Lower said the order was an “abuse of power” by Whitmer. He said Whitmer should rework the executive order and resubmit it to keep those boards intact. Article V, Section 2 of the Constitution gives the governor the authority to abolish executive entities or transfer powers from one executive entity to another. It also gives the Legislature the authority to overturn such actions. House Minority Leader Christine Greig, D-Farmington Hills, said the governor has the right to reorganize state departments as she sees fit. She also noted while Republicans might oppose the boards being abolished, rejecting the order also rejects the efforts within the order to strengthen clean drinking water programs. The order renames the DEQ the Department of Environment, Great Lakes and Energy. It creates new clean water and environmental justice advocate positions, among other significant changes. To overturn the executive order, the Senate must also approve the resolution.

GM to add 1,000 workers at Flint truck plant

General Motors Co. President Mark Reuss last week announced the auto-

JOHN F. MARTIN FOR CHEVROLET

General Motors Co. President Mark Reuss unveils the 2020 Chevrolet Silverado Heavy Duty on Tuesda at GM’s Flint Assembly plant, where the automaker said it will add 1,000 workers.

maker will add 1,000 workers to build new heavy-duty pickups at its plant in Flint, Automotive News reported. Many of those employees, he said during an event at the plant, will come from four U.S. plants, including two Midwest assembly operations, where the company plans to end production in 2019. Reuss, following the event, said “pretty much” all of those positions will be new jobs compared to simply filling open positions. The jobs announcement comes after the Detroit-based automaker has faced mounting pressure from the

UAW, politicians and the Canadian union Unifor for its plans to stop production at five North American factories and cut up to 15,000 jobs, including 5,900 hourly workers. The impacted U.S. plants are Detroit-Hamtramck Assembly, Lordstown Assembly in Ohio and powertrain operations in Warren and Maryland. The Canadian facility is Oshawa Assembly in Ontario. Reuss reiterated that the company has had to make “difficult” and “tough” decisions, but leaders feel now — when the company is healthy — remains the right time to make

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such cuts. “There’s no good time to restructure the company and make sure that you're viable for the future,” he told reporters after the event. “The best time to do it is when the company’s healthy and that’s right now.” GM has said that for 2,800 active U.S. hourly workers affected, the company has 2,700 open positions available. The 2,800 figure includes 1,200 who were retirement-eligible, meaning that even more positions may open up for some workers who were laid off before the November moves. GM CEO Mary Barra last month said 1,500 employees have volunteered to be moved to other plants, including 700 who are already in the process of moving. For 2,600 hourly workers impacted at GM’s Oshawa, Ontario, assembly plant, Barra said the company is working with local government, community colleges and businesses, and has identified 5,000 potential job opportunities. GM didn’t definitively say it would close the U.S. plants, only that production would end and no products would be allocated for the sites.

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NONPROFITS

New St. Vincent de Paul CEO tackles losses, stores By Sherri Welch swelch@crain.com

Many people associate the Society of St. Vincent de Paul in the Archdiocese of Detroit with one thing: thrift stores. That’s a blessing and a curse, said President and CEO Dan Malone. While brand recognition for the stores is a good thing, most people have no idea what the faith-based nonprofit actually does with the revenue it generates. Just shy of a year into his new role, Malone is looking to capitalize on that brand awareness and increase revenue through standardization and renovation of its stores and addition of one or two new locations. He’s also looking to secure a new source of support, corporate donations, along with new individual donors.

HEALTH CARE

Effort under way to update state’s mental health code

Need to know

need to meet our mission of providing for the needy with the need to right our financial house.”

J Under new CEO has paid off $600,000 through operating efficiencies, increased revenue

Stabilizing finances

J Nonprofit working to pay off remainder of $1 million in debt tied to thrift stores

“We’re balancing the need to meet our mission of providing for the needy with the need to right our financial house.”

Seeks to expand services, including new preventative health care center at Detroit headquarters J

Increased revenue is needed as the agency seeks to pay off the remaining $400,000 of roughly $1 million in debt it had a year ago, and to expand the services it’s offering from its Detroit headquarters on Gratiot Avenue, just north of downtown. “What we’re striving to do is create a sustainable operating model,” Malone said. “We’re balancing the

Dan Malone

When Malone, 66, took the reins of the Society of St. Vincent de Paul, he inherited roughly $1 million in debt tied to losses associated with the nonprofit’s chain of thrift stores. The stores were losing money, and fundraising wasn’t where it needed to be, he said. Since then, the agency has paid off $600,000 of that debt through cost-reducing efforts including closely managing the number of its 129 employees on the clock in stores when customer traffic is lower and increasing revenue from stores and donations. SEE MALONE, PAGE 24

REDEVELOPMENT

Greenways to shared streets

By Jay Greene jgreene@crain.com

An effort is underway to update Michigan’s 45-year-old mental health code to encourage the development of more psychiatric urgent care and crisis centers that would work more closely with hospitals, group homes and families to hold and treat people with behavioral health problems until inpatient hospital beds are available. The state’s mental health code, which was written in 1974 and had its last major update in 1996, prohibits crisis centers from holding patients against their will longer than 24 hours unless they receive treatment — even if there is a legitimate public health and safety reason. State law also prohibits ambulances from transporting patients with psychiatric conditions to crisis centers with “pre-admission screening units,” a change mental health providers would like to see made along with appropriate emergency services training. Last fall, Partners in Crisis Services and the Michigan Association of CommuGreg Moore: nity Health Working on white Boards began paper. working with health care attorney Greg Moore of Dickinson Wright PLLC in Troy to develop a white paper that they hope can help convince legislators and state officials to change state emergency medical statutes and what they believe is an antiquated mental health code. Such changes, advocates believe, can ultimately spur development of more outpatient community mental SEE CODE, PAGE 25

SPACKMAN, MOSSOP AND MICHAELS

The city of Detroit is planning this spring to overhaul the Livernois “Avenue of Fashion” to provide more of a pedestrian-friendly, plaza-like environment.

Detroit to revamp 7 business corridors starting this spring By Kurt Nagl knagl@crain.com

Detroit is finalizing plans to revamp seven business corridors across the city this spring as part of a $125 million campaign to breathe life into its neighborhoods. A request for proposals for the projects will be released later this month. Dozens of city blocks, from the Livernois “Avenue of Fashion” to the heart of Mexicantown, are set to be overhauled into pedestrian-friendly plazas and greenways to encourage the type of “comeback” energy seen downtown and in Midtown. The designs, drawn up after dozens of community meetings, reimagine long-struggling retail centers that have the potential to be revitalized. “We started around 2016 to look at what (these areas) could become,” said Caitlin Marcon, deputy director of the complete streets division in the city’s department of public works.

Need to know

JJCity plans to overhaul streetscapes from “Avenue of Fashion” to heart of Mexicantown JJProject is part of Duggan's bond-funded $125 million neighborhood improvement plan JJDesigns call for reimagined, plaza-like corridors in retail centers across city

“We had the concepts and went to community engagement starting the end of 2017.” The city hired an assortment of firms to assist with design of the streets, including Detroit-based SmithGroup, New Orleans-based Spackman, Mossop and Michaels LLC and Boston-based Utile Architecture & Planning. Each of the seven initial projects are expected to start this spring and involve phased construction expect-

ed to be done by 2020. In total, there are 23 projects in the pipeline to be completed by 2022, coinciding with completion of the bond issued to fund the overhauls. The scope and timeline of the other 16 projects remains undetermined. Mayor Mike Duggan announced the streetscape initiative in October 2017 as a large chunk of the $125 million plan to beautify 22 miles of storefronts in 23 neighborhoods across the city. His administration has claimed that the investment could help recapture $2.6 billion that residents spend outside of the city. Construction work was to begin late last year, but the city says it held off in part to avoid weather disruptions. “As with any design process there can be delays,” Marcon said in an email. “Rather than rush to begin a project in late 2018 with risk of not

completing it before winter, we made the call to delay all work to the spring.” Marcon declined to give budgets for each project, saying that costs will not be finalized until the work is bid out. The following projects are scheduled for the spring.

Livernois ‘Avenue of Fashion’

Livernois Avenue from Eight Mile Road to Clarita Avenue Among the largest of the city’s streetscape projects is the planned overhaul of the historic “Avenue of Fashion” in Northwest Detroit. The plan calls for crews to rip out the median and convert the road from two lanes in each direction to just one lane in each direction, plus a continuous left turn lane and parking on each side. SEE CORRIDORS, PAGE 26

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“Everyone tries to sell B2B with hospitality and networking cocktail hours. We didn’t want to hope, we wanted to know, with tangible results. It’s a focus on generating business. It’s not a focus on chitchat or anything else.” — Ted Van Zelst, Pistons’ senior vice president of corporate partnerships

DETROIT PISTONS

Pistons launch B2B networking for corporate advertisers By Bill Shea bshea@crain.com

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Now that the Detroit Pistons are comfortably settled downtown, the business office is rolling out new B2B programs for the team’s corporate advertisers. The newest is “Pistons Partner Connect.” The initiative is a formally structured speed-dating networking event that pairs Pistons advertisers together to talk about possible business relationships. The conceit is that each participating company has to bring both sales and procurement executives, and a Pistons staffer sits in on the meetings to ensure there’s not only productive dialogue but also follow-up on potential deals. The idea is to forgo the traditional networking concept centered on an event or game, which usually isn’t productive, said Ted Van Zelst, the Pistons’ senior vice president of corporate partnerships and the program’s organizer. “Everyone tries to sell B2B with hospitality and networking cocktail hours,” he said. “We didn’t want to hope, we wanted to know, with tangible results. It’s a focus on generating business. It’s not a focus on chitchat or anything else.” The first Pistons Partner Connect was Jan. 22 at the Detroit Foundation Hotel. About a dozen companies participated, Van Zelst said, and the goal is to double that this year. Among the notable participating companies were Henry Ford Health System, Blue Cross Blue Shield, Flagstar Bank and Rocket Fiber, the team said. Some Pistons advertisers are national or don’t have their procurement or sales units based locally, so they didn’t participate, he said. Office supplier Staples intends to participate next time, he added. “It was very successful and all of our partners were happy with the outcome,” Van Zelst said. “They felt it accomplished what we said it would.” Walter Amicucci, vice president of business development at De-

troit-based Rocket Fiber, participated in the first event and said it already is paying dividends. “I’ve had two meetings so far with folks I met (at the event). I was able to connect with a wide variety of people on the fiber business,” he said. “It exceeded my expectations and was very beneficial. I knew it was going to be a bit more intimate, which was nice. The personal interaction worked out fantastic. It was nice to do in person rather than phone or email.” For the inaugural event, there were brief opening remarks by Van Zelst and Charlie Metzger, the Pistons’ executive vice president and chief revenue and marketing officer, and then networking began with 20-minute chats between companies that the team had paired. Companies were rotated. “There’s structure and outline rather than throwing everyone in a room,” Van Zelst said. At future events, the companies themselves will get a chance to make opening presentations, he said. Plans call for at least four events in 2019. Van Zelst created Pistons Partner Connect based on a national-scale B2B program he launched while working as a NASCAR senior executive before joining the Pistons in 2015. The relocation from the Palace of Auburn Hills in Oakland County to downtown Detroit’s Little Caesars Arena, announced in 2016 for the 2017-18 season, occupied much of the front office’s time, he said, so the B2B effort had to wait until they were settled in their new digs. “I had it in my back pocket ready to go,” Van Zelst said. “Now that we’re downtown, it made sense. We had a lot to do last two years. Last year was all about the transition to downtown.” Catering to corporate advertisers’ needs is standard business in pro sports because those companies spend millions of dollars that contribute to a team’s revenue. Forbes estimated that the Pistons doubled their corporate sponsorship revenue

by moving to the new arena. The Pistons say they have a solutions-based corporate sales operation, and the business staff asked its advertisers what more they want in value from their spending with the team. One of the universal answers was introductions to other companies — networking, Van Zelst said. So, they launched Pistons Partner Connect and offer it as an added bonus to sponsors they believe will benefit most. To get maximum value for their time and sponsorship spending, the idea is to keep the networking on track and produce results. One way to do that is to ensure there aren’t competing sponsors at the networking events. “The key there is, everyone in that room is category-exclusive,” Van Zelst said. “It’s not like you’re competing with anyone else.” That means there’s one only one company from each type of advertising or sponsorship category, such as one bank and one hospital. Additionally, a Pistons official sits in on the meetings and helps to ensure there’s follow-up among the companies, he said. That aids the intent of getting tangible results instead of just a boozy fun evening watching a game. There’s also a program-exclusive online portal for participants to use. “No one has really followed through in a meaningful way in the past,” said Van Zelst, who prior to joining the Pistons worked for Miami Dolphins owner and University of Michigan mega-donor Stephen Ross’ FanVision Entertainment as a senior vice president. He also worked at NASCAR for seven years, and for pro wrestling giant WWE and concert promoter LiveNation. Several years ago, the Pistons had a “Networking Business League” B2B program that charged $2,000 to $17,000 for companies to participate in a dedicated club space inside the Palace, but that fell by the wayside. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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do your best work What would you like the power to do? At Bank of America we are here to serve, and listening to how people answer this question is how we learn what matters most to them, so we can help them achieve their goals. We had one of our best years ever in 2018: strong recognition for customer service in every category, the highest levels of customer satisfaction and record financial results that allow us to keep investing in how we serve you. To serve you well, we need a great team. We have one. And we are investing in them. • We are proud of our 16-week paid parental leave policy — maternity, paternity and adoption — along with a new parent kit, backup child care and more enhanced resources coming in 2019. • We increased our starting wage to $15/hour in Feb 2017 — two years ago — becoming one of the first financial services organizations in the U.S. to do so. • Health care premium increases for two-thirds of our U.S. employees have been held to less than one-third the national average for eight years. • More than 50% of our global workforce are women and more than 45% of our U.S.-based workforce is racially diverse. • Support for employees experiencing personal loss, including 20 days paid bereavement. Standing by employees impacted by crisis, with dedicated specialists on the Life Events Services Team. We are proud to be recognized for how we help our employees and for our commitment to being a great place to work.

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CRAIN’S DETROIT BUSINESS

The sale would cover the DMC’s outpatient laboratory operations, which are the state’s largest hospital- and university-based lab and diagnostic service.

DMC selling parts of lab services business to LabCorp By Jay Greene jgreene@crain.com

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Detroit Medical Center is in the process of selling parts of its lab and diagnostic testing operations to Laboratory Corp. of America, a Burlington, N.C.based life sciences company, for an undisclosed price, Crain’s has learned. The transaction is expected to close by April 1. The deal affects only the lab business of DMC University Labs that provides testing services for outside physicians offices, known as “outreach” services, not the lab services that serve DMC’s own six hospitals, a DMC official said. About 90 union workers are expected to be affected by the sale to LabCorp, said Steve Hicks, president of Teamsters Local 283 in Wyandotte. DMC is currently negotiating severance packages with some union employees at DMC University Labs, according to emails from DMC union stewards to members that Crain’s has obtained. DMC University Labs employs several hundred workers in its inpatient and outpatient labs. A DMC official confirmed that Tenet Healthcare Corp., the Dallas-based parent company of DMC, has signed a definitive agreement under which LabCorp (NYSE: LH) will acquire certain outreach lab services from DMC University Labs. “This transaction is a positive step in our continuing efforts to focus on the core of what we do at the DMC — delivering quality patient care that positively impacts the overall health and well-being of our community,” according to a statement to Crain’s from DMC. DMC operates 12 patient service center outpatient locations. They include Canton, Commerce-Edgewater, Commerce-Huron Valley, Detroit-Grand River Health Center, Detroit-Harper Professional Building, Detroit-Hutzel Professional Building, Detroit-University Health Center, Clinton Township-Stilson Center and Southfield-Advance Building and Southfield-DMC Lahser Campus. A LabCorp official also confirmed the purchase of some assets of DMC University Labs. Over the past decade, DMC has outsourced or sold radiology services, housekeeping, linen services, janitorial, emergency medicine transcription services and pharmacy. It has also sold its Medicaid HMO to an out-of-state company.

Need to know

DMC is selling parts of the state's largest hospital and university-based lab and diagnostic service to Laboratory Corp. of America J

J Teamsters Local 283 is negotiating severance packages for dozens of DMC employees J DMC labs would be LabCorp's first acquisition in Michigan

DMC has offered its lab employees a severance package that the Teamsters Local 283 is negotiating, Hicks said. DMC has offered 10 weeks of severance and the union is proposing longer, including at least a year of health insurance and job retraining, he said. Bargaining sessions are scheduled for Feb. 11, 22 and 25. “The union feels it falls very far short for all your years of support,” said the Teamsters steward letter. “We are asking for an early enhanced retirement package for our members who are ready to retire now.” If the outreach department is sold, the Teamsters want LabCorp to hire all 90 union employees, Hicks said. The union also has asked DMC for the purchase agreement and other documents to determine if the transaction is a sale or if DMC is simply subcontracting services to LabCorp, he said. “DMC has refused unless we sign confidentiality agreement,” Hicks said. “We are going file an information request for the agreement with the National Labor Relations Board probably next week after the first bargaining session.” Hicks said the union believes DMC is subcontracting its outpatient services to LabCorp because the sale of the lab buildings are not part of the transaction, and that DMC has informed the union that it will be replacing the union employees with LabCorp workers. “If they are subcontracting, this is a violation of our contract,” Hicks said. “We have been negotiating with them the past two years on a contract and they do this.” A DMC source told Crain’s that DMC has offered a retention bonus of 25 percent of base pay for those employees affected by the deal. The bonus will be accrued monthly and paid either after the close of the deal or the completion of work assignments, said the source, who is familiar with the transaction and asked to remain anonymous.

DMC also is promising placement assistance to other jobs within DMC or one of its affiliates. In addition, DMC is offering a 60-day pay continuation for any impacted employees and severance packages 25 percent longer than the company's standard severance term. Crain’s asked DMC to provide a total number of employees with DMC University Labs, but a DMC official said the system could not answer any more questions before the deal closes. Hicks said the Teamsters represents a total of 80 lab assistants, 25 certified surgical technologist and 50 couriers, but the outreach department changes only affect about 90 union jobs.

History of DMC University Labs Since 1993, DMC University Laboratories has grown to become the largest hospital lab in the state and offers more than 1,000 tests, according to its website. Less than 1 percent of tests are sent to outside reference laboratories. Tests include chemistry, hematology, microbiology, surgical pathology, cytopathology, molecular genetics, cytogenetics, biochemical genetics and immunogenetics. Wael Sakr, M.D., who heads up DMC University Labs and is chairman of the pathology department at Wayne State University School of Medicine and DMC specialist-in-chief of pathology, declined comment on the changes. There are about 45 medical doctors and others who are on the staff of the laboratory, most of whom are also on the WSU medical school faculty. DMC University Laboratories provides laboratory services to other health care systems in Southeastern Michigan, including McLaren Health Corp. and its Barbara Ann Karmanos Hospital on the DMC campus, according to the DMC website. LabCorp employs 60,000 worldwide and posted $10.3 billion in annual revenue in 2017. It operates a network of more than 1,900 patient service centers nationally. In 2017, LabCorp acquired the assets of the Mt. Sinai Health System’s clinical outreach laboratories, which allows LabCorp to provide comprehensive laboratory services to physicians and patients in metropolitan New York City. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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OPINION COMMENTARY

John Dingell had an unsung role as a mentor

hirty years ago this year, a 19-year-old Tom Lewand learned a few lessons about negotiation in business while interning for U.S. Rep. John Dingell on the powerful U.S. House Energy and Commerce Committee. Sitting in Dingell’s office, Lewand remembers listening to the chairman of the committee — then a 34-year veteran of Congress — talk about his deeply held views on gun rights that often ran afoul of the ideology of his own Democratic Party. Dingell, an avid hunter and onetime member of the National Rifle Association’s board, disagreed with fellow Democrats on regulating gun ownership. “But he never did it from a place of conflict or disrespect,” said Lewand, now the CEO of the Detroit-based luxury goods maker Shinola. Dingell resigned from the NRA’s board in 1994 ahead of voting for President Bill Clinton’s crime bill, which included a ban on assault weapons. “That’s reflective of somebody who takes issues seriously and thinks through the implications of those things — and tries to find a solution that is workable for all parties, if not perfect for any one party,” Lewand added. “And that’s a fundamental tenet of any successful negotiation and a lot of successful businesses.” Dingell, who passed away Thursday at age 92, left a well-documented legacy in environmental regulation, expanding access to health care and championing Michigan’s auto industry during a storied 59-year career in Congress that spanned 11 presidents. But what’s less known is how Dingell mentored leaders outside of politics. Lewand, a former president of the Detroit Lions, considers himself a student of Dingell. So does Bill Ford Jr., the executive chairman of Ford Motor Co. Ford called Dingell both “a friend and adviser” during his 20 years as chairman of the automaker headquartered in Dingell’s hometown of Dearborn. “Even on the most divisive issues at the most difficult of times, he was unwavering in his efforts to find com-

“When the government mandates new design or emissions standards, they cannot be met overnight,” Dingell wrote. “... They require a relatively fixed yet finite amount of time.” Dingell was sometimes accused of carrying water for Ford, GM and Chrysler; he played a central role in both federal bailouts of Chrysler and the 2008-2009 rescue of the industry. But the congressman was unapologetic. “I was ensuring that the people of my district, the people who’d sent me

“Even on the most divisive issues at the most difficult of times, he was unwavering in his efforts to find common ground.” — Bill Ford Jr., executive chairman of Ford Motor Co.

JEFF KOWALSKY/BLOOMBERG

CHAD LIVENGOOD clivengood@crain.com

mon ground,” Ford said in a statement. “He constantly reminded us as a company and as an industry that we either work together or we fail separately.” Determined, dogged and sometimes a bit canktankerous, Dingell conducted himself with grace and class in every negotiation with friends and foes.

“He could be a forceful advocate for his position and unrelenting in a lot of ways — and that was another characteristic that I admired in him,” Lewand said Friday. At the height of the Great Recession, when the Detroit Three were in freefall, Dingell was critical of how Ford, General Motors and then-Chrysler Corp. were slow to communicate why their core businesses were flailing and in need of federal assistance (just GM and Chrysler took the federal bailout as they descended into historic bankruptcies). “The companies really could have done a better job of communicating to the people, communicating to Congress, communicating to the government,” Dingell told Crain’s in January 2009 “They’ve got a pretty

good record, but they have been somewhat slow to tell their story, slow to form their arguments, and I have had to constantly push them to see they do these things. They’ve been rather slow in these matters, and the consequences have led me into terrible fights.” As author of the 1970s fuel economy standards, John Dingell the ever-mindful conservationist pushed his hometown auto companies to take better responsibility for the air their cars were polluting while still standing guard over their economic interests in Congress. In his 2018 memoir “The Dean: The Best Seat in the House,” Dingell wrote about how he tried to balance the demands of environmentalists with his knowledge “of how automobile manufacturing works.”

to Congress to fight for them, had someone looking out for their economic well-being,” Dingell wrote in his memoir. It was Dingell’s focus on serving his customers — the voters of Wayne and Washtenaw counties — that Lewand says he took lessons from as a young teenage intern and later harkened back to in his own career. “I think people, whether they’re in a business setting, whether they’re in a social setting, if you start from a position of the prospective of service (to others), you generally find that you can come to a satisfactory resolution sooner,” Lewand said. “It doesn’t mean there won’t be conflict. It doesn’t mean there won’t be toughness. And ‘The Dean’ clearly had both of those.” “But it also means you can work toward a resolution and not just pick a fight for the sake of fighting,” Lewand added. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

The honeymoon did not last long

hen our new governor was elected last fall, I had great expectations that, unlike in Washington, we would see her and the legislative branch working cooperatively and making progress on much of the agenda that both parties agree needs to be done. It did not take long before I was proven wrong, when part of one of the governor’s plans was voted down by the House with a “No thank you very much.” I actually thought that the Republican-controlled Legislature would get along with our new governor for

KEITH CRAIN Editor-in-chief

about a year before we would see the first skirmishes. I could not have been more wrong, and more deadlock seems likely.

I certainly hope I am wrong and everyone comes to their senses. If there’s one issue everyone seems to agree on, it’s that we have to fix the damn roads. My biggest concern is whether our state government will be able to raise the necessary funds — that is, taxes — to pay for this huge undertaking. My best guess is the Legislature will balk at any sort of tax increase to pay for it. Actually, with gasoline hovering around $2 a gallon, now would be the perfect time to use an additional gasoline tax to raise the funds, long before electric vehicles would create

any sort of conflict with gasoline vehicles. All too often our elected officials from both sides of the aisle think they are working for their party and forget that they were elected by the people to work for them. The word “compromise” never seems to be uttered in government these days. Maybe our elected officials in Michigan could make a good example for the folks we send to Washington, who seem to want to do anything before they consider the possibility of working together to get the nation’s work done.

We should tell all elected officials to get with the program, and that certainly includes our governor and our legislators. Remember: There will be another election sooner or later. We demand cooperation.

MORE ON WJR Listen to Crain’s Group Publisher Mary Kramer and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

Summit Place site to become Oakland County Business Center By Kirk Pinho kpinho@crain.com

The redevelopment of the to-be-demolished Summit Place Mall will be called the Oakland County Business Center. Signs advertising the planned development by Southfield-based Ari-El Enterprises Inc. were erected Tuesday along both Telegraph and Elizabeth Lake roads on the 74-acre property’s boundaries at the Waterford Township/Pontiac border. It’s the latest step forward in getting the long-blighted 74-acre mall site repurposed after a years-long battle between the township and the previous owner, Santa Monica, Calif.-based SD Capital LLC, which failed for years to put it to productive use.

Bloomfield Hills-based Taubman Centers Inc., opened in 1998 and siphoned shoppers northeast. Online shopping also took its toll. The enclosed portion of Summit Place Mall closed in 2009 following years of decline. Anchor stores Macy’s and J.C. Penney closed in 2010 and Sears closed in December 2014. ARI-EL ENTERPRISES INC.

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

A Southfield-based developer is proposing to replace the blighted Summit Place Mall with a $63 million redevelopment that would include a variety of uses.

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JJEffort expected to cost $63 million; demolition to begin in April JJMarketing signage installed, brokerage firm hired JJOffice, flex engineering, research and development, warehouse, distribution and restaurants could populate property

Demolition is slated to begin in April and clear the way for up to 1 million square feet of new development. Ari-El, which is headed up by Arie Leibovitz, has hired Larry Emmons and AJ Weiner, managing directors in the Royal Oak office of Chicago-based brokerage firm JLL, to market the property to users. “There is ample room for buildto-suit sites for businesses in need of research and development, corporate offices, warehouses or flextype space,” Emmons said in a statement. “Companies moving in have the opportunity to customize sites and buildings in a location where development ready infrastructure is in place.” Waterford has granted a 10-year property tax abatement and other forms of financing are involved, including its location in an Opportunity Zone. Crain’s reported in November that office, flex engineering, research and development, warehouse, distribution and restaurants could populate the property. A township board document at the time says the project would create 2,183 jobs plus another 352 construction jobs. The 1.4 million-square-foot shopping center was condemned in December 2014. Naples, Fla.-based Wreck-It Demolition LLC is the demolition contractor. Roadways and other infrastructure are slated to be built starting in the summer and the project would be completed over three-five years ending by December 2023, the document says. Summit Place opened in 1963 and was developed by what is now New York City-based RPT Realty, most recently known as Ramco Gershenson Properties Trust (NYSE: RPT). The shopping center, first known as the Pontiac Mall, began declining when nearby Great Lakes Crossing in Auburn Hills, developed by

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CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

HISTORY LIVES INFUZ LTD. ARCHITECTS

A rendering of the renovation of the historic St. Clair Inn.

California developer of St. Clair Inn invests in two more historic hotel, school buildings By Tom Henderson thenderson@crain.com

The California real estate development firm that will finish its $40 million renovation of the historic and iconic St. Clair Inn in St. Clair this summer has been smitten with more of the county’s history. In September, Sherman Oaks, Calif.-based J.D. Market Acquisitions, a real estate broker, developer and property manager that owns or operates a variety of retail and residential housing in California and Utah, bought the Harrington Hotel in Port Huron, a building that was placed on the National Register of Historic Places in 1982. Renovation work has begun on the building. Jeff Katofsky, the president of J.D. Market Acquisitions, said the hotel will be restored to its original architectural glory, with work expected to finish this summer, when its 82 rooms will open and operate under the Best Western Premier brand. When asked about the restoration budget, Katofsky said: “We will be all in at $12 million.” And in January, Katofsky closed on the purchase of the vacant three-sto-

Need to know

JJ$40 million renovation of the historic

St. Clair Inn will wrap up this summer

JJDeveloper Jeff Katofsky has purchased two more historic buildings in St. Clair County JJThe Harrington Hotel will reopen as a Best Western Premier hotel after $12 million restoration

ry former St. Clair Middle School, just a few blocks from the St. Clair Inn. It will be converted into small apartments targeted at millennials and employees of the Harrington and the St. Clair Inn. Built by prominent Port Huron attorney Charles Harrington in 1896 on Military Street in the heart of downtown, the Harrington Hotel was the center of the city’s political and social life for decades. It is a five-story, red brick building that combines elements of Richardsonian Romanesque and Classical Revival styles. In 1919, Harry Truman, who would later become president, and his wife, Bess, spent their honeymoon there. Other dignitaries to stay there over the years included U.S. Secretary of

Treasury William Gibbs McAdoo, actor Otis Skinner, comedian Eddie Foy Sr., boxing champion Robert Fitzsimmons and Thomas Edison. In 1940, when the movie “Young Tom Edison” premiered in Port Huron, guests included the movie’s star, Mickey Rooney, movie mogul Louis B. Mayer, Harvey S. Firestone Jr., Edsel Ford and Father Edward Flanagan, founder of Boys Town. The hotel fell on hard times in the 1950s and the 1960s. By the early 1980s, many of its rooms were rented on a weekly or monthly basis. After threats of demolition by city officials, the hotel was converted into an assisted living center for seniors, which closed in 2017. Randy Maiers, the president and CEO of the Port Huron-based Community Foundation of St. Clair County, said the purchase and renovation of the Harrington is particularly meaningful. “This was the last large vacant building downtown. Ten years ago, there were multiple large vacant buildings, including the Sperry furniture building, the YMCA, the Michigan National Bank building and the Art Van building.” SEE DEVELOPER, PAGE 15

In September, Sherman Oaks, Calif.-based J.D. Market Acquisitions bought the Harrington Hotel in Port Huron.

In this package JJCalifornia developer of St. Clair Inn

invests in two more historic hotel, school buildings. This Page JJA license with Disney marks a turning point for St. Clair inventor. Page 11 JJIn the basement of a boutique moviehouse, an incubator helps businesses grow. Page 12

A lounge at the Harrington Hotel.

JJCompanies launched by The Underground include nonprofits, designers. Page 13

JJP.J. Wallbank Springs partners with Port Huron public schools on STEAM labs. Page 14

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SPECIAL REPORT: ST. CLAIR COUNTY

A license with Disney marks a turning point for St. Clair inventor By Tom Henderson thenderson@crain.com

The Community Capital Club, an investment arm of the Community Foundation of St. Clair County, is investing $300,000 in St. Clair-based Smart Shelf Inc., a startup that makes small bedside shelves that can hold cups, snacks, a reading light and, most importantly, wirelessly charge a variety of mobile devices at the same time. It is part of a $1 million seed round of funding the company hopes to raise to ramp up production. One end of the oblong shelf fits in between the top mattress and the box spring on a bed, making them useful for those living in dormitories, who have small bedrooms, or in motorhomes, boats and other places where space is at a premium or outlets for wall-charging are lacking. One key factor for the Capital Club was a license granted in November by the Walt Disney Co., allowing Smart Shelf to sell shelves for $29.99 that bear the likeness of Mickey Mouse. That license came just in time for Mickey’s 90th birthday. The company has been asked by Disney to come up with designs for possible licenses for upcoming movies, including Toy Story 4 in June, the Lion King in July, Frozen 2 in November and the next Star Wars: Episode IX in December. The technology has been awarded two U.S. patents and three others have been applied for, including one that calls for a miniature projector to be placed in one of Mickey’s ears, allowing the shelf to receive streaming content and project it onto a wall or screen. “We feel they have uncovered a unique niche in a huge global market, combining worldwide brands like Mickey Mouse along with the apparently insatiable appetite around the globe for hand-held devices and charging options,” said Randy Maiers, president and CEO of the Community Foundation. “We also are drawn to the potential for job growth and new manufacturing in this region.” Smart Shelf was founded by Dan Cass, who is president, and his brother, Ed Cass, the vice president. Dan is a longtime executive with a variety of companies in the clean and renewable energy space. Ed has 20 years of experience in graphic design and marketing and is principal owner of BellStar Media LLC, a marketing and website development firm in Algonac. Dan said he got the idea for the shelf when, in a small bedroom with no nightstands, he accidentally knocked over a glass of water, damaging his phone, which was plugged in and on the floor. Dave Zrike is president of R Squared Sales and Logistics LLC of Moonachie, N.J., which has licenses to make a variety of Disney and Star Wars products. Dan Cass introduced himself and a prototype shelf to Zrike at Zrike’s booth at the Chicago Housewares Show last March. Zrike liked the Smart Shelf and offered to help him cut red tape at Disney.

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Dan Cass (left) and Ed Cass and their Disney smart shelves.

Need to know

JJSmart Shelf Inc. makes a small bedside

shelf that can wirelessly charge electronic devices JJThe company is raising a $1 million seed round and received $300,000 from the Community Capital Club JJIn November, Disney granted Smart Shelf a license to sell Mickey Mouse shelves

“It’s an innovative product that offers a solution for people with small places and at the same time is a lot of fun.” Dave Zrike

“It’s an innovative product that offers a solution for people with small places and at the same time is a lot of fun,” said Zrike. He said that Smart Shelf products will not only be sold in the Disney Store but potentially can have a big penetration at Disney parks and hotels. “Another great application is dorms. My daughter has a dorm, with very little space, and she’s always looking for a place to put her phone.” Asked about Dan Cass, Zrike said: “He’s one of the most aggressive, passionate inventors I’ve ever met. When you are an inventor, passion is a big part of the recipe.” Smart Shelf began selling products off its website, smartshelfinc. com, after getting its license from Disney in December last year. It has sold in low volumes so far. Manufacturing is done by local firms on a contract basis. As sales ramp up, Zrike will do some manufacturing and the Casses hope to have their own factory in St. Clair County. The Casses filed for a provisional patent in 2015, filed a utility patent in 2016 and got their first patent in March 2017, about the same time they approached the Economic Development Alliance of St. Clair County about possible assistance. They soon entered and won three business-plan competitions and became what are called virtual tenants of the Underground, a business incubator affiliated with the EDA in downtown Port Huron. (See related story, Page 12.)

SMART SHELF INC.

“Virtual” means they are still based in the city of St. Clair but pay a reduced rent at the incubator to take advantage of it services, mentoring and meeting space. Smart Shelf was one of four companies that each won $5,000 in startup funds during a pitch competition held in conjunction with the Underground’s launch in April 2017. Last November, the Casses got their second patent awarded, which covered advanced capabilities for wireless charging, including harvesting and storing energy waves in air, such as radio frequencies and infrared and LED sources. “Smart Shelf is a classic example of how we can help,” said Dan Casey, CEO of the Economic Development Alliance of St. Clair County, which oversees the Underground. “They didn’t have a business plan. They needed money. They had a prototype and that was it.” “They had all kinds of dreams, ideas for great products,” said Quentin Bishop, the director of business attraction at the EDA. “We’re all for home runs, but let’s figure out how to hit a line drive. What can you sell now to bring in money?” Dan Casey has plenty of ideas for licensing and selling products. Breathlessly he talks about licenses he’d like to sign with universities for their sports teams, with the National Football League, Major League Baseball and the National Hockey League, as well as shelves branded to such things as the “Property Brothers” TV show and Kathy Ireland Worldwide brand. First, though, he needs to finish raising that seed round, which will give him enough money to increase production and to raise his profile at his contract manufacturers. “Right now, we can’t give them enough business to make us a priority. They fit us into their production schedule when they want to. We need to change that,” he said. Ultimately, he aims to increase production to the point where the Casses won’t need contract manufacturers at all. “We have big plans for St. Clair County,” said Cass. “The goal is to make these ourselves and hire a lot of local people.” Tom Henderson: (231) 499-2817 Twitter:" @TomHenderson2

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THE UNDERGROUND

Dan Casey, (left) CEO of St. Clair County EDA, and Neal Bishop of International Transmission Company in front of a mural sponsored by ITC at The Underground incubator.

In the basement of a boutique moviehouse, an incubator helps businesses grow Tom Henderson thenderson@crain.com

RACHEL BAUER REGIONAL DIRECTOR SOUND PHYSICIANS EMBA, CLASS OF 2013

The Underground is a thriving incubator in downtown Port Huron, in the basement of the old Sperry’s department store on Huron Street in what is now the Sperry Moviehouse, a boutique cineplex. The theaters had their grand reopening in December 2016. As part of a $1 million federal Brownfields Economic Development Initiative grant to help fund renovation costs, Chuck Reid, a Holland-based entrepreneur, agreed to allow a business incubator to be housed in the basement. The result has been a low-overhead structure for the Underground and lower rents for its tenants. It had its ribbon cutting in March 2017 and landed its first tenant that April. (See related story, Page 13.) Reid gets 90 percent of the tenants’ rent and pays all the taxes and utilities except for internet costs. The incubator keeps 10 percent for its operating costs. “We’ve visited a lot of incubators, and they often have trouble paying the bills. Our agreement allows us to keep rent low. We have an incubator that is really sustainable,” said Dan Casey, the CEO of the Economic Development Alliance of St. Clair. The incubator is a partnership between the EDA and the state’s central Thumb-area SmartZone, which covers seven counties. The region’s Small Business Development Center is also based in the Underground. Because the SmartZone covers seven counties, the incubator includes what are called virtual tenants — members that have chosen to operate their business elsewhere, but do want access to mentoring, conference rooms and events. “We knew there would be people who wouldn’t want to drive here every

Need to know

The Underground business incubator launched in March 2017 in the basement of the Sperry Moviehouse J

J Tenants can get startup funding of $5,000 in grants from Economic Development Alliance, Community Foundation J Tech companies are welcome, but its founders want to encourage entrepreneurs of all kinds

“We’ve visited a lot of incubators, and they often have trouble paying the bills. Our agreement allows us to keep rent low. We have an incubator that is really sustainable.” Dan Casey

day but wanted the benefits of the program,” said Casey. Tenants get 24/7 access, IT support, Wi-Fi, a graphics work station, office equipment and supplies, design help for ads, brochures and other printed material and access to what is called the Edison Think Tank, a 40-seat space in the back of the incubator that can be rented for training or conferences. Tenants also have in-person, online or phone access to Matt Fernandez, who in addition to running the incubator has the titles of mentor-in-residence and CEO-in-residence. He is a serial entrepreneur who is CEO of two Port Huron businesses, the North Coast Golf Co., which designs and makes high qualify golf gloves, and the Tee Box Club, an e-commerce company focused on golf.

An enclosed office for up to four persons costs $250 a month. Access to a desk and chair on a first-come, first-served basis is $40 a month. Virtual tenants pay $90 a month. Tenants can get startup funding of $5,000 in grants from the Emerge Fund, a fund created by $25,000 in donations a year, half by the EDA and half by the Community Foundation of St. Clair County. Grantees must create an acceptable business plan and accept members to an advisory board. In January, the Community Foundation approved another investment fund of $33,000. Unlike the Emerge Fund, which provides grants, this one will provide funding to companies in exchange for 5 percent of equity. The fund will be split among three winning applicants. They will receive 12 months each of incubation services in the Underground and can spend their $11,000 on such things as legal fees, patent work and prototyping. Tech companies are welcome at the Underground, but its founders want to encourage entrepreneurs of all kinds. “If you want to move back here from Chicago and start a business, we have everything you need,” said Casey. “You don’t have to be high tech. We’re not Ann Arbor Spark and the University of Michigan, we don’t have a lot of tech companies here with a lot of grant funding. We’re happy to help create small companies that will employ local workers.” Casey said the Underground has worked so well he plans to open a satellite incubator in the south end of the county. “I hope to find space and sign a lease in the next couple of months,” he said. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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The Underground launches nonprofits, designers

WE BUILT THE BEST WITH YOU IN MIND.

By Tom Henderson thenderson@crain.com

The Underground, the startup business incubator in the basement of the former Sperry department store in downtown Port Huron, has spawned several successes in its first two years of operation. Here are a few:

COGENT HEX INC.

Scott Morris (left) and Scott McQueen. They are two co-founders of Cogent Hex.

Karen Palka of A Beautiful Me Closet, the first tenant in the Underground.

A Beautiful Me Closet Karen Palka became the first tenant in the Underground in April 2017, while it was still under construction. She founded A Beautiful Me as a 501(c) 3 nonprofit in 2008 and has taught self-esteem to some 8,000 girls in after-school programs over the years. She wanted to expand the program to run a nonprofit retail store that would employ high school girls at night and on weekends and decided to work on that idea out of a co-working space. She said she looked into spaces in Detroit, but when she heard that Port Huron was about to start one, she met with Quentin Bishop, the director of business attraction at the Economic Development Alliance (EDA) of St. Clair County and director of entrepreneurial services for the state’s seven-county central Thumb area SmartZone. The Underground is a partnership between the two organizations. “They hadn’t finished the space. It was saw dust and no walls, but I needed an address. I’d been working out of coffee shops,” she said. “I loved watching the Underground grow from a thought process to execution.” Meanwhile Palka raised $100,000 in charitable contributions and on Jan. 16 held a ribbon cutting at her new thrift store, A Beautiful Me Closet, in downtown Port Huron, directly across the street from the Underground. “We had 150 people at the ribbon cutting, which the fire marshal probably doesn’t want to know about,” she said. Ten area high school girls are employed there. Palka said she met many of them during her after-school programs, including some who were then just in second grade. The store has 2,000 square feet of space on the ground floor and a large basement that she wants to start holding sewing classes in and train her employees to, among other things, fill a local need Bishop told her about: repairing sails for local marinas.

Cogent Hex Inc. Cogent Hex is a turnkey designer and installer of factory automation equipment, including robotics, conveyor systems and vision-control systems. The company was founded in 2016 and began operations in 2017 after Brown Aerospace, a factory automation company near Port Huron, was bought and moved to Shelby Township. “A few of us who had worked on some big projects together decided to venture out,” said company President Scott McQueen. They ap-

proached the Economic Development Alliance. “I reached out to see what kind of opportunities they had for new companies.” They learned about the Underground, and then were one of four companies to win $5,000 in startup funds at a business pitch competition held to help launch the incubator. “An incubator was perfect, because we didn’t have an office to work out of, and the cost of rent was ideal,” said McQueen. In mid-2017, the five co-founders moved in. They have since hired four more employees and have about outgrown their space. “Everyone wants the pizzazz of their own building, but our philosophy is we won’t get a building until we absolutely have to,” said McQueen. “Most of us work on site with customers, but there are times when we have seven people here in the incubator and we have to confiscate space in the conference room to fit everyone in. “We have quotes out on several big jobs, and if we get one of them, we’ll have to leave for our own space. The goal is by year’s end to be out in our own space.”

Golden Laser Designs Gregg Masters Jr. is president of Golden Laser Designs, a company he founded in November of 2017 to do laser etching and cutting for personalized gifts. A disabled vet with a master’s degree in accounting, he took over a marketing and advertising business called Golden Choice Inc. in 2014. Wanting to branch out into laser etching, he bought a laser cutting tool and installed it in his Port Huron house. A friend told him he’d heard there were small grants available to startup companies through a new business accelerator in town. “I told him, ‘I’ve never won anything, and I’m never going to,’” said Masters. His friend pestered him and a week later he relented and met with the Underground folks. He won a grant of $5,000, contingent on joining the Underground for a year. He joined last July and says he will re-up for another year. He operates the business A Prost wine glass out of his home but meets with customers at the Unfrom Golden derground and uses its variChoice. ous services. The Underground has helped him improve his website, distribute samples and make customer introductions. Customers he’s landed since joining the Underground include the Vintage Tavern in Port Huron; the Vinomondo Winery in Fort Gratiot, where he has created a display showing a freighter passing under the Blue Water Bridge; and tumblers and serving trays for Chassix Inc., the auto supplier. “Eventually I’d like to get a storefront and a warehouse,” said Masters. Tom Henderson: (231)499-2817 Twitter: @TomHenderson2

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A company with nearly 40 years of history in Port Huron is investing in the communityâ&#x20AC;&#x2122;s future. The story of P.J. Wallbank Springs Inc., a manufacturer of spring assemblies for automotive and truck clutches, began in England 1954, when Phil Wallbank, a springmaker by trade, saw a newspaper ad for a foremanâ&#x20AC;&#x2122;s position at a spring factory in Ontario. Eager for an adventure, Wallbank responded to the ad, got the job, sold nearly everything he had and moved his wife and young children to Canada. Alas, the factory turned out to be a few machines in a small garage. Wallbank figured if he was going to work in humble surroundings, he might as well work on his own. In 1955, he launched his own company, P.J. Manufacturing. Armed with a few orders and a bank loan of $300, he went to work in the basement of an old farmhouse he had rented for his family. He fashioned his own machines for making springs out of old washing machine motors and hardware scraps. In 1982, to get better access to the U.S. market, Wallbankâ&#x20AC;&#x2122;s son, Mel, moved the company to Port Huron and christened it P.J. Wallbank Springs Inc. Then and now, the company focused exclusively on what are called spring packs, collections of springs in a single assembly that are housed in transmission clutches. That focus has paid off. In September, Inc. magazine ranked Wallbank Springs No. 4,123 on its list of the 5,000 fastest-growing privately held U.S. companies, with revenue growth of 84 percent for 2015-2017, to $24.8 million. Chris Wallbank, the companyâ&#x20AC;&#x2122;s president and Melâ&#x20AC;&#x2122;s son, said the company makes more than 80 varieties of clutch spring products and makes more than half of its sales to customers outside of the U.S. He is a tier one and tier two supplier to companies in South America, Canada, Mexico and Europe, with more than

â&#x20AC;&#x153;The average age of a school building in Port Huron is 68. We needed to create modern learning spaces, and we talked to local business leaders about how to do that.â&#x20AC;? Jamie Cain

half of those exports to China. The company has sales offices in Germany and China. To help train future workers and contribute to the community, Wallbank Springs has committed $150,000 over the next six years to help fund the cost of educational materials and engineering equipment for the new STEAM (science, technology, engineering, the arts and mathematics) programs and labs the Port Huron public schools are creating. According to Jamie Cain, the schoolsâ&#x20AC;&#x2122; superintendent, STEAM labs will be built at six of the districtâ&#x20AC;&#x2122;s 16 schools. Construction is part of phase two of a three-phase, $106 million bond proposal passed in 2016. On Jan. 23, a ribbon cutting was held at the projectâ&#x20AC;&#x2122;s first STEAM lab at Port Huron Northern High School, the school where Wallbank graduated in 2002. The P.J. Wallbank Springs Inc. Engineering STEAM Lab involves 20,000 square feet of new construction, at a cost of $1.2 million. A lab of the same size and cost is under construction at Port Huron High School. Labs at three middle schools will incorporate existing space, as will the one elementary STEAM lab. â&#x20AC;&#x153;The average age of a school building in Port Huron is 68. We needed to create modern learning spaces, and we talked to local business leaders about how to do that,â&#x20AC;? said Cain. â&#x20AC;&#x153;We wanted community partnerships, and

the one with Wallbank Springs is a showcase partnership.â&#x20AC;? Students will get mentoring and some instruction from Wallbank Springs employees, will make field trips to see plant operations and will have access to internships, job shadowing and part-time and summer jobs. â&#x20AC;&#x153;This is a way for Wallbank Springs to get to know students before they leave high school,â&#x20AC;? said Cain. Wallbank said his company already employs two Port Huron students parttime and will collaborate on the STEAM curriculum. Staff will regularly visit the schools and provide input and advice. â&#x20AC;&#x153;I fundamentally believe in this area. People complain about the lack of people in the work force, the lack of capable people. These are smart kids who were lacking in opportunities. Our success as a company is predicated on the people we have here,â&#x20AC;? said Wallbank. Wallbank said he employs about 150 now and expects the company will need another 50 or so over the next two years to manage projected growth. This isnâ&#x20AC;&#x2122;t the first time Wallbank Springs has helped St. Clair area students. The company has set aside 5,000 square feet of space in a 50,000-squarefoot building it owns for the countyâ&#x20AC;&#x2122;s 14 high school robotic teams, who formed the Bluewater Area Robotics Alliance in 2014, to call home. Wallbank said he read in the Port Huron Times-Herald that the alliance was struggling to find regular space to meet and work on projects. â&#x20AC;&#x153;Local teams might be able to get part of the high school gym from 8 p.m. to 10 p.m. on a Tuesday night to meet and create. Theyâ&#x20AC;&#x2122;d have to be off to the side, werenâ&#x20AC;&#x2122;t allowed on the gym floor, that kind of thing,â&#x20AC;? said Wallbank. A grand opening will be held in a month or so. â&#x20AC;&#x153;The end customer is the community at large,â&#x20AC;? said Wallbank. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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sauna, an amphitheater for outdoor weddings and other events, fire pits, a bocce ball court and a man-made beach behind a new portion of seawall in front of the north wing that will allow patrons to go into the water without having to worry about being swept downriver. The large open meeting room on the ground floor and what is being called a skybar above it on the second floor, both under construction between the two wings of hotel rooms, required 35 steel support beams to be driven 140 feet to bedrock. Across Riverside Drive from the inn, a two-story 19,000-square-foot multi-use office and retail complex will begin construction soon. It will include a fitness center, bakery, florist, hair and nail salon, photography studio and art gallery. Katofsky said rooms at the inn will go for a minimum of $150 a night, with suites going for more than $400. The three cottages will vary from $500-$750 in the off season and from $1,500-$2,200 during times of high demand.

FROM PAGE 10

The Harrington’s lobby, hallways and stairway banisters feature beautiful quarter-sawn oak, with many finely carved details. But the floors have been covered with cheap carpet and support columns on the main floor covered with painted wood. Rick Barreca, Katofsky’s partner and chief operating officer, who has been spending three weeks a month in St. Clair County overseeing first the St. Clair Inn project and now the Harrington, said the carpet will be stripped off to reveal the granite below, the paint and wood on the columns removed and drywall that had been put up over the years removed. He also plans to put in a skylight where there is now a ceiling above the five-story interior stairway. He said the empty, stately Harrington caught his eye and last summer, he asked a real estate agent he had worked with in St. Clair, Korissa Wilkins of Kramer Commercial Realty, about it. “I said, ‘You know that building in downtown Port Huron? I love it. Do you know anything about it?’ And she said, ‘It’s my listing. I’ll show it to you.’ Things went quickly.” Barreca said he and Katofsky had been worried about having enough space at the St. Clair Inn to house all the back-office operations and the washers and dryers, as well as where to put the overflow of guests coming to town for weddings or special occasions. The Harrington has a huge basement, with plenty of room for banks of commercial dryers and washers, offices for accountants and other back-office support. They will also renovate a huge stone fireplace along one wall and renovate and reopen a bar that closed many years ago. According to a tax-abatement application Katofsky filed with the city, under the name Hip Hip, Huron! LLC, the renovation will create 60 jobs during construction and a range of 25 to 40 full-time and 15 to 40 parttime employees after completion. The brick school building Katofsky closed on in January will be converted in the next year or so to 72 apartments of about 450 square feet each. The apartments will be targeted at St. Clair Inn or Harrington employees but not restricted to them. “We’re targeting young people who maybe are living with their parents now and can’t find affordable housing,” said Barreca, who said rent will be in the $375 to $450 a month range. Residents will have access to the large gymnasium. A 600-seat auditorium in the school will be rented out for corporate and other commercial events. All the baked goods needed by the St. Clair Inn and the Harrington will be made in the school’s large kitchen. Katofsky said he had a preliminary meeting in December with State Sen. Phil Pavlov (R-St. Clair) and officials from the Michigan State Housing Development Authority about loans and tax credits for the school redevelopment. “They were very receptive to our concept plans. We are in the midst of putting that package together to get to them for their formal consideration and approval, which we expect,” said Katofsky.

Moving along at the St. Clair Inn Work continues at the St. Clair Inn,

Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Three new stand-alone cottages along the St. Clair River on the south side of the St. Clair Inn have been finished.

You know. The Motor City has both fueled and felt the power of the Laker Effect. Many of our students not only hail from the Detroit area, but they also return there: as analysts and engineers, biochemists and health A rendering of the planned pool area at the St. Clair Inn.

which will operate under the Tribute by Marriott brand, a bit behind the original construction schedule that called for completion in March. Barreca said some of the inn’s seven restaurants and bars will open in May, with rooms in the south wing coming online in June or July and soon after in the north wing, where a third story has been added to the original two. In addition to the 106 hotel rooms, three new stand-alone cottages along the St. Clair River on the south side of the inn have been finished, two of them with three bedrooms and one with two. The inn is arguably the greatest symbol of the renaissance happening all along the St. Clair River, from Lake Huron to Lake St. Clair. It was built in 1926, after the St. Clair Rotary Club decided the city should have a grand hotel befitting the area’s status as the center of the boating world and did a public offering of $180,000 to build a 60-room hotel. When it opened on Sept. 22, 1926, it was the first U.S. hotel with air conditioning. The inn was added to the National Register of Historic Places in 1995. In 2014, after a long decline under a series of owners, the inn closed. The next year came news of a new owner from California who came into control of the property under

unusual circumstances, to say the least. Katofsky closed on the purchase for $4.1 million in January 2016. Katofsky is also a lawyer, and was hired to help solve some legal problems the inn’s last owner, Remo Polselli, was having with projects in Florida. Polselli served a sentence for federal income-tax evasion in 2003, and in 2010, his Waterfront Hotel Ventures LLC, which owned the St. Clair Inn, filed for Chapter 11 bankruptcy protection. To settle a suit Katofsky later filed against Polselli involving Florida transactions, he was given the chance to buy Polselli’s three properties in Michigan, the Metropolitan Hotel in Romulus near Metropolitan Airport, the St. Clair Inn and the Sugar Loaf Resort, an iconic landmark in the Leelanau Peninsula northwest of Traverse City that has sat idle for years. In the summer of 2016, the Metropolitan Hotel, shuttered in 2012, reopened as the Radisson Hotel Detroit Metro Airport. St. Clair-based Westhaven Builders LLC and architect Vincent Cataldo of the St. Clair firm of Infuz Ltd. are doing the St. Clair Inn, the Harrington and the middle school. In addition to the new cottages, the inn will have an outdoor pool and

professionals, as leaders in business and leaders of communities. Support them. Support us. And see the power of what can be.

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FORUM

Pamela Good:

Opening the door to literacy is the key to economic success. Page 18

February 2019

STATE OF THE STATE

Amid boom times, potholes line Michigan’s economic path Whitmer administration braces for greater challenges than fixing “the damn roads” By Chad Livengood

clivengood@crain.com

here are potholes in Michigan — and not just in the roads. ¶ Potholes in household income. Potholes in the percentage of working adults. Potholes in student achievement and funding for K-12 schools. And potholes in post-secondary educational credentials needed to fill in-demand jobs. ¶ After nine years of economic growth that replaced seven-in-10 of the jobs lost in the Great Recession, there are signs of long-term trouble as Democratic Gov. Gretchen Whitmer prepares to deliver her first assessment of Michigan’s standing in a State of the State address Tuesday to the Republican-controlled Legislature. ¶ The data that researchers use to compare the economic vitality of individual states paints a picture of a Michigan that’s nowhere near achieving the “top 10 state” status long-desired by business leaders. ¶ Here’s an unvarnished Crain’s report card on the state of these two peninsulas: Below the national average

57.8 percent Economists say the workforce shortages many employers are experiencing can be traced to both a skills gap among adults and too few people working. Michigan’s employment-to-population ratio ranks 38th in the country at 57.8 percent. The national average is 59.5 percent, and Midwest rival Minnesota has more than two-thirds of its residents working, according to U.S. Census data analyzed by University of Michigan economist Donald Grimes. Minnesota also has a better-educated and younger populace than Michigan, which is in the bottom tier of oldest states as measured by median age. Minnesota households earn on average $68,388 annually, 15 percent more than Michigan households that average $54,909 annually, according to U.S. Census data. SEE POTHOLES, PAGE 20 CRAIN’S PHOTO ILLUSTRATION USING GETTY IMAGES

Amber Arellano: Supporting teachers is the key to student learning. Page 18

M. Roy Wilson: Unleash the economic power of higher ed in Michigan. Page 19

Tonya Allen: State’s schools ill-equipped for the coming ‘age of autonomy.’ Page 21

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Voices

“We must empower our kids to lead the future rather than fall victim to it.” — Tonya Allen, president and CEO of the Skillman Foundation See page 21

CRAIN’S FORUM | FEBRUARY 2019

EDUCATORS

Better support of teachers key to student success

or much of the past two decades, Michigan has been slipping behind the rest of the nation in public education. The data can become so sobering and overwhelming that we lose sight of those impacted most: our students. ¶ And far too often, teachers — the change makers for our students — are an afterthought. While there are no silver bullets in education, the research is clear. Teachers and the quality of classroom instruction are the greatest in-school factors for improving student learning. This truth is reflected in the experience of ourselves, our neighbors and our colleagues. Nearly everyone includes a teacher in their list of people who had a major impact in their life direction. Teachers like my extraordinary sixth-grade teacher Mr. Al Jewel, who gave me incredible support and opportunities to cultivate my writing skills, and my third-grade teacher Ms. Bonnie Dutton, who brought such a joyfulness to

learning multiplication tables that it still makes me smile today. This research and experience begs the question: If we know and appreciate the impact of exceptional educators on students’ learning and lives, why do we not AMBER treat teachers with respect ARELLANO and professionalism? This should be the rallying cry for improving the Teachers quality of public education and the in Michigan. In her first quality of State of the State address, classroom Gov. Gretchen Whitmer instruction has the opportunity to lead are the on this issue and insist that greatest we hold our teachers in in-school high regard and provide factors for educators with the support improving and resources to help every student student to learn and learning. achieve. Respecting and promoting the teaching profession is important, but alone is not enough. To truly honor our educator professionals, we should take seriously the need for relevant and

continuous learning. Next year, students who are not reading at or near grade level may be retained in the third grade. Yet we are doing little to ensure that new and experienced educators are well-trained on the best practices of literacy instruction. This void goes well beyond early literacy. Like any other professional, educators should be equipped with timely feedback on student learning and opportunities to continuously grow and improve. Fast-improving education states, like Tennessee, have shown how valuable high-quality professional development and professional mentorship can be for even the most veteran teachers. While educators are truly remarkable, they cannot do it all alone. Ensuring that classroom teachers are a part of a team of professionals helping students learn is also needed. This means addressing our unacceptable 700-1 student-school counselor ratio, nearly three times the recommended ratio. In every district, Michigan must also prioritize qualified media specialists, social workers and teacher coaches — and not just school resource officers. Improving student learning means taking seriously the need to ensure that our most vulnerable students have access to great teachers. Yet when we pay teachers in Michigan’s poorest

districts about $9,700 per year less than teachers in better-off schools and districts, it is no wonder that we struggle to attract and retain experienced educators where they are most needed. For so many, the difference between a thriving child in school and being on the pathway to stability and success after graduation, or not, hinges on having exceptional educators along the way. As a state, we must do much more to ensure this is a reality for all students, not left up to life circumstance or chance. We all want engaged students, prepared for a lifetime of learning and success. As Gov. Whitmer delivers her first State of the State address, I’m hopeful that she will recommit to our teachers to honor and support their critical role in the lives and future of our students. This effort will not be easy and cannot be accomplished alone. The Education Trust-Midwest stands ready to work with the governor, leaders on both sides of the aisle, and most importantly, teachers, to ensure a brighter future for public education in Michigan. Amber Arellano is executive director of The Education Trust-Midwest, a Royal Oak-based education policy, research and advocacy organization.

LITERACY

Build a better Michigan by tackling illiteracy

iteracy is a critical building block of an academic foundation that supports a child’s educational success and future as a productive self-sustaining adult. Unfortunately, this essential building block is missing for hundreds of thousands of students showing up to school each day. ¶ Illiteracy has reached a crisis level as it has not been fully addressed or understood for decades.

Left untreated, the health of our state will continue to suffer. We know that a child who struggles to read becomes an adult who struggles. We implore Gov. Gretchen Whitmer to make eradicating illiteracy one of her top priorities. This silent epidemic is killing the futures of thousands of children across our state. It’s time we address a root cause of a failed educational model in our vulnerable communities — illiteracy. The state currently invests education dollars that cannot be utilized by all students. Students who can’t read can’t participate in school. The current model doesn’t include funds for the individual needs of students. Startling statistics: JJ75 percent of students who cannot read proficiently by the end of fourth grade will end up in jail or on welfare. JJIn the most underserved school in Detroit, only 7 percent of the students are reading proficiently. JJOur work in struggling communities in metropolitan Detroit shows that on average, high school

students are reading between a fourth- and fifthgrade level. I believe illiteracy is America’s most solvable disability. In Detroit, Beyond Basics has implemented a proven, scalable, research-based solution that gets children PAMELA of all ages reading at grade GOOD level in just six weeks. D. Carl Freeman, a Wayne State University professor, Embrace a conducted research on the new literacy Beyond Basics program. strategy “The data are unequivocal, with a students who participate in proven the Beyond Basics reading solution, program make progress on instead of the basic reading skills, at throwing many times the rate of stumore resources at dents in their same school participating only in the what has general education reading not worked. program.” Beyond Basics’ trained personnel provide intensive, one-on-one, multi-sensory reading instruction for one hour per day using a customizable curriculum. We developed this model by partnering with principals and schools in Detroit since 2002, to work with children who were farthest behind to get them reading at grade level. Our holistic literacy programming also engages mentors, art and writing to help students in vulnerable communities learn to read. This intervention has transformed thousands of lives. Now is the time to take action. My recommendation: Embrace a new literacy strategy with a proven solution, instead of throwing more resources at what has not worked.

Give every student the intensive care needed by investing in the critical building block of literacy, ensuring every child gets the individualized reading intervention needed to participate in school. Fund this emergency literacy intervention in schools and open family literacy centers to serve both students and adults in struggling communities. With this investment and collaboration with stakeholders, we can elevate everyone in need. Since Beyond Basics began, our team members, along with key community partners — including 2,000 volunteers, individuals, corpora-

tions, family foundations, school districts and government agencies — have supported us to improve literacy for our most vulnerable. Just like we rush to help victims of a natural disaster far from home, we also need to help victims of manmade disasters that occur over time like a failing educational model. In Detroit alone, there are more than 100,000 children whose lives could be changed and even saved in six weeks. Literacy is an investment in our future. By empowering students and adults with literacy, we can break the generational cycle of poverty. The end result is a stronger, healthier Michigan with a more talented workforce and robust tax base. By MHJ/ISTOCK working together, we can help everyone build a better life right here in Michigan. Nelson Mandela said two things I take to heart: “Education is the most powerful weapon which you can use to change the world” and “it always seems impossible until it’s done.” This investment demonstrates a belief in the potential of every person. I look forward to the day we can look back and see our work to eradicate illiteracy is done. Pamela Good is co-founder and CEO of Beyond Basics, a Southfield-based non-profit organization that provides literacy intervention services to at-risk youth.

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PUBLIC UNIVERSITIES

Unleash economic power of higher ed in Michigan

ichigan is blessed with 15 high-quality public universities that together constitute a vital asset that would be the envy of any state. Each of these universities serves a distinct mission, but all are dedicated to preparing their students to become educated and prosperous citizens, an outcome that benefits them as individuals, and our state as a whole.

Over the past several years, there has been appropriate emphasis on recognizing skilled labor as an option for students who don’t wish to pursue a traditional college degree. This makes sense; a college degree may not be the right path for every student, and more people skilled in the trades could help us meet the diverse workforce needs of our state. But studies have shown conclusively that a bachelor’s degree — or higher — is the surest path to social mobility, career stability and long-term prosperity. That’s where Michigan’s universities come in, as both a valuable state asset and an enormous opportunity — but we need the state’s support for our mutual success. State support for our public universities has been edging up incrementally for

the past few years, following a precipitous decline that placed Michigan low on national rankings for support of higher education. In fact, Michigan now ranks 43rd in the nation in annual per student state support for higher educaM. ROY tion. State budget decisions WILSON are always challenging, but higher education is an inA bachelor’s vestment that provides high returns across the entire degree — or spectrum of the state’s econhigher — is omy, while supporting the surest Michigan’s future as a leader path to in talent and innovation. We social are excited to work with the mobility, governor and Legislature to career increase Michigan’s support stability of higher education. and longIn addition to deciding term how much funding overall prosperity. to allocate to higher education, it’s also important to decide how we allocate those funds. Over the past several years, Michigan has used a metric-based formula to allocate a proportion of its higher education funding. This is the right approach, and we now have enough experience to consider a more sophisticated approach that better enables universities to serve

their distinct missions. An area our funding formula should encourage is graduate and professional degrees. Our advocacy for skilled trades recognizes our need for more plumbers and electricians, but the state also needs doctors and scientists, and people with advanced degrees to teach them. As our economy becomes more advanced and reliant on innovation, we need a workforce educated at a high level to deal with revolutions in big data, mobility and infrastructure. In some fields, a bachelor’s degree has become the price of entry, and graduate and doctoral degrees are becoming ever more critical. Research is another area that may be underappreciated in our funding formula. Currently, only 5.6 percent of the state’s performance-based funding allocation is dedicated to research. Yet research yields enormous benefits for our state, among them the attraction of talent, federal funding and economic development. When I was in Nebraska, Creighton University and the University of Nebraska Medical Center successfully lobbied the state to invest a portion of the state’s tobacco settlement into medical research. As reported in the Omaha World-Herald, we received $12 million-$14 million per year for biomedical research. Over nine years, the $106 million provided for research translated into an economic impact of $2.2 billion and nearly $100 million in tax revenue. That’s a research multiplier of almost $21 for every dollar invested. Re-

search, like education, is an investment worthy of funding commensurate with its importance. All of this is moot if students don’t have the means and access to higher education to begin with. Affordability and accessibility are paramount — for all students with the talent and determination to pursue a college degree. As a nation we have not done well here. A report from the University of Pennsylvania and the Pell Institute for Study of Opportunity in Higher Education demonstrates that in 1970, students from families in the bottom income quartile had a degree completion rate of about 6 percent by age 24, while the top income quartile attained degrees at about 40 percent. By 2016, the bottom quartile had risen to only 11 percent, yet the top quartile rate had risen to 68 percent. The gap is widening. This is morally unacceptable, and economically dangerous. As detailed in University of Michigan President Mark Schlissel’s accompanying op-ed, one potential strategy to remedy this issue is for the state to invest more money in the existing Michigan Competitive Scholarship program. This could relieve student expense concerns and provide a boost to our economy. We look forward to collaborating with Gov. Whitmer and the Legislature to unleash the power of higher education in Michigan. M. Roy Wilson is the president of Wayne State University.

CHILD DEVELOPMENT

Invest in early education to change the trajectory of children, families

new Michigan State University study should be a wake-up call for anyone concerned about the future of our children — and our state. It shows that Michigan ranked dead last among all 50 states for improvement in fourth-grade math and reading proficiency between 2003 and 2015.

This is a dire warning. We already knew Michigan ranked in the bottom third of states for proficiency on those measures. And now we’ve learned we’re the worst at making things better. How can we halt this seemingly inexorable decline and begin to bend the trend lines for student achievement into positive territory? I would argue that, even as we strive to improve our K–12 system, we must invest more in our children’s education from birth. In the wake of the Flint water crisis, our community identified access to full-day, full-year, high-quality early education as the most critical need for helping children cope with learning and developmental challenges caused by lead exposure. But this is something Flint needed before the water crisis, and it’s something all Michigan children should have. Working with partners in and beyond Flint — and with government at every level — the Mott Foundation helped to renovate a shuttered school and build another. Cummings Great Expectations and Educare Flint opened their doors in October 2016 and December 2017, respectively, and now serve 362 students. Working together as part of the Flint Early Childhood Collaborative, both schools seek to

improve learning for students — not only by offering highly trained teachers and an engaging, age-appropriate curriculum — but also by providing a broad array of supports and services to help families succeed. The Collaborative also aims to RIDGWAY share information and best WHITE practices to raise the quality of early childhood educaIt’s essential tion and care provided that we throughout the city. begin The level of programming educating provided at Cummings and the most Educare has positive effects. vulnerable It lays the foundation for children at students to be better prebirth so pared — academically and they’re socially — to enter kinderready to garten. Children and famisucceed in lies learn the importance of our K–12 attending school all day, evsystem. ery day. And families that are supported with resources are not only more engaged in their children’s education, but adults in the family are better able to work or pursue their own education. Gov. Gretchen Whitmer clearly understands the importance of early education for improving the trajectory of our children and families. I’m encouraged that she’s pushing for universal preschool for all 4-year-olds in Michigan. It’s a laudable goal and a great step in the right direction. But, especially for the most vulnerable children, it’s essential that we begin educating them at birth so they’re ready to succeed when they enter our K–12 system. I hope the research and data currently being

MHJ/ISTOCK

generated by Cummings and Educare Flint will help Gov. Whitmer make the case for even more support from state and federal funding streams, especially for kids with the greatest needs. The Flint Early Childhood Collaborative would prioritize the following additional improvements. J Change the way Child Development and Care providers are paid. Currently, they’re reimbursed every two weeks based on students’ attendance. To attract and keep quality educators, and to assure adequate staffing on any given day, providers must be able to count on a consistent budget. That’s why they should be paid on a contract basis for the number of students they serve each year. J Increase the eligibility level at which families qualify for CDC funds from 130 percent of the federal poverty level to 150 percent or more. This would help more families enroll children in early education programs.

J Focus on improving students’ grade-level preparedness by providing professional development for educators that aligns the way they teach with the way students develop and learn from birth through third grade. This is especially important considering Michigan’s new thirdgrade reading law. Beginning in the 2019-2020 school year, children could be held back if they’re more than one level behind in reading. We must recognize that it’s not our students who are failing. It’s our educational system that’s failing them. To change this, we must begin by investing more in our youngest learners. If Michigan hopes to become a top 10 education state — one that attracts both families and businesses — we can do no less.

Ridgway White is president and CEO of the Flint-based Charles Stewart Mott Foundation.

C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

CRAIN’S FORUM | FEBRUARY 2019

POTHOLES

Lagging Midwest competitors in higher ed

43.7 percent

FROM PAGE 17

Median household income in Michigan is about 10 percent below the national annual average of $60,336. Per capita income among working adults who are not retired was $29,348, ranking Michigan 33rd in the country in this category of earnings from just paychecks. The weak showing is directly tied to educational attainment. Michigan ranks 33rd in median household income and 31st in the percentage of adults over age 25 with a bachelor’s degree. When adjusted for cost of living, Michigan is still at 33rd. To climb up the national prosperity ranks, Michigan needs to increase its number of high-income workers and retirees, Grimes said. “Ironically, the states that do the best job in attracting and retaining these individuals don’t necessarily have the lowest tax rates, but they have the amenities that wealthy people want,” said Grimes, assistant director of the Center for Labor Market Research at UM’s Economic Growth Institute.

Michigan’s overall postsecondary education attainment rate of 43.7 percent of adults over age 25 ranks 36th nationally, lagging behind Midwest rivals Minnesota (54 percent), Illinois (51 percent), Kansas (50.7 percent), Iowa (47.6 percent) and Ohio (44.1 percent), according to the Lumina Foundation’s 2018 report, “A Stronger Nation.” The state’s pool of workers with a high-level certificate, associate’s degree, bachelor’s degree or higher also lags more than three percentage points behind the national average of 46.9 percent. When just accounting for adults with a bachelor’s degree or higher, the educational achievement rate is much lower. As of 2015, just 28 percent of Michigan adults older than age 25 had completed a bachelor’s degree, according a data analysis from The Education Trust-Midwest. The gap is within Michigan as well. In just 10 of Michigan’s 83 counties, the rate of post-secondary educational achievement exceeds the statewide average. That group of counties includes Oakland County (56 percent) and Washtenaw County (62.5 percent). It does not include the state’s most populous county (Wayne County, 32.2 percent) or the third-most populous county (Macomb County, 37.9 percent), according to the Lumina Foundation’s 2018 report. Michigan is one of nine states that has no statewide post-secondary education attainment goal written into state law or strategic plan for improvement, according to a 2017 study by the Indianapolis-based Lumina Foundation. “Michigan’s attainment rate is 44 percent, but it has not formally established a statewide attainment goal that meets Lumina’s criteria for rigor and efficacy,” the Lumina Foundation wrote in its 2018 report. The Lumina Foundation has set a nationwide goal of 60 percent of adults having some form of post-secondary education by 2025 — a goal adopted by the Michigan College Access Network. The Michigan College Access Network has defined the effects of a less-educated workforce this way: Of 100 ninth-graders in Michigan, 73 graduate high school on time, 45 enroll in college or trade school within a year of graduating high school, 32 remain enrolled from their first to second year and 18 graduate within six years.

Lower-paying jobs on the rise

62 percent The Michigan Association of United Ways’ most recent study of the state’s workforce showed 62 percent of workers were earning less than $20 per hour in 2015. Topping out at $41,600, workers earning under $20 per hour were living well below the $56,064 annual income for a family of four that the United Way group calculates is needed to cover housing, food, prescription drugs, taxes, utilities and childcare. “We’re talking about 40 percent of the population in Michigan struggles to pay just basic bills,” said Mike Larson, president and CEO of the Michigan Association of United Ways. The Michigan Association of United Ways labels these Michiganians as “ALICE,” which stands for “Asset Limited Income Constrained Employed.” “They’re working — and sometimes one, two or three jobs,” Larson said. The 2017 ALICE report, which is due to be updated next month, shows that the percentage of Michigan’s workforce earning under $20 per hour has been steadily growing since the Great Recession. The number of jobs paying less than $20 an hour increased 7 percentage points from 55 percent in 2007 before the housing market crash and bankruptcies of General Motors and Chrysler. “The reality is we’ve got to get good-paying jobs,” Larson said. “But we’ve got to have people who are educated and trained to do those jobs.”

The “damn” roads are getting worse

79 percent

That’s the percentage of state trunkline roads — freeways, state highways and main thoroughfares like Gratiot, Woodward, Grand River and Michigan avenues — that the Michigan Department of Transportation rates as being in good or fair condition. But the forecast is not good. Metro Detroit’s sprawling suburbs alone have a combined 2,000 miles of county roads rated in fair or poor condition that need to be resurfaced or totally reconstructed. The Southeast Michigan Council of Governments estimates Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw and Wayne counties alone need $1.2 billion more annually over the next 25 years to get 80 percent of roads in good or fair condition. A SEMCOG analysis of state-by-state transportation spending found Michigan was expected to spend $179 per capita on road construction in 2018, 39 percent less than the national average. Every Great Lakes state except Ohio spends more than twice as much per capita on road construction, according to SEMCOG. Whitmer made fixing Michigan’s “damn” crumbling infrastructure the cornerstone of her campaign for governor. It was a message based largely around criticism of former Gov. Rick Snyder and the Legislature’s 2015 road-funding plan to gradually invest $1.2 billion more annually in the state’s roads by 2021. By every estimate, that plan is not meeting the immediate or long-term needs of Michigan’s highways, county roads and city streets — not to mention underground infrastructure, which has been spotlighted by Flint’s lead contamination water crisis, major water and sewer main breaks in the suburbs of Detroit and emerging PFAS underground drinking water contamination in multiple corners of Michigan. “Michigan’s roads now require an additional $2 billion dollars annually to fix because there are 20 percent more roads in poor condition today than there were in 2015,” the nonpartisan Senate Fiscal Agency said in a recent memo. While the 2015 plan has produced record spending for roads, the Michigan Department of Transportation projects the actual pavement conditions on state roads will to continue to decline. In 2021, when the 2015 road funding plan is fully funded, MDOT projects 57.5 percent of the state’s highways and trunklines will be rated in good or fair condition, down from the current 75 percent rating. And in nine years, based on the pace of current road-funding revenue sources, MDOT projects 57 percent of roads will be in poor condition. “To keep prolonging this, it’s just going to exacerbate the problem — we’re going to end up spending more money,” MDOT Director Paul Ajegba told senators last week during a committee hearing.

Student achievement is stagnant

40th and 42nd Those are the reading and math score rankings for Michigan’s fourth graders in 2017 compared to other states in the annual National Assessment of Educational Progress (NAEP) rankings. The 2017 test scores — the most recent data available — were a slight improvement from the previous year. But fourth-graders in Michigan were testing just below fourth-graders did in 2003, a reflection of stagnant or no growth in student achievement over the past 15 years, according to NAEP data. “Unfortunately, while Michigan’s rankings in some subjects have improved since 2015, this is due to larger declines in other states — not because Michigan has made significant improvement in student learning,” according to The Education Trust-Midwest, a Royal Oak-based education research organization. Fourth-grade test scores for Detroit schools remain worst in the nation among large urban districts, as average student achievement scores on NAEP tests dropped five points between 2015 and 2016, according to Education Trust-Midwest. Test scores for fourth-graders are how Michigan’s youngest students get measured against other states. But the academic achievement of third-graders is what education policymakers are most worried about. Between 2003 and 2015, Michigan is one of five that had negative improvement for reading scores among third graders, according to Ed Trust’s 2018 report, “Top Ten for Education: Not by Chance.” The stakes for this year’s second-graders are higher than ever as they are the first class that will be subjected to a new law requiring third-graders to be reading at their grade level or they can be held back. Michigan State University researchers published an extensive study last month linking a decline in student achievement to per-pupil spending declining by 30 percent from 2002 to 2015 when adjusted for inflation. Michigan ranked “dead last among states in total education revenue growth since the passage of Proposal A” in 1994, according to the report authored by MSU Professor David Arsen and two doctoral students.

LARRY A. PEPLIN FOR CRAIN’S

Chad Livengood: (313) 446-1654; Twitter: @ChadLivengood

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C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

CRAIN’S FORUM | FEBRUARY 2019 EDUCATION AND AUTOMATION

Michigan schools ill-equipped for ‘age of autonomy’

ately I’ve been inspired by Nelson Mandela’s quote: “It always seems impossible until it’s done.” Michigan must adopt this spirit of action. I encourage our new governor and legislative leaders to apply it courageously, first and foremost, to our education system. Michigan has adopted a myopic view of our problems — especially education. Data is important; it took years of evidence for many to acknowledge the educational crisis afflicting our state. But too often we allow ourselves to be mired in dashboards where progress is gauged by our ability to catch up, rather than to leapfrog and set a new standard. We impose patchwork solutions that don’t account for a rapidly changing society. We govern for disruption with a hodge-podge approach that applies short-term fixes to legacy problems. Instead, let’s govern for the future. Consider Proposal A. Initially intended to be a short-term, stopgap measure, it is still lending to the severe underfunding of schools across Michigan two decades later. A new report by Michigan State University ranking Michigan dead last in education revenue growth reaf-

firmed that fact. The world is changing, and we haven’t equipped our schools to adapt with it. The economy and the way we work has shifted dramatically in recent decades. For example, in 1979 General Motors produced TONYA around 5 million vehicles ALLEN with about 853,000 employees. By 2017, it produced over 9 million vehiThough the cles with 180,000 age of employees. This is not an autonomy anomaly; it’s our reality. is at our With automation and rodoorstep, botics, manufacturers are our producing 47 percent more education than they did 20 years ago, system with 29 percent fewer is still workers. preparing Technology is no longer students for just automating manual lajobs that bor, it’s automating cognisoon won’t tion. Studies estimate that exist. human knowledge was doubling every 25 years by the mid-1940s. Today, it’s estimated to double every 13 months, and with continued technological advances, is expected to double every 12 hours in the foreseeable future.

The workplace will never look the same. It’s our job to prepare students to thrive in a world of autonomous factories, precision medicine and artificial intelligence manning everything from surgical tables to fast-food counters. Though the age of autonomy is at our doorstep, our education system is still preparing students for jobs that soon won’t exist. Our old playbooks won’t work for the next generation. We must empower our kids to lead the future rather than fall victim to it. Businesses have learned this the hard way. Kodak, for example, was once a trailblazer that dominated the photo industry. Despite early forays into digital cameras and online photo sharing, it lost its century-long position atop the market because it was unwilling to reconsider the underlying business model it had long relied on. Its story is a prime example of the accelerating pace of data and information. In 2000, Kodak announced its consumers had taken 80 billion photos across its 112-year history. Instagram took just eight years to reach over 40 billion photo and video shares. Planting a stake in the future requires being willing to let go of preoccupations with the past, and the present. Our kids must be empowered to manage the true technological transformation. They need access to tools, technology and supports that teach them how to strengthen and adapt their

unique human talents in an ever-changing world. To lead this unpredictable future, children need a core set of skills: J Content — competency in core subjects and the ability to continuously learn. J Communication — speaking, writing, reading and listening. J Collaboration — forming relationships, teams and communities. J Critical thinking — sifting and scrutinizing information intelligently. J Creative innovation — using information and resources in new ways. J Confidence — persistence and risk taking. J While somewhat daunting, the age of autonomy is an opportunity to define the future. Focusing on quarterly analyses and short-term fixes will not cut it. Governing for the future requires purpose-driven collaboration and an intentional effort from all of us — government, businesses, nonprofits and all other sectors. Launch Michigan — a group of business, education, labor, philanthropy, civic leaders and parents — is a great example of this kind of creative collaboration. Its work is only just beginning, but I anticipate it will have a powerful impact advancing our schools, and in turn, our economy. Together, we can define the future. Tonya Allen is president and CEO of the Detroit-based Skillman Foundation.

OPPORTUNITY AND ACHIEVEMENT

College affordability, attainment and economic prosperity are inseparable

f we want our state to be among the most prosperous in the nation, we have to be among the most educated. Two numbers illustrate my point: Michigan ranks 30th in the nation in per capita income and 35th in college attainment. Connecticut, Massachusetts, New Jersey and Maryland all rank in the top five in both categories. Michigan has fallen behind, and if current trends continue, our economic competitiveness — our ability to attract and retain growing businesses — will suffer further. The leaders of Michigan’s public universities and I share the belief that affordability remains a major hurdle for Michigan residents who want to earn college degrees. Also recognizing the link between college affordability and economic prosperity, business leaders in our state have previously called for investments that would move Michigan into the top 10 on the affordability list. Greater state investment in direct-to-student need-based financial aid would lead to greater degree attainment, growth in the Michigan economy and increased per-capita income. It would also allow students to decide where they wish to study in Michigan worrying less about expense, and encourage schools to compete for the best students, regardless of their family income. Many of our state’s university presidents have been considering a strategy that would meet these goals. If the state invested an additional $50 million per year over the next eight years in the existing Michigan Competitive Scholarship program, it would boost our students and the economy, while demonstrating to all Michiganders that these im-

portant priorities are being addressed by enhancing college affordability. States with booming economies like California support higher education in exactly this fashion with need-based Cal Grants to students of up to $12,600 per year. The investment would reMARK S. position Michigan as a topSCHLISSEL 10 state in average grant aid per undergraduate student States with — a ranking that is more in booming line with what our students economies deserve and our economy support needs. Currently, Michigan higher is ranked 38th for grant aid education per student. with The MCS currently proneed-based vides a $1,000 annual maxgrants to imum award. It is available students to all students who meet of up to criteria for both financial $12,600 need and academic merit per year. attending the state’s community colleges, public universities and independent nonprofit colleges. Refining the academic and financial need qualifications of the MCS would ensure that more talented students can qualify for the aid. It is estimated that after the eight years of investment by the state, the maximum annual award would grow to $10,418. That’s a major increase that will allow tens of thousands more Michiganders to attend and complete a college education and reduce their debt burden when they graduate. Many of our state’s public universities have worked to restrain tuition growth and provide

MHJ/ISTOCK

more financial aid at the campus level, including U-M’s Go Blue Guarantee of free tuition for students from families making $65,000 a year or less with assets of $50,000 or less. By combining a more generous MCS grant with federal support from the Pell Grant program, many lower-income students would pay no tuition at our state’s other public universities as well. We also continue to collaborate with the communities we serve to improve college attainment. For instance, U-M is a partner with the Detroit Public Schools Community District in a new P-20 school opening this fall at the Marygrove College campus. We also operate Wolverine Pathways, a college-readiness program for students in grades 7-12 who live in Detroit or within the boundar-

ies of Southfield Public or Ypsilanti Community school districts. I know that Michigan’s other public universities have partnerships throughout our state to encourage college enrollment. Michigan is home to a wonderful mix of colleges and universities that serve every community in our state. But to ensure our future prosperity, we must work together with the state to keep the doors of opportunity open for all. Investing in state aid at levels that our students, economy and communities need and deserve will lift Michigan to its rightful place in national competitiveness and increase the prosperity for all in our state. Mark S. Schlissel is president of the University of Michigan.

C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

Advertising Section

PEOPLE ON THE MOVE

To place your listing, visit www.crainsdetroit.com/people-on-the-move or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com. ACCOUNTING

ENGINEERING

ENGINEERING / DESIGN

BDO

Fleis & VandenBrink

OHM Advisors

BDO USA, LLP, one of the largest accounting firms in the country, welcomes John Pagac as Managing Director of Detroit’s Risk Advisory team. Pagac brings over two decades of experience in financial business process, controls and internal audit. Pagac has a wide range of experience, with a heavy focus in automotive and manufacturing, from assisting companies starting an internal audit function, initial 404 compliance, continued internal controls compliance, operational assessment and more.

Fleis & VandenBrink, a full-service engineering and architectural services firm, is pleased to announce two new Associates at its Farmington Hills office. Jenn Chehab, PE, is a senior-level project and client manager for the East Michigan Services Municipal Group. Jenn has over 25 years of municipal engineering experience and specializes in design and management of municipality utilities, infrastructure, road projects and site designs. She currently manages the Farmington Hills office. Julie Kroll, PE, a senior traffic engineer, has led the company-wide Traffic Services Group since 2017. Julie has more than 18 years of experience in transportation engineering, working on both private and public sector projects in several states.

Lambrina Tercala, PE, ENV SP, was elected to shareholder at community advancement firm OHM Advisors. She is a water and wastewater engineering professional at the architecture, engineering and planning firm. As shareholder, Lambrina will contribute to the firm’s leadership and success, elect board members and future shareholders, and exercise voice in the future direction of the company. Lambrina is a graduate from the University of Michigan with a BSE in Civil and Environmental Studies.

George Tsakoff, PE, was elected to shareholder at architecture, engineering and planning firm OHM Advisors. He is a Principal in Charge and Senior Project Manager in the community advancement firm’s Municipal Services team. An alumni of Michigan State Univ. (BS in Civil Engineering) and Wayne State Univ. (MS in Civil Engineering), George will contribute to the firm’s leadership and success, elect board members and future shareholders, and exercise voice in the future direction of the company.

Matt Wendling, PE, OHM Advisors’ Michigan Transportation Practice Leader, was elected to shareholder at the architecture, engineering and planning firm. He serves as the Michigan Transportation Practice Leader from the firm’s Livonia office. As shareholder, Matt will contribute to the firm’s leadership and success, elect board members and future shareholders, and exercise voice in the future direction of the company. Matt earned a BS in Civil Engineering from Michigan State University.

CONSULTING

LEGAL

HEALTH CARE

Willis Towers Watson

Dean & Fulkerson

Willis Tower Watson welcomes Nate Anderson as the Michigan and East Central leader of its Global Services and Solutions (GSS) business. In this role, Anderson will be responsible for GSS client delivery, growth and people management. Based in Detroit, Anderson joins Willis Towers Watson from Kellogg Company, where he served as vice president of global Total Rewards. Anderson has a B.A. from Kalamazoo College and an M.B.A. from the University of Chicago Booth School of Business.

The law firm of Dean & Fulkerson is pleased to announce that Sarah J. Brutman has been promoted to shareholder at their Troy office. Ms. Brutman joined the firm over a year ago and concentrates her practice on commercial insurance coverage and liability defense. She handles complex coverage litigation in both state and federal courts across the country, with an emphasis on property damage, construction and premises liability. She is an astute analyst of coverage and strategic issues.

Center for Neurological Studies

ACCOUNTING

BDO BDO USA, LLP, one of the largest accounting firms in the country, welcomes Philip Gaglio as Managing Director of Detroit’s Valuation & Business Analytics group. He has more than 30 years of experience and leadership in the areas of valuation, financial analysis, and litigation support. Phil serves BDO’s clients by valuing businesses and a wide range of intangible assets for a variety of purposes, including: Mergers & Acquisitions, Financial Reporting, Tax, Litigation and more.

AUTOMOTIVE

Stoneridge, Inc. In this newly created position, Regan Grant is responsible for developing and executing a global marketing, communications and brand strategy aligned with the company’s product portfolio and growth strategy. Grant will help drive brand awareness and Stoneridge shareholder value throughout the company’s transition from a components supplier to a developer of innovative mobility systems and solutions.

LEGAL

Ogletree Deakins Ogletree Deakins, one of the largest labor and employment law firms representing management, is pleased to announce that Mami Kato and Nicholas Huguelet will join the firm’s Detroit (Metro) office as counsel and associate respectively. Kato maintains a litigation-focused practice in the area of labor and employment law. She has successfully represented clients in state and federal courts, both at trial and appellate levels. Huguelet has dedicated his practice to advising and defending employers in labor and employment matters. He has represented employers across a wide range of industries in front of state and federal courts, government agencies, and arbitrators.

Jennifer Lynn Dale has been named Chief Development Officer for the Center for Neurological Studies, a leader in the use of advanced MRI techniques for diagnosing neurovascular disease. At CNS, Dale will manage a donor-centric philanthropy program. Dale has spent over two decades in professional fund raising and received awards for creativity and innovation. A graduate of Western Michigan University, Dale was a member of Crain’s “40 Under 40” class of 2019.

NONPROFITS

Judson Center Judson Center, a nonprofit helping Michigan’s children and families succeed since 1924, welcomed Tricia Ruby as Chair of the Board of Trustees. Ruby has an industrial engineering background and has been a leader in the field for 25 years, with the past 7 years as President and CEO of Ruby+Associates in Bingham Farms. She has been a very dedicated and passionate advocate for Judson Center, with Board involvement since 2013.

BE PROUD OF WHO YOU WORK WITH... ADVERTISE IN PEOPLE ON THE MOVE!

KNOW SOMEONE ON THE MOVE? For more information or questions regarding advertising in this section, please call Debora Stein at (917) 226-5470 or email: dstein@crain.com

C R A I N ’ S D E T R O I TCRAIN B U’SSDI ETROIT N E SB SUSINESS // F E B R U A R Y 1 1 , 2 0 1 9

February 11, 2019

Page 23 1

Advertising Section

CLASSIFIEDS

To place your listing, contact Kate Rozek at 313-446-0485 or email krozek@crain.com www.crainsdetroit.com/classifieds

MARKET PLACE

JOB FRONT

RESTAURANTS

POSITIONS AVAILABLE

N T ERA ST

AUTODESK’S NOVI, MI OFFICE HAS MULTIPLE OPENINGS FOR THE FOLLOWING POSITIONS (VARIOUS TYPES/LEVELS): - Technical Manager, Generative Design and Additive [Job Code: JDV009]: Design, integrate, or improve manufacturing systems or related processes. - Automation Engineering Manager [Job Code: JDV014]: Direct the activities of a software applications development function including cloud-based or internet-related tools. TO APPLY: Please e-mail resume to occupation.specialist@autodesk.com & indicate the appropriate job code on resume/cover letter.

POSITIONS AVAILABLE HITACHI AUTOMOTIVE SYSTEMS AMERICAS, INC: ENGINEER II [REQ #HR2019-01] Hitachi Automotive Systems Americas, Inc. has the following job opportunities in Farmington Hills, MI: Engineer II [Req #HR2019-01] responsible for coordinating all product development activities between OEM customer & responsible departments; Lead Engineer [Req #HR2019-02] establish software release schedule and software master schedule; Engineer II [Req #HR2019-03] coordinate assignments and feedbacks to support ignition coil programs; Engineer II [Req #HR2019-04] work with the global design team & coordinate assignments and feedback with Hitachi Japan & Hitachi Lerma; Lead Engineer [Req #HR-2019-05] responsible for leading the analog & digital circuit design through analysis & simulation, EMC design. Mail resume to Attn: T. Menning, 34500 Grand River Ave., Farmington Hills, MI 48335. Must Req number to be considered.

REAL ESTATE 10 ACRE ESTATE FOR SALE

UAW RETIREE MEDICAL BENEFITS TRUST - DEPUTY CFO POSITIONS Deputy CFO– positions offered by UAW Retiree Medical Benefits Trust (Detroit, MI). Report to the Committee & Audit Subcommittee on finance activities, including quarterly fin’l results, annual fin’l statements, tax & other reg filings & annual budgets. Must hold a CPA (or Chartered Accountant) or equiv designation from USA or Canada. Please send resume to: kblair@rhac.com.

Call or email today for information on a custom advertising plan!

cdbclassified@crain.com 313.446.0485

The Crain’s CRAIN’S READERS ARE reader: 29.2% are with companies 4.5x MORE LIKELY TO contemplating moving/ INFLUENCE CORPORATE expanding. Help them FINANCING find you by advertising in DECISIONS

Crain’s Real Estate section.

To find out more about our audience, 313.446.6086 • FAX: reach out to Kate Rozek at krozek@crain.com

BUSINESS FOR SALE Notable, long established Retail Business Grossing $2.3 Million with prime Downtown Dearborn location. Owner retiring Asking $895,000. Contact APEX Brokers: rasdesai@hotmail.com

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Call Us For Personalized Service: 313.446.0485 FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds

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PUBLIC NOTICES

Detroit Transportation Corporation NOTICE OF PUBLIC HEARING

All Citizens are advised that the Detroit Transportation Corporation (DTC) has prepared an application for State of Michigan financial assistance for fiscal year 2020 as required under Act 51 of the Public Acts of 1951, as amended, and for federal assistance as required under the federal transit laws, as amended. The DTC is requesting estimated total capital funding through the following sources: Section 5310 for DTC Accessibility and Equipment Upgrades and facility improvements totaling $500,000 (FTA amount of $400,000 and MDOT amount of $100,000). Section 5307totaling $500,000 (FTA amount of $400,000 and MDOT amount of $100,000), and Section 5337 totaling $1,500,000 (FTA amount of $1,200,000 and MDOT amount of $300,000) to keep the system in a state of good repair by renovating and rehabilitating the people mover equipment and facilities. And $5,700,000 of Operating Assistance for the Michigan Department of Transportation The DTC ensures that the level and quality of transportation service is provided without regard to race, color, or national origin in accordance with Title VI of the Civil Rights Act of 1964. For more information regarding our Title VI obligations or to file a complaint, please contact the DTC at the address listed below. The proposed application is on file at the DTC and may be reviewed from Friday March 1, 2019 – Tuesday April 2, 2019 between the hours of 9 a.m. and 4:30 p.m. Written comments or requests regarding the application and/or written requests for a public hearing to review the application must be received by Tuesday April 2, 2019. If a hearing is requested, notice of the scheduled date, time and location will be provided at least ten (10) days in advance. Submittals should be sent to Mr. Oliver Lindsay, Grant Manager, Detroit Transportation Corporation, 535 Griswold Street, Suite 400, Detroit, MI 48226 or 313-522-8445. Barring any changes made in response to the written comments, this document will become final. 535 Griswold, Suite 400 • Detroit, MI 48226 • 313.224.2160 Main • www.thepeoplemover.com

PUBLIC NOTICES

Detroit Transportation Corporation NOTICE OF PUBLIC HEARING

All Citizens are advised that the Detroit Transportation Corporation (DTC) has prepared a plan for State of Michigan and the Federal Transit Administration financial assistance for fiscal years 2020-2023 as required in the Transportation Improvement Plan (TIP).The DTC is requesting capital funding through the following sources to keep the system in a state of good repair by renovating and rehabilitating the people mover equipment and facilities. Fiscal Year

Type of government grant funding

FY 2020

USC 5310

Mobility for Senior & Disabled

Federal Amount 400,000

$ 100,000

State Amount $

Total Amount 500,000

Project Description Mobility for senior and disabled passengers

FY 2020

USC 5307

Urban Area grant

400,000

$ 100,000

500,000

Rehabilitate People Mover System

FY 2020

USC 5337

State of Good Repair grant

$ 1,680,000

$ 420,000

$ 2,100,000

Rehabilitate People Mover System

FY 2021

USC 5310

Mobility for Senior & Disabled

400,000

$ 100,000

500,000

Mobility for senior and disabled passengers

FY 2021

USC 5307

Urban Area grant

400,000

$ 100,000

500,000

Rehabilitate People Mover System

FY 2021

USC 5337

State of Good Repair grant

$ 1,720,000

$ 430,000

$ 2,150,000

Rehabilitate People Mover System

FY 2022

USC 5310

Mobility for Senior & Disabled

400,000

$ 100,000

500,000

Mobility for senior and disabled passengers

FY 2022

USC 5307

Urban Area grant

400,000

$ 100,000

500,000

Rehabilitate People Mover System

FY 2022

USC 5337

State of Good Repair grant

$ 1,760,000

$ 440,000

$ 2,200,000

Rehabilitate People Mover System

FY 2023

USC 5310

Mobility for Senior & Disabled

400,000

$ 100,000

500,000

Mobility for senior and disabled passengers

FY 2023

USC 5307

Urban Area grant

400,000

$ 100,000

500,000

Rehabilitate People Mover System

FY 2023

USC 5337

State of Good Repair grant

$ 1,800,000

$ 450,000

$ 2,250,000

Rehabilitate People Mover System

313.446. 034 7

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C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

MALONE FROM PAGE 3

“This has been a terribly challenging year; it’s a whole new skill set,” said Malone, who joined the society last March after a 38-year career as an attorney with Butzel Long PC. “But it is a business; you have to implement best practices.” The number of personnel working in the stores is now better managed, with fewer employees kept on the clock when business is slow. Malone said other operational changes are also being implemented, including faster rotation of merchandise that isn’t selling and better overall organization, dedicating more floor space to popular categories like furniture and standardizing store formats so customers know what to expect Keith Koppmeiwhen they walk er: Developing into a Society of strategy. St. Vincent de Paul thrift store in Metro Detroit. Sales in the agency’s nine thrift stores — located both near areas of high need and near affluent communities to bring in more high-end donations — have also increased, thanks to innovative promotions such as dedicated grab-bag days, Malone said. On the fundraising front, he brought in Keith Koppmeier as director of development, to fill one of several key positions that were vacant when he took the helm. Koppmeier, who previously held development roles at Habitat for Humanity Detroit and Lake Trust Credit Union, is charged with developing a comprehensive fundraising strategy to attract new corporate and individual donors and with raising the agency’s public profile. Among other initiatives in development, the society plans to host a new annual fundraiser in the fall.

ONESTREAM FROM PAGE 1

The deal represents OneStream’s first outside investor — no angel investment, no venture capital. That’s rare in technology, but private equity is getting more aggressive, said Chris Rizik, CEO and fund manager of Renaissance Venture Capital Fund. “The path here is certainly unusual, to go from bootstrapping the company to a private equity deal, but we’re seeing private equity more and more writing bigger checks earlier,” Rizik said. “But you still don’t see something like this often. It’s impressive.” Michigan’s technology companies have tended to cluster clustered in Ann Arbor, where the majority of angel and venture funding resides, including Rizik’s Renaissance Venture Capital Fund. Several other venture capital funds have cropped up in Detroit in recent years as well. OneStream and KKR declined to provide revenue, but Rizik said current valuations for technology companies are ranging from six to eight times revenue, which would place OneStream’s revenue from roughly $63 million to $84 million. Shea said the company’s rapid growth in recent years and compelling software made it a target for ac-

SOCIETY OF ST. VINCENT DE PAUL DETROIT

The Society of St. Vincent de Paul Detroit is looking to increase its thrift store revenue in part through standardizing store formats and dedicating more floor space to high-selling merchandise like furniture.

“We had a lot of attrition in our donor base with lots of drop-offs” in recent years, he said. “We’ve been working to re-engage them.” The efforts helped increase fundraising revenue last year by 12-13 percent, Koppmeier said. With an investment of $8,500, the agency aired hundreds of 30-second spots on Comcast in December, asking people what Christmas meant to them, as a way to increase its brand awareness outside of the thrift store operations. It’s also worked to heighten its social media presence. Society of St. Vincent de Paul Detroit reported $12 million in revenue for fiscal 2017 ended Sept. 30, down from $13.9 million in 2016, according to its audited financials. It ended 2017 with a loss of $840,478 and net assets of $2.15 million. In its fiscal quisition. The company received several unsolicited bids from competitors. He declined to reveal who made offers, but OneStream competes against major tech conglomerates Oracle Corp. and SAP SE, among others. “We didn’t have any interest in the acquisition proposals,” Shea said. “But we knew we needed help to grow, so we got an adviser to look across the PE landscape. We were fortunate enough to have some of the most elite firms have interest.” OneStream’s customers include UPS, Sagent Pharmaceuticals, Post Holdings Inc., Fruit of the Loom, The Carlyle Group, Melrose PLC and others. OneStream’s software operates like a smartphone app to simplify financial consolidation, planning, reporting, analytics and financial data. “Enterprise software disruptors frequently emerge from within the legacy leaders of the previous generation. So it was with Workday, ServiceNow, Salesforce and many others that took on the incumbent in their space and rapidly gained market share by delivering a new, innovative and agile platform,” David Welch, member at KKR, who will become a member of OneStream’s board upon completion of the deal, wrote in a blog post last week. “Today, these disruptors are major

2017 audit, its auditor UHY LLP noted the society wasn’t maintaining detailed records of goods donated. Its audit for fiscal 2018 isn’t yet complete. Malone said the nonprofit is operating on a $14 million budget this year, with the bulk of its budget coming from energy assistance grants from the state, a third from its stores, and the rest from donations.

Expanding services With experience on the boards of 12 local nonprofits, Malone is as mission-focused as he is business-minded. The agency is in the midst of developing a new strategic plan. But Malone said one goal is already clear: to build on the more than 300,000

“(This deal) really comes down to the trajectory we’re on. We have this bootstrap mentality. ... but you get to a certain point where you want to push the goalpost way down the field. The way you see technology companies evolving, it’s rare to go from bootstrap to an IPO.” — Tom Shea, OneStream CEO

people the society served last year in Monroe, Wayne, Oakland, Macomb, Lapeer and St. Clair counties, the footprint of the Catholic Archdiocese of Detroit. Based on the size of its coverage area, the Detroit affiliate is the third largest Society of St. Vincent de Paul council in the country, only behind Atlanta, Ga., and Phoenix. With roots going back to Paris and a presence in Detroit for 135 years, the Society of St. Vincent de Paul visits people in need in their homes to offer a more personal approach to assistance. It provides thrift store coupons to people who need winter coats for their children or other items like beds. It also provides rental/ mortgage assistance, help with emergency expenses and furniture and food assistance through 35 pantries players in their respective markets of HR, IT, and sales, yet we have not seen a new disruptor do the same for the Office of the CFO. Or so we thought, until we were introduced to OneStream Software. When we first got to know the team at OneStream, their deep domain expertise and vision led us to believe we are on the cusp of a similar market disruption — and we wanted to be a part of it.” The KKR funding will be used to help OneStream’s business expand across geographies and industries, Shea said. The company employs around 250 at offices in Rochester; Atlanta; Stratford, Conn.; Lucerne, Switzerland; Manchester, England; and The Hague, Netherlands. Government contracts are where Shea sees significant growth for OneStream, and KKR is positioned to help that endeavor. Retired U.S. Army general and former Director of the Central Intelligence Agency David Petraeus will join OneStream’s board upon completion of the deal. So will KKR’s Jim Miele and Welch. But Shea knows inviting a private equity partner into the boardroom means there’s a ticking clock on the company’s growth — KKR will eventually want to cash out its investment, hopefully for a profit. That means OneStream will either launch an initial public offering or be

in the region. And last year it dispersed over $4.2 million in state-funded energy assistance grants to more than 3,600 households. Visiting homes in pairs, the society’s 3,500 “Vincentians” or volunteers made 45,000 home visits in 2018, Malone said. Despite its Catholic roots, the agency serves anyone in need, regardless of religious background. Among other services, its Camp Ozanam in Michigan’s thumb area provided a camp experience for 496 children last year, and it provided more than 300 men transitioning back into society from prison with clothing, toiletries and other resources. Now, Malone is looking to expand on the services already provided at the society’s Detroit headquarters, the prominent, yellow Van Elslander Center on Gratiot Avenue at Heidelberg Street. Currently, My Community Dental Centers and students from the University of Detroit Mercy lease space in the building to provide dental services to Medicaid patients from the building’s basement level. Matrix Human Services operates a Head Start location in the building, and St. Vincent de Paul provides food from an on-site pantry one day each week. During the second quarter, the society plans to relocate the pantry to expanded space on the first floor, add a marketplace with food from local urban farmers and operate it Monday-Friday, Malone said. It’s also negotiating with a local health system and a local medical school to bring a preventative health center to the building. If it comes to fruition, the deal would bring St. Vincent de Paul additional lease revenue while also providing people in the area who have transportation barriers with access to preventative care. “The concept is bringing the mountain to Moses rather than bringing Moses to the mountain,” Malone said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch sold to a strategic buyer in the coming years. Shea said the company will work toward an IPO, but it has no active time line. “(This deal) really comes down to the trajectory we’re on,” Shea said. “We have this bootstrap mentality. ... but you get to a certain point where you want to push the goalpost way down the field. The way you see technology companies evolving, it’s rare to go from bootstrap to an IPO.” Shea and several of OneStream’s senior management have experience with exits. In 2006, they sold another low-visibility tech company called UpStream to Santa Clara, Calif.-based Hyperion Solutions. Terms of that deal were also undisclosed. A year later, Oracle acquired Hyperion in a $3.3 billion deal. The UpStream deal allowed Shea and his team to create OneStream and make it successful, he said. “Those bumps and bruises, that evolution, showed us what was hard the first time around,” Shea said. “We knew what we should do better next time. We learned we were selling to a risk averse population, so we had to be perfect. Get one customer, then three customers, then 10. This wouldn’t be possible without that experience.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

CODE FROM PAGE 3

health crisis centers across Michigan and reduce long waits in hospital emergency rooms, a problem known as “ER psychiatric boarding” that has huge and unnecessary human and financial costs. “Michigan’s mental health code has simply not kept pace with the clinical and social advancements in crisis services,” Moore said. “Too many individuals in need of services end up in jails and hospital emergency rooms. We must pave the way for individuals in crisis to receive targeted, specialized services. The starting point is the removal of barriers in the code.” Bob Sheehan, CEO of the Community Mental Health Association of Michigan, said the association and mental health professionals are planning to lobby legislators to update the mental health code. They also will be asking officials at the Michigan Department of Health and Human Services to remove some barriers under Medicaid regulations, including creating additional reimbursement codes for treatment at crisis centers. “We first got involved because the law is not so clear on crisis centers” and the rules on restraining aggressive or abusive patients, Sheehan said. “When we started looking at the code we found there were a number of problems.” The first problem, Moore said, is that crisis centers’ pre-admission screening units (PSUs) have only 24 hours allowed by the code to evaluate a patient when they come from a hospital after being medically certified. But the center must release that patient before 24 hours if no treatment is provided. “The statute can be clarified to follow models in other states where upon examination, if a person is a danger to others, they can be held for a period up to 72 hours,” Moore said. “The problem is people are being ‘streeted’ within 24 hours. There is just not enough time for an inpatient psychiatric bed to be located.” Moore said one of the problems is that crisis centers are not being paid for treatment, only for evaluation. “There is nothing in the code to say they must treat. .. It would (also) be nice if (Medicaid and private insurance) funding were available to PSUs to provide outpatient services while inpatient bed is located. (Right now) they are not getting paid for treatment.” Heather Rae, CEO of Common Ground, which operates a 24/7 crisis center in Pontiac, said many pre-admission screening units at crisis centers hold psychiatric patients longer than 24 hours, technically violating the state mental health code, mostly because an inpatient bed cannot be found. “We have been operating outside of that on a regular basis and many others do, too,” Rae said. “We may assess someone, but if no one takes them, we have the choice of keeping them or treating them and letting them go." But what if a crisis center holds the patient longer than 24 hours without clear authorization by the code and state law? “If we break the law, can we do it for the public good?” said Rae, who is a member of Partners in Crisis Services. In the white paper report, Moore said the mental health code does not clearly address several critical areas, but he believes providers can hold patients against their will for longer than 24 hours if they are a danger to themselves or others. Moore said the code generally only

Bob Sheehan: Plans to lobby legislators.

Dom Pallone: Supports more crisis centers

requires the crisis center screening unit to conduct an assessment of the patient within two hours of arrival and then either authorize or deny authorization to hospitalize the patient. One question arises if a bed isn’t immediately available. Can the PSU hold the patient? “Not forever,” according to Moore's white paper. The “PSU may continue to detain an individual only for so long as the patient requires hospitalization. (The) PSU must treat them, but let them go at the time that the treatment brings the individual back to a level when hospitalization is no longer required." Bob Nykamp, vice president and COO of Pine Rest Christian Mental Health Services in Grand Rapids, said the 24-hour hold limit for hospitals only “clogs the EDs, because it might take longer to find a bed. Most other states have taken care of this issue.” For example, Arizona, Indiana and California have much more relaxed standards for 24-hour stays at crisis centers with PSUs. They also have similar rules on restraints, but there is a general agreement with state licensing agencies that supports using restraints on aggressive patients. Moore said Indiana allows for 72hour holds for psychiatric patients at PSUs. Another common example that needs clarification in the code is if police bring in an individual in protective custody and then leave. Many police officers don’t have time to wait for evaluation and treatment even though the code requires the officer to “execute a petition for hospitalization of the individual.” But does the crisis center have authority to hold the individual? “Yes. The peace officer has made a discretionary determination that the individual is dangerous to himself or others,” Moore wrote. Sheehan said some crisis centers are concerned they must let patients go if the officer leaves. “They can’t hold them against their will,” he said.

Benefits to mental health code changes “The (state mental health) code is a barrier to having more crisis centers. It is very outdated because it was written in the 1970s and assumed there were enough psychiatric beds in hospitals that would accept anyone,” Rae said. “There aren’t enough beds for the people needing it the most.” Sheehan said there are three operating crisis centers in Michigan — Pontiac, Livonia and Lansing, and three more in development, in Grand Rapids, Ann Arbor and Detroit. The Detroit Wayne Mental Health Authority has plans to open one in Wayne County near the Boston-Edison neighborhood off Woodward Avenue and could open two more in the coming years. “Every urban area needs to have a center, so (at least) another five crisis centers. They don’t work well in rural areas. It’s better to go to the ER and have crisis workers go there,” Sheehan said.

In April, Pine Rest plans to open a 3,000-square foot outpatient urgent care center in Grand Rapids for behavioral health patients. Nykamp said updated and common-sense rules in Michigan could allow crisis centers to take patients with moderate psychiatric problems and avoid hospital ERs, where many wait hours or days for a psychiatric bed. ERs are “the worst place for psychiatric patients to alleviate symptoms,” Nykamp said. One of the first changes recommended is to increase to three days how long a crisis center PSU can hold a psychiatric patient and allow treatment to be provided. “The time limitation does make some sense,” Sheehan said. “We don’t want a lot of people being held against their will. It’s a civil liberties issue if applied in the wrong direction. The 24hour rule made sense when you could get a hospital bed in a couple hours. The world of easy access is over.” Second, crisis centers should be allowed to restrain people who are aggressive, a danger to themselves or require more time to settle down. The code is ambiguous about restraints, experts say. Moore said the code requires each mental health “facility” to develop policies on use of restraints. It prohibits physical restraints except in limited circumstances on “residents,” but it does not define who is a resident, only that it is an individual who receives services in a “residential facility.” As a result, some centers interpret to allow restraints under certain circumstances. Others view the language as a total prohibition. The Medicaid provider manual states that providers are prohibited from using methods of seclusion, restraint and other restrictive interventions. “The use of restraint and seclusion in psychiatric treatment settings is one of the most controversial and highly regulated practices in mental health treatment,” Moore said. “We owe it to ourselves to have an honest and thorough debate regarding the therapeutic and safety value. Right now there is just avoidance of the topic by the statutory ambiguity.” Rae and Sheehan, two longtime mental health professionals, have such a policy disagreement. “You can’t restrain in crisis centers, not for one minute,” said Sheehan, who interprets the use of restraints very conservatively. “You can do it in a hospital setting (with medical certification). We think the rules should be the same for crisis centers and allow more time for evaluation” and to allow patients to settle down, receive treatment or for staff to find an inpatient bed. On the other hand, Rae at Common Ground believes there are instances where restraints can be used on people having a mental health crisis under certain circumstances for the protection of the patient and staff. Rae said the center uses restraints about twice a month, adding that crisis centers that interpret the rules as a straight prohibition on restraints can cause the centers to become highly selective in who they serve. “You serve only the easy people.” The confusion in the law has contributed to at least one crisis center closing. Last fall, the Macomb County Mental Health Authority completed phasing out its two-year-old behavioral health urgent center because of funding losses related to the 24/7 staffing. But there were also regulatory concerns related to 24-hour holds and the

use of restraints, said three sources who asked for anonymity. Macomb now offers a crisis hotline and sameday 9-5 nonurgent-care services. “Everyone in Macomb County must now go to a (hospital ER) for urgent and emergent mental health crises,” said one knowledgeable source. “Changes in the mental health code could resolve this problem.” Debra Pinals, M.D., medical director of behavioral health and forensic programs with MDHHS' behavioral health and developmental disabilities administration, said several changes have been made in the mental health code in the past two years, though none that would affect crisis centers. On the new proposals, “we need to see how the language is and the impact it has,” Pinals said. “The goal is always to find different doors and avenues for good care.”

Use of ambulances, service payments Another positive change could be to allow ambulances to transport patients to crisis centers, experts said. The current code bars this. However, emergency physicians are concerned patients could bypass ERs before they are medically cleared. But mental health experts believe paramedics can be trained to evaluate behavioral health problems. “There are no provisions for ambulances,” Rae said. "The police are clamoring for changes. ... Some crisis centers want to use ambulances, but can’t do it.” Moore said the emergency medical services provisions of the public health code could be modified to allow ambulances and specially trained paramedics to transport patients with psychiatric conditions to crisis centers after they have been medically cleared. Experts contend that if more people with behavioral problems who do not need medical treatment were transported by ambulances to crisis centers, such as states like Arizona and California allow, hospital ER boarding would be drastically reduced. Another problem is that insurance limits payments to ambulances to transportation of patients to hospitals, Rae said. In addition, Medicaid should reimburse crisis centers for holding and treating patients, Sheehan said. About 20 years ago, Medicaid paid for crisis observation treatment services at crisis centers and hospitals, the so-called 23-hour-hold payment, said Sheehan. But that fee-for-service payment was phased out. Dom Pallone, executive director of the Michigan Association of Health Plans, said Medicaid HMOs would pay for costs beyond their current responsibility of medical screening, stabilization and mental health assessment at hospitals and crisis centers if Medicaid mandated it and carved it into payments. Pallone said he supports expanding the number of crisis centers and allowing them to treat patients under state law. “That could help with the boarding problem,” he said. But Pallone also said allowing HMOs to manage both physical and behavioral health in the Medicaid system, which will be the subject of a pilot program later this year, could coordinate care better and reduce the need for emergency visits to hospitals. He said savings on the medical side could be used to expand mental health services. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

SMITHGROUP

As part of its $125 million neighborhood improvement plan, the city of Detroit is planning to construct an extension of the Joseph Campau greenway from south of Jefferson Avenue to the Detroit Riverwalk.

CORRIDORS

a destination within a destination,” Marcon said. Like on Bagley, Riopelle will be made flush with the sidewalks to better facilitate events and create more of a plaza feel. More sidewalk room will be given to businesses for outdoor operations, as well. Eastern Market has experienced a rush of new investment and building ownership change in the past few years. Once a quiet refuge for artists, the neighborhood is targeted for large-scale, mixed-use project plans by several developers.

FROM PAGE 3

With the extra space, there will be bike lanes added in each direction, and sidewalks will be extended from 7 feet wide to 23 feet, replicating the spacious sidewalks on Woodward Avenue south of Grand Circus Park downtown. There are also plans to install plaques in the sidewalks commemorating historic businesses on that stretch, such as the former B. Siegel fine women’s apparel store. Landscaping and new bus stops will be installed, along with decorative lighting that extends to Eight Mile Road. The targeted area is a retail corridor on the cusp of revival. It is bookended by the long-running jazz staple Baker’s Keyboard Lounge to the north and a block of storefronts and an under-construction $8.3 million mixeduse development to the south. It is surrounded by upper-middle class neighborhoods such as Sherwood Forest, Bagley and Palmer Park. Restoring the “Avenue of Fashion” also connects to the city’s pilot neighborhood revitalization bid of the nearby Fitzgerald neighborhood. “There are a lot of things going on in the neighborhood, and there’s a number of things in the works,” Marcon said. “(There is) a lot of private development, and tying it together with public investment, we feel that could only boost what’s going on there.” Besides the $8.3 million redevelopment of the former B. Siegel site that seeks to jump-start the Livernois-Seven Mile corridor, Motor City Brewing Works intends to open its second location at the former Hunter's Supper Club building at 19350 Livernois Ave. Co-owner John Linardos said he’s aiming to open later this year. In addition, five other businesses and Motor City Match recipients are expected to open in the area within the next year, according to Charlotte Fisher, spokeswoman for the Detroit Economic Growth Corp. They include fine dining spot Good Times on the Avenue, Skin Bar VII spa, Blessed and Highly Favored Juice Bar, D&D Cui-

Joseph Campau Greenway extension

UTILE ARCHITECTURE & PLANNING

Redesign plans for Bagley Street in Mexicantown call for a shared street, making it easier to stage festivals and for businesses to conduct street sales.

sine restaurant and Block Party — a food and community concept by Tadd Heidgerken.

McNichols greenway

McNichols Road from Greenlawn to Livernois avenues Less than a mile south of the “Avenue of Fashion” project, the city is planning to create a greenway and bike paths connecting the University of Detroit Mercy and Marygrove College. While the longtime institutions anchor their neighborhoods, the former retail corridor between the two is unsightly and nearly vacant. A two-way bike path, new sidewalks, new bus stops and upgraded lighting and landscaping will be added to the stretch. “We really want to make that stretch of McNichols a lot more pleasurable to walk,” Marcon said. Detroit Sip, an early Motor City Match winner, opened there in 2017 and keeps abbreviated hours. Besides a liquor store, it is the only tenant among several abandoned storefronts. Plans for Detroit Mercy nonprofit Live6 Alliance to open its HomeBase community center next door have been delayed, but university officials say it will still happen.

A $1.25 million plan to bring a new restaurant to the neighborhood this year fell through. Building owner Joe Marra said financing was pulled from the project, and he is weighing other potential redevelopment options or selling the property.

Vernor welcome to Southwest Detroit

Vernor from Clark Avenue to Newark Street As a way to enhance the aesthetics of Mexicantown and establish a proper welcome from Corktown, the city is improving the road and sidewalks on Vernor Highway from Clark Avenue to Newark Street, right before the tunnel under the train tracks leading to Michigan Central Station. Decorative lighting will also be installed on the entire stretch. “As you come from the new Ford development, you’ll know right away that you’ve entered into a new community,” Marcon said. A large welcome sign is in the works for the east portion of the stretch, but nothing has been finalized, Marcon said. Ford’s grand redevelopment plans for Michigan Central Station are poised to drastically change the area. Officials are hoping to stay ahead of

the developments and capitalize on them as the area experiences new interest and energy .

Bagley shared street

Bagley Street from 24th Street to West Fisher Service Drive Combined with the improvements on Vernor, the city plans to invest $5.4 million to create a shared street on Bagley Street from 24th Street to the Fisher Service Drive. The goal is to make the retail-heavy corridor more festival-friendly, Crain’s reported in May. The sidewalk will be made level with the street to better accommodate community events, festivals and street sales by local businesses. City officials have said the new framework is aimed at leveraging the area’s walkability and interconnected neighborhoods.

Riopelle shared street

Riopelle Street from Division Street to Fisher Service Drive The same shared-street concept will be applied on Riopelle Street from Division Street to the Fisher Service Drive in Eastern Market. “Riopelle itself has turned itself into a retail destination, so (the businesses there) wanted to turn themselves into

Joseph Campau from Jefferson Avenue to the Detroit Riverwalk A greenway and bike path will be built on Joseph Campau Street from Jefferson Avenue connecting into the Detroit Riverwalk. In addition to the two-way cycle track, “bump outs,” or extra space, will be added in front of storefronts there. The space will allow businesses, such as Atwater Brewery and Andrews on the Corner, to stage outdoor seating and events. The greenway will be installed as a connection point for the existing offroad path that winds north of Jefferson and the riverwalk, which the city and nonprofit partners are intent on expanding and improving.

Kercheval improvements

Kercheval Avenue from Parker Street to East Grand Boulevard Kercheval’s bike lanes will be upgraded and landscaping will be enhanced from Parker Street to East Grand Boulevard on the city’s east side. The planned improvements come as the surrounding neighborhoods, including West Village and Islandview, draw investment, more residents and plans for more mixed-use developments. This stretch of Kercheval is becoming a hotspot for hip, new restaurants and retailers, and the city hopes to seize on that momentum. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

C R A I N ’ S D E T R O I T B U S I N E S S // F E B R U A R Y 1 1 , 2 0 1 9

THE WEEK ON THE WEB

RUMBLINGS

Businesses that sued over Royal Oak Civic Center appeal to Michigan Supreme Court

Whitmer: Road plan will ‘grow’ transit funding

FEBRUARY 1-7 | For more, visit crainsdetroit.com

ov. Gretchen Whitmer said Wednesday that the plan she’s formulating to fund infrastructure improvements in Michigan will “grow” public transportation options with the goal of improving regional transit in metro Detroit. Speaking at the Downtown Detroit Partnership’s annual meeting at Cobo Center in Detroit, Whitmer did not reveal specific details of the road-funding plan she plans to propose to lawmakers in early March when she presents the Legislature her first budget as governor. “The road solution I’m going to put on the table … will grow on the transit side and certainly ensure that we’re doing everything we can to encourage collaboration in Southeast Michigan and get an RTA of some sort,” said Whitmer, referencing the Regional Transit Authority of Southeast Michigan. The RTA was created by legislation signed by former Gov. Rick Sny-

he businesses that sued the city of Royal Oak over its civic center project are appealing to the Michigan Supreme Court. Ten property owners filed a lawsuit against the city in 2017 over its Royal Oak Civic Center project downtown, alleging misdeeds by the city and harm to nearby businesses. They sought to block the new construction downtown that has caused some strife due to congestion and lack of parking. The city and Lansing-based developer Boji Group broke ground on the project and have made headway on construction. An Oakland County Circuit Court judge and the Michigan Court of Appeals have both dismissed the complaint over the civic center project. Now the group of businesses — including Dixie Moon Saloon — is taking its battle to the state Supreme Court, aiming to get the appeals court decision reversed. “The city of Royal Oak, in its zeal for this project, violated the Michigan Constitution, a state statute, and its own Charter to make it happen,” the businesses’ Supreme Court filing states, according to a Thursday news release. The civic center project just east of Main Street near 11 Mile Road has several elements. Royal Oak is overseeing construction of a new city hall building, a public park, a new police station and a 581-space parking structure using approximately $50 million in bonds. An adjacent six-story office building under construction from Boji Group would house a $70 million Henry Ford Health System outpatient medical center when complete. The Royal Oak Farmers Market building stays, but some farmers fear that transferring parking from nearby lots to the new parking deck will drive away shoppers. “We continue to believe that the trial court and Court of Appeals both ruled correctly in concluding that the plaintiffs didn’t have standing,” City Attorney David Gillam told Crain’s Thursday. "We’re confident the Supreme Court is going to deny the application ... because of the fact that the lower courts ruled correctly.”

BUSINESS NEWS J Future and current employees of General Motors’ Cruise autonomous vehicle unit are being offered equity in the driverless tech startup under a new employee incentive plan. The plan, according to an annual report filed Wednesday with the Securities and Exchange Commission, was approved last year by the GM Cruise Board, led by GM CEO Mary Barra. It became effective on Sept. 12, according to the filing. J Up to 93 layoffs are planned at Monroe Bank & Trust just a few months after an Indiana-based company announced it was acquiring the community financial institution for

der more than six years ago. But after voters rejected a property tax to fund the RTA in 2016, the four-county authority has not taken off as originally planned amid regional fighting over funding and the scope of service. Whitmer signaled she would try to help broker a deal to get the northern suburbs of Oakland and Macomb counties back to the negotiating table with Wayne County, Detroit and Washtenaw County. “As we work on a comprehensive plan to fix infrastructure in Michigan, transit is a piece of that,” the governor said. “I have a tendency to think that if Mound Road wasn’t so bad in Macomb County, maybe the county executive could have a longer-term discussion about transit.” Last year, Macomb County Executive Mark Hackel declined to support a second regional transit tax increase proposed by Wayne County Executive Warren Evans.

CITY OF ROYAL OAK

The Boji Group is developer on a six-story, 145,000 Henry Ford Health System building set for downtown Royal Oak as part of a wider civic center construction project.

Detroit digits A numbers-focused look at last week’s headlines:

$1.5B

The amount of additional spending officials say is needed to fix Michigan’s interstates and highways

$1.36B

The unsolicited buyout offer rejected by Detroit Free Press owner Gannett

$1.27B

The worth of the Detroit Pistons, as assessed by Forbes

$290.9 million. The permanent layoffs are scheduled to start April 1 and extend through the summer, according to a notice filed with the state. Monroe Bank & Trust President and CEO Douglas Chaffin said the layoffs are “non-customer facing, backroom consolidations” and will likely be fewer than the 93 reported to the state. J Downtown Detroit is set to get an injection of Asian flavor — and alcohol — on the edge of Grand Circus Park. Developer Joe Barbat and a group of investors are creating Pao Detroit, a 3,500-square-foot “Asian-inspired” restaurant with a bar and nightlife elements on the first and second floors of the former Briggs Hotel, now Briggs Houze apartments. J A German sealing applications supplier with a base in Plymouth Township has acquired a battery manufacturer headquartered in Midland as it looks to join an intensifying electric vehicle and mobility solutions race. Freudenberg Sealing

Technologies GmbH & Co. purchased a majority stake in XALT Energy LLC, which makes lithium ion batteries out of a highly automated plant in Midland, according to a news release from last week.

OTHER NEWS J Gannett Co., publisher of USA Today, the Detroit Free Press and dozens of other newspapers, rejected with a unanimous board vote an unsolicited $1.36 billion buyout bid from MNG Enterprises, better known as Digital First Media. Digital First then said that it might nominate new Gannett board directors to consider its offer. J Commuters crossing the U.S.-Canada border on the Ambassador Bridge will be able to save some cash starting Feb. 18 thanks to toll reductions. The toll rates are dropping to $2.60 (U.S.), from $4.60 and $4, according to a notice from the Detroit International Bridge Co. Current commuter card holders will be automatically enrolled in the Ambassador Bridge Premier Commuter Card Program. There will be no change in the toll rates for commercial vehicles and motorists who are not commuter card holders. J Passenger traffic at Detroit Metropolitan Airport grew 1.5 percent in 2018, with a push from new domestic routes and a boost in international flights, officials announced last week. Approximately 35.2 million people flew in and out of the airport in Romulus last year, the highest since 2007, the Detroit Metropolitan Wayne County Airport Authority said in a news release. Traffic was up 535,000 passengers, primarily due to the number of outbound passengers visiting or residing in the Detroit area, also known as origin and destination, which saw a 5 percent bump from 2017.

DETROIT PISTONS VIA TWITTER

The addition of Blake Griffin is the big on-court change made by the Pistons since the beginning of 2018.

Forbes: Pistons gain in value, but drop in rankings T

he Detroit Pistons are worth $1.27 billion, according to the annual National Basketball Association franchise valuation estimates released Wednesday by Forbes. That’s a 15 percent increase from last year’s $1.1 billion, but the value ranks the Pistons only 26th in the 30team NBA. Last year, they ranked 25th and two years ago they were 21st. The main culprit is other clubs gaining in value more quickly than the Pistons, despite the team relocating in 2017 to new and palatial Little Caesars Arena after 29 years at the Palace of Auburn Hills. Still, the Pistons gained value at a greater pace than the league-wide average of 9 percent. Forbes estimated the Pistons had $52 million in operating income (EBITDA, per Forbes) on $235 million in revenue for 2017-18. That’s up from $22 million in operating income on $221 million in revenue from the season before.

“The move to Little Caesars Arena boosted NBA arena revenue more than $20 million for the Pistons last season thanks to pricier seating options and a doubling of corporate sponsorship revenue,” Forbes wrote. In 2005, the year after they won their last NBA championship, the Pistons were the NBA’s sixth-most valuable team at $402 million, per Forbes. The financial positives may not last unless the team wins more, Forbes said. The Pistons are just 24-29 despite adding star forward Blake Griffin in January 2018. Regardless of attendance and results, the Pistons have been a good deal for their owner. Since private equity billionaire Tom Gores bought the franchise for $325 million in 2011, it has gained $945 million in value under Forbes’ formula. The average NBA franchise is now worth a record $1.9 billion.