Crain's Detroit Business, March 11, 2019 issue by Crain's Detroit Business

Walsh: Brain drain is wrong target Page 3

Slow Roll founder Jason Hall’s new venture Page 3

MARCH 11 - 17, 2019 | crainsdetroit.com

MICHIGAN

Whitmer tax proposals already carved up By Chad Livengood clivengood@crain.com

The shock and awe of Gov. Gretchen Whitmer’s proposal to nearly triple Michigan’s fuel taxes and levy the Corporate Income Tax on 150,000 largely small businesses has already worn off. The budget blueprint Whitmer presented to a Republican-con-

trolled Legislature last week is likely to look very different by the time lawmakers send a fiscal year 2020 spending plan to the new Democratic governor’s desk. Legislative leaders last week quickly shot down Whitmer’s longshot proposal to tax business profits

on public sector pensions. “Those kinds of actions would be doubling down on stupid,” said Senate Majority Mike Shirkey, a Clarklake Republican and owner of Orbitform Group LLC, a Jackson tool-and-die maker that would be subject to higher taxes under Whitmer’s proposal.

of S-corporations, limited liability corporations and partnerships through the 6 percent Corporate Income Tax, instead of the lower 4.25 percent individual income tax. Whitmer proposed expanding the CIT as a means of generating $280 million of the $355 million needed to reinstate an income tax exemption

Business groups and a conservative economist who led the effort to get rid of the Single Business Tax over a decade ago also roundly criticized Whitmer’s CIT plan as a return to double-taxation entanglement of the SBT and its successor, the Michigan Business Tax. SEE BUDGET, PAGE 27

C A N G I QU B I CKEN LOANS GET? W O H Dan Gilbert’s mortgage business climbs to top FINANCE

of industry heap, aims to keep growing By Dustin Walsh dwalsh@crain.com

Dan Gilbert’s Quicken Loans Inc. reigns as the largest retail mortgage originator in the country, overtaking banking juggernauts Wells Fargo & Co. and JPMorgan Chase & Co. in 2018. The Detroit-based mortgage retail origination volume — loan originations

direct to home buyers — reached $82.7 billion in 2018, up from $18.45 billion in 2007, according to figures compiled, topping No. 2 Wells Fargo & Co.’s $70.64 billion. Quicken Loans’ rise was part strategy, part timing. The company was, and remains, a disruptor. It invested and adopted technology to offer home loan applications online during the dotcom bust of the late 1990s. SEE QUICKEN, PAGE 28

INSI

EDUCATION

Wayne State board battle heats up

Eastern Market firms up plans for first food accelerator

By Jay Greene jgreene@crain.com

Escalating drama between Wayne State University President M. Roy Wilson and the board of governors has added uncertainty to the ongoing affiliation negotiations by Wayne State with Henry Ford Health, the university’s long-running effort to turn around the finances at its medical school, and

$3 million buildout could start next month. Page 22 crainsdetroit.com

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NEWSPAPER

Mary Kramer: WSU spat a good argument against elected boards. Page 8

its search for a new medical dean. Last week, Crain’s reported that a board faction on the losing end of a contract extension vote in December for Wilson is trying to build a coalition on the board to push him to resign, according to three sources familiar with the board’s

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dealings who asked for anonymity. At the same time, Wilson asked the university’s legal counsel to explore whether an elected member of the school’s board of governors has broken the board’s ethics code in apparently coaching a news reporter to research articles that could be damaging to Wilson and to the university. SEE WAYNE STATE, PAGE 29 E S S // M A R C H 1 1 , 2 0 1 9 CRAIN’S DETROIT BUSIN

FOCUS

CRAIN’S MICHIGAN BUSINESS:

GRAND RAPIDS

GRAND RAPIDS, Page 10 BROUGHT TO YOU BY:

IDS

THE CURRENT IN GRAND RAP

flow. ou could say Grand Rapids has found its to the state’s most active angel invesMichigan’s second-largest city is home tech entrepreneurs, buoyed by orgator group and a growing community of development nonprofit convened by nizations such as The Right Place, an economic an accelerator founded by Rick Garden, Start and ago, years 30 over Jay Van Andel take a look at a wide array of innovations DeVos in 2012. In this special report, we Michigan: an app that helps farmers and that could spur even more growth in West small network for hunters and fishers, and a farm workers find each other, a social new treatment for Alzheimer’s. a on working but mighty pharmaceutical firm that is

In this package

 AgHelp connects migrant farm workers with jobs, health care and social services. This Page

could? Page 14

 Making West Michigan the place to be. Page 11  Social apps take some of the guesswork out of hunting, fishing. Page 12

 Envoy brings small manufacturers’ wares to retailers across the country. Page 16

 The pharma company that

AgHelp connects migrant farm workers with jobs, health care and social services

Sadoc Paredes (left) and Feliciano Paredes START GARDEN

 Grant Angels’ third investment fund could top out at $25 million. Page 18

Grand Rapids’ skyline along the banks of the

A better harvest

Need to know By Tom Henderson thenderson@crain.com  AgHelp, launched this year, helps with jobs From the time they were kids, Fe- migrant farm workers connect liciano Paredes and his seven sib- and social services lings were migrant farm workers  Won a total of $203,000 in funding and with their parents, both of whom services at a series of business-plan were natives of Mexico but legal res- competitions last year idents of San Antonio. They’d pick in across the Florida, Georgia and Louisiana in  Has signed up 140 growers agencies the spring, then head north in the U.S. and more than 40 service summer. They worked in the cotton that provide help to migrants fields and hand-harvested pickles, ed a career in human resources. But strawberries, oranges, grapefruit, he knew there was a human and and, when they got to Michigan, market need for a business to help peaches, cherries and apples. farm workers find jobs and Paredes knew what it was like to migrant the social and health care to connect worked they’d arrive at a farm where services they might need during the year before only to find it already t a their months up north, away from

 CertifID stops real estate scams inther tracks. Page 15

at Start Garden’s pitch event.

Grand River. | GETTY IMAGES/ISTOCKPHOTO

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MICHIGAN BRIEFS

INSIDE

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

MI hospitals penalized by Medicare for infection rates A majority of the 24 hospitals in Michigan penalized by Medicare for having excessive rates of hospital-acquired infections and patient injuries are located in Southeast Michigan, a fact that the Economic Council for Michigan calls concerning. Penalized hospitals will lose 1 percent of Medicare payments for admitted patients in the next fiscal year, costing some hospitals hundreds of thousands of dollars or more in revenue. Government payers’ goal is to hold hospitals accountable for patient injuries caused by such preventable hospital-acquired infections as surgical-site infections. Of the 800 hospitals penalized nationally, 3 percent are in Michigan, according to a March 1 report in Kaiser Health News based on data from the Centers for Medicare and Medicaid Services. However, the 24 hospitals in Michigan cited in 2019 are higher than the 20 reported by CMS in 2016. The report is based on data at least two years old. In Southeast Michigan, DMC Detroit Receiving Hospital in Detroit, DMC Harper University in Detroit,

CALENDAR

CLASSIFIEDS

DEALS & DETAILS

Hurley Medical Center in Flint and McLaren Flint have been penalized the past five consecutive years. DMC Sinai-Grace hospital has been penalized the last four consecutive years. Three Beaumont hospitals — in Royal Oak, Dearborn and Taylor — were also penalized in 2019 for the 2016 and 2017 years.

MARY KRAMER

OPINION

New Holland, Pabst could be teaming up on whiskey

Judge recommends against solar access fee

It looks like New Holland Brewing Co. could soon be distilling whiskey for beer giant Pabst Brewing Co. New Holland received approval from the federal Alcohol and Tobacco Tax and Trade Bureau for an alcohol label for Pabst Blue Ribbon Whiskey, according to public records. TTB approved the label Feb. 5. MiBiz first reported the news. Requests for comment were left with Pabst and New Holland. The Holland-based brewer began distributing nationally through Pabst Brewing in 2017 under a long-term partnership agreement announced in late 2016. New Holland, a more than 20-yearold brewer, is known best for its Dragon’s Milk stouts. But it also distills whiskey, gin, vodka and rum. It has three locations where it brews and distills in Holland and Grand Rapids, including two brewpub restaurants. New Hol-

OTHER VOICES

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

New Holland Brewing Co. got approval from the federal Alcohol and Tobacco Tax and Trade Bureau for a label for Pabst Blue Ribbon Whiskey in February.

land has more than 400 employees and sells in 38 states and four countries.

Michigan well represented in Forbes billionaires list

More than a dozen Michiganians or those with Michigan ties are among the record 607 billionaires in the U.S. this year, according to Forbes’ annual list. East Lansing native and Google co-founder Larry Page tops the rankings for those with ties to the Great Lakes state. He’s worth $50.8 billion — about $2 billion more than last year, when Forbes listed him 12th. Follow-

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ing is Detroit-born former Microsoft CEO Steve Ballmer at No. 19 with $41.2 billion, up from $38.4 billion. Others on the list with local connections include Detroit native and University of Michigan mega-donor Stephen Ross ($7.7 billion), Detroit real estate mogul Dan Gilbert ($6.7 billion), Detroit Red Wings owner Marian Ilitch ($4.1 billion) and Penske Corp. founder Roger Penske ($1.5 billion). Gilbert is worth more this year. His ranking is 233, up from 284 with $6.5 billion last year, according to media reports. Ilitch dropped about $1 billion to No. 478 from 391 with $5.2 billion after falling about $1 billion in 2017, too.

PEOPLE

RUMBLINGS

WEEK ON THE WEB

A Michigan administrative law judge has recommended the state Public Service Commission reject DTE Energy Co.’s proposal for a fee on residential solar-energy generators for accessing the power grid, and backed the commission’s staff recommendation to pay individual small solar customers for providing excess electricity back to the grid. DTE contends the fee is needed to pay for the grid that solar-generating residential customers use. The recommendation, issued by Judge Sally Wallace, was a partial victory for both solar advocates and DTE. The three-member MPSC is expected to vote on the DTE rate case that includes the solar rates in early May. DTE and other interested parties typically file responses to administrative law judge recommendations, and the PSC does not have to follow the recommendations.

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WORKFORCE

Why fighting brain drain is the wrong battle

Q&A

NEW DIRECTION

he skills gap permeates every workforce conversation in Michigan. It’s become the central focus of economic development and public DUSTIN policy and deWALSH fined the fundamental outlook of our collective future. We’ve been talking about Michigan’s brain drain for two decades. Elected officials, policy wonks, political leaders and, yes, the media have fired darts at the target of stemming the outflow of Michigan’s young, educated residents. The focus, of course, has always been on creating jobs — the good paying kind — as a some sort of snare trap to keep the college types grazing in our borders ... and paying taxes. Retaining talent. Growing talent. The buzzwords of a post-recession economy long on unfilled jobs and short on bodies. Obviously, education and talent retention are important pieces of the labor puzzle, but also the smallest part. Fact is Michigan keeps a great many of its prized college graduates right here in the Pleasant Peninsula. The “brain drain” isn’t not real, but it’s also overblown and focusing on keeping talent is less important than importing it. In last week’s issue of Crain’s, you read about a new idea to solve the alleged brain drain. Rob Cleveland, president and CEO of Cornerstone Alliance, a southwest Michigan economic development organization based in Benton Harbor, is calling for the creation of the Michigan HUGE Incentive (Homegrown Undergrad and Graduate Education Incentive). The five-year program relinquishes recent graduates of Michigan colleges and universities of income tax, or at least a portion. The fundamental goal of Cleveland’s idea is to stem the departure of college graduates by flipping economic incentives on its head, offering tax rebates to workers, not companies — something I’ve also called for recently. But applying a good solution to a problem that is more falsehood than fact won’t render positive results — unless, of course, the objective is to provide debt-burden relief to Michigan college graduates who were most likely going to stay here anyway. Michigan has one of the lowest outflow migration rates of college graduates in the nation, according to data compiled for Crain’s by William Frey, senior fellow at The Brookings Institution’s Metropolitan Policy Program. According to Frey’s data, Michigan lost 43,339 residents who were 25 and older with a college degree between 2013 and 2017, or an outflow rate of 2.3 out of 100 college-educated 25-plus-year-olds who leave Michigan. SEE DRAIN, PAGE 25

SPORTS BUSINESS

Inaugural golf tournament corporate sales on a brisk pace, organizer says By Bill Shea bshea@crain.com

bike ride. I’d go on this bike ride with people and have the most amazing time because the groups were small. I just started to remember what it was like at the beginning of Slow Roll when we were having conversations about what was next. When we started Slow Roll, we were just a bike ride. We didn’t have any direction. We didn’t have anything in mind as far as education or anything of that nature. The more we did it, we saw the opportunity to educate people on things we thought were important. We felt like when we started Slow Roll, the rides that already existed catered to partying rather than promoting positivity. We started Slow Roll to be the opposite of that, a ride that was for everybody. (But) the last five years of Slow Roll just became me screaming, “Stay to the right! Stay to the right!” for an hour and a half. I wanted something different. Not that I had done it all, but I felt like I personally had reached my end in Slow Roll as far as growth. In order for me to grow personally, I needed to go explore the other sides of things.

Organizers of the inaugural Rocket Mortgage Classic golf tournament say corporate hospitality sales for the June PGA Tour event at the Detroit Golf Club are pacing far ahead of their expectations. “We’ve seen unprecedented interest demand in tickets, hospitality and sponsorship,” said Jason Langwell, the tournament’s executive director and executive vice president for Chicago-based Intersport that’s running the tournament on behalf of title sponsor Quicken Loans Inc. that owns the Rocket Mortgage app. Langwell said hospitality inventory is 80 percent sold out. Based on what Langwell said has been sold for the June 25-30 tournament, companies have paid about $2.6 million just for hospitality, which is multiseat or table structures such as chalets, skyboxes, and club space to be erected along the historic golf course’s fairways, tee boxes and greens. That doesn’t include hundreds of thousands of dollars in remaining inventory, or the millions of dollars in ticket Need sales and corpoto know rate sales of nam 80 percent of ing rights during the event. hospitality Organizers ininventory sold out creased hospitalahead of schedule ity offerings three  More than $2.5 times to meet demillion worth of mand, Langwell chalets and said, and even skyboxes already tweaked up pricsold es. The inventory  Tournament is and pricing were created by seeing June 25-30 at what could be Detroit Golf Club built around the golf course, especially the final holes that are most in demand, he said. Intersport built the business plan, including pricing, around what 10 similar tourJason Langwell: naments in the Hospitality event’s marinventory in ket-size peer demand. group have done recently. “Pricing is based off a comparison of what has been the right price point in other like-size markets, and also taking a look at various products in the market,” Langwell said. “That demand has been so solid suggests we’ve appropriately priced the product.” The names of the companies that are buying naming rights and hospitality inventory won’t be disclosed for about another month, Langwell said, and will coincide with the public ticket sale. Between 250 to 300 companies typically are involved financially in some way with a PGA Tour event, he said.

SEE RIDETROIT, PAGE 27

SEE GOLF, PAGE 26

RiDetroit Founder Jason Hall, front, leads a small group on a ride in downtown Detroit. KAT STEVENS

Slow Roll co-founder Jason Hall taking a quieter path with RiDetroit By Sherri Welch | swelch@crain.com

t’s been a year since Jason Hall left Slow Roll Detroit, the nonprofit he co-founded with Mike MacKool in 2010-11 to host weekly bike rides in and near Detroit.

The Monday evening rides had grown to include 5,000 or more bicyclists each week and been replicated by several other U.S. cities by the time Hall left. He’d been featured in a minute-long Apple iPad commercial that highlighted his work with Slow Roll and the city of Detroit in 2014. And as part of the promotion, Apple sent him to cities across the U.S. and in other countries. During the rides he hosted in other cities, he began to think about taking a new path. Hall, 44, talked with Crain’s Senior Reporter Sherri Welch recently about RiDetroit LLC, the new biking tour and event company he launched last summer to offer rides by reservation

only, how it harkens back to the beginning of Slow Roll and how he plans to grow the business. The transcript has been edited for length and clarity. Crain’s: What led you to leave Slow Roll Detroit? Hall: When we started Slow Roll, we

had no idea it would turn into what it turned into. It became this awesome … ride. When the Apple commercial came out (in 2014), I was lucky enough to travel with it. I went to Miami, Mexico, London, Sao Paulo. That gave us an opportunity to expand our view of what we thought we were as an organization. When I would go to these places, generally I’d go to speak. But they’d organize a

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Woodward Angels’ kickoff gets boost from Gilbert, Ross By Tom Henderson thenderson@crain.com

The Woodward Angels, a new angel-investment group based in Detroit, will hold its second meeting in mid-April at a time and place yet to be determined and will continue to hold meetings, complete with pitches from entrepreneurs for capital, every other month. Lauren Hoffman, a director of the group and the venture-community liaison for Detroit-based Rock Ventures LLC, Dan Gilbert’s investment vehicle, said the organization will have a small headquarters office in downtown Detroit at a location yet to be selected. Gilbert is a founding member of the organization and attended the first meeting Feb. 20 at the Shinola Hotel with Stephen Ross, the prominent New York real-estate developer and the largest charitable benefactor in the history of the University of Michigan. Hoffman said Ross was in town and attended the meeting with Gilbert but has not committed to any formal role in the investment group. “He’s certainly not a member at this time,” she said, stressing the “at this time.” In 2016, Ross and Gilbert were inaugural members of the Miller Family Wayne Law Alumni Wall of Fame, the same year they each donated $5 million to the university’s law school, the largest donations in the law school’s history. They are both graduates of the law school. In 2015, Wayne State had an event honoring Ross, and at that time, school officials privately expressed hope they could get Ross to expand some of his philanthropic activities from Ann Arbor to Detroit. Ross, a native of Detroit who attended Mumford High School, is the chairman and majority owner of The Related Cos., a global real estate development firm he founded in 1972. The company developed the Time Warner Center and the Hudson Yards Redevelopment Project, both in New York.

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Dan Gilbert is a founding member of the organization.

Stephen Ross hasn’t committed to formal role with investment group.

He is also the principal owner of the Miami Dolphins of the National Football League and its Hard Rock Stadium. Ross has donated $378 million to UM, where he got a degree in accounting in 1962. The school’s business school was named for him in 2004 after his gift of $100 million, and in 2013, Ross donated another $100 million to the business school and $100 million to the athletics program. Hoffman said that the Feb. 20 meeting at the Shinola, which drew more than 75 would-be members, was informational and that those attending the April meeting will be considered “founding members.” Membership is $2,000 the first year, with a commitment to invest $25,000 per calendar year in Detroit area companies. “We have a healthy number of people verbally committed,” said Hoffman. “People from across the Detroit business community and a number of top executives are interested in joining.” The Woodward Angels fills a gap in the local angel-investing community since the Great Lakes Angels, anoth-

er group, stopped holding monthly pitch meetings early last year. The Woodward Angels will be an affiliate of the Grand Angels Holding Co. LLC, the holding company for the Grand Rapids-based Grand Angels. Also affiliated are the Ka-Zoo Angels of Kalamazoo, which was formed in 2017. The three groups will be marketed under the DBA Michigan Capital Network. Tim Parker, the president of the Grand Angels, said he hopes to announce an affiliation with a fourth angel group in Michigan in the coming months. “At Rock Ventures, we researched what we could do to leverage the local startup scene, and that led us to an awareness of an early-stage funding gap and to the Grand Angels,” said Hoffman. “We’re happy to be able to use the Grand Angels and their back-office support.” Hoffman said two companies made pitches for capital at the inaugural meeting but said he was not at liberty to name them. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Visteon Corp. wins appeal in Van Buren Township case By Dustin Walsh dwalsh@crain.com

The Michigan Supreme Court on Friday denied Van Buren Township’s request to appeal a lower court ruling in favor of Visteon Corp. in a case that pitted the township against its largest corporate resident. The suit, originally filed in Wayne County Circuit Court in August 2015, alleged the multinational auto supplier breached its contract over bonds tied to the construction of Visteon’s 263-acre campus near Ecorse Road and I-275. The township claims Visteon is legally obligated to cover the projected shortfall between bond payments and tax revenue from its corporate headquarters. At that time, the shortfall was projected at $29 million by 2019 and city services and residential taxes are at stake, Linda Combs, township supervisor, told Crain’s. The township re-

Need to know

Supreme Court rules in favor of Visteon in HQ bond case 

 Van Buren Township sued the supplier in 2015 for breach of contract  Township sought payments to cover projected bond shortfall

structured its bond agreement to shrink the shortfall and is working to reduce the impact further, according to the appeals court ruling. Visteon contended it isn’t obligated to cover the shortfall. A circuit judge dismissed the case in February 2016, saying the township cannot sue for an injury, or shortfall, it has not yet realized. The appeals court and now the Supreme Court agreed. Chief Justice Pro Tem David Viviano wrote the dissenting opinion for

the high court, arguing the case should be retried in the lower courts. However, Van Buren Township can refile the complaint when, in fact, a shortfall occurs, both courts ruled. The Visteon development opened in 2004. When the Visteon Village campus was envisioned, it wasn’t known that Visteon would ultimately end up in bankruptcy court or that the commercial real estate market would deteriorate after the financial meltdown. Visteon was a hot commodity for local economic development managers following its spinoff from parent company Ford Motor Co. in 2000. Communities were eager to lure the automotive supplier and its headquarters in hopes of securing a windfall in property taxes. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Chelsea, Grand Rapids retirement communities affiliate By Sherri Welch

Affiliate snapshot

On the face of it, a new affiliation agreement between United Methodist Retirement Communities and Grand Rapids-based Porter Hills Presbyterian Villages Inc. has many of the markings of a full merger. Following completion of the deal on March 1, UMRC is now the sole shareholder of Porter Hills with the transfer of ownership from Westminster Presbyterian Church in Grand Rapids. The two senior living and care nonprofits have overlapping boards, and they are sharing c-suite executives. They’re also combining functions like human resources and leveraging their combined purchasing power for things like employee health insurance and property insurance to garner lower costs through economies of scale. Together, the nonprofits represent a $150 million organization, making it the second-largest nonprofit senior living organization in Michigan (behind Trinity Health), UMRC said, based on data in the 2018 LeadingAge Ziegler 200, a national ranking of senior living nonprofits on various factors. They collectively employ 1,300 at sites in 22 counties serving more than 6,700 seniors.

Chelsea-based United Methodist Retirement Communities

swelch@crain.com

Years in operation: 113 2019 budget: $77 million, including affiliates Steve Fetyko: Expect to save by affiliating.

Kim Hoppe: Wasn’t building a reserve.

UMRC and Porter Hills have kept their obligated groups separate and continue to operate as separate legal entities, keeping alive the brands known in Southeast Michigan and on the state’s west side. Yet, by affiliating as they have, they expect to save between $500,000 and $1 million annually, said Steve Fetyko, interim CEO for the two organizations. By affiliating, the two nonprofits “can gain scale that allows us to be masters of our own destiny ... to continue well into the future to serve generations of older Michiganders,” Fetyko said. “We have achieved what we hoped through an affiliation, rather than having to explore a merger.” Initially, the two thought they’d wind up combining the two organizations,

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John Thorhauer: Didn’t see reason to merge.

Jay Wisentaner: Looking to be better prepared.

said John Thorhauer, longtime president and CEO of UMRC who is now president and chief strategy officer for the two nonprofits as he prepares to retire in October. “Typically, you’d merge the entire legal structure and consolidate ... everything. (But) we don’t see any good reason to do that to accomplish what we wanted to accomplish.” By remaining separate legal entities, the nonprofits avoid complicated licensing changes in operating areas like skilled nursing, he said. And if either organization decides to expand, it has twice the opportunity to secure financing. The ability to expand is important given the demographic shift that’s happening in the state and nation, Thorhauer said. AARP projects that U.S. population of people age 85 and older will more than triple between 5.8 million in 2010 to 19 million in 2050. The affiliation between UMRC and Porter Hills will better position them to expand to meet the increasing demand, Thorhauer said. The way their affiliation is structured is unique, he said, but it’s a fairly easy structure to put together and is something that could work for other nonprofits. “You don’t necessarily have to have the entire platform we’ve created ... you could have portions of it,” aligning in areas such as marketing, human resources, sales and marketing, fundraising and purchasing, Thorhauer said. “It accomplishes what most nonprofits would like to do: create the scale and efficiencies to be able to serve people better.”

Struggle to find footing

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After years of operating at a deficit, Porter Hills needed to do something differently if it wanted to expand its services to more people, said Kim Hoppe, who joined Porter Hills as CFO in May 2016 and is now CFO for both nonprofits. It had entered into several joint ventures over the course of three to five years “without allowing one to get their legs under them” before entering another, she said. “We were so mission-driven and wanted to do so much for seniors, we just kind of did it all at once instead of taking the time to let one get going.” At the same time, Porter Hills wasn’t building a reserve to do capital improvements at its 10 campuses, she said. It reported a loss of more than $4 million in 2017. It narrowed its loss to about $2.4 million in 2018 and is projecting a loss of about $591,000 for fiscal 2019, ended June 30, Hoppe said, operating on a budget of $64.5 million this year. “We were going through some financial things, but those were getting resolved,” said Porter Hills Vice Chairman Jay Wisentaner, who is a partner and registered investment adviser at

Employees: approximately 650 People served annually: 2,100 Locations: 9 sites in Chelsea, Dexter, Detroit, Ypsilanti, Jackson and Lansing Services offered: independent and assisted living, memory care, rehabilitation and skilled nursing and through affiliates, center-based social and medical care for seniors, affordable assisted living and affordable housing. Senior housing units: about 875 Grand Rapids-based Porter Hills Presbyterian Village Inc. Years in operation: nearly 50 years 2019 budget: $73 million, including affiliates Employees: approximately 650 People served annually: 4,600 Locations: 9 sites in Grand Rapids, Sparta, Kentwood, Belmont, Caledonia, Walker, Muskegon and Holland Services offered: independent and assisted living, memory care, rehabilitation, center-based social and medical care for seniors and unlike URMC, care management, homecare and hospice Senior housing units : about 830

Norris Perne & French LLP in Grand Rapids. With the industry facing rising costs amid declining Medicare and Medicaid reimbursement rates and an aging population, Porter Hills’ board and management began looking at options for aligning with another senior living nonprofit. “We were looking to be better prepared for the growing need for senior services,” said Wisentaner, who also chairs the Porter Hills Foundation. Porter Hills engaged Indiana-based Mennonite Health Services and Chicago-based investment banking firm Ziegler as it sought to bring costs in line with revenue and to put out the word that it was seeking a nonprofit senior community partner. Two dozen senior living nonprofits from around the country responded. After “dating” several, it chose Chelsea-based United Methodist Retirement Communities. The deal, announced last week, keeps the finances of each organization, including debt — about $53 million for Porter Hills and under $40 million for UMRC — separate. UMRC was a Michigan community whose footprint fit well within the Porter Hills footprint, Wisentaner said. Its commitment to its mission and culture also fit with Porter Hills’, he said, noting that he knew UMRC was the partner it had been looking for after a site visit to one of its campuses. “I walked away after that visit saying I wouldn’t mind putting my mother there,” Wisentaner said. For its part, UMRC and its affiliates had total revenue of about $75 million in 2018 and ended the year just about break-even, Fetyko said. In its preliminary financial disclosure for the fourth quarter of 2018, UMRC said operating revenue for its obligated group — consisting of inde-

pendent living, assisted living and skilled nursing sites — was 3.4 percent or $1.2 million under budget for the year, offset somewhat with operating expenses tracking 1.6 percent or $602,000 below budget. Every nonprofit in the country is seeing pressure to do more with less and to maintain a very solid financial base to execute its mission, Fetyko said. “We become stronger together than we were on our own.”

Details of the affiliation Though based roughly 100 miles apart, the two nonprofits are sharing administrative staff including the CEO, CFO and chief human resources officer. Their boards remain separate but some of UMRC’s board members have joined the Porter Hills board and vice versa. Some members serve on both boards, and both boards must agree on major decisions, Hoppe said. One of the goals of the affiliation was to become more efficient and identify cost savings,said Fetyko, who was previously CFO at UMRC. “Fortunately, we’ve been able to do that with no negative impact to employees...and no impact to programs.” As it explored an affiliation over the past two years, Porter Hills filled vacant positions, including the CEO spot, with contract employees. As a result, the two organizations did not have to do any layoffs as they moved to a shared administrative structure, he said. The UMRC Foundation and Porter Hills Foundation will continue to operate as separate nonprofits but also share common leadership with Wendy Brightman, who’d previously led the UMRC Foundation, serving as president of both. The Porter Hills Foundation had been without a president for six to nine months.

Opportunities for growth The affiliation presents opportunities to share best practices and knowledge of the regions each serves, Fetyko said. For example, UMRC doesn’t have a home health company, but Porter Hills has a statewide license with the home health business it owns. “Even though each are separate legal entities, because of the shared, overlapping governance ... and leadership, we can help identify where strategically it makes sense for each to expand their services lines,” Fetyko said. The affiliation brings together two organizations with very unique, competitive brands for the benefit of consumers as well as their organizations, said David Herbel, president and CEO of Lansing-based LeadingAge Michigan, a statewide association of nonprofit senior services providers. “They’re able to create larger scale, where before they couldn’t.” He believes that each being part of a larger affiliation will inspire confidence in donors about future sustainability of the organizations. That bodes well for the money each raises to support benevolent care on their campuses, Herbel said. Beyond that, their affiliation “really is connecting one side of the state with the other,” he said. “I think this is one of the first times you’ll see organizations coming together in that way.” Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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OPINION EDITORIAL

COMMENTARY

Whitmer plan first big test in Lansing

CEO: ‘Status quo’ won’t work

ov. Gretchen Whitmer showed last week that she’s not playing for small stakes. The 45-cent gas tax increase Whitmer proposed in her first budget is more than money to fix Michigan’s crumbling roads. It’s a plan that could aptly be named “Fix All The Damn Budgets.” The plan would not only raise $2.5 billion aimed at bone-rattling potholes and deteriorating bridges. It would also free up money committed to former Gov. Rick Snyder’s $1.2 billion road package from 2015. Doing so would rip off several recession-era financial BandAids applied to K-12 and higher education funding and put more money toward those priorities, too. Whitmer’s “big bang” proposal does have some concerning features. A $280 million business-tax increase on LLCs and S-Corps unfairly targets the part of the economy that creates jobs and would hamper entrepreneurial investment in Michigan. The aim behind that tax increase is to pay for restoring a special tax exemption for public employee pensions, a bit of patronage for a prominent Democratic constituency. That’s not a recipe for growth. The governor, however, clearly knows her proposal is just the opening bid. She signaled to Crain’s editorial board last week that she’d be willing to trade the business tax increase in order to secure a road funding deal. That would be a good trade. Thankfully, both parties agree that the time is now to fix Michigan’s infrastructure — so there’s reason to be optimistic that they’ll come to a deal and not kick the can down the road as they have for decades. Is a gas tax the best way? It has the virtue of functioning as a “user fee,” and such a tax is spread across the economy, affecting individuals and businesses alike. But ramping up the gas tax over 366 days is a concern. That relatively sudden impact would have consequences for the economy. Then again, so does having some of the worst roads in the country. There’s no need for the tax to hit that quickly. A more gradual increase would ease the immediate effect on people’s pocketbooks, and the state could still sell bonds against the future revenue stream to make a visible and tangible impact on the roads now. Whatever the outcome, this negotiation is the first big test of whether the new powers in Lansing can deal with each other on an issue everybody agrees requires action. We’ll be watching closely.

lbert Berriz is taking his money elsewhere. Or, put differently, the CEO of the Ann Arbor-based real investment giant McKinley Inc. is taking the firm’s founder Ron Weiser’s money to other states like Florida with progrowth strategies on transportation investment. “We’ve actually exited certain parts of Michigan,” Berriz said. “We don’t think people will continue to build there, because the roads just don’t support growth in those communities.” On the day before Gov. Gretchen Whitmer rolled out an eye-opening $2.5 billion fuel tax increase proposal, Berriz tried to reframe the debate in Lansing to get beyond the dollar-amount focus that has consumed a generation of state leaders. “All of you are talking about a number — whether you believe it’s $1 billion, $2 billion or $3 billion — I think it’s $4 billion, by the way,” Berriz told a room full of stakeholders at a Business Leaders for Michigan lunch last week. “Your number only does this: It keeps a status quo population in Michigan of 10 million (people). As a real estate investor, if you told me the proposition is the job growth is going to be flat, the population is going to be flat — that’s not a Top 10 state.” Berriz was frank in discussing how McKinley — which has a real estate portfolio valued at $4.6 billion, $1 billion of which is in the Ann Arbor area — is investing in new apartments in growing states like Florida instead of the state where Weiser started building a real estate empire a half-century ago. “Quite frankly, there comes a point where what passes for roads is going to obstruct economic development,” Berriz said. After years of debate, the Republican-controlled Legislature now

CHAD LIVENGOOD clivengood@crain.com

finds itself boxed in on road funding. They’re boxed in by the fact that they’ve been in control of the Legislature for eight consecutive years. Albert Berriz: “If there’s a lot Pothole-patching of (waste) there, strategy scares I mean, why off investors. didn’t you go after it?” asked former GOP Senate Majority Leader Ken Sikkema, who is part of a bipartisan group pushing for a 47-cent fuel tax hike spread over nine years. “That’s a really tough narrative for Republicans to sort of advance.” Republican legislators are boxed in by a Democratic governor calling for a 45-cent fuel tax hike who has the bully pulpit to publicly taunt lawmakers to “fix the damn roads” every day from now until the next election. Unlike her predecessor, Whitmer is not likely to let legislators off the hook for passing a plan that takes a half-decade to ramp up and doesn’t change the pavement’s downward trajectory. Senators are boxed in by their own Senate Fiscal Agency that says at least $2.7 billion more is needed annually to get 90 percent of roads in good condition. Lawmakers are boxed in by busi-

ness groups like BLM, Michigan Chamber of Commerce and the Detroit Regional Chamber pressuring them to come to grips with the reality that money from their 2015 road-funding plan isn’t getting to the roads fast enough, especially in metro Detroit. And now they’re boxed in by influential businessmen like Berriz — and, by extension, Weiser, one of the nation’s leading fundraisers and megadonors for Republican politicians who just ended his second term as chairman of the Michigan Republican Party. Berriz declined in an interview with Crain’s to say where McKinley will no longer invest in apartment housing in Michigan. But during the BLM forum, Berriz made it clear that much of Michigan is no longer an investment priority beyond the U.S. 23 corridor between Ann Arbor and Brighton. The reason for investment along U.S. 23? Berriz credited the recent $92 million project completed in 2017 that converted the left shoulder to a third “flex” lane for rush-hour traffic and included bridge replacements on an 11-mile stretch that carries 66,000 vehicles a day and was previously Michigan’s most congested corridor. Capital goes where there’s a longterm strategy to grow; the current “paradigm” in Michigan caps growth, Berriz said, and Michigan’s current pothole-patching strategy is already scaring off investors, he said. “All of your conversations are about just fixing roads,” Berriz told the roomful of Lansing lobbyists and insiders. “This has nothing to do with moving the business community forward. ... At the end of the day, people will stop coming here.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Wayne State looks like argument for appointed boards

enry Kissinger once restated a previously observed maxim about academia: “The reason that university politics is so vicious is because stakes are so small.” That may be true in some cases, but the battle within the Wayne State University governing board is not small potatoes. A faction of the board appears intent on upending a plan to stabilize the future of one of Wayne’s jewels — its medical school. It’s a long saga that dates to the transition of the school’s longtime partner, the Detroit Medical Center, from a local nonprofit corporation to, in 2011, a for-profit hospital group owned by an out-of-town company. As the DMC relationship with WSU began to change, WSU started working more closely with Henry Ford Health System. And last fall, trustees voted 8-0 to approve a letter of intent to pursue a formal and far-reaching relationship with that Mid-

MARY KRAMER Group Publisher

town neighbor. Jay Greene has followed this story literally for years, including an insightful story that you can find on Page 1. It’s not really clear what some trustees object to with Henry Ford other than, perhaps, nebulous concern that the governing board would somehow lose authority over the medical school. They may lay their ire on how much consultants to the deal are being paid. What is clear is that unless at least five

of eight trustees agree, no deal will move forward. Last week, Jay reported that WSU President M. Roy Wilson has asked legal counsel to determine whether one trustee, Michael Busuito, wrongfully coached a reporter to seek documents that could negatively affect university business. Busuito had earlier issued a statement announcing that he had the votes to block a Henry Ford deal. In news accounts, it appeared Busuito suggested he spoke for the board, which could violate board conduct rules. The rebellious faction issued this statement last week, defending its actions: “We have seen the mistakes of presidential leadership at Michigan State University. Here at Wayne State University, Roy Wilson, the president, must and will be held accountable by those of us who were elected to govern." Comparing the Henry Ford deal to the Larry Nassar scandal seems a mite

over the top. But it’s clear at least four trustees — one who took office only in January — seem bent on derailing the deal and probably Wilson’s tenure. And now it’s all public. Could some of the trustees’ vehemence lie in personal motivations? Jay reported last week that the leader of the anti-Wilson faction, Busuito, had been chair in 2015 of the University Physician Group, the medical practice affiliated with the medical school. He was removed for an unspecified reason by UPG’s board. Now he’s leading the charge in blocking a draft agreement with Henry Ford. Can you say “conflict of interest?” Ideally, a board and its president understand the challenges, share a vision and work together toward a common goal. Trustees hold management accountable, but don’t micro-manage. I chair a university board at Grand Valley State University. Though I was elected

chair by my colleagues, the eight trustees who serve are appointed in staggered eight-year terms by the governor. Trustees are elected in statewide elections at Wayne, University of Michigan and Michigan State. GVSU is a relatively new school; the first class was admitted in 1963. But it has benefited from continuity of leadership: just four presidents have served since 1963. During that time span, WSU has had nine. Maybe, just maybe, appointing trustees is a better model than electing them.

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.

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Money for roads hidden by corporate tax breaks

or those opposed to Gov. Gretchen Whitmer’s proposed 45-cent gas tax, State Budget Director Chris Kolb says Michigan has six other options for new revenues to fund new road spending in Michigan. These range from new personal or corporate income taxes to higher sales and use taxes, property taxes or vehicle registration fees. “If you don’t like this solution, then you can bring another one to us,” Crain’s reported Kolb saying. “But we need $2.5 billion — and there’s only so many ways to raise that.” Here’s one more solution for consideration: The fairest, least disruptive and most effective way to unlock more funding for our roads would simply be to unwind Michigan’s massive — and massively ineffective — collection of economic development subsidy and incentive programs. Before imposing a huge tax hike at the pump, our first step should simply be to stop Michigan’s state and local politicians from making deals that excuse a few favored companies from paying the same taxes that everyone else does. Michigan’s one of the most profligate states in the country at these types of deals, which are consistently found by researchers from across the philosophical and political spectrum to do little to improve net job creation while favoring big businesses over smaller or less politically connected competitors. Additionally, the evidence is clear that we’re not risking the “jobs going elsewhere” without these programs, as overwhelmingly they subsidize decisions companies have already made based on basic factors such as the overall competitive landscape and their access to customers, workers, suppliers, resources, infrastructure and the like. What would happen if we eliminated state and local economic development programs in Michigan and redirected those resources to infrastructure? It’s difficult to identify exactly how much money is on the table thanks to famously transparency-averse economic development bureaucracies, but even a high-level look at recent public budgets and reports shows that the money to “fix the damn roads” is likely there if we want it. Consider: J In 2017, Michigan state and local governments reported a combined $944 million in decreased tax revenues that year due to economic development tax abatement deals. J In 2018, the Michigan Strategic Fund board approved $719 million in new brownfield tax increment finance plans, which are a recently expanded mechanism for diverting taxes out of state and local government budgets to fund development projects. In the first two months of 2019, the MSF has approved another $73 million of these deals. J In 2017, the MSF spent $320 million on program expenses, $213 million of which was a direct transfer from the state government. J The Michigan Economic Development Corp. spends $22 million per year on salaries and benefits alone. That might only be slightly less than one percent of the $2.5 billion per year we’re told is needed to “fix the damn roads,” but $22 million buys a lot more laborers in high-visibility vests filling potholes than it does

OTHER VOICES John Mozena

MEDC staffers, who regularly count the highest-paid workers in state government among their numbers. (For instance, a 2017 public records request from MLive found that the

person in charge of fixing the state’s almost 10,000 miles of roads, Michigan Department of Transportation director Kirk Steudle, had an annual salary of $165,000. That same year, MEDC CEO Steven Arwood made $283,000.) Of course, only some of this money would be immediately available. Much of it is locked up in contracts that can cover decades, which couldn’t be quickly unwound. However, roads are a long-term problem and in the short term, making the decision to prioritize infrastructure quality over ineffective corporate welfare would avoid

25%

the massive economic hit of a $2.5 billion tax hike that would slam Michigan’s overall competitiveness, make the state less attractive to cost-sensitive logistics and manufacturing employers and put our state’s small businesses at yet another cost disadvantage to their larger competitors. It also wouldn’t tie Michigan’s road funding to gasoline sales just as our auto industry is devoting itself to reducing — if not eliminating — gasoline consumption in the vehicles that will be using those roads. In the long run, a policy of rolling back development subsidies and incentives

would create an environment of increasing revenues over time as existing programs and contracts continue to sunset. Compare this to gas tax revenues that will only shrink over time — even with Michigan’s gas tax-linked electric vehicle registration fees — and necessitate yet another debate over new revenue streams in the years to come. Before we raise taxes on everyone in Michigan, let’s simply start making everyone pay the taxes we already have. John C. Mozena is the president of the Center for Economic Accountability.

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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 // M A R C H 1 1 , 2 0 1 9

FOCUS

CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

THE CURRENT IN GRAND RAPIDS

In this package

ou could say Grand Rapids has found its flow.

Michigan’s second-largest city is home to the state’s most active angel investor group and a growing community of tech entrepreneurs, buoyed by organizations such as The Right Place, an economic development nonprofit convened by Jay Van Andel over 30 years ago, and Start Garden, an accelerator founded by Rick DeVos in 2012. In this special report, we take a look at a wide array of innovations that could spur even more growth in West Michigan: an app that helps farmers and farm workers find each other, a social network for hunters and fishers, and a small but mighty pharmaceutical firm that is working on a new treatment for Alzheimer’s.

 AgHelp connects migrant farm workers with jobs, health care and social services. This Page  Making West Michigan the place to be. Page 11  Social apps take some of the guesswork out of hunting, fishing. Page 12  The pharma company that

could? Page 14  CertifID stops real estate scams inther tracks. Page 15  Envoy brings small manufacturers’ wares to retailers across the country. Page 16  Grant Angels’ third investment fund could top out at $25 million. Page 18

Grand Rapids’ skyline along the banks of the Grand River. | GETTY IMAGES/ISTOCKPHOTO

A better harvest

AgHelp connects migrant farm workers with jobs, health care and social services By Tom Henderson thenderson@crain.com

From the time they were kids, Feliciano Paredes and his seven siblings were migrant farm workers with their parents, both of whom were natives of Mexico but legal residents of San Antonio. They’d pick in Florida, Georgia and Louisiana in the spring, then head north in the summer. They worked in the cotton fields and hand-harvested pickles, strawberries, oranges, grapefruit, and, when they got to Michigan, peaches, cherries and apples. Paredes knew what it was like to arrive at a farm where they’d worked the year before only to find it already had a full quota of workers, or that a late frost had killed much of the crop, and to head off from there on a random search for work. He knew what it was like to have members of the family get hurt or sick and have no idea where to find affordable health care, or if there were any social services that could help them. For 15 years, the family made the drive north, before the parents decided to make Michigan their base and settled in Belding in 1990. Paredes went to college and start-

Need to know

 AgHelp, launched this year, helps migrant farm workers connect with jobs and social services  Won a total of $203,000 in funding and services at a series of business-plan competitions last year  Has signed up 140 growers across the U.S. and more than 40 service agencies that provide help to migrants

ed a career in human resources. But he knew there was a human and market need for a business to help migrant farm workers find jobs and connect to the social and health care services they might need during their months up north, away from home. Off and on for years, Paredes tried to get a business up and running — networking, making and remaking a business plan, and getting advice and mentoring from local support agencies and Grand Rapids entrepreneurs. Last year, his dream became reality with the official formation of AgHelp Corp., a Delaware C-Corp that does business as AgHelpUSA. Feliciano is CEO; two of his brothers, Sadoc and Ivan, focus on marketing and sales, attending confer-

Sadoc Paredes (left) and Feliciano Paredes at Start Garden’s pitch event. START GARDEN

ence and trade shows; and Feliciano’s wife, Lori, is the business manager. Lori and Sadoc work full time at AgHelp. Ivan works as a field interviewer for various government agencies, and Feliciano has kept his job as a recruiter for Grand Rapids-based Spectrum Health. From 2011 to 2016, Paredes was an analyst for the state’s Workforce Development Agency, making field checks of Michigan farmers to make

sure they were in compliance with laws regarding the treatment of migrant workers. He said he’d meet families who were living in the back of a freezer truck because they couldn’t find any local housing. Or who had a family member who’d been in need of health care for weeks or even months without knowing there was subsidized health care 10 minutes away. Feliciano Paredes said his “aha” moment came in 2011 when he was

watching a documentary called “The Harvest/La Cosecha,” about the plight of child migrant farm workers and their families. “I was watching a scene where one of the families arrives at a rundown motel, only to find out that the work that was promised to them is no longer there. When I saw their expressions of desperation, concern, anger and sadness, a light went off in my head,” said Feliciano. SEE AGHELP, PAGE 16

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CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

Making West Michigan the place to be Economic development nonprofit The Right Place helps businesses — and Grand Rapids — grow By Tom Henderson thenderson@crain.com

When The Right Place Inc. was created to spur economic development in Grand Rapids in 1985, the city was anything but the right place. Like all major cities around the state, the city had fallen on hard times, the windows of many empty downtown buildings filled with for-rent and forsale signs. Outdoor cafes? Full-occupancy office buildings? New high-rise condominiums? A thriving minor-league professional hockey team? A popular minor-league baseball team? The things Grand Rapids boasts now would have seemed like hallucinations. In 1984, Jay Van Andel, the co-founder with Richard DeVos of the Amway Corp., organized a committee of 13 area business leaders to figure out how best to stem the tide. He called it the Right Place Committee. Included were Robert Pew of Steelcase and Frederik Meijer of Meijer. The committee hired the Battelle Memorial Institute to do a study, and a year later it delivered a detailed plan for economic development, focusing on three goals: job and company retention, expansion of local businesses and attracting businesses from elsewhere. In 1985, The Right Place Inc., an economic development nonprofit, was launched with a staff of three. “Jay thought they needed to do something to help turn things around here. Until then, there wasn’t any organized economic development and there needed to be. Since then, we’ve become a model for other cities around the state,” said Birgit Klohs, who has been president and CEO since 1987. “The Grand Rapids of the 1980s was very different from the Grand Rapids we know today. The unemployment levels were at record highs, hitting 11 percent in West Michigan and 16.5 percent in Michigan. In contrast, we are now experiencing record low unemployment rates hovering around three percent,” she said. “Several of the buildings that have become landmarks and economic drivers in our community, such as the Van Andel Arena, DeVos Place and the multiple medical schools and research institutions on the hill, did not even exist back then. It is hard to imagine when you look at the vibrant downtown we see today.” Today, The Right Place has a staff of 35 and a successful track record of delivering on all three objectives. No longer focusing just on Grand Rapids and Kent County, it now also serves Ionia, Montcalm, Newaygo, Lake and Oceana counties. Last year, the organization helped 29 companies either grow their coverage or move to the area, coordinating financial incentive packages from state and local sources and helping companies navigate or get variances for local zoning. It helped them re-

Need to know

JJNonprofit economic development

organization founded in 1985 to help Grand Rapids grow

JJKey objectives are job and company retention, expansion of local businesses and attracting businesses from elsewhere JJLast year helped 29 companies retain

47 jobs, create 2,108 jobs and supported $439.7 million in new investments

Birgit Klohs: Nonprofit has become model.

Therese Thill: Staff calls on 400 CEOs a year.

tain 47 jobs, create 2,108 jobs and have a total of new or retained payroll of $93.7 million, with total new investments of $439.7 million. Therese Thill, The Right Place’s vice president of business development, said much of that is a result of outreach by her staff. She said they call on 400 CEOs a year to see what their needs are and if her team can help. Since its founding, The Right Place has helped bring the area $5 billion in new investment and create 50,000 jobs. A 501(c)6 nonprofit, it gets about 80 percent of its funding from private-sector charitable contributions, 10 percent from area municipalities and 10 percent from foundations.

“The Grand Rapids of the 1980s was very different from the Grand Rapids we know today.” Birgit Klohs

Here are some recent projects The Right Place was involved in: J In October, Arcanum Alloys announced it was moving its headquarters and research and development from Sunnyvale, Calif., to Kentwood, bringing 25 high-tech jobs and a capital investment of $693,000 with it. The company, founded in 2011, produces 20-ton coils of its specialty alloys for some of the world’s biggest manufacturing companies. The Right Place connected the company to workforce development resources at West Michigan Works!, and the Michigan Economic Development Corp. approved a $162,500 Michigan Business Development Program performance-based grant. J Also in October, Grand Rapids-based Grand River Aseptic Manufacturing Inc. announced it would be expanding operations in a new nearby 62,000-square-foot facility, with a capital investment of $63.5

million and the creation of 107 new jobs. The company was founded in 2010 and purchased the assets of a joint venture between the Van Andel Institute and Grand Valley State University. It makes sterile products for the life-sciences industry. The Right Place connected the company with West Michigan Works! to help with worker training, and the MEDC approved a $1 million performance-based grant. The expansion was also supported with tax abatement from the city. J In September, Medbio Inc. announced it was investing $3.5 million to expand its operations in Cascade Township, creating 43 new jobs. The company, which specializes in injection molding, assembly and packaging for clients operating clean rooms in the U.S., Europe and Central America, is renovating a 25,000-square-foot building across the street from current operations. The MEDC supported the project with a $180,000 performance-based grant, and the township applied to the state for approval of an industrial-facilities tax exemption. J In May, SMFS Inc., a cybersecurity firm in Arlington, Va., doing business as Grimm, announced it was opening a Michigan location in the village of Sparta, investing $621,000 in the facility and adding 27 new high-tech jobs. The company is a service-disabled, veteran-owned small business. Its Sparta office will be focused on cybersecurity for the automotive and aerospace industries. The MEDC approved a $216,000 performance-based grant and West Michigan Works! will help with talent recruitment and training. J Also in May, Grand Rapids-based Performance Fabrics Inc., which does business as HexArbor, announced it will expand to a new location in the city, investing $8.7 million and creating 50 new jobs. The company also planned to refurbish its existing facility. The company, which was founded in 2002 and before the expansion had 130 employees, makes industrial protection equipment, primarily cut- and puncture-resistant gloves and armguards and safety eyewear. West Michigan Works! assisted with worker training, and the MEDC approved a $350,000 performance-based grant. J Last March, The Right Place Inc., in collaboration with the MEDC Corp., helped Grand Rapids-based Jedco Inc. expand its aerospace manufacturing operations. The company promised to invest $9 million in new machinery and equipment and create 39 new jobs over the next three years. Jedco makes components for gas turbine engines and other aerospace components from high strength alloys and employed 167 when the deal was announced. The MEDC approved a $215,000 performance-based grant. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS A F e e - O n l y We a l t h M a n a g e m e n t G r o u p

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“Finally. A technical team who understands my complex love language.”

Go hunt or stay home? Social apps take some of the guesswork out By Tom Henderson thenderson@crain.com

Find out what your cloud services could be saying at marconet.com.

What’s better than turning a hobby into a business? Turning it into a business that has attracted eager venture-capital funding, a rapid rise in customer adoption and brand-name partners. Hunting and fishing was Jeff Courter’s hobby. Sportsman Tracker Inc., a company he founded in 2012 to provide an online and app-based platform for hunters and fishermen, is his business, and he expects to close soon on a new funding round of $2 million, which will include a partnership with former executives at a large outdoor retailer he isn’t yet able to name. “We’re closing on our third round of funding, which will allow us to hire new tech positions, scale our marketing spend and further establish the HuntWise brand as a cornerstone of the hunting industry,” he said. HuntWise is the name of his company’s smart phone app for hunters. FishWise is for fishermen.

Need to know

JJA hunter and fisherman launched an app-based platform for fellow sportsmen that is closing on its third round of funding JJIts algorithms predict the best hunting times for 14 species, including deer, waterfowl, turkey, upland game, bear, moose and more JJThe company’s apps, HuntWise and FishWise, have been downloaded 1.5 million times

In 2012, Courter was driving at 4:30 in the morning to go goose hunting in Fenville when he had a flash. “I’m a computer science major and I thought, ‘Wouldn’t it be sweet if there was some program to help you determine optimal conditions for your hunt, figuring in the weather?’” he recounted. “That day I went home and began preparing a forecast based on all the weather variables. This was before I had any concept of an app.” He tinkered with it for two years before forming a company, co-founding it with a CPA friend, Jon Schwan-

der, who is the company’s CFO. At the time, Courter was director of photography and a senior editor at Storytelling Pictures, a Grand Rapids company making corporate films, music videos and feature-length documentaries, a job he kept until the end of 2014 when he took the plunge and made Sportsman Tracker a fulltime gig. Soon after starting his company, Courter made a pitch for funding at Start Garden, a startup incubator in downtown Grand Rapids that was founded by Rick DeVos in 2012. Courter participated in a monthly pitch event there called the 5x5 Night, where five entrepreneurs make five-minute pitches for funding. Courter won his pitch, and $5,000. He then won a follow-up pitch event at Start Garden, this one for $20,000. In 2013, Courter launched two free apps on the App Store, Hunt Predictor and Fish Predictor. The apps gave hourly weather predictions, times for sunrise and sunset and included graphs predicting odds of

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Health Care Law Experience

In Your Corner.

Jeff Courter

Jeff Courter, CEO, Sportsman Tracker

success at various hours of the day, even advising users in bold letters to either go hunt or stay home. Within a year, mostly by word of mouth, there had been 200,000 downloads, which caught Start Garden’s attention. It funded a seed round of $100,000 in 2014. “I thought, then, maybe I should start thinking of quitting my job,” said Courter. “It was a hard decision for me because I loved my job. I loved this, too, but it is a risk going into business for yourself.” Courter raised $850,000 in 2015, a round led by Huron River Ventures in Ann Arbor. He was building his user base by giving away the apps. “We didn’t have a monetization channel, yet,” he said. “If you get enough visitors, you figure out how to monetize it,” said Tim Streit, a managing partner at Huron River. In 2016, as downloads continued to grow, Courter raised a round of $950,000, this time led by M25, an early-stage venture capital investor in Chicago. Joining both of those larger rounds were Karis Capital Partners of Stamford, Conn., Detroit-based Invest Detroit and Wakestream Ventures LLC, which spun out from Start Garden as the venture-capital funding arm of the DeVos family office. “Jeff is sharp, with a very passionate team that knows their customer segment extremely well,” said Patti Glaza, managing director of Invest Detroit’s ID Ventures. “They have

learned how to monetize their enthusiasts, and have built a strong community.” She said she has committed to the new round, too, as has Streit. “I give a ton of credit to this company and to Wakestream Ventures and to Start Garden. Jeff took that first $5,000 and ran with it,” said Streit, who also invested in the 2016 round after co-founding Grand Ventures in Grand Rapids. By then, the Hunt Predictor app had morphed into HuntWise. Its algorithms use a variety of weather variables to predict the best hunting times for 14 species, including whitetailed deer, waterfowl, turkey, upland game, wild boar, coyote, rabbit, squirrel, black bear, brown bear, black-tailed deer, moose, mule deer and elk.

Time to monetize By the end of 2016, it was time to turn users into money. Courter launched a premium subscription app for $10 a month or $50 a year. Paid features include a directory that lists the owners of public parcels of land. If a hunter is driving back roads and sees deer or turkeys in a field, he can get the phone number for the owner and call for permission to hunt. A hunter can use the app to share photos of a just-shot deer or justhooked rainbow trout, recipes for cooking game, tips on how recent floods or fires have affected certain

locations, and his or her location, which came in handy last fall when one subscriber fell out of a hunting blind, was injured and summoned help. “You look for antiquated industries going online, and nothing is more antiquated than hunting. Jeff started with giving people weather data. You add a social feed. You offer a gear store, an e-commerce site that’s a host for other gear companies, people post photos and you become Facebook for hunting and fishing,” said Streit. Last August, the HuntWise app launched a partnership with GSM Outdoors, a major hunting-equipment retailer based in Grand Prairie, Texas, to let users buy the companies products while on the app. “Sports enthusiasts are large consumers of equipment and services to improve their performance and provide more enjoyment in their activities,” said Glaza. This spring, Courter said the apps will be upgraded to include state-specific layers, such as maps of off-road-vehicle trails, cell coverage maps, hiking trails, maps of wilderness areas and maps of recent forest fires. “Sports enthusiasts are large consumers of equipment and services to improve their performance,” said Glaza. “It's been great to see Jeff execute methodically every step of the way and how the market is responding,” said Joe Lampen, a member of the board and treasurer at Start Garden and finance director at Wakestream. “Jeff really understands that capital efficiency is critical to making this happen,” said Mike DeVries, Wakestream’s chief investment officer. “We’ve all been surprised by how fast his user base has grown. Jeff is so unassuming, ‘aw-shucks, I’m just here getting it done.’ We think very highly of him and his team.” Sportsman Tracker employs six at its office northwest of downtown Grand Rapids, with Courter planning to be at eight or nine by the end of the year. “This will never be a company that needs to raise a $20 million round. It’s structured to be capital efficient,” said Streit. “We think this can be a very large company that can double or triple revenue every year for years. And this new round of funding is going to be a massive turning point in terms of scale.” Courter declined to provide detailed revenue figures but said the company, which has had 1.5 million downloads, “scaled revenue from $0 to multi-million in less than three years.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Contact Sarah Wixson at slwixson@varnumlaw.com n

Health care law, including working with physicians, physician groups, hospitals and health care entities Transactional and real estate law, and complex commercial litigation

Tier 1 Metropolitan Ranking in Health Care Law

2019

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

CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

The pharma company that could?

Grand Rapids-based Tetra Discovery Partners strikes a licensing deal to test Alzheimer’s treatment

thend

By Tom Henderson

Most of his 11 employees work in labs at the Homer Stryker MD School of Medicine Innovation Center in Western Michigan University’s Business Technology and Research Park in Kalamazoo. Tetra has two small labs there now and will add a third soon, after it hires another four chemists. The company also uses local contract research organizations.

thenderson@crain.com

Tetra Discovery Partners Inc., a small pharmaceutical company in Grand Rapids with a handful of employees, ended 2018 with the kind of news most early stage companies don’t even dare to dream about. In December, it signed a licensing deal with Shionogi & Co. Ltd., a Japanese drug company, which provided $5 million in an upfront licensing agreement, an equity investment of $35 million and, if Tetra hits its development milestones, another $120 million plus royalties. Company founder, chairman and CEO Mark Gurney said the influx of capital will fund the completion of two U.S. Food and Drug Administration Phase 2 trials of a compound with the working name of BPN14770, which is something called a phosphodiesterase‐4D allosteric inhibitor. The Phase 2 tests will evaluate its efficacy in treating Fragile X Syndrome and Alzheimer’s disease. Gurney said the drug could also treat other conditions marked by cognitive and memory deficits, including other dementias, learning and developmental disabilities, traumatic brain injuries, depression and schizophrenia. The 30-patient Fragile X trial has begun, with the 255-patient trial on early stage Alzheimer’s patients to begin in April, at about 20 sites yet to be determined. “We have no agreements signed, yet, but we plan to have a Grand Rapids site,” said Gurney. “The trial will be divided between private and academic clinical sites.” He said most Alzheimer’s drug trials have been on patients with moderate and severe symptoms. “We think our drug will have greater benefit earlier in the disease, on patients who are one to three years after diagnosis.” The drug has received orphan status for Fragile X by the FDA, which is given to drugs with small populations of potential patients, making a profit difficult if not impossible without such assistance as tax credits. It is estimated there are 30,000 people in the U.S. with Fragile X, a genetic condition that causes a range of development problems and mild to moderate intellectual disabilities. Gurney said that if those two trials are successful, he expects the company to hold an initial public offering in the fall of 2020. “It’s reasonable to assume that an IPO round for a large indicator like Alzheimer’s would be $150 million," he said. In addition to the capital, an important aspect of the deal for Tetra, said Gurney, is that it gives Shionogi the licensing rights for Japan, Korea and Taiwan, leaving Tetra with rights in other critical markets, including the Americas and Europe. Also critical is that Shionogi researchers have already had success with drug formulations concerning the same biochemical pathway modulated by BPN14770, including Cymbalta and Intuniv. Last, Shionogi has particular expertise in evaluating the best delivery

Well known in the industry

Mark Gurney, CEO of Tetra Discovery Partners

Need to know

Tetra signed licensing deal with Shionogi & Co. Ltd. to fund FDA Phase 2 trials for a compound that could treat Fragile X, Alzheimer’s 

 If trials are successful, company expects to hold an IPO in 2020  Tetra’s CEO Mark Gurney helped discover beta-secretase, an enzyme that is in part responsible for the protein deposits in the brain that cause Alzheimer’s

mechanism for individual drugs, such as by capsule, tablet or in powder sprinkled on food.

A board of brand names Tetra boasts a powerhouse board of directors. Joining Tetra’s board after the December deal was Ryuichi Kiyama, a senior vice president at Shionogi who previously was president and CEO at Ezose Science Inc., a New Jersey-based biotech. Other board members include Douglas Morton, a former vice president of Pfizer Inc., who has 43 U.S. patents and is on the advisory boards of Cleveland Clinic Innovations, the Hopen Lifescience Venture Fund, and the Southwest Michigan First Life Science Fund; Lance Stewart, the senior director of strategy at the University of Washington’s Institute for Protein Design; and Joseph Collard, co-founder CEO of Delray Beach, Fla.-based Epigenetix, a drug development company whose targets include brain cancer. Serving on the company’s scientific advisory board is Edward Scolnick, the former president of Merck Research Laboratories and currently chief scientist at the Stanley Center for Psychiatric Research at the Broad Institute at the Massachusetts Insti-

tute of Technology; and Catherine Strader, who has had executive positions at Merck and Schering-Plough and has guided more than 50 compounds through drug discovery. Tetra, which was founded in 2011, previously raised $25 million from a variety of grants from the National Institutes of Health; a Series A round of equity funding of $7 million in 2016; and a follow-on round of funding of $1.5 million last year. In both in 2013 and in 2014, Tetra raised $1 million in loans that were converted to equity during the 2016 A round. The Grand Rapids-based Grand Angels, the state’s most active angel-investor group, participated in both of those debt rounds and has now invested a total of $2.75 million in the company. The debt rounds also included investments by New Jersey-based Johnson & Johnson; Ann Arbor Spark; Detroit-based Invest Michigan; the Biosciences Research & Commercialization Center at Western Michigan University; Grand Rapids-based 42 North Partners LLC, the family investment office of Mike Jandernoa, the former Perrigo CEO; and the Muskegon Angels. “It’s really exciting to take Tetra’s drug discovery to this next step,” said Tim Parker, the Angels’ president, referring to the collaboration with Shionogi. “It’s been a long haul. Seeing an international pharmaceutical company invest is a huge validation. The company’s leadership is great, and it attacks a problem no one has been able to solve.” “Tetra’s leadership team has had a vision and a plan from the beginnings of the company and has executed that plan continuously and flawlessly,” said Charlie Moret, president of Invest Michigan. “The Shionogi investment is validation of the company’s progress and promising

future prospects. Mark Gurney should be ranked as one of Michigan’s most effective startup executives in life sciences.” “I’ve known Mark Gurney for years, and consider him one of the smartest and most innovative CEOs I’ve ever met,” said Tim Streit, co-founder and managing partner of the Grand Rapids-based venture-capital firm of Grand Ventures. “We don’t invest in bio, but if we were ever going to break our rule, that would be the company.” “The coolest thing about Tetra is the work has been done here in Grand Rapids, which is not known for pharma,” said Carl Erickson, a member of the Grand Angels and founder and CEO of Atomic Object LLC, a Grand Rapids-based software development firm. “And he’s done it with a lightweight approach, with a handful of employees. He’s competing with huge companies and he’s beating them with good science.” Gurney didn’t get any funding from Start Garden, the startup accelerator in Grand Rapids founded by Rick DeVos, or from Wakestream, the venture-capital arm of the DeVos family office, which doesn’t invest in pharma startups, but he said mentoring from Mike Moran at Start Garden was very helpful early on as he prepared to meet with potential funders. “He helped me with my pitch deck. I knew pharma, but I didn’t know business. I show him five slides in five minutes, and he’d say, ‘I don’t understand anything you’re saying,’” recounted Gurney. By the time he could break the complex science down to layman’s terms, he was ready to pitch for cash. Gurney has a small office on the third floor of the Grand Rapids Techhub, an accelerator in downtown Grand Rapids, next to Streit’s office.

Gurney is well known in the pharma industry. He was an associate professor at Northwestern University’s Feinberg School of Medicine from 1989–1995 and while there got an MBA from the university’s Kellogg School of Management; from 1995-2000 he was director of genomics research at Pharmacia; from 2000-2010, before returning to Grand Rapids to found Tetra, he was senior vice president at deCODE Genetics Inc., a pharmaceutical company in Reykjavík, Iceland; and since 2016 has been on an advisory board of the A. Alfred Taubman Medical Research Institute at the University of Michigan. He has authored 117 peer-reviewed papers that have been cited over 18,000 times and holds 36 patents. While at Pharmacia, Gurney and his team discovered beta-secretase, an enzyme that is at least in part responsible for the protein deposits in the brain that cause Alzheimer’s. Tetra’s drug inhibits beta-secretase, and FDA tests will prove or disprove Gurney’s hypothesis that it will affect amyloid formation and prevent or slow the progression of Alzheimer’s disease. Gurney was the lead inventor on more than 20 patents based on that discovery. Tetra has two U.S. patents and patents in Japan, China, Korea and Taiwan, with others applied for, said Gurney. Gurney said he regularly attended biotech and pharmaceutical conferences, including the annual prestigious BIO International Convention. “We talked to potential customers early and often,” said Gurney. “We were trying to meet all the large pharmas.” The venture-capital arm of Johnson & Johnson was an early investor, and some of its executives advised the company on a path to commercialization. In 2017, at the BIO convention in San Diego, Gurney had his first meeting with Shionogi executives, one of a dozen or so meetings he had at that convention with pharma companies, and Shionogi continued to follow Tetra’s progress through Phase 1 trials. Last May, Tetra was honored as one of 50 state companies to watch at the annual Michigan Celebrates Small Business event in Lansing, a program sponsored in part by the Michigan Economic Development Corp., the Edward Lowe Foundation and the Small Business Association of Michigan. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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CertifID LLC stops real estate scams in their tracks By Tom Henderson thenderson@crain.com

When the principals of Grand Rapids-based Sun Title Agency LLC got scammed out of $180,000 in a phony real estate deal cooked up by hackers, they were quickly able to trace where their money went, contacted banks who were unwittingly involved in the scam and got $140,000 of it back. And then they went a step further — they founded another company, CertifID LLC, to verify identities in real time on both the buy and sell side of electronic real-estate transactions. Are the buyers and sellers legit? Is the money real? Is it going where it is supposed to go? In 2005, lawyers Lawrence Duthler and Tom Cronkright, who went to Wayne State University’s law school together, started a real estate transaction and title company. Today, Sun Title is a prosperous business with seven offices in western Michigan. Duthler continues to manage the title business, while Cronkright devotes his time to CertifID as CEO. Since its founding in late 2017, the company has protected more than $1.2 billion in wire transfers. Early in 2018 it raised a seed funding round of $1 million, led by Grand Rapids-based Wakestream Ventures LLC, a funding arm of DeVos family office. And early this year it finished raising a follow-on round of $1.9 million, led by the Grand Rapids-based Grand Angels and joined by Wakestream and Ann Arbor Spark. The $100,000 from Spark came from winning a pitch contest at the first annual Michigan Angel Summit in Southfield on Nov. 12. The pitch contest capped a day of networking and educational programs for angel investors across the state. “We’re excited about where they are going,” said Tim Parker, the Grand Angels’ president. “They’re really scaling quickly.” “Tom has deep domain experience as an industry executive. Through his own experience, he identified a problem and went out and solved it,” said Mike DeVries, the chief investment officer at Wakestream. “The size of their potential market? It’s crazy how big it is. We’re pretty bullish on Tom. He’s a great founder and salesman.” “Tom has found a major pain point for a major industry,” said Tim Streit, a manager director at Grand Rapids-based Grand Ventures, which hasn’t invested in CertifID, yet, but is likely to do so if more funding is needed. “We’ve been monitoring their progress and hope to be supportive in future rounds.” “Fraud is a big deal in our environment. The issue of buyer and seller funds being diverted nefariously is such a big story,” said Michelle Valente Lee, an attorney at the Atlanta law firm of Morris, Manning & Martin LLP, one of CertifID’s customers. Georgia law requires that law firms manage the transfer of funds in real estate transaction, not title companies. Her company started with a pilot program with CertifID in December, then did a full rollout early this year at its four offices. “I’ve been impressed with the company. The program is simple and effective and

Need to know

Founders of Grand Rapids-based Sun Title Agency founded another company to protect real estate transactions from hacking and fraud J

J CertifID raised a seed funding round of $1 million in 2018 and a follow-on round of $1.9 million early this year J Company’s tech verifies the identity at the time of wire transfers of the individuals and financial institutions involved

comes with a $1 million bond. We hadn’t been hit with any fraud, yet, but it’s like Russian roulette. It’s only a matter of time. We feel more buttoned up, now,” she said. Lee said she first met with a CertifID representative last October at the big American Land Title Association convention in Los Angeles. “I went by their booth. I know some of our competitors were using them and wanted to learn more. A lot of real estate agents don’t use their company’s emails, because they’ll go from company to company. A lot of them

just have Gmail accounts, and Gmail isn’t as secure as company accounts. It didn’t take me long to say, ‘We need this,’” said Lee. Eric Burgoon is the chief lending officer at Grand Rapids-based Lake Michigan Credit Union, the largest credit union in the state with $4.35 billion in assets. A recent fraudulent wire transfer was enough for him to become a CertifID customer. “I’ve known Tom through his title business, and I’ve worked with him in the mortgage business for many years. He runs a good operation.

He’s an entrepreneur and a creative thinker. He brought this idea to us two years ago and I was intrigued,” he said. Intrigue turned to action about a year ago. A credit union customer was building a house in Florida, and it turned out the builder’s e-mail had been hacked. Burgoon’s customer asked him to wire $160,000 to the builder through what turned out to be a fictional title company. “By the time you catch it, that money is overseas,” said Burgoon. SEE CERTIFID, PAGE 18

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CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

Envoy brings small manufacturers’ wares to retailers across country By Tom Henderson thenderson@crain.com

As malls across the country shutter, the trend in retailing has moved to smaller, boutique stores. How do manufacturers connect with those smaller shops? Especially those who can’t afford to enlist an army of sales people to fan out across the country to alert store owners to the new fall or winter lines — let alone to follow up to take their orders? Well, like so many modern marketing and sales solutions, you go digital. Grand Rapids-based Envoy B2B, which was founded in 2011, provides a webbased platform for shoe and boot manufacturers and accessories companies to showcase their wares and promote their upcoming or seasonal offerings. Retailers can browse products and place their orders through Envoy. Envoy also has a large photo studio on site and can reduce the cost and headaches for smaller manufacturers of having their products photographed. Another service it offers is a periodic survey of 7,000 retailers nationwide to see what they want or need from their suppliers. “We say, ‘Here’s what your retailers want. Listen to you retailers and grow your brand,’” said CEO Jon Faber. Seattle-based See Kai Run is prime example of a smaller manufacturer who has benefited from Envoy’s platform. Helen Rockey is the CEO of the company, a maker of children’s footwear founded 12 years ago that has projected sales of about 1.3 million pairs of shoes this year. Nordstrom is her No. 1 customer, but she also sells to about 300 small, independent shoe stores around the country.

AGHELP FROM PAGE 10

“I thought to myself, ‘It’s 2011 and I can download an app that helps me find the coolest coffee shop or the trendiest place to eat dinner. But If I’m a farm worker, traveling around trying to earn enough money to make it through the winter, and trying to find resources to meet my basic needs, word of mouth is the only thing available.’ That’s when I made a promise to myself that I would do what I could to change that,” he said. Feliciano imagined a “Yelp for ag jobs” that would let workers know who was hiring, what they paid, and connect them to resources and information in the community, like where they could find a health clinic or how to get their kids enrolled in schools. Last year, in addition to gaining legal status as a corporation, AgHelp won a total of $203,000 in funding and services at a series of business-plan competitions across the country, giving it the money it needed to finish building a robust website, aghelpusa.com, which went live in December, and to launch a smart-

Need to know

Envoy B2B is a digital platform for shoe and accessory companies to showcase and sell their wares 

 Customers include Joules, Lems Footwear, Merrill, Ducati, Kodiak Boots and Original Footwear  Bootstrapped growth to start before raising equity funding of $300,000 in 2015

She said that Envoy’s digital platform has made it much easier to alert her customers to new products, eliminating the high cost of sales people making calls around the country. Rockey said she decided to turn to Envoy when she visited its booth at the big Outdoor Retailer show in Salt Lake City in 2015. She immediately understood the value proposition and has been a customer since. “It allows us to serve our customers as if we were a large company. Retailers have immediate access to ordering and our merchandising services. It’s speeded up our ability to service customers and reduces our paperwork and ordering errors. It’s really been a benefit for See Kai Run,” she said. Envoy has also replaced the big seasonal catalogs her company used to produce in the past. “We use Envoy as our catalog,” Rockey said. Avery Nystrom is wholesale account manager for Howler Brothers, an Austin-Texas-based outdoor apparel company that has used Envoy since March 2017. “Envoy has truly changed how we deal with the wholesale side of our business. We are now able to capture orders electronically, and shops and phone app in early March. Last March, AgHelp took the top $500 prize in the first-ever Traverse City Regional GreenLight Michigan Business Model Jorge Gonzalez: competition, Interesting that then won $7,500 they grew up as later that month farm workers. when it finished fourth in the statewide GreenLight competition in East Lansing. Then, AgHelp was one of five companies accepted into the first annual Iowa AgriTech Accelerator, a threemonth program that culminated in a Demo Day in October. Sadoc made the pitch and AgHelp won the event, which brought an investment of $40,000 and support services valued at $110,000. The company used the money it got from the accelerator to hire a web developer based in Querétaro, Mexico. Meanwhile, in September, Feliciano made his third pitch for cash at Start Garden, the incubator facility in Grand Rapids founded by Rick DeVos in 2012. Each month it holds what it bills as 5X5 Nights, where five entre-

reps can place orders on the site without our help, which ultimately generates more business. And the employees at Envoy are alway there to help when we need anything or if we ever want to see something new on the platform.” Envoy’s approximately 25 customers include a mix of larger and smaller manufacturers, including Joules, Lems Footwear, Merrill, Ducati, Kodiak Boots, Landau, OOFOS and Original Footwear. Six company co-founders make up Envoy’s management team. In addition to Faber, Chris Morris is the chief experience officer, Mark Johnson the chief marketing officer, Todd Slager the chief operating officer, Jeff Tow is chief design officer, and Brandon Merritt the president and chief technology officer.

Timing is everything When Envoy launched, the iPad was becoming a big deal and Faber and his co-founders thought there was an opportunity to provide digital advertising and marketing to apparel manufacturers. Faber was already in digital advertising, employed by WZZM Channel 13 in Grand Rapids to grow its online ad revenue. Faber and the other co-founders kept their day jobs and worked on Envoy at night and on weekends. “It was more like working two jobs all the time,” said Faber. They were content to grow the business slowly and finance its growth themselves instead of diluting their equity by taking on equity funding to grow faster. “We had a customer out of the gate, which gave us revenue out of the gate. We were able to fund growth out of revpreneurs pitch their companies for five minutes. The winner gets $5,000. Twice before, Feliciano had pitched. This time he won. The award included six months of free membership in Start Garden. “The third time was the charm,” said Jorge Gonzalez, Start Garden’s director, when asked about AgHelp. “There is only one winner at 5x5. You tell the others not to give up. Being an entrepreneur is getting knocked down and getting back up. That’s what Feliciano did. We got a sense right away at Start Garden that we needed to incubate him. It took him a long time to get his app built, but he kept at it. “It’s very interesting that they grew up as farm workers, that they’ve had the experience of not finding work, that they had hardships growing up, and now they are using technology to help other farm workers,” he said. “My opinion is Feliciano is going to be very successful.” In November, the hot streak continued. AgHelp won $25,000 at an agricultural accelerator program in Vermont, and in January, at the American Farm Bureau Federation’s Ag Innovation Challenge in New Orleans, AgHelp was named one of the four finalists and won $15,000.

The landing page of AgHelp. The site went live in December.

It takes a village Feliciano has had many mentors over the years, including Linda Chamberlain, who heads the Technology Commercialization Office at Grand Valley State University. In 2016 she connected him with a GVSU student to develop a prototype app and accepted him into a four-week customer discovery program. He also got advice from the Great Lakes AgTech Incubator in West Olive, which helped spread the word to local growers and support organizations.

“It has been very exciting to see all these different pieces come together to support a population that contributes so much to Michigan’s agricultural industry,” Feliciano said. Another influential adviser was Carl Erickson, founder and CEO of Grand Rapids-based Atomic Object LLC, considered one of the premier website and smart-app development companies in the state. Several years ago Feliciano reached out to him for advice on web and app development. Erickson, a member of the Grand

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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 // M A R C H 1 1 , 2 0 1 9

Jon Faber, CEO of Envoy.

Angels and something of a guru for startup businesses in western Michigan, told him he had come knocking on the wrong door. Atomic is good, he told him, but not cheap. AgHelp didn’t need the best — it needed functional and cheap. Once you have something, you can test your model. See if you can get enough growers and enough workers on your platform to make enough money to really be a business, Erickson said. If so, down the road, you can always beef up your website and improve your app. Feliciano found that cheaper developer in Mexico. Erickson also asked the managing partner of his Grand Rapids office, Mike Marsiglia,to mentor Feliciano, to help refine his go-to-market strategy and build a realistic budget. “Mike took the time out of his really busy schedule to sit down with us, on multiple occasions, to provide feedback and direction on what things to keep in mind as we start building out AgHelp, not just with functionality and design, but with a more comprehensive look at what we want AgHelp to be for our stakeholders, the community of users we’re serving, and the importance of stay-

ing true to creating something that creates positive social and economic impact as we scale,” said Feliciano. “We were really impressed with what we had read about them, and we came away with wanting to become a part of their family of clients, and we’ve set our sights on doing just that in the future.” “Theirs is a great story. They’re very coachable and they’re solving a big problem,” said Erickson, who is not yet an investor in the company, as Feliciano hasn’t yet needed to raise equity capital. “A lot of people would look at what Feliciano is doing and say that’s something for a nonprofit to do. He said, ‘No, a for-profit model will work.’ And they’ve found a way to validate their market. I feel very proud of the help we’ve given AgHelp without any return, except helping good guys do good work. It was the right decision to tell them not to hire us. What they got wasn’t as good as what Atomic Object would have built, but they didn’t need to spend the money till they knew they had a market.”

An avid early customer Michigan relies on more than 94,000 migrant farm workers to

hand-harvest more than 40 different crops, Feliciano said. It’s typical for the state’s farmers to lose millions in unharvested crops because of a shortage of workers, or to have to mow millions of pounds of asparagus that are rotting in the field. Heeren Brothers of Comstock Park, near Grand Rapids, turned to AgHelp to ease some of those challenges. Heeren has a large apple orchard, a packing facility that serves apple growers from around the state, a produce distribution operation and a warehouse in Iowa. Liza Alvarez, the director of human resources, said the company employs about 130 year round and adds 20 seasonal migrant workers for the two-month harvesting season and another 30 for the sixmonth packing and distribution season in the late summer, fall and early winter. Until two years ago, she had been an H.R. manager in the automotive and plastics industries, a job made easier by relatively high wages, benefits and steady source of workers. She said farming presented a host of challenges. “I have less to work with when I’m hiring. It’s low pay, hard work, no benefits and the job ends,” she said. Some migrant work-

ers return regularly, others don’t. The operation is often left with fewer workers than needed on a daily basis. “You don’t know when the migrants are coming, or if they will be back.” She heard about AgHelp last year. “I signed up for a beta test. I needed something that would communicate with migrant workers. It was too late in the season to help us, but I could see that the concept is great. They’ve got their app up and running now, and it’s going to be a good resource.” Alvarez praised Feliciano’s ground-based marketing, buttressed by his first-hand familiarity with migrant workers and their culture. “They’re marketing to the Hispanic community, to the Hispanic chamber, to support services.” Alvarez said the fact that AgHelp is a digital service won’t be an impediment to reaching migrants. Everyone is on smartphones and social media, and if the parents aren’t, their kids are. “We add a second shift for packing season and I'm going to be absolutely depending on this app for my second shift,” said Alvarez. AgHelp began signing up growers, service agencies and migrant workers last year. So far, Feliciano says he has

enue,” said Faber. After slow growth, the company took off in 2015. It raised its first equity funding of $300,000, hired its first full-time software developer, and moved into its 10,000-square-foot headquarters and photography studio downtown, overlooking the Grand River. “I think Envoy is a great story,” said Carl Erickson, a member of the Grand Angels, an investment group based in Grand Rapids, and the founder and CEO of Atomic Object LLC, a website and mobile app development company. He said he first heard about Envoy early in 2015, soon before it raised its capital round, at a meeting of First Event, an organization that promotes small businesses in Grand Rapids. After the keynote speaker was done, recounted Erickson, “Jon’s brother came up to me and said, ‘My brother could really use some guidance. Would you meet with him?’ I’m always happy to do that, talk to smart young entrepreneurs. We met, and we hit it off.” Erickson soon joined Envoy’s advisory board and gave him advice on software development, business development and employee equity. More important, he was an investor in that first round (a personal investment and not a Grand Angels investment). Another investor was Adtegrity, a digital-advertising company in Grand Rapids. “It’s really exciting what they’ve done,” said Erickson. “It took them a little while to dial in their model. Originally they were looking to land whales, very large clients. But it’s hard to land them. They eventually identified their market as smaller brands that are big enough to need technology, (but) too big to do everything by hand. “Looking at what they wanted to do, you’d say, ‘Oh, you’re going to have to raise $1 million before you can launch that platform.’ But they didn’t go that route. They bootstrapped it. They really refined their approach to sales and marketing, and are really poised to do well.” Faber says the company has been growing recently at 25-30 percent a year and expects revenue this year of about $3.2 million. signed up 140 growers across the U.S. and more than 40 service agencies that provide help to migrants, including the Western Kentucky Regional Migrant Education Program, the University of North Georgia College Assistance Migrant Program, Iowa Workforce Development, the U.S. Occupational Safety & Health Administration and the Consulate of Mexico in Tucson. Last year, AgHelp got about 1,100 migrant workers to sign up to be included when things went live. The service is free for service providers and workers. Growers can sign on for as little as $399, which allows them to advertise and accept applications for 10 positions for six months; the fee rises through a variety of levels to $3,499 for 200 positions for 12 months. “Our goal for the first year is to reach $300,000 in revenue,” said Feliciano. “More importantly, we’re eager to see the social and economic impact our platform will have on farmworkers, growers, and agencies. We’ve only just begun. We have long term goals to get in into Canada, Australia and other markets.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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

CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

Grand Angels’ third investment fund could top out at $25 million By Tom Henderson thenderson@crain.com

Kitch Drutchas Wagner Valitutti & Sherbrook

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The Grand Rapids-based Grand Angels, the state’s most active angel-investment group, held a first close last week on its third investment fund, the Grand Angels Venture Fund III, which could top out as high as $25 million. Paul D’Amato, managing director of venture funds for the Grand Angels, declined to disclose the size of that first close. “I’d like to finish raising the fund tomorrow, but we’re shooting for (this) summer,” said D’Amato. The group raised its first limited-partner fund of almost $2 million in 2011 and a second fund of $7 million in 2015. Both are fully invested. D’Amato said the first fund had 18 portfolio companies and the second fund 15. He said the venture funds tend to invest in later stage companies than a typical angel investment. He said only about 10 percent of the new fund will go to seed-stage companies, with about a third going to Series A investment rounds and the rest to B, C or D rounds. He said investments will generally range from $100,000 to $1.5 million, and generally in three industry sectors — life sciences, advanced manufacturing and software. Members of the Grand Angels will be free to make coinvestments in deals they like with the investments made by the new fund. Two weeks ago, the Grand Angels held the first meeting of a new group it is affiliated with in Detroit, the Woodward Angels, a meeting organized in partnership with Dan Gilbert at the Shinola Hotel. D’Amato said the new fund will actively seek investments in Southeastern Michigan. “We want to grow the Detroit group carefully and make sure they help us

CERTIFID FROM PAGE 15

Legally, it was the customer’s liability, but Burgoon said as a matter of protecting its reputation, the credit union ate the loss. To avoid future losses, it turned to Cronkright. “We were easy pickings for Tom. We didn’t need another sales pitch. You don’t think it’s going to happen to you, and then it does.” Burgoon says the credit now uses CertifID for all mortgage and builder wire transfers and is considering using it for all transactions of more than $10,000.

A blindsiding event

FISHBECK , THOMPSON, CARR & HUBER engineers | scientists | architects | constructors

CertifID grew out of what Cronkright calls “a blindsiding event” in 2015. Sun Title was handling the sale of a gas station on the east side of Grand Rapids. The buyer, who looked to be someone in San Francisco, sent a cashier’s check for $185,000 to Sun Title, of which it was to keep $5,000 for services rendered and forward $180,000 on to the seller. Two days after the money was wired to what they thought was the seller, the cashier’s check bounced. “We called

Tim Parker, president, Grand Angels. TOM HENDERSON/CRAIN’S DETROIT BUSINESS

with due diligence and deal flow,” said Tim Parker, the president of the Grand Angels. About 100 attended that first informational meeting. Parker said he hopes to have 20 high-net-worth individuals signed on as formal members of the Woodward Angels when a second meeting is held in about two months, at a location yet to be determined. “I think we’ll be able to grow it pretty quickly,” he said. The cost to join the Woodward Angels is $2,000, the same as it is for the Grand Angels or the Ka-Zoo Angels, a group formed in 2017 as an affiliate of Grand Angels Holding Co. LLC, the holding company for the Grand Angels. The three affiliated angel groups as well as a fourth angel group elsewhere in the state that Parker hopes to announce in the coming months will also be marketed under the DBA Michigan Capital Network. The second Wednesday of each month, the Grand Angels hold a pitch event in the morning for two or three entrepreneurs seeking funding, then

they drive to Kalamazoo for an afternoon pitch. They’ll make arrangements to pitch in Detroit on a separate day. The fund model has grown popular among the state’s angel investors. The Ann Arbor-based Michigan Angels have raised three $2 million funds; in July, Grosse Pointe Farms-based Belle Michigan, a group of women angel investors, announced it was raising a $20 million fund, the Belle Michigan Impact Fund, to invest in early stage companies owned by women. The Grand Angels were founded in 2004. Since then, either through funds or by individuals, about $30 million has been invested in about 45 companies. “But the key thing is that $30 million has leveraged hundreds of millions of dollars in co-investments, most of it from out of state,” said D’Amato. “We’ve got a deal pending now that will bring in another $40 million.”

the guy in San Francisco and said, ‘We’re having a problem with your check.’ And he said, ‘You have no idea. The FBI comes to my house every month.’ We were the sixth title company to call him and tell him there was a problem with one of his checks.” Meanwhile, the money Sun Title thought they had wired to the seller ended up in a bank in New York and was quickly disbursed in smaller volumes to a handful of co-conspirators. “They moved the smaller packets of money around the country,” said Cronkright. Cronkright and Duthler started filing civil suits against various banks, some of whom froze accounts. Eventually, they recovered $140,000. It turned out to be what Cronkright describes as a “complex ruse.” After the scam, Cronkright got a call from a U.S. attorney in Tampa who gave him more details about the fraud. It was like a plot from a bad novel, involving a cyber syndicate in Texas that was using the money to buy aluminum ingots, a Nigerian gang leader, and a jailed money mule who had launched another fraud from jail to finance a hit on a witness. Sun Title had a near miss on another fraud in the fall of 2016 that led to the decision to launch CertifID. The real estate agent for property in Grand

Haven that Sun was handling had his email hacked. Soon after, an email that appeared to be from Sun sent instructions to a credit union on where to wire money. “The branch manager at the credit union noticed some small glitch and called us to verify that the email was legitimate,” said Cronkright. It was not. “We immediately began looking for a technology to add a layer of security, and it didn’t exist.” He had a prototype built for a software-as-a-service web-based platform, shared it with some trusted customers and formed a company in February 2017. “We originally used outside contractors, but now we have our own team of engineers,” said Cronkright. The company, which has applied for a patent, verifies the identity at the time of wire transfers of the individuals involved and of the financial institutions. It has nine employees. Cronkright said the company is approaching profitability. He said he is still focusing exclusively on real estate but will be branching out soon. “There are three or four other verticals we need to be in, and that can really scale the business.”

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

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AXT Company Salma Starlgn hasIte volo officte mpossitatint volut fugiaec tibus, sumqui temposa ndianti onserrumende se et doles doles cus, quaeceres erro quia m volorehendam aut molorate nem cus net aperibus dicta sed ligenda nditis endantiae quos doluptur sitatur eproviduste volende riatum verum expel ipicatenis doluptatiunt volupta quam, i auda ommolup tatur? Quiaeper quamus et pa cus in repudionem aut velluptam videlic ieniet hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro

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Franki Henry hasIte TING ACCOUN volo officte mpossitatint volut Davis Inc. fugiaec tibus, sumqui Davis Design temposa ndianti Paul Jones hasIte onserrumende se et Frank Henry hasIte officte volo doles dolestint cus, quaeceres erro volo officte volut mpossita quia volorehendam aut mpossitatint volut fugiaec tibus, moloratem cus net aperibus fugiaec tibus, sumqui temposa dicta nem ligenda nditis sumqui temposa ndianti endantiaesed quos et doles doles ndianti sedoluptur ende onserrum doles sitatur eproviduste volende onserrumende se et doles cus, quaeceres erro quia quia erro riatum verum expel ipicatenis s m quaecere cus, volorehendam aut molorate m doluptatiunt voluptadicta quam, nem volorehendam aut molorate cus net aperibus nem ommolup tatur? Quiaeperi auda cus net aperibus dicta endantiaesed ligenda nditis sed pa cus in ligenda nditis endantiae sitatur quos doluptur repudionem sitatur riatum doluptur quos volende eprovidustequamus et aut eproviduste volende riatum ipicatenis verum expel velluptam videlic verum expel ipicatenis volupta quam, doluptatiunt ieniet Quiaeper hariam vero i auda doluptatiunt volupta quam, ommolup tatur? i auda cus, audit quamus et ommolup tatur? Quiaeper pa cus in repudionem quamus et pa cus in repudionem videlic ieniet velluptam aut aut velluptam videlic ieniet vero cus, audit hariam ACCOUNTING r hariam vero cus, audit optatquatem expla doluptatu r doluptatu expla tem facepro optatqua autatqui dolori ut Jon & Jon Co. autatqui dolori ut facepro

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Salma Starlgn hasIte volo officte Agency Russel mpossitatint volut m Thompso Paula fugiaec tibus, sumqui officte volo ndianti hasIte temposa tint volutse et mpossita onserrumende tibus, cus, quaeceres erro fugiaec doles doles temposa sumqui quia volorehendam aut ndianti moloratem cus net aperibus doles doles se etnditis ende onserrum dicta nem ligenda erro quia quaeceres quos cus, endantiaesed doluptur m dam aut molorate volorehen sitatur eproviduste volende nem dicta aperibus net verum cus riatum expel ipicatenis sed endantiae nditisvolupta ligenda doluptatiunt quam, sitatur doluptur quos ommolup tatur? Quiaeperi auda riatum volende te eprovidus pa cus in repudionem quamus et expel ipicatenis verum aut velluptam videlic ieniet quam, volupta untcus, doluptati hariam vero audit i auda Quiaeper ommolup tatur? optatquatem expla doluptatur em quamus et repudion pa cus indolori autatqui ut facepro aut velluptam videlic ieniet hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro INSURANCE

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Carol Strong hasIte CE Tina Bond hasIte Michael Banks hasIte JennINSURAN Stone hasIte Bella Jones hasIte voloCONSTRU officte CTION Singletree LLP volo officte volo officte volo officte volo officte Calla LLP mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut Marble Agency Michael Banks hasIte fugiaec tibus, Up fugiaec tibus, fugiaec tibus, sumqui fugiaec tibus, sumqui fugiaec tibus, sumqui Ground Jones hasIte Bella volo officte Jon & Jon Co. 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Gilda’s Club acquires Lake House cancer support nonprofit By Sherri Welch swelch@crain.com

Gilda’s Club Metro Detroit has acquired The Lake House — A Gathering Place For Those Touched by Cancer, a St. Clair Shores nonprofit launched eight years ago by former board members and employees of Gilda’s Club. The Lake House struggled to get financial traction, said Laura Varon Brown, executive director and CEO of Gilda’s Club. Merging the two organizations ensures the east-side community will continue to receive the cancer support, educational and social programs The Lake House offered, she said. And gaining a second location in the region aligns with Gilda’s Club’s strategic plan. “A big focus of our strategic plan is to be sure we are expanding our footprint to reach as many families as we can with our free services for families facing cancer,” including support, wellness and educational programs, Brown said. “We’re honored that (The Lake House) trusts us with what they started, and we’ll make sure we do a good job with it. ... continuing solid programing, even a wider, open door and just listening to that community and what they need.” The deal with Gilda’s really was the only option for the long-term sustainability of The Lake House programs, said Madeline Bialecki, executive director of The Lake House. “There were egos involved ... but in the end, the board voted unanimously in favor of the deal,” which brings the relationship between the two nonprofits full circle, she said. Originally planned as an east-side affiliate of Gilda’s, The Lake House launched as an independent nonprofit in May 2011. Its founders had approached Gilda’s in 2007 about establishing an affiliate and begun joint fundraising efforts. But the effort languished after about 18 months, leading a handful of Gilda’s former board members and employees to depart and launch The Lake House. “We had a very rough first three years. I was the fourth executive director in three years,” a fact that led Michael Radner, brother of the late actress Gilda Radner and namesake of Gilda's Club, to break from The Lake House, Bialecki said. Radner had aligned with The Lake House after cutting ties with Gilda’s over some management decisions. The executive turnover also made it tough to establish the nonprofit’s name in the medical community, something important in getting referrals and doctors to speak at events the nonprofit hosted. That’s something Bialecki said she was only able to do over the last year or so. “There were a lot of fences to be mended after the first three years,” Bialecki said. Perhaps the most important among those efforts was mending fences with Gilda’s Club. Given the early relationship between the two nonprofits, they have the same mission and are doing the same type of work within 15 or so miles of each other, Bialecki said. Becoming part of Gilda’s opens up opportunities, she said. “They’ve been around for 25 years — their reputation, name, experience, resources both locally and nationally ... will strengthen our program and enable us to offer our members so much more.”

GILDA’S CLUB METRO DETROIT

Laura Varon Brown (left), executive director and CEO of Royak Oak-based Gilda’s Club Metro Detroit, is ready to work with Madeline Bialecki, executive director of The Lake House.

Gilda’s has a strong focus on support groups, and those groups are facilitated by licensed professionals, Bialecki said. But because of its financial struggles, The Lake House didn’t have the resources to offer those programs or the family programs offered by Gilda’s. The merger “will expand our services and create more opportunities for our members to get the services they want and need,” she said. “It was always the intent of our founders that we would be part of Gilda’s, and now we are.” The Lake House operated on a budget of about $150,000, ending at close to break-even most years.

It reported total revenue of just less than $143,000 in 2017 and a loss of just more than $2,000, according to financial results filed with the state. It did a little better in 2018 because it received new grants, Bialecki said. “But I was not able to build up our donor base to the level that it needed to be to serve our members,” she said. Last year, The Lake House served 508 people, reflecting an additional 125 who came for programs in 2018. “We’ve been growing explosively. ... It just wasn’t financially sustainable for us on our own,” she said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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

Farmers Restaurant closes after property sale By Kirk Pinho kpinho@crain.com

Farmers Restaurant Inc., a longtime Eastern Market staple, has closed following the sale of its building to landlord Sanford Nelson. Nelson told Crain’s on Wednesday morning that he finalized the purchase of four buildings in the city’s food district on Tuesday for an undisclosed price. He said he plans renovations of all four properties. He said he had asked the owners of Farmers Restaurant to stay open. “I have been dining there for a while. But they wanted to close. We tried to talk them into staying on through renovations, but they just weren’t interested. They wanted to retire,” said Nelson, son of serial entrepreneur Linden Nelson. Jimmy Fermanis, son of owner Gavrill Fermanis, declined comment. “We have no comment. The owners have retired.” A sign in the restaurant window last week said: “Thank you Detroit & Eastern Market for the many wonderful years of business. We have retired! God bless everyone!” Fermanis owned the properties totaling 35,000 square feet for more than a decade, according to public records. The purchase brings Nelson's Eastern Market portfolio to about 20 buildings and 250,000 square feet, including the building that houses Supino Pizzeria. The buildings he bought last week

Need to know

JJSanford Nelson closed on purchase of 35,000 square feet of space across four buildings JJPlans renovations of all four properties JJOther tenants like Adam's Meat LLC and Cultivation Station Inc. moved or closed last year

are: J 1468 Adelaide St., which is 22,000 square feet. J 2510 Market St., which is 3,000 square feet, to be renovated for commercial space. J 2504 Market St., which is 5,000 square feet, to be renovated for firstfloor commercial space and second-floor creative office or affordable artist studio space. J 1473 Winder St., which is 5,000 square feet. A full renovation is expected for retailer tiemaker Well Done Goods by Cyberoptix, according to a press release. The two tenants in the buildings are Gabriel Import Co. and Eastern Market Antiques. “Gabriel Import is staying and Eastern Market Antiques is staying for the time being,” Nelson said Wednesday morning. “The building needs a lot of work. There is no fire safety system in the building or anything like that, so we are working with the vendors in there to find new space in the market. They are going to have plenty of time.” He said he hasn’t yet determined his overall renovation budget for the

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KIRK PINHO/CRAIN’S DETROIT BUSINESS

Sanford Nelson closed on the purchase of 35,000 square feet of space across four Eastern Market buildings on Tuesday.

properties. In addition to Gabriel Import and Eastern Market Antiques, Well Done Goods by Cyperoptix will be moving from about 4,000 square feet in Gratiot Avenue space that Nelson owns into 1473 Winder. “After just over 16 years at our location on Gratiot, we are really excited

for the opportunity to move into larger space that will better accommodate both our manufacturing facility and retail offerings along with cafe space for our many events,” Bethany Shorb, founder and creative director of Well Done Goods, said in a press release. “Now visitors will be able to see the quality we put into the many

fantastic products we manufacture daily and ship internationally.” Nelson said other tenants like Adam’s Meat LLC and Cultivation Station Inc. moved or closed last year before he purchased the properties. Nelson is part of a new corps of landlords swooping into Eastern Market and buying property in the coun-

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Eastern Market firms up plans for first food accelerator By Sherri Welch swelch@crain.com

Building on the incubator space it offers to food startups, Eastern Market Corp. is developing new food accelerator space in buildings developer ASH NYC acquired last June. The market’s nonprofit operator has leased 15,000 square feet across five of the seven buildings ASH bought last year along Adelaide Street, between Orleans Street to the east and Riopelle Street to the west, to create what it’s calling in the short term the “Metro Accelerator.” It has letters of intent from five small food companies that started out in its Detroit Kitchen Connect incubator or sell their products at Eastern Market and are ramping up production as they grow, Eastern Market President Dan Carmody said. Carmody declined to name the five companies but said the subleases should be finalized in the coming month, with lease rates in the range of $7-$10 per square foot. The seven to eight available spaces range from 1,500 to 2,500 square feet. ASH isn’t commenting on plans for the other 90,000 square feet of space left in the two larger buildings that are part of the development. But in an email, founding partner and CEO Ari Heckman said, “We are excited to collaborate with Eastern Market and support their vision of

creating a diverse, food-centric community anchor for the neighborhood and for Detroit.” Eastern Market is finalizing its cost estimates but expects to begin $3 million in exterior work and buildout to provide turn-key spaces with electricity and water for the food companies, Carmody said. Thomas Roberts Architect LLC in Wyandotte is serving as architect. When the accelerator space shells are complete, companies can bring in equipment and start production, Carmody said. The goal is to have the first tenants move in by August. “The hope is that in three to five years, they’d outgrow these spaces, move into even larger spaces and the spaces would be freed up for other new (food companies),” Carmody said. There are between 400 and 500 active food entrepreneurs trying to bring food products to market or expand production in Detroit today, he said. A few companies such as McClure’s Pickles have grown past their startup phase into a sustainable business. “We believe if we work it, we can get others to scale,” Carmody said, creating new jobs and bolstering the city’s emerging food economy. While Eastern Market is referring to the new space as the Metro Accel-

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Eastern Market is developing a food accelerator in space leased from ASH NYC, which bought this mid-rise building last year.

erator, the name is subject to change, he said. “There are naming rights available. ... we had the DTE Energy Plaza outside of Shed 5 ... because this is off the market square, we would entertain that.” The new accelerator space will build on Feast Detroit, a co-packing operation launched in fall 2017 in a former Garden Fresh building in Inkster that was sold to Eastern Market and then leased by three small food

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Other tenants such as Adam’s Meat LLC and Cultivation Station Inc. moved or closed last year before the purchase.

try’s oldest food district. Others include Detroit developers and economic development professionals Roger Basmajian and George Jackson and New York City-based developer ASH NYC, replacing the street-level business operators in Eastern Market that traditionally owned their own properties (and sometimes others). According to Dan Carmody, president of Eastern Market Corp., some existing businesses have expressed concerns about rent increases as the new landlord crop pours money into improving the district’s older buildings. Part of that concern arises because the space has been comparatively inexpensive for decades, Carmody said in October. “The previous landlords came up in an age where having a warm body and somebody paying any kind of rent was an advantage over having vacant space,” he said. Deadline Detroit reported in December that some commercial and residential tenants learned of pending 150 percent rent increases last sum-

mer. That caused some to flee. Nelson said Wednesday that rents in his new properties will be “market rate” and has previously said that he plans on carving out affordable space for artists and food users as his overall vision for his portfolio progresses. “What I can say, is that satisfied tenants who see a future with us is critically important, and we are committed to working with tenants on a case by case basis to meet their individual needs,” he said in an email. “The majority of space in these buildings are vacant, and once renovated, the new and improved spaces will be market rate.” The listing price for the four-building portfolio was $6.5 million, according to marketing materials by Southfield-based Farbman Group. Southfield-based Signature Associates Inc. represented Nelson’s Detroit-based Firm Real Estate LLC in the transaction.

WHAT MICHIGAN COMPANIES CAN DO TODAY TO PREPARE FOR HOW WE WILL WORK IN THE FUTURE

Industry 4.0, workspace transformation, IoT, the war for talent. We all read the headlines about what’s possible in 5, 10 or 15 years, but what investments should companies be making today - in processes, technology and people - to innovate and leap ahead? Hear from local business leaders about the investments leading Michigan companies are making right now, in 2019, to compete for years to come. FEATURED SPEAKERS INCLUDE: • Andy Storm, President & CEO, Eckhart Inc. • Matt Elliott, Michigan Market President and Region Executive, Bank of America Merrill Lynch • Michael Cicco, President and CEO, FANUC America Corp. • Spencer Gracias, CEO, Stefanini SPONSORED BY:

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

SEPTEMBE

S P EC I A L REPORT

WHO’S 40 NEXT? 40 under

Since 1991, Crain's Detroit Business has gathered They’re builders. 40 of the community's overachievers for a special Their raw materials may be steel and conc rete, or powsalute. Past winners have started companies, er cables, or sc rap metal. found success at a young age, established Some use spre adsheets, or se nsitive negotia businesses and made nonprofits stronger. tio

NESS

companies to handle their production and provide contracted production services to other small food companies. The new Metro Accelerator space in Eastern Market will provide space for companies looking to do their own production rather than contracting it out to a co-packer like Detroit Feast, Carmody said. A project to develop additional food accelerator space in a 104,000-square-foot former Water Board building at 3500 Riopelle St. in Eastern Market has been on the table for the past couple of years but has not yet begun.

Detroit-based real estate company Ventra Group LLC, run by former Detroit Economic Growth Corp. head George Jackson, has teamed up with Ottawa-based developer Halcor Group on the $20 million-$22 million project that would include restaurants, accelerator and office space. “We’re waiting for the developer to begin the project,” which is expected to take about a year to complete once started, Carmody said. “We’re hopeful it would get underway this year.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

ns, or simple sweat. Th KNOW SOMEONE WHO FITS THE BILL? ey’re building the actual buildings that will Submit a nomination today by visiting define Detroit’ s skyline for crainsdetroit.com/nominate decades to co me. They’re building thei r own businesses, or bu ilding up the businesses th ey’ve been hired to lead. They’re building dura ble, supportive communiti es. And as they put peop le back to 2019 work, get them into homes, and help the next generation grow and thrive, they’re buildin g metro NOMINATIONS CLOSE APRIL 22 Detroit’s futu re. PUBLISH DATE: SEPT. 2 We think you should know who they are. Read their stories startin g on Page 8. crainsdetro

it.com

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CALENDAR THURSDAY, MARCH 14 The Road To Opportunity Tour: Governor Whitmer’s Address To The Detroit Business Community. 11:15 a.m.-12:45 p.m. Detroit Regional Chamber. Michigan Gov. Gretchen Whitmer talks with the business community a week after her first

SPOTLIGHT state budget proposal to the Michigan Legislature. Following her address, Whitmer will have a one-onone conversation with Sandy Baruah, president and CEO of the chamber, and participate in an audience Q&A. MGM Grand Detroit. $75 members. $150 nonmembers. Contact: Marianne Bogard, phone: (313) 596-0479.

UPCOMING EVENTS Social Media For Business Growth. 9-11:30 A.M. March 20. Oakland County One-Stop Shop Business Center. An overview for using LinkedIn, YouTube, Facebook, Instagram and Twitter to grow any business. Topics include: three things to do to

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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. FINANCIAL SERVICES

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NONPROFITS

CIBC Private Wealth Management

KORTX

Area Agency on Aging 1-B

Marketing technology company KORTX has promoted Eric Lee to Managing Partner, Operations, where he will be responsible for integrating functions across the organization. Eric’s ability to bridge business initiatives and technology has been essential in facilitating growth at KORTX, and this appointment to Managing Partner, Operations will grant the authority and visibility to further company-wide innovation and collaboration.

Area Agency on Aging 1-B welcomes AnnaGloria McCormick, MPA, as our new chief integration officer. She will oversee Aging and Adult Services programs, which include senior nutrition programs, in-home care services, and adult day services. McCormick is experienced in managed care plans for dualeligible populations with special needs and in federal quality improvement initiatives and reporting.

HEALTH CARE

Plante Moran Cindi Raymond has joined Plante Moran as a principal in its healthcare strategy and operations practice. In this role, she’ll serve clients nationally as she guides them through the changing healthcare landscape. She’ll focus on process and operational improvement, PDPM readiness and strategic business planning. Raymond is known for her acumen in leading and shaping the future of senior care and living in both the post-acute and senior housing environments.

LEGAL

Panagos Kennedy Linda Kennedy joins Bill Panagos in the Panagos Kennedy law firm, which specializes in IP Business & Technology Law. She brings 20 years of experience from the aerospace & defense and automotive industries. She advises on matters relating to intellectual property, especially patent and trademark licenses, litigation, opinions and global portfolio management. Kennedy also counsels clients on best practices for preserving trade secrets and managing technical data rights in government contracts.

MARKETING / TECH / ANALYTICS

KORTX Marketing technology company KORTX has promoted Chris Rowell to President, Sales, where he will be responsible for further expanding the company’s national footprint. Chris exceeded every expectation in his previous role as VP of Business Development, and will be building out a high-performance sales team and running the company’s most strategic accounts in his new role.

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

Also new to AAA 1-B is Renee LaVigne, LMSW, who serves as our director of clinical operations, overseeing contract compliance and quality performance. She has more than two decades of clinical experience, primarily in the behavioral health space.

NEW GIG? Preserve your career change for years to come.

Plaques • Crystal keepsakes Frames • Other Promotional Items

C O N TAC T

Stacey Gray is a portfolio manager with more than 25 years of industry experience. In this role, she is responsible for managing investment portfolios for institutional and high net worth clients.

Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569

find Success on each platform; how to use status updates that gain attention; ways to manage priorities; how to make posting simpler and the fastest way to grow and audience. Oakland County Executive Office Building Conference Center. $40. Phone: (248) 858-0783; email: smallbusiness@oakgov.com

DEALS & DETAILS MERGERS & ACQUISITIONS  Wheaton Van Lines Inc., Indianapolis, Ind., a moving and storage company, has acquired Stevens Worldwide Van Lines, Saginaw, a moving company, bringing the number of companies in the Wheaton group to four: Wheaton World Wide Moving, Bekins Van Lines Inc., Clark & Reid Company Inc. and Stevens Worldwide Van Lines. The Stevens family will continue to own and operate Stevens International Forwarding and Focused Logistics, and their three local agencies will continue to be agents of the Stevens Worldwide Van Lines brand in Saginaw, Toledo and Cleveland, Ohio. Websites: wheatonworldwide.com, stevensworldwide.com

Troy chamber CEO to join MVCA as new leader

Ara Topouzian has been hired as the Ann Arbor-based Michigan Venture Capital Association’s new executive director. Topouzian will assume the position March 25, the association announced last week. He replaces Maureen Miller Brosnan, who left the Topouzian organization at the end of 2018 to pursue other opportunities. Topouzian joins the MVCA after nearly six years as president and CEO of the Troy Chamber of Commerce. Previously, he was the economic development director for the city of Novi. “I’ve long admired the strategic initiatives developed by the MVCA, and I’m honored to be joining the organization,” Topouzian said in a news release. “MVCA has helped position Michigan’s entrepreneurial and investment community for success, and I’m excited to be a part of extending the organization’s vision as it continues to grow.”

CONTRACTS  Taubman Centers Inc., Bloomfield Hills, a real estate investment trust company, has agreements to sell 50 percent of Taubman Asia’s interests in three Asia-based shopping centers to funds managed by The Blackstone Group L.P., New York, N.Y., a global investment firm. Blackstone will be making the investment through its Asia Core+ real estate investment unit. Taubman will remain the partner responsible for the joint management of the three shopping centers and retain the following ownership interests: 17.15 percent in Starfield Hanam, Hanam, South Korea; 25 percent in CityOn.Xi’an, Xi’an, China; and 24.5 percent in CityOn. Zhengzhou, Zhengzhou, China. Websites: blackstone.com  Oakland University. Rochester, has named Brogan & Partners Media Agency, Birmingham, a marketing agency, as its agency of record for consulting, planning, buying and stewardship. Websites: oakland.edu, brogan.com  Qualitech, Bingham Farms, a technology and software re-seller, has installed its hosted VOIP phone system and cloud-managed network infrastructure at The Ride, Brighton, a fitness center. Websites: qualitech.net  LIFT — Lightweight Innovations For Tomorrow, Detroit, a research institute, has had its agreement extended for a year with the Department of Defense while negotiations are under way for a new long-term partnership for development and deployment of advanced lightweight material manufacturing technologies. Website: lift.technology

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Jane Goodman

Craig Conrad

Ad agency Doner hires leadership

Southfield-based Doner is looking to strengthen its team with a new executive hire and a promotion. Jane Goodman, 44, is the ad agency’s new chief strategy officer. She replaces CSO James Ward, who became president of McCann Worldgroup’s Detroit office. Doner also promoted Craig Conrad, 47, to president of its Detroit office from his previous role as chief marketing officer. He joined Doner as executive vice president and brand leader on Chrysler and Fiat accounts in 2011. The appointments were effective last Monday, according to a news release.

Angela Hospice names new leader

Livonia-based Angela Hospice has promoted its executive director to president and CEO. Marti Coplai, who has been with the nonprofit since 2015, took on the role last March 1, which was the last day at the helm for Margot Parr, according to a news release. Parr retired after taking the leadership job in 2015. Coplai, 57, has 15 years of experiCoplai ence in senior living and end-of-life care. In her new role, she will oversee the nonprofit’s operations, including programs for adults, children and infants, as well as community outreach and educational programs.

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Advertising Section

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

JOB FRONT

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GETTY IMAGES/ISTOCKPHOTO

DRAIN FROM PAGE 3

Comparatively, the rate is 3.2 out of 100 leaving Illinois, 3.3 out of 100 leaving Arizona, 3 out of 100 leaving Massachusetts and 2.5 out of 100 leaving Ohio. In fact, metro Detroit is the leader at retaining educated talent in the nation, according to The Brookings Institution data reported by CityLab in 2016. Metro Detroit retained 77.7 percent of its college graduates, ahead of metropolitan Houston, New York, Seattle, Atlanta, Dallas, etc. The numbers drop when you account for the entire state (it wasn’t uncommon for a west Michigan resident to head to Chicago for grad school, as several from my alma mater, Grand Valley State University, did). But it’s not staggering. Michigan loses far more 55-and-older retirees every year to Arizona and Florida alone than it does college-educated residents moving anywhere else. The aptly named HUGE incentive would allow the eligible graduate to pay no Michigan income tax during the first year after acceptance into the program. In the following year, the graduate would pay 1 percent income tax, 3 percent the following year, 3 percent the year after that and 4 percent in the final year of the incentive. More than 115,000 people in Michigan graduated with an associate, bachelor’s, master’s or doctoral degree in 2017. The plan doesn’t call for proof of an out-of-state job opportunity to qualify. “You must be a Michigan resident, and you must file a Michigan tax return. It’s that simple,” Cleveland wrote in Crain’s. So the program could, theoretically, subsidize more than 106,500 graduates to prevent another 8,500 from leaving the state for job opportunities elsewhere each year. Or, if these graduates all made $50,000 — just south of the median annual income for all Michiganders — over the five years of the program, the state would forgo $575 million in income tax to keep those 8,500 people from leaving. That’s about $67,647 per job. Now that’s obviously pushing the

program to the extreme, but it shows the point. The HUGE Incentive is indeed huge, and inefficient. The states with the best economies lose talent, too, but they bring in lots more. Washington state, for instance, had a net migration rate of nearly 1, according to Frey’s data. In other words, for every college-educated resident who leaves, it attracts two. Colorado and North Carolina have net migration rates of 1.02 and 0.81, respectively. Michigan, by comparison, has a net migration rate of -0.34, meaning for every two people that migrate in, 2.3 migrate out. They just happen to mostly be retirees. An economic analogy applies here. It’s more expensive and less efficient to try to keep the cars inside the parking garage than it is to incentive all the cars outside the parking garage to enter. Michigan can look to the states with even greater outflow migration and offer debt-reducing income tax rebates to them and build Michigan’s population instead of maintaining it. More than 523,000 people migrated out of California last year. More than 261,000 left Arizona. Nearly 230,000 left Colorado and 280,000 left Georgia. There’s literally “brain drain” everywhere you look, no matter how hot the local economy may be. Michigan needs more college graduates. There are dozens of ways to accomplish this goal. Improving K-12 education and increasing college access is a worthy attempt to grow our own. But they may leave. Some of them inevitably will. Improving mass transit and creating “cooler,” more livable downtowns is part of the equation too. The Latin phrase auribus teneo lupum translates to “holding a wolf by the ears” and it is used to describe a scenario where any decision you make is risky. That’s where this conversation lies. It’s incredibly expensive to do something, but equally as expensive to do nothing. Plugging the brain drain won’t fill the state’s demand for talent — the state projects to have 811,000 open jobs by 2025 — so maybe it’s time to find a way to redirect the wellspring. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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CADILLAC BRICK - SALES REP WANTED

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Senior Test Engineer, 1 Position; Work Location: Novi, MI. Perform sys lev valid infotainment modules using tech like func, web test & dev use case/Test scen for sys, regression & compat test suite acr Connec, HMI dom. U’stand of A gile/SCRUM method. Dev test p’form to auto application lev scenar using QTP tool. Exp Dev performance test in LoadRunner, Use Combi techn for test case dev using tools like Hexawise. U’stand client techn req at des phase & concep scope of feature-level verif. Ana & track defect using ALM & req traceability. Interface cust to reproduce issue in vehicle/ bench valid & guides them coll neces logs. Work with Busn Anal & Funct Owner & Domain special to custom req & dev test case to enable compre test mechanism. Anal/interpret test res, predic p erfor/failure & provid req product/design data, comm test results clearly in written reports/formal present & making gen recom based on analy of validation res. Required: Bachelor’s deg (or foreign Equivalent) in ComSci, Eng, IT, Electr/ Telecom or equi or related and 5 Yrs of exp in IT. Alternate: Master’s deg (or foreign Equivalent) in ComSci, Eng, IT, Electr/Telecom or equi or related and 3 Yrs of exp in IT. Exp in System Integration, Regression and Stress/performance testing (function, performance, acceptance etc.). Agile/SCRUM, creat Test plans, UAT & Release doc. Create test case dev, execu using ALM & Test rep for validation rel. Exp with automated test tools Hexawise, QTP, Load Runner & test automation, defect management tools ALM. Apply: Send resumes - Harman Connected Services Attn: Mahesh G M/Job Code STE-HCS-M-10, to 2002 156th Avenue NE #200, Bellevue, WA 98007. May have long term assignments in other locations in U.S. including Livonia, MI areas.

MARKET PLACE INVESTMENT OPPORTUNITIES INVESTORS & BORROWERS WANTED FOR HARD MONEY LOANS Secured by Real Estate and Personal Property - Loan amounts from $25k to $1M Call for details: 818-481-8220 Email: gagdc@sbcglobal.net GG CAPITAL INVESTMENTS, LLC

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POSITIONS AVAILABLE SENIOR TEST ENGINEER - HARMAN CONNECTED SERVICES INC. Senior Test Engineer, 1 Position; Work Location: Novi, MI. Validate/qualify SW & HW for In- vehicle Infotainment(IVI) elect cont unit for var car manuf. Work on Semi-Auton vehicle safety feat like Rear View Camera, Lane Sensing, Collision Avoid incl (AI) based sub-sys & sens that interf with infot module. Create simul for (CAN) using Vehicle Spy & CANoe to repl infot sys beha in actual vehicle envi Dev & exe scri using program lang like Python & C++ run autom test setups compr mult (ECU). funct valid on infot units features Multimedia, Connec (BT/Wi-Fi), Navig, (VR), Vehicle Diagn & Telematics. Self- certification testing on phone projection features like CarPlay & Android Auto and validate tuner funct like AM FM & SXM. Sanity, KPI, Regres, anal cust req, create test case on specs & sup the exec of test plan.Create test rep with sup traces, log files & excel desc. Fol CMMI guideline to create & maintain test doc & perform Defect Analysis. Req: Bachelor’s deg (or foreign Equivalent) in ComSci, Eng, IT, Elec/ Electro/Telecom Eng /equi / related & 5 Yrs exp in IT. Master’s degree (or foreign Equivalent) in ComSci, Eng, IT, Elec/Electro/Telecom Eng /equi / related & 3 Yrs exp in IT. Exp valid IVI feat like BT/Wi-Fi, (VR), Camera, Navig & Vehicle Diagn. Work k’ledge auto techno: CAN, LIN, MOST, ETHERNET. Exp Simulation tools VehicleSpy, CANoe & CANalyzer & log tools Blue Pirat, Neo VI &. Program k’ledge in Python & C++ to exe automation. Embedd sys based on QNX & Android, Android test & debug. Work k’ledge using Power Meter & Signal Generator. U’stand product req & exp with dev test cases, test exec, test status rep & Defect Analysis. Apply: send resumes to Harman Connected Services Inc, Attn: Mahesh G M/Job Code STE-HCS-M-11, to 2002 156th Avenue NE #200, Bellevue, WA 98007.

Requests for Proposals are being accepted for: Grow Detroit’s Young Talent, Instructor-Led Training (ILT) Services Responses Due: March 22, 2019

Wagner-Peyser Employment Services and Trade Adjustment Assistance Responses Due: March 22, 2019

DESC, a non-profit corporation, A Michigan Works! Agency, in cooperation with the Mayor’s Workforce Development Board (MWDB) serves as the fiscal and administrative entity that provides public workforce development programs and services for the city of Detroit to employers and job seekers. More information on these opportunities are available at the following website: https://www.descmiworks.com/opportunities/rfps-and-rfqs/ To request a full RFP package, please email DESC at descprocurement@detempsol.org and provide the RFP title(s) requested, company name, address, office phone, contact person’s name, title and valid email address. Mayor’s Workforce Development Board Cynthia J. Pasky, Co-Chairperson David E. Meador, Co-Chairperson Jeffrey M. Donofrio, Executive Director

Detroit Employment Solutions Corporation Board Calvin Sharp, Interim Chairperson Detroit Employment Solutions Corporation Nicole A. Sherard-Freeman, President and Chief Executive

An equal opportunity employer/program. Supported by the State of Michigan, Talent Investment Agency. Auxiliary aids and services available upon request to individuals with disabilities. 1-800-285-WORK. TTY: 711.

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

DETROIT GOLF CLUB

A view of the Detroit Golf Club, which is hosting the PGA Tour’s new Rocket Mortgage Classic tournament in June.

GOLF

Rocket Mortgage Classic

Companies spend large sums on golf hospitality for a variety of reasons, including branding locally onsite and via the national TV broadcast; as a reward perk for employees; and as a way to woo clients and generate new business via network during the week of golf. At the upper end of Rocket Mortgage Classic’s hospitality inventory are six “fairway suites” on the 18th hole that each seat up to 50 people each. Each suite is $120,000 and five of the six have been sold, Langwell said. The original plan called for just four such suites until demand necessitated adding two more. “It’s a great problem to have,” he said. The final hole also will have double-decker “skybox suites.” The six upper-level boxes, which are for up to 35 people, are sold out at $90,000 each, while five of the slightly smaller lower-level boxes, which seat 25 people at $65,000 for the week, are sold, Langwell said. The 18th also will have up to four of what Langwell calls “partner suites” that are only for companies that sign high-end multi-year deals for naming rights, hospitality, etc., and are not being sold a la carte, Langwell said. Two of the 1,200-square-foot suites, for up to 50 people, are planned now, and access will include the golf course’s permanent clubhouse. Quicken/Rocket Mortgage will have its own space wrapping around the rear of the 18th green, Langwell said. That’s part of its naming rights deal. The 17th green will have eight 25-person skyboxes that total a combined 5,000 square feet. They sell for $60,000 each and seven of the eight have been sold, Langwell said. Twenty-person 20-by-20 open-air cabanas will be constructed along the entire left side of the 15th hole, and Langwell likened them to poolside cabanas in Miami or Las Vegas. He said all of them have been sold at $40,000 each. There are another 20 cabanas, slightly smaller and priced at $30,000 each, along the 17th, he added, and 14 have been sold. The cabanas include food and beverage service.

When: June 25-30

FROM PAGE 3

What: PGA Tour’s Rocket Mortgage Classic Where: Detroit Golf Club Public tickets: Sales start at 9 a.m. March 13 exclusively via RocketMortgageClassic.com; prices start at $10. Title sponsor: Quicken Loans Inc. Sponsorship inquiries: sponsorship@ rocketmortgageclassic.com TV: CBS Field: 156 players Purse: $7.3 million

There are other options for companies that don’t want to spend in the upper tiers of hospitality during the event. For example, behind the 15th green will be a “cool club, for socializing and fun” for up to 2,000 people with access sold in packages of two, five and 10 tickets, Langwell said. Prices range from $1,750 to $9,100 but access doesn’t include food and drinks. Langwell called it a “massive structure” with nice views of the green. “It’s selling out,” he said. “It’s a more economical option.” Michelob Ultra holds the naming rights for the 15th-hole club as a national PGA Tour sponsor, but financials details haven’t been disclosed. At the 14th hole, a 10,000-squarefoot club structure is being constructed to serve 800 to 1,000 people a day with food, beverages, and indoor and outdoor seating, Langwell said. Admission to the club will be sold as a four-day ticket for groups of two, five or 10. Prices start at $3,000 for two paired tickets to $20,000 for a table of 10. “It’s a great way to take care of a client or prospect,” Langwell said. A club on the 16th hole, which also will have views of the tees on the 17th, will be available for an $85 ticket that’s basically an upgraded tournament ground pass for a day, Langwell said. That space will be for up to 2,000 people and will have a food menu and bar service for individual purchase, a patio with umbrella tables, and a covered viewing deck, he added. The pro-am on the Wednesday be-

fore the tournament officially starts still has spots available for $10,000 individually or $40,000 for a foursome. Langwell said those who buy into the pro-am will be paired with one PGA Tour player on the first nine holes, and a different player on the back nine. “It’s selling really well,” he said. Hospitality and other revenue defrays the tournament’s startup and operational costs, which haven’t been disclosed. Langwell, 45, did say that any PGA Tour event typically has a “multiple-million investment up front.” Quicken itself says it’s pleased with sales so far. “We are extremely impressed with the support that the Rocket Mortgage Classic has received from businesses of all sizes in the area. We have had the opportunity to create additional hospitality areas multiple times to accommodate the tremendous demand we have seen from those interested in being part of an event that showcases Detroit to a national and international audience,” Casey Hurbis, Quicken’s CMO, said in a statement. Quicken, owned by billionaire Detroit businessman Dan Gilbert, last year worked out a four-year deal with the PGA Tour and Detroit Golf Club to create the Rocket Mortgage Classic. It’s the first PGA Tour event in Detroit, and the first in Michigan since the Buick Open in suburban Flint was scrapped in 2009. The mortgage giant toyed with the idea of pairing PGA Tour stars with celebrities Justin Timberlake and Mark Wahlberg in 2016 for a one-off gimmick at Detroit Golf Club, but the idea never materialized. Quicken hasn’t disclosed its cost to put its mortgage app brand on the event. The event will serve as a significant brand-awareness opportunity Quicken’s primary consumer-facing online mortgage product, which the company has spent millions to market through sports and mainstream channels. Because Quicken Loans isn’t in the business of staging sports events, it hired Chicago-based Intersport, which has an office in the Dan Gilbert-owned One Woodward Avenue building, to launch, market, sell and operate the tournament, something Intersport has done many times in golf and other sports. Langwell said

10 Intersport staffers are working in Detroit on the tournament, and a few others handle the company’s nongolf business. Intersport has worked with Quicken Loans on sports marketing activation for eight years, said Langwell, a 2011 Crain’s 40 Under 40 honoree and a two-time All-American golfer at Wisconsin’s Carthage College. Quicken Loans has said in the past that it’s devoted up to 30 percent of its enormous annual marketing spending to sports marketing, including college basketball and auto racing at times. It’s the official mortgage sponsor of the PGA Tour and senior Champions Tour, and in March 2014 it replaced AT&T as title sponsor of the PGA Tour’s Quicken Loans National invitational tournament that has been played at courses around Washington, D.C. Last year, it ended that relationship and worked out a deal with the PGA Tour and Detroit Golf Club for the new tournament nearer its corporate headquarters and much of its workforce. The four-day event, with a 156-player field and $7.3 million purse, will air on CBS. The new tournament comes at a time of flux for pro golf in the state. The LPGA Tour last year announced the inaugural Dow Great Lakes Bay Invitational at Midland Country Club on July 17-20, but the LPGA’s Volvik Championship at Ann Arbor’s Travis Pointe Country Club lost its title sponsor and spot on the tour calendar this year. It has been played every May from 2015-18, and its organizers have said they continue to seek a new sponsor and hope to get back on the LPGA Tour schedule. “We’re ready to go as soon as a new title sponsor is finalized,” said Keith Karbo, who launched and ran the LGPA tournament. “There are dates on the event calendar that work well. Everything else is in place as we have strong support from several corporate partners, a committed army of volunteers and a database of loyal ticket customers. We’re in discussions with potential title sponsors, and we hope to announce those plans soon.” Dave Richards, owner of Bloomfield Hills-based Resort & Golf Marketing, told Crain’s in 2015 that an LPGA event costs its main sponsor about $500,000 to $750,000; while a

mid-level event on the PGA Tour, such as the now-defunct Buick Open in Grand Blanc, was $5 million to $6 million. Today, that title sponsorship is likely even more. So is the revenue, especially now that the last major recession, which hit Michigan especially hard, is a decade in the past. Marketing budgets have been healthier in recent years, and Richards said last week that the Rocket Mortgage Classic’s corporate support will reflect that. “I’m not surprised that sales are very strong,” he said. Several factors also help sales, he said, such as the event’s newness, it being in Detroit and having Gilbert involved. “It’s hard to beat that combo,” Richards said. “Detroit, obviously, adds the entertainment venues, the sports district, a zillion new restaurants, the total package. There is a lot more to sell. Plus, a new event is always easier to sell.” The new tournament also benefits from a lack of competition. While there are plenty of sports entities and events to sop up marketing dollars, corporations especially like golf because of the business opportunities during nice weather. The last major men’s golf event in Michigan was the 2008 PGA Championship at Oakland Hills Country Club in Bloomfield Hills. “A lot of local companies have or are adding golf to their entertainment budgets,” Richards said. “Southeast Michigan is still a huge golf area.” Kevin Frisch, a Gaylord-based golf and travel marketing veteran, said there’s pent-up demand for pro golf in metro Detroit from fans and businesses. “Golf has always been a great way to give back to charity and entertain clients, whether it is playing golf or attending golf tournaments and events,” he said. “With the LPGA making Michigan a regular stop on their tour, the Senior PGA Championship continuing to be involved with Whirlpool and KitchenAid in Benton Harbor, and the PGA Tour Champions returning to Warwick Hills in Flint, it was only a matter of time that the PGA Tour returned to one of its more popular destinations.” Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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

RIDETROIT

in front of me, it was time to think a little bit about Jason.

What’s the other side of things?

When did you start RiDetroit and how does it work?

FROM PAGE 3

The smaller ride. When you have 5,000 people on a bike ride, it becomes very difficult to communicate with them. We had a week the police actually called us and said you had 10,000 people. When you have that many people, the message can get lost. There’s no way someone five blocks away is going to hear what you’re saying to get that message out. A large part of what we were doing was encouraging people to volunteer at the Children’s Center and also Focus: HOPE, the Greening of Detroit. We would start the ride there (or end up there) to get them more exposure. Part of the partnership was they’d come out and talk about what they do, and how it was important. We could move the needle because we were talking to people directly. But then it became 5,000-10,000 people, and you couldn’t get the message out. We were so concerned with permits and porta potties that we were losing our identity. We wanted to be this community group and a catalyst for people making change. I personally felt like we were losing the ability to get that message out. At that point, I was doing so much solo traveling, I was not really thinking about what Mike felt. I knew he was content with doing Slow Roll. But me personally, it was a personal thing. I felt like after seven years of putting everyone else

Jason Hall, founder, RiDetroit and co-founder, Slow Roll Detroit

BUDGET

The average gas station in Michigan that sells 2,500 gallons of fuel daily would have to prepay an extra $1,125 in state fuel taxes each day under the proposed increase in the tax on gasoline and diesel fuel, according to the Michigan Association of Convenience Stores.

FROM PAGE 1

“The argument is we need to give government pensioners a tax break, and we’re going to pay for it with a surtax on private employers,” said Patrick Anderson, CEO of the Anderson Economic Group in East Lansing and author of the SBT repeal in 2007. “This is double taxation — there’s no two ways around it. It’s double-taxation at a lower rate." In an interview with Crain’s, Whitmer signaled her willingness to jettison the business tax proposal if she can get a deal on tax revenue for roads — the cornerstone of her political mandate from voters last fall. “I did have a conversation with some people in the business community and they said, ‘Well, we don’t like this one piece.’ And I said, ‘Fine, work against that one piece, but help me get the rest of this budget done,’” Whitmer told Crain’s.

‘Bold, real solution’ House Speaker Lee Chatfield, an Emmet County Republican, called Whitmer’s proposed 45-cent fuel tax hike a “nonstarter,” while Shirkey said it’s simply too high of a burden for motorists and businesses to shoulder. “The citizens of Michigan cannot absorb — especially the folks that actually work for a living — cannot absorb a 45-cent increase in the gas tax,” Shirkey told reporters. “They just can’t do it.” Mark Griffin, president of Michigan Petroleum Association and Michigan Association of Convenience Stores, said the owner of an average gas station that sells 2,500 gallons of fuel per day would have to prepay an additional $1,125 in tax each day, creating cashflow problems for their business. “When you’re making two cents-agallon (profit) typically at best, you can’t eat $1,100 a day,” Griffin said. “If

DAWN HAMILTON

CHAD LIVENGOOD

you raise your gas prices, now you’re eating yourself on your in-store sales. It also means we’ll never see $2-a-gallon gasoline ever again.” Griffin said his member businesses “get it” that Michigan’s roads are crumbling and in need of additional investment. “But they just don’t want to be put out of business,” he said. Whitmer said the pothole “crisis” plaguing motorists “requires a bold, real solution that actually fixes the problem.” Though Whitmer’s tax hikes — as proposed — are seen in Lansing as dead on arrival, Shirkey and other Republican legislators have left open the door for some form of tax increase to fund roads. “I probably will look at some type of revenue as we move forward,” Senate Appropriations Chairman Jim Stamas said during a taping of WKAR-TV’s “Off The Record.” “But what that revenue is and how much it is, I don’t have that.” After years of debating road funding, Shirkey said there’s “consensus that we can rally around” that the state needs

to be spending $2.5 billion more annually on roads. Both he and Stamas said they count the Legislature’s 2015 road-funding plan that’s supposed to generate $1.2 billion more annually for roads by 2021 to the $2.5 billion goal. Whitmer’s $2.5 billion fuel tax hike would generate a net road funding increase of $1.9 billion by the 2021 fiscal year because she removes an earmark of $600 million of income tax that was part of the 2015 funding plan, according to nonpartisan House Fiscal Agency.

Sales tax complications Lawmakers are starting to study other ways to generate more money for state highways, local roadways and bridges. Chatfield wants to remove the 6 percent sales tax on gasoline and diesel fuel that is legally earmarked for schools and cities. The fact that sales taxes levied on fuel don’t go to roads has long been a complicating factor in past legislative efforts to raise new revenue for roads.

About June of last year, I was thinking about my future and what I was going to do. I did all the routes for Slow Roll for seven years and built relationships. I felt like I’d made such an investment in biking and learning about biking and infrastructure and everything that went with how to make a bike ride work. I still love biking and people. So how do I get back to those two things I loved? So I said, “I’ll start a smaller ride.” RiDetroit is a for-profit bike group that tours the city to show people that Detroit is a beautiful place to live, work and play, but just on a more intimate level where we can really have the conversation about making change. Groups are no larger than 50. I’ll always reach out to a restaurant or bar for some type of entertainment, and I’ll reach out to a charity to give them some money, some shine. That’s really my motto: Try to make a living while giving. If there’s the ability to attach a charity to an event, I will. One of the rides I did was with the Detroit Public Schools Foundation. I have a sliding scale for the cost and deal with each individual separately. If it’s a school, I give free tours. But otherwise, I charge about $35 per person and a bike rental would be additional. I work with American Cycle and Fitness in Royal Oak, which has one of the largest rental and

demonstration bike fleets in Southeast Michigan. Because I am for-profit, a lot of times people will call me and have something in mind they want to do. I’ve partnered up with LuLuLemon, for instance, on a ride with executives they’ve brought in from all over the world. I have also done a ride for them where they opened up to their customers for a ride they (sponsored). Are you marketing to companies?

I’m definitely marketing to companies and to schools; I’m a for-profit. I feel like tourism right now is one of the biggest industries that’s happening in Detroit. I’m really trying to connect to tourism and the new employees coming in to Detroit, companies like Ford and Quicken are bringing new employees. It sounds like a similar model to Detroit Experience Factory which does walking tours in Detroit and markets them to businesses, as well as the public.

I’m sure there’s a lot of experiences, but I’m on a bike. And they’re on foot. There are clear advantages to being on a bike. You can cover more ground in the same amount of time. Are you the sole employee for RiDetroit?

Yes, just me. Hopefully, we’ll grow. But I’m not in a hurry to expand. If there’s one thing we learned about Slow Roll, it was definitely take your time in doing things and do it the right way.

Business tax proposal: Who would be affected Gov. Gretchen Whitmer proposed last week amending the 2011 law establishing the 6 percent Corporate Income Tax to make S-corporations, limited liability corporations and partnerships subject to the same tax as c-corporations. Under the 2011 repeal of the Michigan Business Tax, the owners of S-corps, LLCs and partnerships were no longer subject to a business income tax and have been able to passthrough their business profits to 4.25 percent individual income tax. There are about 250,000 S-corporations, LLCs and partnerships that file a tax return with the Internal Revenue Service each year, according to the Michigan Treasury Department. Whitmer’s proposal includes an exemption on the first $50,000 of profits from pass-through entities, which the Treasury Department estimates would exempt about 100,000 small business owners from paying the CIT.

A change in the tax would affect a broad array of types of businesses. The vast majority of small and midsized businesses tend to fall into one of the classifications. State Treasurer Rachael Eubanks said the owners of passthrough entities would get a credit on their individual income tax return for taxes paid under the CIT so that their effective tax rate would rise by 1.75 percentage points. Whitmer’s proposed tax hike on businesses — a 41 percent increase in the rate of taxation — would generate $280 million annually in additional business tax revenue for the state’s general fund, according to the nonpartisan House Fiscal Agency. When factoring federal deductibility of state taxes on federal tax returns, the House Fiscal Agency estimates s-corps, LLCs and partnerships in Michigan would be subject to a net tax increase of $100 million.

In 2014, the Legislature sent voters a proposal to raise the sales and use taxes to 7 percent in exchange for removing the sales tax on fuel and replacing that with a higher tax on gasoline and diesel. Voters rejected that proposal — which Whitmer was a part of crafting as the Senate’s Democratic leader — in a May 2015 special election by a margin of 60 percentage points. Whitmer’s plan calls for the tax on gasoline and diesel to increased in three, 15-cent chunks over a year. The governor acknowledged the massive fuel tax increase could have a ripple effect in the economy in the cost of consumer goods and services. “We are paying a tax right now and it’s the worst kind of tax because it’s not

actually fixing the roads ...” Whitmer told Crain’s. “We’re all paying for infrastructure that is crumbling beneath us.” Stamas, R-Midland, diplomatically called Whitmer's budget plan “courageous.” “I can’t say I agree with it,” Stamas said. “But at the same point, to come out with a 45-cent proposal on gas and the amount of almost $2 billion more in spending, right off the top, that takes courage.” The Associated Press contributed to this report. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

QUICKEN FROM PAGE 1

It also maintained a centralized call-center approach while competitors relied on a massive network of bank branches. Those moves positioned the Detroit-based company to gobble up market share after its bank competitors were decimated during the housing crisis a decade ago. It increased market share in the retail mortgage origination sector from 1.8 percent in 2007 to 5.1 percent in 2018, largely based on the home mortgage refinancing boom coming out of the housing crisis, according to data by business-to-business industry magazine Inside Mortgage Finance Publications. Quicken’s strategy of building brand loyalty in an industry that historically had none and offering an effective online tool during a time where low-interest rates offered home owners opportunities to refinance for lower payments paid dividends. But industry slowdowns in home sales and lending, and Quicken Loans’ reliance on refinancing amid rising interest rates pose potential challenges as Quicken Loans aims to grow even more.

Sell and buy and sell more Gilbert co-founded Quicken’s predecessor Rock Financial in 1985 as a 22-year-old law school student alongside his younger brother Gary Gilbert, who is now a film producer in Los Angeles and with Dan Gilbert co-owns the Cleveland Cavaliers, and Lindsay Gross, now director of mortgage banking at Quicken. Then-Livonia based Rock Financial Corp. went public in May 1998, raising $33.3 million, before selling the company to financial software firm Intuit Inc. for $532 million. With the mortgage business outside the scope of Intuit’s core tech business, it sold back to Gilbert and a group of investors the mortgage arm, now called Quicken Loans, four years later for $64 million. Under Intuit, Quicken’s traditional mortgage lending operation had shifted from a traditional mortgage originator to one focused heavily on building an online experience. Gilbert doubled down and pushed Quicken Loans even more into the digital ether with a rapid-growth strategy built on an aggressive sales culture. A 2017 New York Times article described Quicken’s culture as “a place where ‘Glengarry Glen Ross’ meets Seussville.” While the company largely lacks the fraternity house mentality of Wall Street, a work hardplay hard atmosphere that quote embodies remains. Gilbert famously created his “Isms” book, which serves in part as the ethical gospel according to Gilbert. The now 144-page book is loaded with axioms like “Numbers and money follow; they don’t lead” and “Yes before no. AKA know before no.” “We have our isms and they help guide the decision making of the organization,” said Jay Farner, CEO of Quicken. “Either you have a culture that gives you the opportunity to get better or one that helps you get worse. When your team members understand what you stand for ... then they can be confident in the decisions they make. Our culture is about the thought process it takes to focus on the client first. That’s the key. To me, it’s not drinking the KoolAid, but empowering someone to make a difference.”

C R A I N ’ S D E T R O I T B U S I N E S S // M A R C H 1 1 , 2 0 1 9 The high-octane sales culture, however, has resulted in several lawsuits filed by ex-employees from lack of overtime pay to hostile work environments. At the same time, Fortune has ranked Quicken Loans on its “100 Best Companies to Work For” list for more than a decade and Quicken has been successful in defeating most of its workplace-related lawsuits.

ing. “No threat, including high-profile senseless lawsuits from powerful federal officials, will deter our company and its leadership from doing the right thing,” Quicken said in a statement in 2015. “We will stand in defense of our impeccable reputation

Housing crisis winners A year after Gilbert announced Quicken would move its Livonia operations to then-struggling downtown Detroit, the housing market began to collapse in mid-2008. Quicken had grown from a nascent nonbank mortgage operation to a major player filling a void left by its larger bank competitors that were falling victim to their role in the subprime mortgage disaster and the federal fines and regulations that followed. “Quicken deserves credit for being at the right place at the right time and having the right business model, but it would never have gotten where it is if not for the housing crisis,” said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “Most of the big banks were embroiled in subprime mortgages and pulled back from the mortgage market after the crisis. They were sick of the government settlements over FHA, Fannie and Freddie loans. But conforming loans was a real sweet spot for nonbanks like Quicken.” Quicken wasn’t alone in the nonbank space. California-based PennyMac Financial, formed by former executives from a major subprime lender Countrywide, and Loandepot. com all began swiping market share from traditional banks. Quicken had succeeded where the banks did not — operating a much-lower overhead centralized call center approach that could turn mortgages at a much quicker rate than the traditional method of driving to your local bank branch. “Very few lenders had success with the call center business model,” Cecala said. “Quicken has managed to become the largest retail lender without the thousands of retail offices.” But its nontraditional approach to mortgages did not come without scrutiny. The U.S. Department of Justice filed a lawsuit in 2015, contending that Quicken originated hundreds of loans between September 2007 and December 2011 backed by the FHA when they were not eligible for the program due to Quicken lenders overstating a borrower’s income so they could qualify for the loans. The DOJ also contends the U.S. Department of Housing and Urban Development has paid $500 million in claims on 3,900 Quicken-endorsed loans. Gilbert quickly brought a lawsuit against the government days before the DOJ filed its suit, alleging the government violated the Administrative Procedure Act in the investigation and contends the government improperly divined a pattern of violations based on a sampling of FHAbacked loans through Quicken, rather than reviewing all loans individually. “Quicken is the red-headed stepsister of the mortgage market because it’s a nonbank and Dan Gilbert is viewed as a maverick. That gets the attention of regulators, I guess,” Cecala said. “But Dan Gilbert’s never met a lawsuit he wouldn’t fight.” Quicken Loans lost its suit against the government, while the DOJ case against the company remains ongo-

“Either you have a culture that gives you the opportunity to get better or one that helps you get worse. When your team members understand what you stand for ... then they can be confident in the decisions they make.” — Jay Farner, CEO of Quicken

established by thousands of hard-working ethical team members ... ” Farner is quick to point out that Quicken has a low delinquency rate. “We have a long track record of producing the best quality loans across the country with the lowest default rates and have been independently named the lender with the best client service for nearly a decade,” Farner said in an email. “We are a 34-year-old, 17,000 employee organization that is proud of our track record. It has been a highly successful ‘get-rich-slow-scheme.’” Farner declined to discuss Quicken Loans’ revenue or income. Rock Ventures LLC, the parent of Quicken and Gilbert’s other companies, generated revenue of $6.56 billion in 2017, according to Crain’s estimates.

Go where the consumer is In 2016, the company launched Rocket Mortgage, the first completely online mortgage lender service. It allows prospective home buyers to be approved for a mortgage in minutes using nothing but their smartphone. The idea is to hook buyers into Quicken products before they even decide to take out a loan. “As challenging times presented themselves, we doubled down,” Farner said. “We made investments in technology and did more advertising. We focused on building something that was different within the industry. That made us scalable. Most mortgage companies grow to a level then it’s the processes that stop them, the paperwork, the data. That’s where we excel.” Greg McBride, chief financial analyst for New York financial services company Bankrate LLC, said Quicken’s expertise in technology puts it

ahead of competitors and in a place to mop up more market share as technology constrains smaller mortgage companies into obscurity. “The mortgage world is definitely becoming more and more digital every day,” McBride said. “Quicken is in a better spot, as a lot of banks have been laggards in technology investments.” Quicken believes it can engage the consumer before it needs a loan with Rocket Mortgage and maintain engagement with Quicken’s traditional mortgage services. Banks spent dollars on advertising for their banking services, but never broached “wasting” that spend on its mortgage business. Consumers simply didn’t care where they got a loan, just that it was the best price — or so they believed. “Nobody thought it was worthwhile,” Cecala said. “Quicken has proven that it does pay off. They’ve done so many things that have bumped up against the conventional wisdom of the mortgage market.” This requires millions and millions in advertising spend — Rocket Mortgage launched with an ad during Super Bowl L with a 60-second spot in the first half of the game. Quicken subsequently aired another Rocket Mortgage ad during Super Bowl LII in 2018 featuring Detroit-born comedian and actor Keegan-Michael Key. The result is that Quicken’s technology-driven platform closes a loan approximately every 12 seconds, five days a week across the U.S., and Farner believes its growth is only limited by its ability to maintain customer service, not by competition. “You would need close to 1,500 physical branches to compete with our centralized operation and close the same amount of volume,” Farner said. “Obviously, your costs would be multiples of ours, not to mention the considerable management challenges of thousands of people spread across that many locations. This platform continues to get more efficient, faster and provides a better experience for our clients each and every day as we add technological and process-driven improvements. The company has built a moat around itself because of this significant and unique strategic advantage.” But the experts disagree on whether Quicken can truly penetrate the mortgage consumer to generate continuous brand loyalty. “We see varied behaviors,” McBride said. “Some are hunting for the best deal but others are looking for a brand they are familiar with. (The consumer) is at a crossroads of a competitive rate and a brand they are comfortable. People are recognizing they don’t want to get ripped off, but also not chasing the lowest rate if it sacrifices service.” Cecala said building brand loyalty in the mortgage space is difficult because people typically don’t take out mortgages that often. “Consumers need a home loan only a few times in their lifetime,” Cecala said. “Attracting as many as you can makes sense, but finding a loyal customer separated by years of experience is pretty difficult.”

A bigger piece of a shrinking pie? Market share and loyalty will be critical for Quicken Loans to keep growing because home sales are contracting after peaking in 2017 and in-

terest rates have been rising. Loan volumes were down nearly 10 percent among the top 40 retail originators in 2018, according to Inside Mortgage Finance data. Quicken ended the year down 3.8 percent, while Wells Fargo and Chase were down 25.4 percent and 8.8 percent, respectively. The decline is largely tied to a slowdown in refinancing. Interest rates have risen — a 30-year fixedrate mortgage averaged 4.45 percent interest, up from 3.48 percent 18 months ago. Nearly 64 percent of Quicken’s loan volumes in 2018 were tied to mortgage refinancing. The average percent of overall mortgage business tied to refinancing among the top 50 refinancing lenders is 29.4 percent, according to Inside Mortgage Finance. However, Quicken is quickly establishing itself in the new home purchase lending sector, or loan servicing, growing that business by nearly 22 percent in 2018. Wells Fargo’s new home purchase mortgage lending fell by 8.6 percent and the average growth in loan servicing space among the top 50 lenders was 1.7 percent last year, according to Inside Mortgage Finance data.” Strong growth in servicing will insulate Quicken as interest rates rise, Farner said. “Quicken Loans now services $325 billion of mortgage volume and nearly 8 million people live in homes that have a mortgage with Quicken Loans,” Farner said. “This fast-growing and top-5 servicing portfolio not only throws off substantial income, but its value is counter-cyclical to rising interest rates. In other words, the value of the portfolio rises significantly when interest rates rise because the loans in the portfolio are expected to last longer than when rates are lower. This change in value is booked in our profit and loss statement and is a natural hedge to the origination business. Any mortgage operation that does not have a large servicing portfolio is much more challenged in a rising rate environment.” But Cecala said Quicken’s continued growth in that sector could be hindered by something technology hasn’t sidestepped: people. “The home purchase market is much more dependent on referrals from real estate agents than anything else,” Cecala said. “They have countered that with Rocket Mortgage, going directly to consumers before they even decide on buying a home, but it’s not clear that can work in a large enough scale to continue to grow that side of the business.” Farner contends Quicken could double its market share in the servicing space — 2.6 percent in 2018 — with its digital presence, but said that its growth is limited or enhanced only by its ability to build a better product. “Do I believe we have the opportunity to have a larger percentage of the market? Yes, I absolutely do,” Farner said. “But we talk about the things we need to have a better (customer) experience. What are the clients not getting? That’s really the driver of it. One of our isms is that ‘Money and numbers follow, they don’t lead.’ If we create a better experience, could we double digital market share? Absolutely. But it will only come after we build that better experience and better strategies.” 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 // M A R C H 1 1 , 2 0 1 9

WAYNE STATE FROM PAGE 1

On its surface, the dispute appears to be about the Henry Ford Health deal and how much control Wayne State would cede if it goes ahead. The negotiations have also caused difficulty with Wayne State’s sometimes rocky relationship with Detroit Medical Center. Michael Busuito, elected to the board in 2016, went public about two weeks ago to say he “had the votes” to scuttle an affiliation deal Wilson and Wayne State medical executives had sought with Henry Ford Health System. Members of that board faction have alleged problems with the Henry Ford affiliation proposal and overspending on health care consulting contracts by Wilson. On March 2, Wilson informed the board that health care consultant Dwight Monson had resigned. Monson in his resignation letter accused accusing Busuito and board member Sandra Hughes-O’Brien of working to push Wilson out. Wilson said Monson’s resignation letter alleged that Monson’s son overheard one side of a conversation Busuito was having in an airport lounge on Feb. 26, advising another party to seek detailed information from the university about its contracts with three consultants working with the school. Three days later, Wayne State received a Freedom of Information Act request from The Detroit News seeking detailed documents on contracts with Monson, departing Vice President of Health Affairs David Hefner and other consultants working with the school. Wilson told the board that he had asked Wayne State legal counsel to look into Monson’s allegations. Board members pledge to adhere to a code of conduct that includes allowing only the chairperson of the board to speak on its behalf. Governors are allowed to give personal opinions to the media. In December, before two new trustees took office Jan. 1, Wilson received a three-year contract extension on a 5-3 vote in December, with Busuito, Hughes-O’Brien and Dana Thompson in the minority. In Monson’s resignation letter, addressed to medical school Dean Jack Sobel, the consultant said he believed Busuito and Hughes-O’Brien are pursuing a “personal agenda at odds with the best interests of” the Wayne State medical school. “I understand that a president and his/her board can disagree on substantive issues, but the board should adhere to its legitimate role of governance and not intrude and entangle themselves in management issues,” he said. He added that their communications with the medical school leadership had created a “toxic environment” that adversely affected the Henry Ford negotiations, a relationship that could “reposition (the medical school) for a brighter future, reversing its decades-long slide toward academic mediocrity.” WSU Board Chair Kim Trent issued a written statement to Crain’s supporting Wilson: “Roy Wilson’s integrity and strong leadership have taken us from worst to first,” said Trent, citing Wayne State’s accomplishments in attracting minority students and admitting the largest freshman class on campus in history this year. She added that it was “outrageous that a board member at an airport lounge would make unfounded charges about the president and consultants” to a member of the media.

Busuito

Hefner

Monson

Sobel

versity,” Monson said. Monson said his son, who typed out notes on the conversation verbatim on his notebook computer, heard Busuito make negative comTrent ments about someone, but it was unclear to him who Busuito was referencing. “When I told him, “This is all about Roy Wilson,” my son asked, “Who’s Roy Wilson.” When I said, “He’s the president of the university,” my son replied, “Dad, that’s who they are after.”

Board split

AARON ECKELS FOR CRAIN’S DETROIT BUSINESS

Wayne State University President M. Roy Wilson has asked university attorneys to investigate allegations arising from a phone call overheard at an airport.

“We have a code of conduct in how the board engages with the press,” Trent said. “We have board members who don’t agree with that and have decided not to abide by it,” she said. Thompson and Hughes-O’Brien did not respond to interview requests. Busuito, who was traveling in Italy last week, did not respond to multiple emails seeking comment. Busuito, a physician, is former chairman of Wayne State’s University Physician Group. In a statement to Crain's about Wilson and his leadership from the three board members and newly elected member Kumar, the four governors doubled down on criticism against Wilson. “The Board members mentioned in Dwight Monson’s letter are very aware of the libelous allegations made against them in his letter. We have seen the mistakes of presidential leadership at Michigan State University. Here at Wayne State University, Roy Wilson, the president, must and will be held accountable by those of us who were elected to govern,” they said in the statement. Trent said she was outraged that the four board members would compare the scandal at Michigan State involving failed oversight of Larry Nassar, a university doctor who was convicted of a long series of sexual assaults on patients, to issues facing Wayne State. “There is no scandal here,” she said. David Nicholson, a former WSU governor for five years who rotated off the board at the end of December, said the three other governors have opposed major parts of the Henry Ford affiliation in recent months. However, he said they supported the Henry Ford letter of intent in September, when the board voted 8-0 to approve it. “Something has changed. It is a complicated deal. They may be hearing from vested interests hoping to maintain the status quo,” said Nicholson, who is president and CEO of PVS Chemicals in Detroit. “We have a relationship with (for-profit) DMC and they are worried about changes.” Nicholson said Wilson has done an outstanding job, bringing in experts such as Hefner, Keane and Monson who helped begin to erase a $32 million annual loss at UPG and the medi-

cal school in 2015. He said the health care experts were effective and worth their pay. “If we had hired McKenzie (& Co. Consulting), we would have paid $5 (million) to $10 million per year,” Nicholson said “When (Wayne State’s consultants) came in, the medical school was on probation. They turned it around in one year. They made hard decisions on unproductive faculty and found additional research dollars. They made millions and turned around the school. We paid them.” Diane Dunaskiss, another former board member who approved Wilson’s contract extension, said his record was exceptional and none of the other board members had any problems with his performance. “Wayne State is a great place now and a lot because of Wilson,” she said. On the talks with Henry Ford, Dunaskiss said the board was informed the past two years of progress made in extending clinical, teaching and research services. Dunaskiss also said Wilson needed to hire consultants. “We wanted the best people on the job. These are issues that were problems at Wayne State for years. We all knew about them, but nobody addressed them before Roy got here,” she said. Kumar said in a follow-up email to Crain’s: “As you know I have just joined the (board of governors). I am not fully aware of all the facts as yet. I am in agreement with the Board members raising questions and will support all measures necessary to keep transparency and accountability. Beyond this my perspective is limited.” In an email statement Tuesday morning, Barnhill, who is the other new board member, gave Crain’s the following statement: “As a new board member I am still gathering information to shape my perspective on this issue. That said, I think it is unfortunate that internal matters have risen to this level of scrutiny.” In an interview, Monson said his main reason for resigning was because of interference into management areas by three board members. “I believe the three members who voted against Roy did it for personal reasons and not on behalf of the uni-

At Wayne State’s Dec. 7 board meeting where Wilson’s contract extension was approved, Busuito, Hughes-O’Brien and Thompson cited concerns about ongoing business problems they perceive with the university’s medical school, affiliation discussions with Henry Ford and multimillion-dollar expenditures on two consultants and two executives hired to turn around the medical school and faculty practice plan since 2015. Over the past nearly four years, the Wayne State medical school has successfully passed accreditation inspections from the Chicago-based Liaison Committee for Medical Education after receiving failing marks and cut losses by more than $50 million from the medical school and UPG, which filed for bankruptcy last fall. Last September, WSU and Henry Ford signed a letter of intent for a broader affiliation that would cover research, teaching and clinical services. The WSU board of governors voted 8-0 to accept the letter of intent. The two sides continued to hash out details and make changes in the document. A final agreement was expected to be presented to the board of governors later this month, although at this point it seems likely to be delayed. Busuito, Hughes-O’Brien and Thompson also said a seven-month review period to approve Wilson’s contract extension was not enough time to decide. They also objected to discussing the contract because it was not on the agenda, and they were informed of the final contract vote only three days before. Former board members Nicholson and Dunaskiss said the three dissenting board members have personal problems with Wilson and some of the consultants. They also said the board had plenty of time to review Wilson’s contract extension and were fully briefed on the talks with Henry Ford. “(Busuito and Hughes-O’Brien) had other ideas how they want to solve the funding problems at the medical school,” said Dunaskiss, who said their approach was unrealistic because of the depth of problems facing the medical school and the need to find an outside partner. Mark Gaffney, chair of the Wayne State board’s health affairs committee, said talks with Henry Ford have not been completed and changes were being made to satisfy both sides and the objecting board members. “I think they are very unhappy and disgruntled,” Gaffney said. “They are incorrect about some of their assumptions and opinions about Roy Wilson. He is doing a good job. ... Conclusions about the negotiations with Henry Ford are way premature.”

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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 // M A R C H 1 1 , 2 0 1 9

THE WEEK ON THE WEB

RUMBLINGS

Downtown H&M store on Woodward to open this fall

Mitten Crate to open in Eastern Market

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

an Gilbert’s Bedrock LLC real estate company has confirmed that it is putting a Hennes & Mauritz Inc. — better known as H&M — store on Woodward Avenue in downtown Detroit. Crain’s reported in April that the Swedish retailer was planning a store in the central business district. Bedrock announced last week that H&M will take 25,000 square feet across three Albert Kahn-designed buildings at 1505, 1515 and 1529 Woodward between John R and Park Avenue. H&M joins the likes of Nike, Under Armour, John Varvatos, Lululemon, Bonobos and other national retailers downtown, all of which have opened in Gilbert properties in the last several years. “When we started work on the former site of the J.L. Hudson’s department store approximately one year ago, stories from the public poured in about memories of shopping along Woodward Avenue,” Gilbert, founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, said in a news release. “H&M is one of those flagship retail stores that will take the Woodward Avenue shops to another level. We are hopeful that new memories and experiences will be formed once again along Woodward Avenue.” The store will employ approximately 20 people, according to an H&M spokesperson. “We are thrilled to add another location in the Detroit area and offer our customers and fans another location to find affordable fashion in a sustainable way,” the company said in a statement. The company has 15 Michigan stores, with metro Detroit locations in Sterling Heights, Ann Arbor, Novi, Dearborn, Auburn Hills, Clinton Township, Roseville, Taylor, Livonia and Troy, according to its website. It says it plans to open about 220 new stores across the country this year, most of which will be H&M stores but also include other H&M Group brands such as COS, Monki, Weekday and ARKET. It has more than 171,000 employees worldwide across more than 4,700 stores. Bedrock’s real estate portfolio in Detroit and Cleveland consists of more than 100 buildings totaling more than 18 million square feet. Gilbert is working on a $909 million redevelopment of the Hudson’s site into the state’s tallest building, an $830 million redevelopment on the Monroe Blocks site, a $311 million redevelopment of the Book Tower and Book Building and a $95 million addition to One Campus Martius, among others. Those projects received $618.1 million in tax incentives.

BUSINESS NEWS J Automotive safety lighting supplier Truck-Lite Co. plans to move its headquarters from New York to Southfield, where it intends to create 95 jobs and invest $4 million. The company is relocating to be closer to the supply chain and qualified talent, according to a news release from the Michigan

Retailer H&M will take 25,000 square feet across three Albert Kahn-designed buildings at 1505, 1515 and 1529 Woodward Ave. between John R and Park Avenue in Detroit.

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

$2.5 billion

Amount of annual funding Gov. Gretchen Whitmer hopes to raise through a 45-cent fuel tax increase to fix the state’s roads

$2 million

Level of renovations planned for the historic Masonic Temple’s two concert venues

500

Number of jobs planned for Detroit, 350 of which would be new, as part of Coyote Logistics’ new technology hub in Corktown

Economic Development Corp. J Farmington Hills-based real estate investment firm RHP Properties Inc. has picked up 17 manufactured home communities across five states in a move valued at $170 million. It purchased 3,177 home sites, bringing its real estate portfolio to 254 manufactured home communities and 63,659 home sites in 25 states, according to a news release. J A 129,000-square-foot Kroger Marketplace and fuel center is being planned at the site of a now-closed Kmart building in Sterling Heights. It will cost Kroger more than $26 million and will employ more than 300 partand full-time employees, according to Kroger. J A live music bar and restaurant chain is being tapped to take over the space left behind by Cheli’s Chili Bar in downtown Detroit. After a $2.5 million investment, Tin Roof will open at 47 E. Adams Ave., according to company CEO Bob Franklin. J The historic Masonic Temple in Detroit is pegged for $2 million in renovations under a new operating and booking agreement with AEG Presents. AEG Presents — the live entertainment division of Los Angeles-based AEG Live — is to be the exclusive operator of the Masonic Temple Theatre and the Cathedral Theatre inside the Masonic Temple, according to an announcement last week. J New Hudson-based Feldman Auto-

motive Group is expanding into new car brands as it continues to grow its mini empire. Feldman has acquired McInerney’s Chrysler Dodge Jeep Ram at 23940 Allen Road in Woodhaven, the dealership group announced last Monday. J The state’s largest skilled trades union intends to consolidate its metro Detroit operations in a new $30 million facility on Detroit's west side that would offer free training. The Michigan Regional Council of Carpenters and Millwrights, alongside contractor partners, would finance building a 120,000-square-foot training center on the former Tappan School site, according to a news release. J Detroit is expanding its Project Green Light real-time crime-monitoring camera system to include nearly 1,000 traffic light cameras at major intersections in the city, Mayor Mike Duggan said during his State of the City address last week. Duggan said the Department of Public Works cameras on traffic poles will be wired into the Project Green Light system, which has surveillance cameras at more than 500 businesses and public places in Detroit.

SPORTS NEWS J General ticket sales start next week for the first PGA Tour tournament in Michigan since 2009. Prices start at $10 for Rocket Mortgage Classic events June 25-30 at the Detroit Golf Club, sponsor Quicken Loans Inc. said in a news release. J Detroit City FC last week unveiled its 10-match schedule for the new National Premier Soccer League Founders Cup later this year that will serve as a stepping stone for the semi-pro soccer club’s bid to turn fully professional. The cup so far includes 11 teams that are expected to form a new professional league in 2020. J A donation by Detroit native musician Jack White leads a new charge to raise $100,000 for the restoration of historic Hamtramck Stadium. The White Stripes rocker pitched in $10,000. J PistonsGT, the professional live-streaming video gaming team of the Detroit Pistons, used their two first-round NBA2K League draft picks on Tuesday to select a point guard and a power forward to fill out the roster entering season two. Both the league and individual NBA teams are investing in pro video gaming as a new revenue source and as a way to capture younger fans.

itten Crate, which offers specialized gift boxes featuring Michigan-made products, is opening its first brick-and-mortar store, in Eastern Market. The store, which was scheduled to open Saturday, will sublease space from current tenant Beau Bien Fine Foods LLC at 2478 Riopelle St. near Detroit City Distillery and Eastern Market Brewing Co., according to a Wednesday news release. Through its website, Mitten Crate offers monthly subscription boxes packed with a range of Michigan-made products made by companies including Dexter-based smallbatch chocolate maker Mindo Chocolate, Plymouth-based dessert shop The Blu Kitchen and more. “We work with over 100 brands throughout the year, and what excites me the most is getting to be able to tell their stories to our customers face-to-face,” co-owner Cory Wright said in the release. “We can only do so much online, and this opportunity to have a conversation around the products people are purchasing is amazing.” Wright established Mitten Crate in 2013 alongside co-owner Andrew Chmielewski, who was a Crain's “20

in their 20s” honoree in 2016. The company generated $268,000 in revenue in 2018, according to Wright, and projects it will generate $370,000 this year, on the conservative side. Mitten Crate's retail space will feature a “build-your-own” gift crate and customers can ship boxes directly from the store, Wright said. The new store will also feature a variety of premade gift boxes and the rest of the retail space will be filled out with individual Michigan-made products, including Beau Bien goods, with the ability to sample almost every variety the company produces. Mitten Crate will be open noon-6 p.m. Thursday and Friday and 10 a.m.-4 p.m. Saturday, with plans to have extended hours in the summer. Mitten Crate will occupy the front retail space as well as a warehouse portion, Wright said. Beau Bien will continue to operate a warehousing portion in the back, as well as a commercial kitchen and office, but will share a shipping dock with Mitten Crate, he added. Noelle Lothamer, owner of Beau Bien, said the space is bigger than what she actually needed and was “taking away” from her core wholesale business.

NUDELL ARCHITECTS

Western Golf and Country Club in Redford Township revealed renderings of its planned new 36,500-square-foot clubhouse. Its old facility was destroyed in a fire in June.

Western Golf and Country Club rallies after fire T

here’s no replacing a 92-year-old clubhouse. But a raging fire last summer has forced Western Golf and Country Club in Redford Township to do exactly that. The country club and 18-hole golf course has used a temporary pavilion with a bar, kitchen, heat, large glass windows and carpeting for events while the charred remnants of its main building were cleared away. Demolition finished last week. Around then, the 360-member club released renderings of a new clubhouse with a targeted spring 2020 opening. “It will be state-of-the-art with all the newer modern amenities,” said Jason Iding, general manager. “We aren’t trying to build a replica of what we had. With the course built in 1926 and the clubhouse soon after ... we tried to mirror it off of our old club.” Clubhouse 2.0 won’t be much larger than the original — 36,500 square feet, compared to 35,000 square feet. But the layout allows for much more usable space, member-

ship director Halley Roberts said. The new building will be more accessible for year-round use, Iding and Roberts said. It will have a workout facility, golf simulator, patios on its ground and second levels, a bridal suite and business center. Costs aren’t set yet, but the club expects to invest somewhere around $8 million-$12 million on the new facility, Iding said. Insurance proceeds covered the demolition. Western hired Nudell Architects of Farmington Hills and Orlando to design the building. The company has also worked with Country Club of Detroit and Meadowbrook Country Club, according to reporting by Hometown Life. Plans for a general contractor haven’t been finalized. Iding expects construction to start in 30-45 days, depending on weather. Roberts told Crain’s on the day of the fire, June 1, that the experience was “devastating, but the silver lining is no one was hurt. We are still open ...”

Wednesday, April 24 9 – 11:30 a.m. | The Fillmore, Detroit Individual tickets: $80 Reserved table of 10: $850

Crain’s Real Estate NEXT brings together a group of experts to share their perspectives on the retail landscape driving Detroit and neighboring suburbs. SPEAKERS JUST ADDED TO THE AGENDA INCLUDE: Joey Agree, CEO, Agree Realty Corp. Scottie Lee, Vice President, The Taubman Co. Jennifer Skiba, Vice President, Bedrock

LAST YEAR’S EVENT SOLD OUT! Don’t miss the chance to network with industry players and decisionmakers from a collection of companies.

Kristi Trevarrow, Executive Director, Rochester DDA Jevona Watson, Owner, Detroit Sip ...more speakers to be added soon!

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NOMINATIONS OPEN FOR CRAIN’S 2019

NOTABLE WOMEN IN STEM

Crain’s Detroit Business will name the 2019 Notable Women in STEM in a special report on May 27. In that report, we’ll profile women who are changing, growing and strengthening STEM-focused companies and organizations across the state. They’re also considered leaders in their workplaces and in the community. The form and accompanying materials must be submitted by Monday, March 18.

For more information or to nominate, visit crainsdetroit.com/nominate

Celebrating 103 Years of Being in Detroit’s DNA

1916 - March 11 Walbridge Aldinger Co. – Forged in Detroit

1917 - Book Building

1919 - Orchestra Hall

1927 - Olympia Sports Arena

1921 - Lonyo Rd. Sewer

1926 - Book Tower

1928 - Ambassador Bridge Foundations

1988 - DIA

2014 - Michigan DNR Outdoor Adventure Center 1992 - One Detroit Center (now Ally Detroit Center)

2017 - 28Grand

2003 - Compuware Building (now One Campus Martius)

2014 - David Whitney Building

Thank You, Detroit!

Building and restoring our city for more than a century Walbridge has played an integral role in too many Detroit landmarks to name. And we’re just getting started. From constructing the Book Building and Olympia Sports Arena to renovating the Detroit Institute of Arts and Detroit Opera House to restoring the David Whitney Building, David Stott Building and Wayne State’s historic Hilberry Theatre, no construction company is more committed to Detroit than Walbridge.

PRE-CONSTRUCTION I CONSTRUCTION I DESIGN I TECHNOLOGY I FACILITY MANAGEMENT

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walbridge.com

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