Crain's Detroit Business, May 20, 2019 issue by Crain's Detroit Business

Women in Leadership: Building a business from miniatures Page 10

Firm seeks Beilein’s successor Page 3

MAY 20 - 26, 2019 | crainsdetroit.com REAL ESTATE

Ross, Gilbert, UM dealing on ex-jail site In discussions for UM innovation center

Dan Gilbert

Stephen Ross

By Chad Livengood clivengood@crain.com

and Kirk Pinho kpinho@crain.com

New York City real estate mogul Stephen Ross is in talks with Detroit billionaire businessman Dan Gilbert and the University of Michigan about establishing a manufacturing innovation center on the vacant Gratiot Avenue site where Wayne County’s half-built jail was demolished last summer, Crain’s has learned. The concept is a “Detroit innovation center” that could house research and development for UM, according to three people familiar with the talks who requested anonymity. It would represent a major expansion into Detroit for the university. For years, the 15-acre former jail site has long been seen as an eyesore to the eastern gateway of downtown Detroit — and a major development opportunity at I-375 and Gratiot that could spur northward revitalization along the avenue. For UM, the Gratiot site is envisioned to mirror Cornell University’s Cornell Tech urban campus on Roosevelt Island in New York City, according to two sources familiar with the plans. Ross’ real estate development firm, Related Cos., was one of the developers that constructed Cornell Tech’s first residential building on Roosevelt Island, a narrow island in New York’s East River nestled between Manhattan Island and the Queens borough. A native of Detroit who has donated more than $300 million of his wealth to UM, Ross has expressed past interest in doing a real estate project in the city — but has largely remained on the sidelines of the revitalization of downtown Detroit that Gilbert has led since bringing his Quicken Loans Inc. to the city nine years ago. SEE JAIL SITE, PAGE 20

Gilbert, GM talked about buying RenCen By Kirk Pinho kpinho@crain.com

and Michael Wayland mwayland@crain.com

KURT NAGL/CRAIN’S DETROIT BUSINESS

The site of the failed Wayne County jail project has mostly been cleared and is undergoing site preparation.

General Motors Co. and Dan Gilbert had discussions in the fall about him purchasing the company’s Renaissance Center global headquarters. Four sources familiar with the discussions said the Detroit-based automaker (NYSE: GM) approached the billionaire mortgage and real estate mogul about a deal that would have added 5.5 million square feet to his ever-growing portfolio of downtown Detroit towers. It’s the latest property that Mary Barra’s company has tried to shed from its real estate portfolio, following news late last year that it was trying to sell its Courtyard by Marriott in the Millender Center across Jefferson Avenue for what sources at the time was a $45 million asking price tag. Talks between GM and Gilbert six months ago did not advance far, at least in part because the complex built in the 1970s and early 1980s by Henry Ford II requires substantial upgrades, including a costly overhaul of the HVAC system, three of the sources said. SEE RENCEN, PAGE 20

TECHNOLOGY

Clinc takes aim at Siri — and IPO — with $52M investment

By Tom Henderson

Clinc Inc., an Ann Arbor-based company that uses artificial intelligence to allow companies to more easily interact with their customers, has closed on a venture-capital funding round of $52 million, the company said Monday, the latest in a string of large investments in growing technology companies in Michigan.

The series B funding round is aimed at getting the company to an initial public offering of stock by 2022 as the company tries to take communicating with computers a step beyond Siri. In 2017, Clinc raised an A round of $6.3 million, following seed funding of $1.2 million in 2016. The company was founded in 2015 by a husbandand-wife team, Jason Mars, the presi-

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dent and CEO, and Lingjia Tang, the COO. Both are assistant professors at the University of Michigan and run their own research group there, the Clarity-Lab, clarity being short for cross-layer architectures and run times in 10 years. The group designs the scalable architecture needed to support future artificial intelligence applications. Clinc developed and markets Finie, a Siri-like voice-controlled app originally intended for financial institutions. It has since expanded its customer base to include Ford Motor Co. and is targeting health care, travel and hospitality, the gaming industry and quick-service restaurants. This round includes investors on both East and West coasts, further verification that Michigan has begun to shed its reputation as a fly-over state. The round was led by a new in-

CLINC INC.

Jason Mars, a University of Michigan professor, is president and CEO of Clinc.

vestor, New York-based Insight Partners, and joined by another new investor, Menlo Park, Calif.-based DFJ Growth Management LLC, and by two existing investors, Columbus, Ohio-based Drive Capital and Chicago-based Hyde Park Venture Partners. Insight Partners was founded in 1995 and has more than $20 billion of assets under management and has invested in more than 300 companies worldwide. DFJ Growth is a subsidiary of Draper Fisher Jurvetson, one of the legendary early VC companies in Silicon Valley. “This is a key milestone for us. My intention is for this to be the last milestone before we have an IPO,” Mars said in a telephone call Friday from China, where he opened a small sales office at the end of last year. SEE CLINC, PAGE 19

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MICHIGAN BRIEFS

INSIDE

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

Leland’s Fishtown businesses threatened by rising water levels

Fishtown, one of northern Michigan’s only remaining commercial fishing villages, is pulling together funds to aid its efforts to repair damage to shanties and docks from rising water levels at the historic site. Last week, water levels in the tiny offshoot of Leland on the Leelanau Peninsula grew 1 to 2 feet as a seiche caused water to spill over the top of the docks and into businesses, according to local media reports. A seiche is a standing wave propelled by strong winds and changes to atmospheric pressure that takes place in a “semi- or fully enclosed body of water,” according to the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration. As the water oscillates back and forth, seiches can last for hours or days. The total cost of the project is $1.6 million and about $450,000 has been raised so far, Amanda Holmes, executive director of Fishtown Preservation Society, told the Traverse City Record-Eagle. The nonprofit is hosting a fundraiser June 21. Money raised will go toward work on Carlson’s Fishery, Village Cheese Shanty, the Morris shanty and fishery, infrastructure repairs necessary to handle rain runoff and more, the newspaper reported.

CALENDAR

CLASSIFIEDS

DEALS & DETAILS

Work will begin this fall, UpNorthLive.com reported.

KC CRAIN

OPINION

MI lawmakers OK ban on abortion procedure; Whitmer to veto

OTHER VOICES

Michigan’s Republican-led Legislature voted Tuesday to ban a common second-trimester abortion procedure, pushing ahead with legislation Democratic Gov. Gretchen Whitmer said she would veto. The bills would prohibit physicians from performing abortion by dilation and evacuation except to save a woman’s life. Anti-abortion advocates refer to the procedure by the nonmedical term “dismemberment abortion.” The procedure, in which the fetus is removed in pieces with a surgical instrument such as forceps, was used in 1,777, or 6.7 percent, of abortions in the state in 2017. It accounted for half of all second-trimester abortions, including 78 percent done after the 16th week of pregnancy. The Senate and House passed identical legislation, on 22-16 and 58-51 party-line votes, at a time Republicans across the U.S. are advancing tough anti-abortion bills they hope can pass muster with the Supreme Court.

State’s unemployment rate up to 4.1% in April

Michigan’s unemployment rate increased slightly to 4.1 percent in April after six consecutive months of re-

PEOPLE

RUMBLINGS

WEEK ON THE WEB

whose registered agent is Manos, according to state records. The plane reportedly was having engine trouble and controllers had directed it to an airport in Frankfort when it vanished. Authorities have said the plane took off from Ontonagon in the Upper Peninsula and was heading to Monroe in Southeast Michigan. FISHTOWN PRESERVATION SOCIETY VIA FACEBOOK

Water levels grew 1 to 2 feet high in Leland County’s Fishtown, as a seiche caused water to spill over the top of the docks and into businesses.

maining unchanged. Figures released Wednesday by the Michigan Department of Technology, Management and Budget show the state’s seasonally adjusted jobless rate was half of a percentage point higher than last month’s national unemployment rate of 3.6 percent. In April 2018, Michigan’s jobless rate was 4.3 percent. Total employment grew by 7,000 during the month while the number of jobless workers increased by 4,000.

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Authorities name 2 men in missing plane

Authorities have released the names of two men they believe were aboard a small plane that went missing over Lake Michigan in northern Michigan. The Traverse City Record-Eagle reported that the Benzie County sheriff ’s office lists the missing men as 65-yearold Randal Dippoid, of Perry, and 53-year-old Emanuel Manos, of Monroe. The aircraft is registered to Howell-based Evergreen Exploration LLC,

Leapfrog gives an 'A' to 26 hospitals for patient safety

Twenty-six Michigan hospitals scored an “A” for meeting patient safety and quality measures in the spring survey of top hospitals by The Leapfrog Group and Economic Alliance for Michigan. Michigan hospitals were led by five affiliated with Detroit-based Henry Ford Health System and five affiliated with Spectrum Health based in Grand Rapids. Detroit Medical Center had two of its six hospitals on the list as did McLaren Healthcare Corp. in Grand Blanc and St. Joseph Mercy Health System in Ann Arbor.

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HEALTH CARE

Michigan HMOs earn record net income in 2018

SPORTS BUSINESS

By Jay Greene jgreene@crain.com

Michigan’s health insurers earned record profits in 2018, a year in which they raised many types of premiums steeply in anticipation of changes to Obamacare. Muted increases in payment for care led several of them to make higher profits on coverage than allowed and will have to pay refunds to customers. Led by Blue Care Network, which earned $250.6 million in net income in 2018 for a 5.9 percent margin, Michigan’s 21 health plans made a total of $500.4 million last year for a 3 percent margin, topping 2017’s record of $452.1 million, according to data from the Michigan Department of Insurance and Financial Services. Underwriting income was even better, totaling $587.4 million in 2018 for a 3.4 percent total margin. Without Blue Care Network, however, net income for the Need remaining 15 to know plans totaled $233.1 million for  Blue Care Network increased a 1.9 percent total margin. net income by “Overall plans 3.3% in 2018 to have tried to be $250.6 million more competi But eight plans tive and as a rereported lower net sult we have been income and four able to manage plans lost money health care costs and drive down  Nationally, health insurers had administrative expenses. The rebanner year, but sult has been inmust refund crease in net incustomers $1.4 come on billion for average,” said excessively priced Dominick Palpremiums lone, executive director of the Michigan Association of Health Plans. MAHP represents most of the health plans except for the two Michigan Blues’ plans. Pallone said he is uncertain how the state will judge last year’s HMO financial performance when setting Medicaid rates later this year for 2020. SEE HMOS, PAGE 18

Michigan coach John Beilein yells during the team’s NCAA men’s college basketball tournament West Region semifinal against Texas Tech in March in Anaheim, Calif. AP PHOTO/MARCIO JOSE SANCHEZ

LOOKING BEYOND BEILEIN Michigan taps search firm with deep local connections to aid in University of Michigan head basketball coach replacement effort Need to know

By Bill Shea bshea@crain.com

The University of Michigan’s athletic department has turned to an old friend to help it find a new men’s basketball coach. It has hired Turnkey Sports, the executive search wing of Haddonfield, N.J.-based Turnkey Sports & Entertainment Inc., to handle the process of hiring John Beilein’s replacement. The company has a challenge ahead: Finding the replacement for the winningest coach in UM history, for a job that will be one of the highest-paid public employees in the state. Turnkey was founded in 1996 by Len Perna, who earned a bachelor’s degree in 1982 and law degree in 1985 from Michigan. He’s a Michigan native, graduated from Brother Rice High School, and later was executive director of the Detroit Tigers, Detroit Red Wings and Olympia Entertainment from 1988 to 1994. Michigan used Turnkey in 2015 to manage the search that resulted in Warde Manual being hired as the replacement for interim athletic director Jim

New Jersey-based Turnkey Sports will handle coach search process for UM 

 Turnkey was founded by UM grad and former Tigers, Red Wings executive Len Perna  Firm was used to handle search that resulted in Warde Manuel’s hire as UM AD

Perna

Hackett, the current Ford Motor Co. CEO who filled in at Michigan after David Brandon was ousted as athletic director. Neither the university nor Turnkey is willing to comment on the search process until a hire is made. Turnkey clients have included Detroit’s pro sports teams, and many leagues, teams, stadiums, companies, organizations and events nationally. The company says it has done more than 1,000 executive searches.

“If I can get a proven coach, someone with a track record as a head coach, that’s what I’d like to see and then I want somebody who can coach and who can develop talent.” Warde Manuel, to reporters during last week’s Big Ten meetings in Rosemont, Ill.

SEE SEARCH, PAGE 18

NONPROFITS

Wolverine develops software platform, sells it to son of CEO By Sherri Welch swelch@crain.com

Rather than waiting for the state to figure out a fix for its flawed child welfare information system, Wolverine Human Services, one of the state’s largest child welfare agencies, hired an IT consultant and invested over $412,000 to develop its own. In use since mid-2017, the “Noble Child” platform, built on the customer relationship management system Salesforce, has already shown significant improvement over the pen and paper tracking system Wolverine and its peers have traditionally used. It’s cut the time it takes to license a foster care

Judith Wollack

Matthew Wollack

family from 13 months to six. Those efficiencies and accurate tracking are things the troubled Michigan Statewide Automated Child Welfare Information System can’t provide, child welfare providers said, despite a

$231 million investment since 2011. The state of Michigan, which is exploring other systems as it makes decisions about its own child welfare system by the end of June, has seen a demonstration of the Noble Child child welfare system but not yet issued a request for proposals, said Bob Wheaton, public information officer for the Michigan Department of Health and Human Services. Several other states are also reportedly assessing the Noble Child platform, and the Children’s Center of Wayne County plans to license parts of the system. That interest, which stands to help

Need to know

Wolverine Human Services invested over $412,000 in program that’s cut time to license a foster care family in half 

 Other nonprofits, states looking at the system  Nonprofit’s sale to son of founder and CEO raises conflict of interest questions

children near and far, could bode well financially for Grosse Pointe Parkbased Wolverine Human Services, producing revenue to support its mission. But it could also benefit one of its executives, Matthew Wollack, the son of the nonprofit’s founder and President

Robert Wollack and its CEO Judith Fischer Wollack. The appearance of possible private inurement — where a nonprofit’s assets benefit an individual — raises conflict of interest questions, nonprofit experts said. It’s something the Internal Revenue Service views as an unacceptable practice for nonprofits, according to Washington, D.C.-based BoardSource. Wolverine Chair Karen Menke Paciorek said the board’s primary concern in selling the platform to Wollack was moving it to market quickly so other agencies could use it. SEE WOLVERINE, PAGE 19

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Commercial Real Estate Telecom

Detroit Zoo’s economic impact spikes with opening of new animal habitats, other investments By Sherri Welch

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The economic impact the Detroit Zoo has on the region spiked over the past five years with the opening of new animal habitats and completion of other capital projects. Last year alone, the Royal Oak attraction spurred $167.6 million in economic impact — a combination of the zoo’s direct spending, the operating expenses of its food and beverage and gift shop outlets and catering services run by vendor Service Systems Associates Inc., visitor spending at the zoo and in the surrounding region at hotels, restaurants and gas stations and the multiplier effect of those dollars, according to a new study commissioned by the zoo. That’s up from total economic impact of just over $100 million in 2013 when the Plano, Texas-based Conventions Sports & Leisure International last completed the study. The Detroit Zoo’s average annual economic impact for the five years between 2014 and 2018 was just under $176 million, with banner years in 2015, when the Cotton Family Wolf Wilderness opened and in 2016, when the Polk Penguin Conservation Center was completed. With the creation of the Polk Penguin Conservation Center, the Arctic Ring of life and other attractions, “more people are coming, staying longer and spending more outside of the zoo at other venues,” the zoo’s executive director and CEO Ron Kagan said. “We’re important locally but also ... drawing people from other parts of the state and other states and countries,” he said. “That’s a result of the increased business activity that occurs as the zoo continues to develop.” The zoo has invested more than $60 million in capital projects since 2011, according to communications director Patricia Mills Janeway. And its current master plan includes another $23 million or so in capital projects by 2024. The new study comes as the Detroit Zoo continues to negotiate for a Macomb County location to serve as the home to the planned, $15 million Great Lakes Nature Center and a year after it floated the idea of establishing a major aquarium in downtown Detroit.

Visitor spending

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

Last year, the zoo had 1.38 million visitors, according to the study. The number of people visiting the zoo peaked at nearly 1.7 million in 2016 when the $32 million Polk Penguin Conservation Center — the largest project ever undertaken by the zoo — opened, setting a new all-time high and increasing the number of people coming through the gates for the 11th consecutive year. Based on ZIP code data collected through the ticketing process, nearly three-quarters of visitors come from within the tri-county area of Wayne, Oakland and Macomb. Another 16 percent come from elsewhere in Michigan, and 10 percent from other states and countries. But much of the visitor spending associated with the zoo is coming from people who live outside the region, according to the study.

The Polk Penguin Conservation Center was completed in 2016.

CURT CLAYTON

Detroit Zoo investments The Detroit Zoo has invested more than $60 million in capital projects since 2011:  $800,000 Holtzman Wildlife Foundation Red Panda Forest, which opened in December  The Devereaux Tiger Forest, which is set to open next month

$2 million expansion of the giraffes’ habitat, with interior enhancements completed in 2018 and the exterior, including a visitors’ plaza expected to be done this summer 

 New habitat for Japanese giant salamanders opened in 2018  Expanded Edward Mardigian Sr. River Otter Habitat opened in 2017  Completion of a new, $1.4 million anaerobic digester to convert animal waste into energy to help power the Ruth Roby Glancy Animal Hospital Complex  $32 million Polk Penguin Conservation Center in 2016  Cotton Family Wolf Wilderness opened in 2015  Jane and Frank Warchol Beaver Habitat opened in 2013  $1.8 million Cotton Family Wetlands/ Boardwalk opened in 2012 

Lions habitat opened in 2011

Other renovations and improvements, habitats for great apes, reptiles, aardvarks, warthogs, bears, sloths and barnyard 

 Landscaping improvements with permeable pavement and other updates

Over the past five years, an estimated 46 percent of the total output generated by zoo-related visitor spending has been from out-of-state visitors. Nearly a third, or 31 percent, of the zoo-related spending and ripple impact have come from people visiting from other parts of the state and the remaining 23 percent from residents of the tri-county area, which helps support the zoo with an operating millage. About a quarter of the zoo’s budget, which is $44 million this year, comes from a tri-county millage, Kagan said. The study includes visitor spending that takes place inside the zoo in its financial operation spending, which totaled $47.8 million last year. Outside the zoo, visitors from within the tri-county area spend an average of $8.87 per person per trip, according to the study, while other Michigan visitors spend about $58.83 per person and out-of-state visitors an estimated $127.50 per person.

Kagan

Alexander

Visitor spending in the region as a whole on hotels, gas, restaurants, gifts and other items totaled more than $41 million last year and $50.7 million in 2016 when the penguin center opened. “We’ve always known we are either the top single family paid attraction in the state ... or one of the top ones,” Kagan said. Attractions like the Arctic Ring of Life (opened 18 years ago but still attracting crowds), the Polk penguin center and other habitats and visitor experiences “are so unique and special that people who are really into nature kind of know about this place,” he said. “We continue to make the zoo a more compelling place, continue to enhance revenue (and) continue to make the experience more dynamic, interesting and relevant for people.” Among other findings, the study estimated that the Detroit Zoological Society, its third-party concessions, catering and gift shop vendor and visitors directly spent $98.3 million last year. The zoo’s operations and capital improvement projects accounted for nearly half of that. In all, the zoo’s operations supported more than $65 million in wages and an estimated 1,916 full- and part-time jobs last year, per the study. That’s nearly double the numbers in 2013 when the zoo supported $35.3 million in personal earnings and 1,082 full- and part-time jobs. The zoo is an essential asset in drawing visitors to the region, said Larry Alexander, president and CEO of the Detroit Metro Convention & Visitors Bureau and a member of the Detroit Zoo’s board. It’s historically been among the top two attractions in the region based on visitor numbers, behind The Henry Ford in Dearborn, he said. But with the concerts, sporting events and other activities it hosts, Little Caesars Arena may have taken the top spot. All of the attractions are a big piece of the region’s economy, Alexander said. “Having a multitude of things for people to see and do helps drive the growth of tourism… (and) tourism is a huge economic driver when you look at the taxes (and) jobs generated.”

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Safe Balance’s Dynamic Arc is a diagnostic tool to measure balance and to recommend steps to avoid falls. SAFE BALANCE INC.

Home-care firm expands use of startup’s anti-fall tech By Jay Greene jgreene@crain.com

Safe Balance, a Birmingham-based health technology company, has signed a three-state contract with Residential Home Health and Hospice of Troy that it hopes will greatly expand customers for its patented technology that assesses fall risks for seniors. Founded in 2016, Safe Balance has since expanded into seven states with more than 2,000 people tested at clients that include home health agencies, senior living facilities, hospital systems and accountable care organizations, said Nathan Clinton-Barnett, the company’s vice president of clinical services. One in four Americans aged 65 and older falls each year, according to the Centers for Disease Control and Prevention. Falls are the leading cause of fatal injury and the most common cause of nonfatal trauma-related hospital admissions among older adults. Residential, which has a history of pioneering new health care technology, began piloting the Safe Balance program last December and estimates it has reduced falls by at least 20 percent, said David Curtis, president and CEO of Residential. He said the program will help seniors stay safe and pinpoint potential fall risks before they happen, which will improve quality of life and reduce expensive hospital stays and ER visits. Over the past six months, 437 people were tested by Safe Balance in more than 27 communities in Michigan and Illinois. After some therapeutic intervention, two areas of critical fall risk decreased: standing balance improved 22 percent and time to complete basic mobility skills

Need to know

JJSafe Balance has patented technology

that tests seniors’ risks of falls to improve quality of life and reduce health care costs JJHas signed 11 licenses with home health, hospitals and senior living facilities JJResidential Home Health and Hospice is testing hundreds of seniors with data showing 20% reduction in predicted falls

Clinton-Barnett

Curtis

improved by 5.3 seconds, Clinton-Barnett said. “Falls among the senior population are a major concern,” said Travis Schmidt, Residential’s vice president of home health operations in Michigan. “There are many fall prevention programs, but most are reactive or warning systems. Safe Balance enables us to predict who is at higher risk for a fall and then mitigate that risk through therapy intervention.” In a patient survey with Residential, Safe Balance found that more than 71 percent of people age 65 and older reported a prior fall resulting in an injury with 67 percent reporting an injurious fall within the past year. Few of those patients received any skilled services designed to minimize falls. Safe Balance combines a tablet-based app and proprietary instrumentation that generate objective

measures in a person’s standing dynamic balance and gait. The app combines the results with a patient interview, history and performance metrics to calculate a fall risk score. The program then recommends mitigation strategies based on the risks identified. For example, if the assessment determines the individual is at a high risk for falls, then Residential coordinates with the patient’s physician to develop a personalized care plan to improve strength and balance to reduce falls. “Establishing an exclusive partnership with Residential was a clinical decision that made complete sense for our program,” Clinton-Barnett said. “By providing the Safe Balance program in conjunction with Residential’s health care services, communities and medical providers can expect the best outcomes for the seniors they care for.” Sheila Bullard, vice president of business development with Safe Balance, said the company hopes signing a major license with Residential will help expand the program across the country with other hospital systems and health care facilities that care for seniors. “We are proving the system works,” she said. In March 2018, Barnett-Clinton said Safe Balance changed its model from a per member subscription to senior living facilities to licensing the company’s program to health organizations like Residential and hospital-based systems. The data also is stored on cloud-based systems for easier access. “(Users) can run it on tablets and offer analytics outside of the clinical realm,” he said. “It allows us to enhance our clinical capabilities much further than before.”

With Residential, Safe Balance now has sold 11 licenses to companies that operate in Michigan, Illinois, California, Arizona, Indiana and Pennsylvania. It is pilot testing the system with a customer in Florida, he said. At Sunrise Senior Living in Grosse Pointe, Joanne Blenman, regional director of resident care, said Sunrise centers use Safe Balance as part of its individualized care approach to residents. Over the next 60 days, about 900 seniors are expected to be tested with Safe Balance. “We focus on promoting the overall well-being of each resident – mind, body, and spirit,” Blenman said. “This relationship complements Sunrise’s already robust evidence-based wellness programs, one of which includes falls management. We strive to support and maintain residents’ independence, and the Safe Balance technology helps enhance our regular efforts to assess their functional performance and plan personalized interventions.” Sunrise also has locations in Bloomfield Hills, Bloomfield Township, Troy, Shelby Township, Farmington Hills, Rochester, West Bloomfield, Northville and Grand Rapids, along with international locations. Because each region of the country has a different season for fall risks, Safe Balance has tests adjusted for the time of year. “People tend to be less active in the summer months in Arizona. It is opposite here in Michigan. In November, we can see falls start to decrease,” Clinton-Barnett said. “We can provide information to senior living facilities on trends so they can increase community health and wellness activities, blood pressure monitoring and chair yoga” to help prevent falls.

Clinton-Barnett said Safe Balance also is adding depression and geriatric screening to its testing protocols. “They are factors with fall risk. Maybe in the fall when there is less sun,” he said. Recent data shows that seniors who have low vision from such conditions as macular degeneration and contrast sensitivity impairments can contribute to falls. “By introducing evidence-based solutions optometry, occupational therapy or nutritional supplementation to this critical risk, we can directly influence a positive result that was otherwise hidden,” Clinton-Barnett said. “Poor vision can result in tripping or stumbling and by identifying the presence of this risk, we can offset it directly, quickly and effectively.” For those seniors who have been tested, the fall risk analysis also can compare six-month or more frequent periods and then compare with medical reports, last time in hospital or emergency departments to more completely analyze patients. “We are finding that the vast majority of people were not receiving patient referrals for physical or occupational therapy,” Clinton-Barnett said. Last fall, a wheelchair-bound resident in his 60s at a senior living facility in Michigan was tested with Safe Balance and found to have extreme fall risks when attempting to walk short distances. He was given occupational and physical therapy for six months to reduce fall risks. “He wanted to walk 10 feet. When we came for the assessment in March he walked in the room,” Clinton-Barnett said. “He achieved his goal.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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New Rockwell Medical CEO talks about turnaround after controversy By Jay Greene jgreene@crain.com

Stuart Paul, CEO of Rockwell Medical Inc., isn’t looking back at possible missteps made by previous management of the Wixom-based bioscience technology company. After being hired last September to replace former CEO and founder Rob Chioini, turn around the company and generate long-promised drug sales of its premier product, Triferic, an iron-replacement drug for patients on kidney dialysis, Paul has made two key moves he believes will propel Paul the 14-year-old company to profitability. “We starting selling (Dialysate) Triferic a week ago,” said Paul, a 25year veteran of the drug industry with stints at Baxter International and Abbott Laboratories. “I’ve done a lot of pharmaceutical launching in my career. Triferic has such a potential for success. I just made the decision (to launch) because of the transformational opportunity” to improve the health of patients. Triferic is used to replace iron and maintain hemoglobin in dialysis patients suffering from anemia. The second move was to announce a plan to submit a new drug application in the next several weeks with the Food and Drug Administration for intravenous Triferic. Paul said Rockwell is not projecting sales or revenue guidance for Triferic, even though shareholders have been clamoring for years to see returns from the promising drug. “Critical things have to occur (to generate decent sales). We have a business and sales plan to bring on key accounts, and the prospects over the net 12 months are good. We are going to build the standard of care in the industry, and this is just the first version,” he said.

Need to know

JJNew Rockwell CEO Stuart Paul begins

company turnaround with new management team JJWixom-based company last week begins commercial sales of power form of Triferic iron replacement drug product JJWill submit application to FDA and Medicare for intravenous Triferic product

Last month, Rockwell received a preliminary recommendation from the Centers for Medicare and Medicaid Services that would allow it to sell a powder packet formulation of Dialysate Triferic. Paul said the company is engaged in a commercial and medical education approach for Dialysate Triferic with a focus on dialysis centers that it already does business with along with select independent dialysis organizations, which amount to 25 percent of the market. “Medicare, CMS, just came out with a new policy for transition payments” that begin Jan. 1, Paul said. “We believe IV Triferic, if approved by the FDA, will be approved (for the transition payments) by CMS” and Rockwell could begin to generate sales in the massive Medicare market. Paul said the IV Triferic drug will be marketed to the larger dialysis centers that make up the bulk of the market for the drug.

Management shakeup Last summer, Rockwell (NASDAQ: RMTI) reached a $1.5 million settlement with Chioini, former CFO Thomas Klema and two former directors over disagreements on how to sell Triferic. A majority of the board and key shareholders disagreed with Chioini’s strategy for when to commercially launch Triferic and gain approval for Medicare reimbursement of the drug for kidney dialysis patients. “I’ve been CEO for seven or eight months. I was quite aware of Rockwell and interacted with them in the past in prior company environments,” said

Paul, noting that he knew from afar the potential value of Triferic if handled and marketed correctly. “I am good at building and (working) toward success in challenging environments, turnarounds, getting business back on track,” he said. “I was not overly concerned because, underlying everything, I felt I could put steps in place where over couple years we could transform” the company and generate expected sales. Paul said it only took him a couple of months to build a top-notch management team, one that he says has a lot of talent in both the pharmaceutical industry but also in the kidney failure market. Of the company’s 300 workers, he said he hired a handful of executives, including leaders in marketing, sales, operations and finance. “We have a team of about 25 in the field responsible for selling,” he said. One of the outspoken shareholders over the past three years has been David Richmond, president of Jackson-based Richmond Brothers Inc. Richmond was one of several large shareholders who had called for the ouster of Chioini and the replacement of several board members. “We got involved because we wanted promises being made to be met with equal results,” Richmond said in an email to Crain’s. “We believed and still do that this is a world-class therapy. We believe it can change the way iron is delivered and will become standard of care.” Despite the changes, Rockwell’s share price is still in the pits. But since December, when Rockwell’s share price bottomed out at $2.26, the price has steadily increased to $4.99. Still, the company’s share price is still far below its five-year high of $18.01 in July 2015. During the first quarter 2019 ended March 31, Rockwell’s sales increased to $15.6 million, a 4 percent increase from the same period in 2018. However, the net loss increased to $8.7 million, or 15 cents per share. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Market research firms rebrand as Escalent By Kurt Nagl knagl@crain.com

A pair of market research businesses in metro Detroit are rebranding as Escalent Inc. and consolidating to a single headquarters in Livonia following an acquisition by a California-based private equity firm. Livonia-based Market Strategies International and Farmington Hillsbased Morpace Inc. have finalized a merger announced last June when Palo Alto, Calif.-based STG Partners LLC purchased the companies, according to a news release. The combined operation is expected to earn about $104 million in annual revenue. The newly formed company’s headquarters is at 17430 College Parkway in Livonia, where employees who were with Market Strategies are based. About 110 employees from Morpace are moving from its former headquarters in Farmington Hills to the Livonia office. Once the move is complete — expected by the end of the year — 220

Lawrence

Sauter

Escalent employees will be based in Livonia. The company employs another 180 employees throughout the U.S., as well as in Canada, China and the UK. The company said the acquisition and merger did not result in any layoffs. Melissa Sauter of Market Strategies and Duncan Lawrence of Morpace were initially poised to be co-CEOs of Escalent, but the company announced last month that Lawrence would transition to an advisory role, and Sauter would be sole CEO. “Since announcing our merger, it has become even more clear to me

how powerful our combined organization will be,” Lawrence said in a news release from the company last month. “I have also been using this time to reflect on my 25 years with Morpace. With the merger teams fully engaged and making great progress, I have decided to transition into a strategic adviser role for our combined organization and will work closely with our clients in the automotive industry.” Escalent gathers data and provides insights to clients for branding, customer experience, product development and segmentation. Its clients come from a range of industries, including auto, tech, financial services, health insurance, energy and pharmaceuticals. According to the company, its new name is derived from the word “escalate,” which defines its goal of rapidly increasing growth for its clients. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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OPINION COMMENTARY

How the seeds were planted for Oudolf’s Belle Isle garden N

EW YORK — The setting was more than fitting — albeit a coincidence. In a tony restaurant overlooking The Vessel, the people-magnet landmark of the spiffy new Hudson Yards on Manhattan’s west side, Jean Hudson was talking gardens. Surrounded by her children — daughter Jeannie and son Webber — grandchildren, nieces and nephews and dozens of ex-Detroiters (former Detroit Institute of Arts director Sam Sachs was in the room), she described last week how a dedicated volunteer group had lured one of the world’s best-known garden designers to take on a commission in Detroit. Now, only $400,000 was left to raise to make the dream of bringing Piet Oudolf to Detroit’s Belle Isle to begin planting 1.5 acres this fall. And she was asking that people in the room contribute to filling in the gap. Just outside the Jean Hudson windows sits one of Oudolf’s most famous projects — the High Line, the formerly unused elevated rail track transformed into a magical garden that New Yorkers and tourists have flocked to. Oudof also created the Lurie Garden in Chicago’s Millennium Park, another “urban oasis.” And now, Oudolf is coming to Detroit. This started when Maura Campbell, a communications veteran with state government experience, was president of the Garden Club of Mich-

MARY KRAMER Group Publisher

igan from 2014-16. As part of a strategic vision exercise in 2014, she asked members to “think big” about a Belle Isle project that would require collaboration on something that would benefit Detroit and the region. Longtime member Jean Hudson, matriarch of the iconic Detroit family that Detroiters remember from the J.L. Hudson Co. store and downtown Detroit’s retailing heyday, answered the call with two words: Piet Oudolf. “I had to ask how to spell his name,” Campbell said, laughing. An early overture was unanswered, so Campbell wrote what Hudson calls “a love letter” to Oudolf and snailmailed it to him. The more personal letter did the trick: He answered, a visit to Detroit was scheduled, and Oudolf was on board for Belle Isle. The group’s agreement with the state Department of Natural Resources that runs Belle Isle as a state park requires that $2 million in endowment and cash pledges must be raised before anything is planted. Foundations have chipped in, with grants ranging from $250,000 to $750,000 from the Hudson-Webber Foundation created by members of the Hudson family generations ago. About $1 million has come from indi-

OUDOLFGARDENDETROIT.ORG

The preliminary master design of the Piet Oudolf garden planned for Belle Isle.

vidual donations. The Community Foundation for Southeastern Michigan is accepting the checks on the project’s behalf. Oudolf is known for mixing grasses and perennials to create a natural look. The first planting is scheduled for this fall for what is being described as a “five seasons garden” — the shapes, colors and textures will change with the seasons — even a Michigan winter. The garden will be a huge people-magnet for Belle Isle, but Camp-

bell says the goal of a new 501(c)3 nonprofit created as part of this process is to bring the lessons of the garden and how it was planted to neighborhoods, parks and schools in Detroit and the region. It seemed fitting that the New York fundraiser was held adjacent to the High Line. Even more fitting was, on the fringe of the room, stood Stephen Ross, the host of the evening and the Detroit native who created Hudson Yards, the largest privately developed real estate project in U.S. history.

Webber Hudson works for Ross’ Related Cos. Bringing the Detroit connections to this landmark project for Belle Isle in a neat, Detroit-centric circle.

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.

The case for ‘Fair’ fee schedule for auto insurance medical coverage

n the short time since the Michigan Senate and House each passed their own versions of no-fault auto insurance reform, there has been much comment on the content and repercussions of the bills. Overlooked, however, is impaired access to the best doctors — based on fee schedules that will make it impossible to provide care. While we do not believe that an imposed fee schedule will result in meaningful and direct savings to the consumer through a reduction of premiums (the PIP portion of the nofault premium is less than 35 percent of the total premium, so that a reduction of even 20 percent amounts to very little savings), there is a viable solution that will retain the high quality physicians in practices caring for collision trauma victims: the Fair Health Actual Value database, fairhealthconsumer.org. Doctors, it is thought, make enough money and will be fine so long as lower auto insurance rates can be delivered. But you should care. Here is why. Michigan offers state of the art medical treatment in many critical areas of injury care. But, by imposing an oppressive fee schedule, many of the fin-

OTHER VOICES

Bryan Schefman and Pratheep Sevanthinathan

est doctors, orthopedists, neurosurgeons and brain injury specialists will simply no longer be willing to treat motor vehicle accident victims. Why would they, when payment is insufficient, the risks of adverse consequences are high for a number of complex injuries, and the risk of non-payment is very high? Will you be able to get the surgery you need performed by the best doctor you can find or the one you are most comfortable with? Fee schedules such as Worker’s Compensation, Medicaid or Medicare are so low that they often do not allow a break even on costs; Medicare rates are based on the concept of a “payor mix”

of reimbursements from various commercial practices. What is proposed is a race to the bottom. Health insurance rates are negotiated with a prompt pay of seven to 30 days, with nominal paperwork, electronic submissions and electronic eligibility confirmation, coverage is never rescinded, and payment is not denied. And there is an enrolled population of patients as a base that is advertised to. Auto insurance carries no such ease of operations, advertising, and performance; it requires a billing department to correspond by paper with adjusters, hire an attorney to litigate denied claims, and then spend valuable time at depositions and court hearings. An adjuster will often delay by scheduling the insured for an insurance medical examination and deny the claim when that report is issued. Only at the conclusion of lengthy litigation is it paid at a discount based on the chance of other pre-existing conditions. The requirements to sustain this waiting and collections game are immense. The fee schedules currently proposed are miserably inadequate to

attract the best. We believe there is a very sensible solution: The Fair Health Actual Value Database. The cost of doing business in populous areas such as Royal Oak, Ann Arbor or Troy are significantly higher than doing business in Clare or Muskegon. The Fair Health AV Database considers this in setting rates based on national data. No hospital or medical practice can survive on government payor rates — everyone would end up as the Detroit Medical Center, which was forced to sell to a bidder that merely assumed debt. The Fair Health database is already used by many of the auto insurers to reprice physician charges which are much higher. These are currently the rates that the insurers are comfortable paying and have gladly accepted even as part of a class action settlement in Illinois. As such, the transition to this system would be smooth and non-disruptive. Fair Health AV Database tracks billions of claims from actual charges from thousands of facilities within the state and nationally. It can, therefore, incorporate inflation, increases/de-

creases in the cost of supplies, technological advances and the availability of providers and changes in coding. Acceptance of the Fair Health rate by no-fault would eliminate balance billing suits, which account for a large portion of the current volume. Accelerated payments at this rate would allow predictability for the no-fault providers and change the calculus for whether to dispute a claim. An accelerated rate and payment structure based on Fair Health would also reduce the reserves required for nofault insurers’ Injured But Not Reported loss reserves. The Fair Health Actual Value Database solution has been acceptable to no-fault — without endangering onesixth of the Michigan economy. It will protect all your constituents, those who need medical care and those who offer that care. Attorney Pratheep Sevanthinathan is the owner and managing partner of The Seva Law Firm in Troy. Attorney Bryan Schefman is owner of Schefman & Associates P.C. in Bloomfield Hills. They both represent injured motorists and medical providers.

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Veterans could help build a better Detroit

s Detroit moves along its path for renewal and enlightenment, making the most of our newfound cool status requires that we be ready to handle the growth. Yet a recent study by the Associated General Contractors of America cites a potential labor shortage that could impede the big build. I contend that Detroit, and the state, has an overlooked opportunity to meet those demands. One of the key resources for a stronger workforce could and should be veterans of the U.S. Armed Forces. Michigan, with more than 625,000 residents who served, is home to one of the country’s largest veteran populations. As a Vietnam veteran from Detroit, I have seen how the skills and dedication of veterans have played an important role in sustaining and/ or improving systems, education and social challenges. The National Veterans Business Development Council (NVBDC), headquartered in Detroit, has been working for years to certify which businesses are indeed veteran-owned and thereby increase the employment of veterans. Contractors should start their search here as they look to fill positions. As the NVBDC succeeds, more veteran-owned businesses are expanding their outreach, contracts and employees. For the Detroit area, this means that more products and more services can come from veterans. There are also national success stories touting the synergy between veterans and the construction industry. Industry leaders and advocates say veterans make ideal workers because of their intense loyalty, dedication and teamwork. Many companies have initiated programs to train and employ veterans. The Home Depot Foundation

Deadline extended for Crain’s Excellence in HR Awards Know an HR professional or team delivering incredible results for their business? You have more time to nominate them for Crain’s Excellence in HR Awards. Human resources leaders are the nerve centers of their businesses. Though they often operate behind the scenes — sometimes boxed into stereotypes about pizza parties and paperwork — HR professionals take care of people, control costs, keep things in compliance and help organizations achieve their strategic goals. Awards will be given in six categories: Overall Excellence / HR Team of the Year; Compensation and Benefits; HR Innovator; Employee Experience; Diversity and Inclusion; and Finding and Growing Talent. The deadline to nominate an individual or team has been extended to Monday, June 3. Visit crainsdetroit.com/nominate for more information or to nominate. Questions? Contact special projects editor Amy Bragg (313) 446-1646; abragg@ crain.com.

OTHER VOICES Jack Devine

announced last year that it will donate $50 million during the next 10 years to prepare 20,000 workers for the construction industry, by partnering with the Home Builders Institute to train, among others, military

veterans and active U.S. Army soldiers who will soon be leaving the service. We’re also doing our part to grow the ranks by investing in local youths. Vietnam Veterans of America, Chapter 9, recently donated $10,000 to the Detroit Public Schools Foundation for scholarships, a portion of which was designated for students pursuing a career in the building trades. The basis of this effort, which was announced at the Randolph Career Technical Center, is not just to seal the legacy of our servicemen and women, but more importantly it is to provide another career choice

Industry leaders and advocates say veterans make ideal workers because of their intense loyalty, dedication and teamwork. for Detroit youths. The scholarships are being administered by the Detroit Public Schools Foundation. The funds will help those students pursuing careers in the trades pay for either an accompanying degree program at a community college or the

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costs of critical items such as transportation, construction apparel and equipment. So, as we work to address labor shortages that will enable the people of the city, and of the area, to meet the tasks ahead, I suggest making the most of the population who has already proved their mettle by tapping into the men and women of the U.S. Armed Forces. There are many, many veterans who are ready and able to report for that duty. Jack Devine, who served in the U.S. Air Force in 1965-1969, is a founding member of the Vietnam Veterans of America, Chapter 9.

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FOCUS

WOMEN IN LEADERSHIP

A model business

By Rachelle Damico

Special to Crain’s Detroit Business

Aimee Zoyes always had an entrepreneurial spirit. She started her company, AC Illustration, when she was just 28 years old. “When I was young, I had fewer responsibilities than I do now and was luckily somewhat naive and fearless,” Zoyes said. “I felt I had more opportunities going off on my own.” Now she’s the president of Zoyes Creative, the agency responsible for the 12-by-14 model of downtown Detroit made for Bedrock Real Estate Services LLC in 2011. The model sits on the 10th floor of One Campus Martius and is seen by thousands of visitors each year. SEE ZOYES, PAGE 11

Aimee Zoyes ALI LAPETINA FOR CRAIN’S

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SPECIAL REPORT: WOMEN IN LEADERSHIP took thousands of hours. It’s interesting because over the years we wondered if model making would be less popular with animations, renderings and digital technologies. There’s something about a physical model that has a wow factor that renderings and animations just don’t offer. People are fascinated with it, and to this day the projects continue to get bigger and bigger.

What’s next for your company?

We’re moving to Detroit next year. Many of our clients and projects are in the city and we want to be integrated into the energy and vibrancy of downtown. We’re continuing to grow, and have our sights set on expanding nationally. The future is bright. This interview has been edited for length and clarity.

Zoyes Creative created the 12-by-14 model of downtown Detroit made for Bedrock Real Estate Services LLC in 2011. The model sits on the 10th floor of One Campus Martius. ZOYES CREATIVE

ZOYES FROM PAGE 10

The agency also created models for Olympia Development of Michigan, including a 40-plus-block model of District Detroit and a model of the new Detroit Red Wings arena in 2014. Aside from their model work, Zoyes Creative was commissioned to help brand Bedrock’s City Modern project, an 8.5 acre residential development located in the Brush Park neighborhood. The agency also did branding work for Hunter Pasteur’s Pullman Parc, which is located at the site. Last year, Zoyes Creative was hired by three retired pro football players — Lions’ players Calvin Johnson and Rob Sims, and Michigan State Spartans’ center Jason Strayhorn — to develop branding and marketing services for their firm Locker Room Consulting, which offers consulting and financial opportunities for retired athletes. Zoyes Creative has 15 employees and doubled in revenue in the last three years, up from $1 million in 2016 to $2 million today. Did you have the entrepreneurial bug early on?

From an early age I was interested in business, and also in artwork and crafts. I used to draw things and try to sell them to my parents. Later, I became a painting major in school, so I knew I wanted to do something creative. My first job out of college was working for a small architectural rendering studio where I hand-painted renderings. I don’t do anything creative anymore physically, but I enjoy the art direction and being a part of a creative agency. Why did you decide to start your own company?

I felt I had more opportunities going off on my own. I had built relationships with most of my customers working as an illustrator in the community. I remember creating a direct mail piece and sending it to a list of targeted clients. That drew attention, and it was little by little from there. When I started working as an independent subcontractor, I also managed an art gallery in Birmingham to make sure I could sustain myself. I only managed the gallery for about six months. I was so busy that I went (into) business for myself full time. I moved into a small office space in Birmingham, hired my first employ-

The Zoyes File Education: Bachelor of Arts with a concentration in painting from the University of Toledo. Career ladder: Began her career in 1994 working as an architectural illustrator for Howard Associates, an architectural rendering firm in Sylvania, Ohio. She moved to Michigan a year later to join Communications Associates, a Troybased marketing firm. She was there for about three years before starting her own business called AC Illustration LLC, where she created architectural rendering for developers, builders and residential architects. Her current company, Zoyes Creative, was formed with her husband Dean Zoyes. Dean’s Detroit-based architectural model-making company, Zoyes East Inc., and Aimee’s Birmingham-based AC Illustration merged under the Zoyes Creative name in 2009. Current role: President of Zoyes Creative, a creative agency located in Ferndale that specializes in branding, architectural rendering, modeling and more. Aimee Zoyes is responsible for the strategic direction of the company, as well as new business development, brand strategy and art direction. Fun fact: During her first year as an entrepreneur, she became inspired to build her company after seeing her future husband’s picture on the cover of Crain’s, which featured a story about Dean Zoyes’ model building business for architects. “I said to myself, if he could do it, I could do it,” Aimee Zoyes said. She met her husband three years later through business relationships.

ee and grew from there. What were some early challenges for your company?

At the beginning, the economy was robust here. I had one employee, small overhead and could focus on getting better at my craft. After five or so years the economy started to downturn and that was difficult. I was living through the economic recession in a city that was one of the hardest hit in the country. Architecture and construction were hit hard. It was difficult to navigate. Resilience was probably my best skill. How did you get through the recession?

My husband and I married in 2006, right when things got tough here. We both ran our own companies, but kept our businesses separate. I

thought it would be too difficult to work with my husband. During the recession, we decided to combine our businesses to survive. Looking back, it was one of the best things we’ve done. It gave us a certain niche that we could expand on. I worked for developers, builders and residential architects, and he worked for larger architects like SmithGroup, Gensler and Rossetti Associates. We shared clients and made our business more efficient. There were no longer two fax machines, two rents and two cable bills. We economized all of that into one space to help each other grow. What was the transition like when you began running the company with your partner?

When we first started, it was challenging. As time went by, we thought about one of us pursuing an executive position outside of the industry while the other ran the business. We did that for a short time. My husband worked for EEI Global in the exhibit industry for a few years and I ran the business. That was challenging as well, because he had his stresses working in a corporate environment and I had mine running both sides of the business. As Zoyes Creative became busier, I begged him to come back because I needed him to grow. We’re polar opposites in some ways, but it’s also our strength, because he has what I don’t and vice versa. He’s an operations person and more detail oriented and I think more strategically when it comes to new business development, problem solving and overseeing those types of decisions. The second time we came together we had more appreciation for what that gave us. We recognize the benefits and the freedoms that we have being self-employed. We also have the shared benefit of living and breathing our business.

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Many people are familiar with your models of Detroit. What’s the hardest part of that process?

The challenge with a lot of the Detroit models is that we didn’t have any architectural files to work with. There’s no place for us to access all of the building’s architectural records, and we don’t have contact with all of the previous architects or owners to gather files. Instead, we had to rely on Google Earth images to determine the height of a building and draw each building ourselves. It was a massive effort that

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The city of Detroit bought 142 acres of the former Michigan State Fairgrounds site near Woodward Avenue and Eight Mile Road in Detroit. LARRY PEPLIN FOR CRAIN’S

Crunching the former state fairgrounds land costs What a difference a few years can make. Sixteen acres of former Michigan state fairgrounds land that a development group KIRK headed up by a PINHO prominent Lansing real estate developer and an NBA Hall of Famer bought last month has more than quintupled in value since it first agreed to purchase property there. In addition, the city of Detroit is paying the Michigan Land Bank Fast Track Authority more than 25 percent more than the appraised value for 142 acres of the site at Eight Mile Road and Woodward Avenue, the January 2018 valuation shows — although the city and state dispute those numbers. There’s a lot to unpack here. The Fast Track Authority said it was keeping with its previous agreement with Magic Plus LLC, headed up by developer Joel Ferguson and Earvin “Magic” Johnson, which paid $472,464 ($29,529 per acre) for 16 acres of land along Woodward south of Eight Mile in the 158-acre site. JLL’s Chicago office valued that property at $2.61 million in an appraisal conducted 16 months ago. At that price, the sale would have been for $163,125 per acre, or 5 1/2 times what Magic Plus ultimately paid. A prior deal for the 158 acres had Magic Plus paying $4.65 million, or $29,430 per acre, just slightly below the ultimate purchase price. “When the Michigan Land Bank released the original RFP in 2012 for the state fairgrounds, Magic Plus was

the only entity to respond. Though the sale did not close until recently, Michigan Land Bank honored the original per acre price that was determined in 2012 based on the then appraised value of $4,650,000 for the entire property, approximately $29,000/acre,” the Fast Track Authority said in a statement. “There were several iterations of the development plan over the past six years, including changes in community support for the project and changes in administration within the city of Detroit. Through all these changes, Magic Plus remained committed to the project. Both Magic Plus and the Michigan Land Bank continued to work together throughout those six years to find the best arrangement for this property and the City of Detroit.” Joel Ferguson, a Lansing developer and principal of Magic Plus, said in a statement last week that the developers are working through the planning process for the Woodward Avenue frontage “with an expectation of a development that will be a game changer for the community, the city of Detroit and the state of Michigan.” The Fast Track Authority also said that “there were several factors considered” in the $7 million purchase price the city paid, “one of which was based on the state looking to recoup the cost of the property, at the time that was roughly $7 million.” When the city agreed to pay $7 million for the site’s remaining 142 acres in a deal that was announced in March 2018, the deal was for $49,296 per acre. However, the January 2018 appraisal from JLL pegged that property with a $5.44 million value, or $38,310 per acre.

The city is paying $3.5 million upfront for the land, and the remainder once the city sells the property or in 10 years. The city anticipated issuing a request for proposals to redevelop its part of the property after the deal closed. In a statement, F. Thomas Lewand, Mayor Mike Duggan’s group executive for jobs and economic growth, said in a statement that the city and state disagreed with the appraised value. Instead, they valued the property “at closer to $20 million,” he said. “The final negotiated purchase price landed at $7 million based on a number of factors, including that the city only pays $3.5 million up front, and the balance only when we sell the property (or ten years from closing).” One appraisal was done in 2012. The January 2018 appraisal cost $20,000, the state said. “From a market value, going off the 2012 value vs. the 2018 value would make no sense at all,” said Brandon Boudreau, COO for Detroit-based Metro-West Appraisal Co. LLC. The Magic Plus group had planned a massive redevelopment of the site with more than 3 million square feet of new space, including residential, retail, office and entertainment uses, but in the 5 1/2 years since a purchase agreement was signed with the land bank little has happened to the site. It’s not uncommon for developers to get land and other properties from governmental agencies on the cheap under the assumption that they are going to be redeveloped, put back in private ownership and begin contributing to the tax base and providing jobs.

“We’ve seen instances where land buyers and/or large tenants are given discounts on land or building leases. This would take place at the early stage of a larger development where securing an anchor user is advantageous to the overall development,” said Anthony Sanna, senior managing director in the Birmingham office of Integra Realty Resources, an appraisal firm. “Often times, a premium can be charged to subsequent tenants and/ or land users as a result of having the anchor(s) in place, sometimes mitigating the earlier incentives.” Gov. Rick Snyder transferred ownership of the land to the land bank authority in April 2012, three years after the last state fair was held at the property.

The Mid brownfield subsidy sought: $58.5 million The developers behind the planned $310 million pair of high-rises and other buildings that constitute The Mid development are seeking $58.5 million in brownfield incentives for the project. The subsidy, revealed in a brownfield plan posted on the Detroit Brownfield Redevelopment Authority website last week, is for cleanup of contaminated materials and infrastructure. Developers front the costs for those things but are paid back through tax-increment financing, which captures increases in the taxable base after a project is completed. The Mid project, which is currently going through the community benefits agreement process after being

publicly revealed in March, is slated to have two high rises that include a 228-room Thompson hotel, 60 condominiums, plus more than 200 multifamily residential units and other uses like retail, public space and parking. The first phase, which includes the 25-story hotel/condo tower, is expected to cost $195 million and start construction this summer, according to project representatives. Another $20 million or so in tax abatements over 10 years is sought, according to a post last month in Curbed Detroit.

Updated timeframe for East Jefferson Meijer store “Late summer.” That’s what Dennis Archer Jr. said when I asked him about the updated time frame for construction starting on the planned Meijer Inc. grocery store on East Jefferson Avenue. When the $60 million project, slated at the time to include more than 200 apartments, was first revealed in October 2017, construction was expected to be complete by the fall this year. It is being developed by East Jefferson Development Co. LLC, which is a joint venture between Bloomfield Hills-based Lormax Stern Development Co. LLC, Archer and Marcel Burgler of Grand Rapids-based Prime Development. The project has been held up by factors that include increasing construction costs. Stay tuned. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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‘DETROIT RISING’

Chasing fraudulent auto insurance medical claims Attorney John Hohmeier has 130 pending lawsuits sitting on his desk pertaining to various medical claims for coverage under Michigan’s unlimited auto insurance benefits for injured motorists. Hohmeier, one of 17 lawyers at Scarfone & Geen P.C., a Madison Heights firm that represents auto insurance companies, says half of the lawsuits have some element of fraud in which the injured driver or their doctors seek to game the no-fault system for services and payments. Many of the claims, Hohmeier said, include staged accidents and motorists lying about their physical capabilities. One emerging form of fraud involves stealing or photographing the auto insurance card from a vehicle and filing an immediate accident claim with a carrier so the thief can obtain a claim number and start seeing doctors the next day, Hohmeier said. “We call it paHohmeier per claims,” Hohmeier said in an interview for the Crain’s “Detroit Rising” podcast. “So if you go, for example, to dinner with your wife and you valet your car, the valet or somebody in the parking garage will take a picture of your insurance policy, get two or three friends together, call up the insurance company, make a claim, get a claim number (and) take that claim number to any of the dozens of no-fault doctors in the metro Detroit area. “They’ll get four different sets of prescriptions off the bat — because that’s standard operating procedure for a lot of the doctors who are willing to treat no-fault patients without insurance or prior payments.” Reining in the cost of medical claims

CHAD LIVENGOOD clivengood@crain.com

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for injured motorists is at the center of a legislative effort in Lansing to reform Michigan’s unique auto insurance law — the only one of its kind in the country with mandated Personal Injury Protection (PIP) coverage for all motorists. Hohmeier contends the limitless PIP medical benefits under Michigan’s 45-year-old insurance law encourages overutilization of medical procedures and outright fraud. He spends his days trying to combat perceived fraud and litigating over bills for clients such as State Farm Mutual Auto Insurance Co. and AAA of Michigan. Often times, Hohmeier said, the paper claims occur so fast that the insurance company doesn’t catch them until after the thief or thieves have already sought medical treatment or prescription drugs from unwitting doctors. “I’m not at all blaming the doctors — they don’t know it any more than the insurance company knows it when the people call in,” he said. When auto insurance carriers flag suspicious claims activity, they attempt to contact the motorist by phone to verify they were, in fact, in an auto accident, Hohmeier said.

Opening bell coming for Detroit Beer Exchange By Annalise Frank afrank@crain.com

The owner behind Kalamazoo Beer Exchange has another stock-market bar in the works, this time in downtown Detroit. James Flora, who opened a bar and restaurant in Kalamazoo in 2010 where beer costs fluctuate like stock prices, plans to open a Detroit Beer Exchange, he confirmed to Crain’s. The bar is planned for 1258 Washington Blvd., in Detroit-based Roxbury Group’s redevelopment of the historic Stevens Building alongside Invest Detroit. Roxbury bought the Stevens Building as a pair with the Louis Kamper Building in 2016 with Invest Detroit, and it is keeping them as affordable senior housing after renovations. They have nearly 9,000 square feet of retail space, according to Roxbury’s website. Roxbury spokesman Dan Austin said last week that the developer referred comment to the tenant.

“We’re very excited and we have been for quite some time,” said Flora, a Berkley native. He declined to disclose more details, including timeline for a potential build-out and opening, saying more information is “to come.” Flora had previously planned a second location in downtown Lansing in 2016 and 2017, but the project with Lansing-based Eyde Co. fell through, the Lansing State Journal reported. Flora declined to comment on the situation. At the Kalamazoo exchange, which has 28 beers on tap, TVs broadcast prices and beers’ per-ounce values rise and fall with demand. A “stock market crash” means beer is cheap for five minutes. The bar serves wine and cocktails, too. It’s also a full restaurant with bar fare, soup, salads, sandwiches and main courses. Another bar modeling itself after a stock exchange, The Dow, opened in 2017 in Birmingham.

“The insurance company may not even know it’s fraudulent for a couple of days,” he said. “And by then, the person has already gone to the doctor, they’ve got their prescriptions and they’re off.” Michigan’s no-fault auto insurance law has become awash in litigation surrounding medical bills as auto insurance companies question and deny claims and medical providers leapfrog over patients to sue insurers for not paying. Between 2008 and 2018, the number of first-party no-fault lawsuits nearly doubled from 6,035 to 11,764. Seven out of 10 of the 2018 lawsuits were filed in Macomb, Oakland and Wayne counties. Crain’s reported last month there was a 295 percent increase in first-party lawsuits filed in Oakland County between 2016 and 2018 as Wayne County judges tossed out lawsuits from medical providers — and judges north of Eight Mile Road allowed them. Court-appointed case evaluators are starting to more closely scrutinize lawsuits brought by medical providers seeking judgments against no-fault carriers, Hohmeier said. “I think the case evaluation panels are starting to question why a lot of these cases are being filed in Oakland (County) when the providers are in Wayne, the accident was in Wayne, the underlining claimant is in Wayne,” he said.

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Detroit Wayne Mental Health seeks to partner with Medicaid HMO for integrated care By Jay Greene jgreene@crain.com

A new proposal from the Detroit Wayne Mental Health Authority would team the state’s largest provider of behavioral health services with at least one Medicaid health plan to coordinate mental and physical health services. If successful, care coordination could save millions of dollars that potentially could be used to expand mental health services and at the same time cut HMO expenses, DWMHA officials said. The organization last week issued a request for information to Medicaid HMOs and other interested agencies for an integrated approach to health care services. At least 25 health organizations have downloaded the proposal since it was posted May 10 on the Michigan Inter-governmental Trade Network. Under the 20-page proposal, which must first overcome some regulatory and legislative hurdles, savings of up to an estimated $25 million would come from reducing unnecessary hospital emergency room visits and inpatient and catastrophic care could be used to expand mental health services, said Willie Brooks, CEO of DWMHA. Brooks said DWMHA alone spends $55 million annually on hospital costs. He said HMOs could be expected to also save an unspecified amount of money by reducing unnecessary hospital and outpatient costs. “We cannot partake in the (three) pilot programs (the state plans to launch later this year to test integrated care), yet at the same time we want to be part of the integrated care” movement because of the potential savings involved, Brooks said. “It will be beneficial to patients and fits in with the holistic care philosophy we have adopted.” Brooks said last year DWMHA pledged to gear its future services in a

Need to know

JJOrganization proposes to share savings

by coordinating physical and behavioral health services

JJEstimated savings could be $25 million in unnecessary hospital costs, which could be used to expand mental health care JJPlan needs changes in state law and regulations, and a willing Medicaid partner

Brooks

Pallone

holistic care approach that focuses on improving behavioral and physical health, and the economic, social justice and spiritual well-being of patients. As the largest of the 10 regional prepaid inpatient health plans in Michigan, DWMHA has an overall budget of about $780 million. It serves more than 73,000 people, including 82 percent Medicaid or Healthy Michigan, 11 percent non-Medicaid and 6 percent Medicare-Medicaid dual eligible patients. The proposal deadline is June 14 and DWMHA plans to start the integrated care approach this fall, Brooks said.

Seeking shared savings Dom Pallone, executive director of the Michigan Association of Health Plans, said several Medicaid health plans are reviewing the integration proposal. He said the plan is contingent on health plans sharing savings from the physical health side. “This just looks like an effort by a PIHP (Prepaid Inpatient Health Plan)

to see if they can find new revenue to offset their financial losses,” Pallone said in an email to Crain’s. “They seem to be looking for proposals to do care coordination, but there aren’t any state barriers to doing more on care coordination, so I’m not really sure why they haven’t done something in this arena already.” Brooks said DWMHA initiated the proposal because Wayne County was not selected by the Michigan Department of Health and Human Services as a pilot region to test integrated care. He said it has been working on coordinating care with mental health providers, physicians and health plans, but the new proposal would formalize interactions and speed up integration. Robert Sheehan, CEO of the Community Mental Health Association of Michigan, said similar innovations between mental health organizations and managed care payers are starting to happen across the state. To date, however, there hasn’t been any shared savings plans worked out. “Wayne County is very large and is requesting a health plan partner. There are also some great partnerships going on in Oakland County and in some northern counties (in Michigan), but no shared savings yet,” Sheehan said. “There are a lot of mental health providers working with health plans on co-location of services and sharing of clinical records.” Pallone said Medicaid health plans want to improve the current system and are working in many ways toward those goals already with mental health agencies and the 10 regional prepaid inpatient health plans, which manage $2.8 billion in state Medicaid behavioral health funds. “I don’t think this is asking for true integration — financial, administrative and clinical — and isn’t very innovative,” he said. “(Health plans and the association) also will continue to work with our partners at MDHHS

and the Legislature to find a path forward that improves health outcomes for the whole person in a way that is fiscally responsible to the limited resources of taxpayers.” In 2016, then-Gov. Rick Snyder proposed Section 298, a plan to merge the $9 billion Medicaid physical health system managed by health plans and the now $2.8 billion Medicaid behavioral health system. In a compromise, Snyder agreed to test integration in three pilot programs, which will be managed by health plans. The pilots, which are expected to begin this fall and run two years, will be tested in Genesee, Saginaw, Muskegon, Lake, Oceana and Mason counties. Some details, including health plans paying for support services for people in their homes, have yet to be worked out. This week, Brooks met with MDHHS officials to ask for a waiver from the state regulation that requires prepaid inpatient health plans like DWMHA to use all funds, including potential savings from efficiencies, during the fiscal year. Currently, state regulations mandate that savings of mental health agencies and profits from Medicaid HMOs must be accounted for at the end of the year and not held over. State health officials promised to work with Detroit Wayne Mental Health Authority, a DWMHA spokesman said. However, DWMHA and the HMOs also need changes in state laws. “The challenge we have is for the state to allow HMOs and community mental health agencies to take the savings and reinvest it into” mental health services in an ongoing basis, Brooks said. “We and Medicaid HMOs are punished if we don’t spend (savings) right away,” he said. “The state allows Medicaid HMOs to make money, but when they calculate their rates they take into consideration profits and reduce rates.”

How proposal would work

Under the proposed contract, Brooks said, the Medicaid HMOs and Detroit Wayne Mental Health Authority would continue to be paid from the state and manage their funding as always. But there would be an alternative payment model system created by the organizations to return physical health savings to the mental health authority on a quarterly or monthly basis. “Maintaining two distinct risk pools, behavior health (DWMHA) and physical health (Medicaid HMO) is necessary to protect the integrity of the relationship between DWMHA and partnered (HMOs),” the proposal says. In the meantime, the proposal calls for DWMHA to make available to Medicaid HMOs a network of physical health satellite offices. Each office will include dental, vision, preventative health care and other services. Mutual credentialing of providers will also be necessary. Brooks said developing a medical records exchange system and streamlining referral processes is key to coordinating and integrating care. It is unclear now how many patients could be served under an integrated approach. It depends if one or more Medicaid health plans participate and whether other populations besides managed care are included. For example, Detroit Wayne Mental Health Authority serves about 17,000 people who are not enrolled in a health plan, are receiving fee-for-service Medicaid services or have serious mental illnesses. “DWMHA will work with as many MHPs as are interested in partnering on an integration model that is based on the DWMHA model of care, core values, and pilot goals,” the proposal says. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Kensington Church backs out of Bloomfield campus plans Need to know

By Kurt Nagl

knagl@crain.com

Kensington Church is opting not to move ahead with a new campus in Bloomfield Village following a flood of concerns from residents. At a village planning meeting last week, the Troy-based nondenominational church, along with its developer Novi-based Cunningham-Limp Co., withdrew its $3 million offer to buy Detroit Country Day’s Bloomfield Village Campus, said Art Atkinson, village manager. The church was planning to build a 15,000-square-foot venue on 3.5 acres of property at Lahser and Maple roads. Many residents voiced opposition because of space and parking issues. “Cars would be parking in the shopping center next door, which is already overcrowded, and on the streets in front of houses,” Atkinson said. “I think that the feeling was that this particular entity’s desire was too large for the property at hand.” Atkinson said Tuesday’s meeting was met with “45 minutes to an hour”

JJTroy-based church withdraws $3 million offer to buy Country Day campus JJParking concerns were the primary issue for residents JJFuture plans uncertain for property, church

Kensington Church scrapped its plan to build a 15,000-square-foot campus in Bloomfield Village.

of residents voicing concern. Cliff Johnson, pastor of Kensington Church’s Birmingham operation, said in an emailed statement that the church had 120 days to conduct due

diligence after entering a purchase agreement with Country Day. “At the top of the list was engaging with the neighborhood association to make sure they understood our in-

KENSINGTON CHURCH

tended use of the property, and to gather feedback,” he said in the statement. “After hearing valid concerns from the neighbors, we have decided not to pursue the property and con-

tinue to look for other locations.” The church targeted the property after Country Day consolidated locations with a $30 million expansion at its middle school at 22400 Hillview Lane in Beverly Hills. The church had been renting space at Groves High School in Birmingham on Sundays for services but was outgrowing the space — a situation similar to what happened in Macomb County before the church opened a permanent $14 million campus in Clinton Township on Hall Road. Atkinson said there are no new plans for the old Country Day campus. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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

A 33-unit, mixed-use apartment complex is planned for the site of a long-vacant CVS in Hazel Park. RON & ROMAN

Hazel Park plans development, $3.2M streetscape By Kurt Nagl

knagl@crain.com

As Hazel Park plots to build a downtown, a proposed mixed-use development and $3.2 million streetscape plan could help move the vision forward. A mixed-use apartment building with 33 units and 14,000 square feet of retail is planned for the site of a long-vacant CVS store on John R. Road — the city’s main drag. In the coming weeks, crews will begin overhauling John R., slimming it from four lanes to three, widening sidewalks and adding parking and bike lanes from Eight Mile Road to the Chrysler Service Drive. Nine Mile Road from Dequindre Road to the Ferndale border at West End Street is also targeted for a road diet and repairs. The idea is

Need to know

33-unit, mixed-use apartment building planned for John R. 

 Road construction aimed at making area more walkable  City planners envision destination downtown

to create pedestrian-friendly infrastructure as a foundation for new development. “That is what we’re hoping to be the re-emergence of a downtown in Hazel Park,” Jeff Campbell, community development director for the city, told Crain’s. Tucked along Detroit’s northern border, the Oakland County city has

been overshadowed for many years by its vibrant neighbor to the northwest, Royal Oak, and more recently, Ferndale, with which it shares city limits to the west. Planners in the 3-square-mile city are adamant that Hazel Park is an up-and-coming place to be, and a budding restaurant scene and redeveloped race track are playing in its favor. Construction of the new apartment building at 23722 John R is expected to start soon. The four-story complex is being spearheaded by Lucky Ranger LLC, whose registered agent is Michael Lang, owner of Renshaw Lounge in Clawson. Campbell said developers still need some engineering and planning approvals, but the project is expected to

be done by late 2020. “It is extremely exciting,” Campbell said. “The developers want to work with us to attract unique, destination businesses in Hazel Park.” The apartment building would be kitty-corner to popular restaurants Mabel Gray and Latido at joebar. The old CVS building, which closed around 15 years ago, would be demolished. Woodward Detroit CVS sold the property to Lang in January 2018 for $750,000, according to property records. Lang declined to comment on the new development. The architect for the project is Ron & Roman LLC, based in Birmingham. Canton-based Cadillac Asphalt won the bid for John R road work, expected

to be complete before the end of the year. Work on Nine Mile is expected to be complete this season, but might get pushed until 2020, Campbell said. The road construction is being funded by a $939,000 federal grant and road bonds issued by the city. Ed Klobucher, city manager for Hazel Park, said the new development and streetscape will “make the whole area pop” and hopefully lure millennials. “There’s a lot of interest and excitement,” he told Crain’s recently. “We’re pleased to see that. Crime rates are low, housing values are up. It’s a good time to be in Hazel Park.” Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Beaumont to move distribution center to Belleville Need to know

By Annalise Frank

afrank@crain.com

Beaumont Health leased an industrial building in Belleville so it can relocate and grow its distribution and mail-order pharmacy operations. The move from a Warren facility this summer would “accommodate growth” and give the health system better access to highways for distribution, Carolyn Wilson, Beaumont Health chief operating officer, said in an emailed statement. The center is used to store medical supplies distributed to its facilities and to fill and ship mail-order pharmacy items, Wilson said in the statement. The 124,564-square-foot building at 41965 Ecorse Road has both warehouse and office space. It’s roughly between Detroit Metropolitan Airport and Willow Run Airport, with nearby access to I-275 and I-94. General Electric Corp. previously “lightly used” the building for its aviation group, according to CBRE

 Health system to move warehouse and mail order pharmacy operations from a Warren facility this summer  New location would allow for growth and better highway access  Belleville building previously used by General Electric

Beaumont Health is leasing a Belleville building for distribution operations.

Group Inc. marketing materials. It was also formerly owned by New York-based Ashley Capital LLC and was originally built in 2002. The lease started in late April un-

der property owner Brookwood Capital Partners, according to a news release from CBRE and CBRE spokesman Mark Thomton. CBRE first vice presidents Peter Rogers and

CBRE GROUP INC.

Randall Allman represented Brookwood Capital Partners in the leasing deal. Insite Commercial represented Beaumont. Thomton and Beaumont declined

to disclose financials of the lease. The CBRE marketing materials advertise a potential lease rate at $5.95 per square foot, with the tenant paying additional operating expenses. Beaumont did not answer a question on how much it’s investing in the new facility, but said it plans only small changes. Beaumont operates eight hospitals in Southeast Michigan. It has 145 health centers, 5,000 physicians and 38,000 employees, according to its website. The health system also announced in April it would build a new outpatient center in Livonia, creating around 100 new jobs.

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

CALENDAR

SPOTLIGHT

TUESDAY, MAY 21

WaitTime takes on strategy officer, investor

Jump-Starting America — How Breakthrough Science Can Revive Economic Growth and the American Dream. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Co-authors and MIT professors, Jonathan Gruber and Simon Johnson, share the story of how America once created the most successful economy the world has ever seen and how we can do it again in their new book “Jump-Starting America.” The Masonic. $45 members, $55 guests of members. Website: econclub.org Extended Reality XR Workshop. 8:30 a.m.-4:30 p.m. Automation Alley. One-day workshop will help in identifying, understanding, planning and deploying Augmented Reality, Virtual Reality, and Mixed Reality within an organization. It also will provide the foundation to plan and develop proof-of-concept and begin to roadmap Extended Reality strategies. Automation Alley. $295 members. $495 nonmembers. Contact: David Pollock, email: david@thevrara.com

UPCOMING EVENTS Adcraft Day Show 2019. Noon-5 p.m. June 4. Adcraft Detroit. The Day Show speakers will share insights and stories of success and failure (and the need for both), and how shaking things up often requires more than a delicate touch. Speakers include: David Lubars, chief creative officer, BBDO; Deborah Wahl, global chief marketing officer, Cadillac; Arash Yomtobian, global client lead automotive, Google. Gem Theater. $50 members; $200 nonmembers. Phone: (248) 219-9234.

WaitTime, a startup that streamlines restroom and concession visits in large venues, has tapped the co-owner and president of the Grand Rapids Drive basketball team to be its chief strategy officer. Steve Jbara, who helped launch the NBA Jbara G-League team in Grand Rapids in 2014, bought a minority stake in Royal Oak-based WaitTime and began leading its strategy on a full-time basis earlier this month. Jbara is among 35 internal investors who have raised $20 mil-

lion since the company launched in 2014. Jbara said he will continue overseeing operations with the Drive, and remain as chief operating officer for Redford Township-based advertising boutique Jekyll & Hyde.

Ann Arbor Orchestra leader to retire

Ann Arbor Symphony Orchestra’s executive director is retiring after 25 years with the nonprofit. Mary Steffek Blaske will step down at the end of the year, according to a news release. A national search overseen Blaske

by the nonprofit’s board will be conducted to locate a replacement for Blaske. “Mary has been the heart and soul of the organization for 25 years,” board President Rick Hendricks said in the release. As leader of the 90-year-old organization with a $1.6 million annual budget, Blaske oversees a 71-member orchestra and nine administrative staff members. The board is composed of 36 people.

The Detroit News names Miles editor, publisher

Longtime managing editor Gary Miles has been named editor and publisher of The Detroit News to replace Jonathan Wolman, who died last month, the newspaper said. Miles, 55, was hired by The News in

2000 as assistant metro editor after a stint as managing editor of the Times Herald in Port Huron. He also had newsroom jobs at WILX Channel 10 near Lansing, the Lansing State Journal Miles and the Daily Journal in Vineland, N.J. He was promoted to managing editor of The News in 2013. “It’s an incredible honor to lead one of the biggest and finest news staffs in Michigan,” Miles said in a statement. “We’ll keep giving Metro Detroit and all of Michigan a news report that’s honest, accurate, fair and compelling.”

DEALS & DETAILS MERGERS & ACQUISITIONS  Ahead LLC, Chicago, a computer consultant, is acquiring Link Solutions Group LLC, Saline, an information and technology services provider. Websites: ThinkAhead.com, linksolutionsgroup.com

CONTRACTS  BullsEye Telecom, Southfield, a telecommunications services provider, and RedShift Networks Inc., San Ramon, Calif., a technology company, have a partnership to deliver cybersecurity solutions for protecting and securing enterprise VoIP/SIPbased networks. Websites: bullseye-

telecom.com, redshiftnetworks.com  DeMaria Building Co. Inc., Detroit, a commercial construction firm, was awarded the construction management contract to perform two Starbucks buildouts at the new Beaumont Service Center in Southfield and the Beaumont Farmington Hills Campus. Website: demariabuild. com  Near Perfect Media, Bloomfield Hills, a public relations firm, has been named the agency of record for Ven Johnson Law, Detroit, and Jim Brady’s Detroit, Ann Arbor and Royal Oak. Website: nearperfectmedia. com  Qualitech, Bingham Farms, a technology integrator and software re-seller, has installed VOIP phone

systems at Birmingham Maple Clinic, Troy, a mental health services provider, Northfield Trucking Co., Taylor, a transportation company, and Pitt Investments, Southfield, a real estate investment company. Website: qualitech.net

firm’s Brighton location has added six loan officers, expanded product offerings and added software to speed up the lending process. Website: rossmortgage.com

EXPANSIONS

 Transitions Legal PLLC, Birmingham, a law firm, has added guardian ad litem services to its practice. The firm is working with courts in Oakland County and Macomb County, assisting individuals who are deemed legally incapacitated or developmentally disabled. Website: transitionslegal.com

 My Place Hotels of America, Aberdeen, S.D., has opened a new location at 48881 Alpha Drive, Wixom. The three-story, 64-unit hotel is independently owned by Wixom Hotel Partners LLC. Website: myplacehotels.com  Ross Mortgage Corp., Troy, a residential mortgage lender, has opened an office in Lafayette, La. Also, the

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Elizabeth Browning, RN has returned to The Senior Alliance as the new Director of Programs and Special Projects. She recently worked as a Clinical Analyst for the maintenance and support of the electronic health record software. In her new role, Elizabeth will lead the agency’s efforts to prepare for future contracts with regional and national healthcare organizations. Elizabeth’s work will be critical to the delivery of health services to The Senior Alliance’s healthcare partners.

Graham Healthcare Group, a subsidiary of Graham Holdings Company, is intensifying its growth strategy of investing in joint ventures with health systems, physician groups, and senior living providers with home-based post-acute assets. The organization welcomes Shellé Jones as Vice President of Strategic Partnerships to support partner organizations in developing and executing an integrated home-based post-acute strategy that meets the unique needs of the communities they serve.

Experis is pleased to welcome Brian Smith as Director of Risk Advisory Services and Financial Operations. Brian will effectively lead Internal Controls, Internal Audit, Regulatory Compliance, and Risk Management projects for Michigan clients. Earlier in his career Brian worked for KPMG, HHI Group Holdings, Altair Engineering & most recently was the Vice President Internal Audit for Joyson Safety Systems. Brian is a Certified Public Accountant, Certified Internal Auditor & Six Sigma Certified.

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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 Y 2 0 , 2 0 1 9 CRAIN’S DETROIT BUSINESS

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Application Development Manager (Multiple Positions)

(Accenture LLP; Detroit, MI) Manage project execution to ensure adherence to budget, schedule, and scope. Must haveaccepted willingness and abiliRequests for Proposals are being for: Crains ty to travel domestically approximately 80% ofDetroit the timeBusiness to meet client Commercial Move Management needs. For complete job description, list of requirements, and to apply, Responses Due: May 29, 2019 go to: www.accenture.com/us-en/careers 00707268). Monday, (Job# May 20

INVESTORS & BORROWERS WANTED FOR HARD MONEY LOANS Secured by Real Estate and Personal Property- Loan amounts from $25K- $1M CALL FOR DETAILS: 818-481-8220

EMAIL: gagdc@sbcglobal.net Food Assistance Employment and Training (FAE&T) Plus with Matching GG CAPITAL INVESTMENTS, LLC Funding (SNAP 50/50) 2 columns x 3 inches = $1,128

POSITIONS AVAILABLE Responses Due: May 31, 2019 MISCELLANEOUS x’s 1 run(s) = $1,128 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 Assistant Controller, Norgren Automation Solutions LLC SEEKING PERSONAL SHOPPER services for the city of Detroit to employers and job seekers.

Saline , MI

Crainsavailable Chicago Business I am in my late thirties on a fast track to seMore information these opportunities at the following Conduct budgeting,on forecasting, and periodicare financial reporting. Req. Bach.website: nior management. I am color blind single https://www.descmiworks.com/opportunities/rfps-and-rfqs/ deg., or foreign equiv., in Acctng, Fin, Econ, Bus Admin, or rel, + 5 yrs postand need help in dressing for success. bach, progress, rel RFP work package, exp. Please apply to: Jenna Richman, Norgren Inc., Monday, May To request a full please email DESC at20 procurement@detempsol.org. Qualified applicants must Send References/ Experience and Resume submit the following information via MI email: Company Name, Office Phone, Contact Person’s Name, Title and 1325 Woodland Drive East, Saline, 48176 (Reference jobAddress, code: AC001). Email: help.colorblind.shopper@gmail.com Valid Email Address. 2 columns x 3 inches = Request $780 or DESC FAE&T Plus RFP Request. Email Subject Line should include: DESC Move Management RFP Mayor’s Development Board x’s Workforce 1 run(s) = $780 REQUEST FOR PROPOSALS Detroit Employment Solutions Corporation Board Cynthia J. Pasky, Co-Chairperson David E. Meador, Co-Chairperson Jeffrey M. Donofrio, Executive Director

Calvin Sharp, Interim Chairperson Proposals Wanted: Corporation Audit & Tax Services Detroit Employment Solutions Nicole A. Sherard-Freeman, President Executive SER Metro Detroit, Jobsand for Chief Progress ,Inc. ( a An equal opportunity employer/program. Supported by the State of Michinon-profit corporation) and its affiliates are gan, Talent Investment Agency. Auxiliary aids and services available upon request toliciting individualsproposals with disabilities. 1-800-285-WORK. TTY: services 711. for audit and tax

sofor the period of July 1, 2018 to June 30, 2019. To request an electronic copy of the RFP please email your name, address and contact information to detienne@sermetro.org. Proposals accepted until 5:00 pm,, May 24, 2019

POSITION AVAILA LE

COMMERCIAL REAL ESTATE SALES POSITION Sales position available with one of the most well established commercial real estate brokerage companies in southeast Michigan. Responsibilities include servicing an existing listing portfolio of over 600 individual properties totaling in excess of 15 million square feet. A real estate background is preferred but not required. Please send resumes to: Jason E. Capitani at JCapitani@Lmcap.com All inquiries will be held in strict confidence

POSITIONS SOUGHT

Sharp executive with 30+ years exp running all aspects of a private mid-size company looking to lead another business to record-setting growth. Hardworking, loyal, trustworthy, innovative and results-oriented. Willing to invest in the right opportunity. Email CDBboxreply@crain.com Reference 2007 in subject line USINESS AVAILA LE

Architectural Firm Available Strong Client List Southeast Michigan Contact D Lawrence Email CDBBoxreply@crain.com Reference 2005 in Subject Line

INVITATION TO

ERS

River Rouge Housing Commission - Invitation to Bidders

The River Rouge Housing Commission request bid proposals for the services listed below for its 300 Public Housing dwelling units, Hyacinth Court II Community Center and its Main Office. Bid packets will be available on our website: www.riverrougehousing.com in the RFP section on Thursday, May 16, 2019. The Pre-Bid meetings will be held at 460 ½ Hyacinth Court., River Rouge, MI. 48218. Sealed bids will be received for the list below by the River Rouge Housing Commission until 2:00 pm on Friday, June 14, 2019 and will be opened. Bids received after 2:00 pm on June 14, 2019 will be rejected and returned unopened to the bidder. For more information contact River Rouge Housing Commission Monday-Friday during normal business hours from 8:00 am – 4:30 pm at 313-382-1414. INVITATION TO BIDDERS – PRE – BID MEETING SCHEDULE 1. General Labor Services Tues. May 28, 2019 11:00 am 2. Janitorial Services Tues. May 28, 2019 11:00 am 3. Lawn Services Tues. May 28, 2019 12:00 pm 4. Pest Control Tues. May 28, 2019 12:00 pm 5. Snow Removal Tues. May 28, 2019 12:00 pm 6. Plumbing Services Tues. May 28, 2019 1:00 pm 7. Heating & Cooling Tues. May 28, 2019 1:00 pm 8. Comprehensive Maintenance Tues. May 28, 2019 1:00 pm Interested bidders may obtain bid documents from our website: www.riverrougehousing.com All Bids must be addressed to: River Rouge Housing Commission 180 Visger Rd.,River Rouge, MI 48218 Attn: Lori D. Long, Executive Director NOTE: ALL AWARDED CONTRACTS WILL BE FOR (2) Years & Can be Extended for (1) yr. (At the Owners Discretion) All bids must be submitted on prescribed forms. We are an Equal Opportunity Employment Agency FOR THE BIDS TO BE ACCEPTABLE ALL BIDS MUST INCLUDE THE FOLLOWING: 1.Non-Collusive Affidavit (On bidders Letterhead) 2. Representations, Certification and Other Statements of bidders (HUD Form 3569-A completed by bidder) 3. Contractor’s Qualification Statement (AIA Documents A305 completed by bidder) 4. Certification of Non Segregated Facilities (completed by bidder) 5. Section 3 Form

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

SEARCH FROM PAGE 3

The firm’s other professional services portfolio includes data analytics, surveys, business intelligence and marketing consulting. Michigan hasn’t disclosed what it will pay Turnkey Sports for its search services. Search processes at Michigan in the past have involved creating an internal search committee. It’s unclear if that will happen for the basketball job. The final hiring decision will be made by Manuel. According to its website, Turnkey Search said it provides clients with a “fully written candidate book. We dig deep and keep pushing, pushing, pushing to uncover the true strengths and weaknesses of every candidate. Our deep, long relationships make us the best-informed search firm in the industry.” The search firm conducts job candidate searches at the C-suite level and also at the manager, director, vice, senior and executive vice president levels.

It’s currently working on a couple of other searches with local connections: President of 313 Presents, which is the joint-venture between Olympia Entertainment and Palace Sports & Entertainment that oversees booking and management of the two organization’s various venues in metro Detroit; and vice president of operations at Comerica Park. Turnkey Sports’ intercollegiate athletics search operation is led by Gene DeFilippo, who worked as a coach and later athletic director at Villanova and Boston College. The process to hire Michigan’s next basketball coach will get its share of public scrutiny because the job is high-profile and pays well. Beilein, who was hired May 13 by Detroit businessman Dan Gilbert to coach his Cleveland Cavaliers in the NBA, exits Michigan with the most victories in school history. He leaves Ann Arbor after 12 seasons with a resume that includes two Final Four appearances, four Big Ten Conference titles, two conference tournament championships and nine NCAA Tournament appearances with Michigan. Prior to his hire in 2007, the program

HMOS

budget, a basic version of which is publicly submitted to UM’s regents every June and is self-sustaining, is $185.2 million in spending against $187.7 million in revenue. The budget lists $70.8 million in salaries for coaches, staff and administrators, which is the department’s biggest expense. Another $27.8 million was budgeted for scholarships for the department’s 900 student athletes. Beilein, 66, had signed a five-year contract extension with Michigan in 2018 that paid him a $400,000 base salary and $1.9 million in other annual compensation. Perna is expected to be directly involved in the search, too. His sports business experience is deep: He was responsible for managing all marketing deals, licensing, media and new business development for the Tigers and Red Wings and the entertainment business owned by Detroit’s Ilitch family. His last job before launching Turnkey was as senior vice president for operation (and general counsel) for the National Hockey League’s Dallas Stars, a tenure that included construction of the $420 million American Airlines Center,

Michigan health plans financials

FROM PAGE 3

“It is too early to tell exactly what effect the financial situations for HMOs will have on rate development for Plan Year 2020,” he said. “For the individual and small group markets, plans are still currently working on early projections for rates. Plans will continue to do their best to continue to keep rates moderated, and there are a lot of factors that go into rate determinations.” Over the past five years, Michigan’s health plans have steadily improved net income and enrollment. But total underwriting revenue declined 2.8 percent to $17.1 billion in 2018 from $17.6 billion in 2017. Revenue growth also was flat in 2016 because Medicaid membership slowed as the economy grew. After Healthy Michigan Medicaid was established in 2014 under the Affordable Care Act, the state’s 11 Medicaid health plans increased revenue significantly the next two years. Six health plans in 2018 experienced revenue declines. They include Health Alliance Plan of Michigan ($359.5 million), Meridian ($213.5 million), UnitedHealthcare Community Plan ($191.9 million). On the other hand, Blue Care Network ($658.2 million) and Priority Health ($164.9 million) saw increases in revenue. “Some of this might be explained by a slow decline in enrollment in Medicaid over the last two years as the economy has improved,” Pallone said. “The state (also) has continued to aggressively impose managed care savings (payment cuts) within the Medicaid rates ... under the expectation that managed care entities need to continuously find efficiencies.” Still, over the past decade, total enrollment in health plans has grown 31 percent to more than 3.45 million as employers and individuals seek lower costs and increasingly accept more tightly controlled network rules. Net income also has steadily increased during that period, especially starting in 2015 — the first full year after Obamacare’s Medicaid expansion began. Pallone contends those overall

hadn’t been in the NCAA tournament since 1998. Michigan has not yet listed the job requirements on its online database of open positions at the university. There are 10 other athletic department jobs listed. “If I can get a proven coach, someone with a track record as a head coach, that’s what I’d like to see and then I want somebody who can coach and who can develop talent,” Manuel told reporters during last week’s Big Ten meetings in Rosemont, Ill. Speculation about potential replacements has included current Michigan assistant coaches Luke Yaklich and Saddi Washington; former Beilein assistant LaVall Jordan who is now head coach at Butler University; Miami Heat assistant and former UM “Fab Five” star Juwan Howard; Oklahoma City Thunder coach Billy Donovan; Jay Wright at Villanova, and Texas Tech’s Chris Beard. The veteran head coaches elsewhere will cost Michigan a premium to pry them out of their current roles, but the university has the financial heft to pull it off. The school’s entire current athletics

Pallone

Kallas

numbers are distorted by Blue Care Network’s massive net income tallies. “Absent Blue Care, the rest of the HMOs are below where we were in 2015, the first full year of Healthy Michigan Medicaid,” Pallone said. “It’s fair to say the Blues have had two years of steady growth, but the rest of the HMOs only really saw 2018 as a growth year for net income, but still haven’t gotten back to 2015 levels.” For example, Michigan HMOs, excluding Blue Care, earned $312.7 million in 2015, but only a total of $211.7 million and $233.1 million in 2017 and 2018, respectively. Nationally, health insurers had a banner year as they set premium prices an average 26 percent higher in 2018 after threats to end Obamacare by President Donald Trump and leading Republicans. While final numbers for 2018 are not complete, health insurers were projected to earn more last year than the record $161 billion in profits netted in 2017. Another reason for the high profits was that per person claim expenses increased by only 7 percent in 2018, much lower than expected. Based on rules under the Affordable Care Act, many health insurers must refund customers $1.4 billion for excessively priced premiums, according to a recent study by Kaiser Health. It will be the largest payment to consumers since ACA was approved in 2010. Under Obamacare, health insurers must spend at least 80 percent of premium revenue on claims or quality improvements as required by the ACA. The average share of health premiums paid out in claims fell from 82 percent in 2017 to 70 percent in 2018, Kaiser said. A Crain’s review found several health plans fell under 80 percent and are expected to issue refunds. They included Blue Cross Complete

HMO

2018

2017

Blue Care Network

$250.6 million

$242.5 million

Priority Health

$123.8 million

$78.7 million

Molina Healthcare of MI

$97.5 million

$33 million

Blue Care Complete

$31.4 million

$17.1 million

United Healthcare

$25.1 million

$18.5 million

McLaren Health Plan

$22.2 million

$20.5 million

Aetna Better Health

$12.9 million

$3.2 million

Upper Peninsula Health Plan

$10.9 million

$12 million

Total Health Care USA

$10.6 million

$15.5 million

Physicians Health Plan

$6 million

$9.3 million

Humana Medical Plan

$3.7 million

($2.1 million)

Health Alliance Plan of MI

$3.5 million

$8.7 million

Paramount Care

$1.5 million

$2 million

Trusted Health Plan

($3.6 million)

($86,452)

Michigan Complete Health

($5 million)

$636,227

HAP Midwest Health Plan

($5.4 million)

$1.8 million

Meridian Health Plan of MI

($88 million)

$546,074

Other plans

$2.4 million

($11 million)

Total

$500.4 million

$452.1 million

NOTE: Includes investment income and taxes paid

Source: Michigan Department of Insurance and Financial Regulation, Michigan Market Review, Crain’s Detroit

(78.8 percent), Trusted Health Plan (71.9 percent), Molina Healthcare of Michigan (77.7 percent) and UnitedHealthcare (79.7 percent). “There was a lot of uncertainty going into 2018,” Pallone said. “Claims were flat last year. When we looked at individual market for 2018, rates went up dramatically, but in 2019 they have been fairly moderate, and a slight reduction for some.”

Michigan’s net income leaders Michigan’s health plans varied greatly in total revenue, profitability, enrollment and administrative expenses percent. But eight of 17 reported lower net income, and four plans lost money. Blue Care Network, the state’s largest health plan with 738,000 members, increased net income 3.3 percent to $250.6 million in 2018. BCN increased enrollment 7 percent in 2018.

“Blue Care Network had a strong year in 2018 with membership growth for the sixth straight year, increased revenue due to membership growth, and effective management of health costs for our customers,” said Jim Kallas, BCN’s vice president and treasurer, in a statement. “Our membership at year-end 2018 was at 916,000 members which includes commercial, self-funded and Medicare members. Achieving membership gains speaks to the efforts we’ve made as a company to improve our customers’ experience and provide health insurance products that improve our members’ lives, while supporting our community.” Kallas said BCN has cut premiums for small-business employers four times since July 2017, accounting for an average 2.6 percent premium reduction. “Blue Care Network is an outlier here,” Pallone said. “I would say

which opened in 2001. He’s a graduate of New York University’s sports executive training programs, and has a master’s degree in sports administration from Ohio University. Before launching his firm, he worked as a lawyer at Hawkins Delafield & Wood LLP in New York City for clients such as ESPN and ABC’s Capital Cities. UM has used executive search firms several times for its high-profile hires. In 2014, Michigan retained Los Angeles-based Korn/Ferry International as a headhunter for a new football coach after Brady Hoke was fired. That search ended with Jim Harbaugh’s hiring, and it was led by noted sports headhunter Jed Hughes, who was involved in Michigan’s 2011 hiring of Hoke but at a different search firm. Hughes also aided the 2010 hiring of Brandon. Korn/Ferry’s contract for the Hoke replacement search was for a minimum of $80,000 and up to $250,000, UM said at the time. It’s unclear what the final cost was. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19 (BCN’s financial performance) is a byproduct of their market dominance and of Blue Cross as a whole. They have an ability to leverage (size to extract lower provider rates). We hope that employers and individuals will be mindful of that as they move to purchase in 2020.” No. 2 by net income was Priority Health with $123.8 million in net income, a 57.3 percent increase from $78.7 million in 2017. Total enrollment at Priority was 514,000, a 1 percent drop from the year before. “Priority Health’s financial performance is a reflection of the company’s commitment to enhance its product portfolio, reduce the occurrence of unnecessary health care costs and keep administrative costs low,” Mary Anne Jones, its CFO, said in an email to Crain’s. “We continue to see growth across the company, we ended 2018 with more than 782,000 members, up from 779,000 last year, and are well-positioned for continued success in the future.” Priority Health’s total membership also includes about 268,000 enrollees from PH Insurance Co., PH Choice and self-funded employer plans. On the other hand, Meridian Healthcare of Michigan, which was acquired last summer by WellCare Health Plans inc. for $2.5 billion, lost $88 million in 2018, mostly because of charges against its balance sheet resulting from the merger. For example, general administrative expenses increased substantially in 2018 to $241.2 million from $184.3 million. Like most plans, prescription drug costs also rose, going up to $338 million from $311 million. Total revenue dropped to $1.99 billion last year from $2.2 billion the prior year. Because Tampa-based WellCare is undergoing a sale to Centene Corp. for $15 billion, officials for Meridian are prohibited from discussing the 2018 financial year. Pallone, who said he also was unable to talk with Meridian officials, said he believes Meridian incurred some one-time administrative costs, which included paying legal and consulting fees, additional staff time negotiating and closing the merger. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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

CLINC FROM PAGE 1

He said he is plans on having an initial public offering in 2022. “It’s been quite a crazy journey,” Mars said. “The rate at which we have been able to scale this business, it’s nuts. Clinc is on a mission to achieve the impact we set out to have on the world. You look at Siri, or Alexa or Google Assist, and there’s been such a stagnation in the market. The market is ready for the next level of interaction between people and machines.” The company claims that Finie is able to understand what it calls unstructured and unconstrained speech and interprets semantics, intent and the underlying meaning of user queries. A customer can use Finie to ask a bank to transfer $500 from savings to checking, or to ask for a replacement credit card to be mailed out. Or when a warning light on a dashboard of a Ford car comes on, instead of pulling over and looking it up in the owner’s manual, the driver can ask Finie what the light means and how urgent it is to get taken care of. Or a driver can use the app to ask if he or she has enough fuel in the tank to drive from Ann Arbor to Detroit and back, or to adjust the cruise control.

WOLVERINE FROM PAGE 3

“When you have a good idea you want to get it going so you can prevent problems” for children in the child welfare system, said Paciorek, a professor of early child education and children and families at Eastern Michigan University. Transparency is critical to Wolverine, Fischer Wollack said in a statement emailed to Crain’s earlier this month. After Crain’s questioned the process, Wolverine chose to get legal review of the contract. “Independent legal counsel has been retained by each entity to review all Noble Child contracts and documentation to ensure we maintain compliance,” Fischer Wollack said.

Seeking a solution Following repeated issues with the state’s child welfare information system, Wolverine contracted with Ann Arbor-based Torrent Consulting in 2016 to develop the Noble Child child welfare information system with feedback from Wolverine’s employees. “We knew what we built, we could repackage and sell,” said Matthew Wollack, Wolverine’s vice president of strategic development. “But Wolverine was not a software company or vendor. This fell outside of its mission.” So he created Noble Child Inc., a for-profit company, to commercialize the platform. And Wolverine sold it to him to commercialize but without a competitive bid process or independent legal representation. Matthew Wollack’s attorney was the only legal consultant on the deal. Wollack said that once he created the new company and made the offer to Wolverine, he was not a part of the nonprofit’s decision-making process on the deal. “From my perspective, there was no conflict of interest.” “We didn’t have the interest or resources to take (the platform) to others, but we knew we had something

EVAN DOUGHERTY, MICHIGAN ENGINEERING, COMMUNICATIONS & MARKETING

Lingjia Tang, assistant professor of electrical engineering and computer science at Michigan Engineering, is a co-founder of Clinc, an A.I. personal assistant startup.

Mars said the new funding will go to product development, with Clinc growing its head count from 75 to 140 by the end of the year and moving into a new 26,000-square-foot office at 200 S. First St. in Ann Arbor, when the build out of that building is finished later this year. Currently Clinc is currently based on the 5,000-square-foot second floor of the Cahoots tech incubator on East Huron Street in downtown Ann Arbor. Ann Arbor-based Ca-

hoots Holdings was one of Clinc’s seed-round investors. Last June, Clinc opened an office in the financial district in London. At the same time, at a conference in Amsterdam, Clinc announced a partnership with the giant Turkish bank Isbank to roll out its AI platform to the bank’s 5.5 million mobile users. It also plans to open an office soon in Southern California by the end of the year. Mars said Finie has 31 million users worldwide.

significant,” said Fischer Wollack, who is president of the Bloomfield Township-based Association of Accredited Child and Family Agencies. She didn’t see a conflict of inPaciorek terest, either, she said. Matthew Wollack was willing to take it on and raise the capital needed to take it to market. “I have a $38 million budget, 680 employees and 550 kids, and that’s ... what drives my decisions,” Fischer Wollack said. Wolverine looked at what best practices were and what was reasonable, she said, noting attorneys set the terms of the deal. “That was all advice given to us.” “I would not allow any conflict of interest; I’m a pretty ethical person,” Fischer Wollack said. “I’m always thinking about what’s best for Wolverine first.”

not going to help the child who is served cereal with nuts in the morning,” she said. Wolverine’s board is committed to doing what’s best for children and families, she said. “That’s our number one focus ….” Matthew Wollack knows the business, Paciorek said. “Who better to ... develop it than someone who has day to day contact with these issues?” Because Wolverine is an investor in Noble Child, when the program is successful, money will come back to the nonprofit, Paciorek said. “That’s a model other agencies could follow.”

Board signoff The transfer of the Noble Child platform needed the blessing of Wolverine’s board. Reached by phone in early May, Wolverine’s former longtime board chair, Bruce Kintz, president of Secure Harbor Financial in Ann Arbor, said he wasn’t present at the board’s June meeting last year and didn’t recall conversation before that about the sale of Noble Child to Wollack. He resigned from the board last September after nearly 33 years, 27 as board chair, to make way for new blood, he said. Paciorek, who has been on the board for 15 years and was named chair when Kintz exited the board, said the state’s child welfare system wasn’t working to help children and child welfare agencies in the state, and that was putting children in harm’s way. If a foster care agency like Wolverine is called at 11 p.m by the police to place a child into a foster home, and that child has a nut allergy that is noted on paper back in the office, “that’s

Financial details No cash has changed hands yet between Wolverine and Noble Child. Under the deal reached a year ago, the benefit to the nonprofit will be determined once a value has been set for the startup company. A convertible debt instrument, which is functioning as a promissory note, of sorts, to Wolverine will convert into equity upon subsequent investment in the company or its sale, said Noble Child’s attorney, Marcus Laman, shareholder at Minneapolis-based Briggs and Morgan. If neither of those things happens, Wolverine gets paid $500,000 in cash plus 8 percent interest on that, he said. Wolverine finished 2018 with $37.4 million in total revenue and net income of $1.1 million, CFO Chris Holmes said, noting it’s operating on a similar budget this year. Beyond foster care, it provides child welfare services in a number of other areas, including: adoption, family preservation, juvenile justice, independent living for foster care kids aging out of the system, trauma/ abuse survivor treatment and substance abuse treatment. After taking ownership of Noble Child, Matthew Wollack hired a team of eight, including developers, and made additional investments to build more functionality and features and repackage the system for generalized commercial use, the spokeswoman for Noble Child said. Wolverine subsequently awarded

Clinc had revenue of $4.5 million in 2017 and grew that to about $18 million last year. “We are thrilled to welcome Clinc into the Insight portfolio,” said Jeff Lieberman, a managing director at Insight Partners, in a press release. He is joining Clinc’s board. “At Insight we look for companies utilizing the most innovative technological advancements, and Clinc has shown this with their conversational AI experiences and virtual assistant solutions that mimic human intelligence.” “Clinc proves once again that a small team of dedicated engineers can create a breakthrough product against the large incumbent companies. Clinc also demonstrates that many of the most technologically advanced products are coming out of the Midwest,” said Mark Kvamme, partner and co-founder at Drive Capital, in a press release. According to CrunchBase, the deal website, the $52 million round is the largest single investment a category it calls conversational AI and appears to be the largest investment in any Michigan fintech, or financial technology, company, and follows on a string of large investments in state companies. In April, HistoSonics Inc., a company in Ann Arbor whose technology uses ultrasound to destroy cancerous tumors, raised a round of $54 million,

the second largest for a medical-device company in the state. That followed the largest round ever for a state company, a $77 million round announced by Kalamazoo-based Ablative Solutions Inc. in January for its medical device, which reduces hypertension by injecting alcohol into nerves in the renal system of certain patients with hypertension. In October 2017, Ann Arbor-based Duo Security Inc., a provider of a two-factor system to provide internet security for companies, announced what had up to then been the largest round in state history, $70 million, which last August led to the company’s $2.35 billion acquisition by Cisco Systems Inc. In 2016, the Ann Arbor-based pharmaceutical company Millendo Therapeutics Inc. raised what was then the VC record of $62 million, topping the previous funding record set in 2014 by Plymouth Township-based ProNAi Therapeutics Inc. when it raised a round of $59.5 million. Mars previously was a visiting research scientist at Google and a research scholar at Intel Corp. In 2016, he was named by Crain’s as one of 50 names to know in IT in Michigan.

Noble Child a $98,000 contract early this year to build on the platform used internally by developing a foster care portal to interact with foster care parents, applicants and older foster care youth who are preparing to be on their own. Wollack, who is not yet earning a salary at the new company, said he doesn’t see a conflict in holding an executive role at Wolverine and at a company benefiting from a contract with Wolverine. “I’m not involved in the decision-making process if Wolverine is going to execute a contract with Noble Child,” he said. “For that matter, I know that whenever Noble Child bids a contract with any party, it’s always at fair market value or below fair market value for those services because we are a startup.” Wollack is marketing the platform to other child welfare agencies in Michigan and working with Deloitte LLP and Salesforce, he said, to participate in open-state competitions for child welfare information management systems. So far, it’s submitted bids in Iowa, Vermont, Louisiana, Virginia, Illinois and New Mexico. He is also working to raise $850,000 in first-round investment for the new company. He’s secured half of that so far and hopes to have the rest in place by the end of June, he said. Fischer Wollack said she does not see a conflict with her son holding both roles, either. Other employees of the nonprofit have two different jobs, she said. Wolverine’s senior vice president of residential services is also a professor at Saginaw Valley State University. And its director operations is also a part-time employee of the Vassar Police Department, a spokeswoman for the nonprofit said. And while Matthew Wollack is privy to decisions being made on the foster care side of Wolverine’s operations, other vice presidents are charged with making recommendations related to them, not her son, Fischer Wollack said. “We talk about needs. But he (Matthew) would never be the person behind the decision making.” “Selfishly, I would hate to lose him from Wolverine,” Fischer Wollack said.

“He’s significant to our ongoing management team. He’s younger than the rest of us, so he brings a different kind of energy.”

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

Safeguards More and more nonprofits are monetizing assets to create revenue that supports their missions, said Teri Behrens, executive director of the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University. But they should have conflict of interest policies in place as they look at those types of deals, she said, and policies to state when a competitive bid is warranted. That’s something other nonprofit experts, like the national group BoardSource, suggest as well. On its website, BoardSource recommends that all nonprofit board members sign annual conflict-of-interest statements, disclose known potential conflicts, and recuse themselves from discussions and voting when conflicts do arise. Wolverine’s lack of competitive bidding and transfer of nonprofit assets without any due diligence to ensure the nonprofit was getting the best deal is “troublesome,” said Behrens, when the situation was described for her. The familial relationship between the top executives at Wolverine and their son who bought the software platform presents concerns that decisions are being made based on personal interests, Behrens said. “I can understand them wanting to get it to market quickly,” in order to help other children and agencies, she said. “But that doesn’t eliminate their need to make sure they are following good practices and staying within the limits of the law.” With the new contract, Wolverine is now making decisions as a nonprofit that benefit one of its employees, Behrens said. And that is setting up a scenario of ongoing conflicts of interest. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

RENCEN FROM PAGE 1

One of the sources said a sale to Gilbert could happen down the line, and another source said GM is not believed to be seeking other buyers at this point for the property, which was announced in 1973. Bedrock LLC, Gilbert’s real estate development, ownership, management and leasing company, said in a statement that it does not “comment on rumors or speculation.” The company has a portfolio of more than 100 properties — primarily in and around downtown Detroit — with more than 15 million square feet of space. It is also developing billions of dollars worth of new buildings downtown. In an emailed statement, GM said it “has made significant investments and improvements to areas within and around its headquarters at the Renaissance Center on Detroit’s riverfront. As a downtown Detroit-based company, we have regular discussions with other leaders and organizations about the city’s ongoing development. We won’t share the details of those conversations or comment on speculation about specific discussions.” Gilbert has long been interested in Detroit riverfront real estate. Before he ultimately decided to move Quicken Loans from the suburbs to the former Compuware Corp. headquarters building downtown (now One Campus Martius), he briefly considered building a new headquarters for the mortgage company on the riverfront. In addition, Bedrock and GM have had discussions over several years about land immediately east of the RenCen totaling north of 10 acres that could become a mixed-use development in a joint venture between the two companies. And just last year, Bedrock paid $5 million for 2.75 acres of east Detroit riverfront land in a sale involving one of the city’s most vociferous bankruptcy creditors, Bermuda-based Syncora Guarantee Inc. The property totals about 2.75 acres. His team has also had discussions about the former Uniroyal Tire Co. site, which is 43 acres across from Belle Isle. It has been one of the most

JAIL SITE FROM PAGE 1

UM President Mark Schlissel told Crain’s last fall school officials were searching for “partners” to help the university establish “a more substantial role physically in Detroit going forward” beyond its small Detroit Center outpost in Midtown and the Horace Rackham Educational Memorial Building on Woodward Avenue. A university spokesman declined to comment on whether the Gratiot jail site is under consideration. “Stephen Ross is a longtime friend of Dan Gilbert and a fellow booster of Detroit and the region. Stephen and Related (Cos.) have interest in learning more about the Detroit market and Bedrock is well positioned to educate them on the current landscape and the opportunities in Detroit,” Bill Emerson, CEO of Bedrock, said in a statement to Crain’s. A spokesperson for Related Cos. did not respond to a request for comment. Ross is known to have been in town recently. Ross, Gilbert and Mayor Mike

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 2 0 , 2 0 1 9 challenging properties for development in the city, although earlier this year, the Detroit Economic Development Corp. tapped Chicago-based Skidmore, Owings & Merrill LLP to do a master plan for the property. In 2017, Gilbert, who spearheaded Detroit and Windsor’s ultimately unsuccessful bid to land Amazon.com Inc.’s so-called “second headquarters,” included in Detroit’s proposal a plan for the Seattle-based retail behemoth to locate some of its campus in included 20 new buildings enveloping part of the RenCen to the east across 28 acres, with 8 acres of public space. Most of that property is owned by a GM subsidiary. The plan called for more than 2 million square feet of office space and 1,200 residential units, plus 166,000 square feet of retail, a 333,400-square-foot public plaza/ park, 40,300 square feet of public rooftop terrace space and nearly 272,000 square feet of private rooftop terrace

In an emailed statement, GM said “As a downtown Detroit-based company, we have regular discussions with other leaders and organizations about the city’s ongoing development. We won’t share the details of those conversations or comment on speculation about specific discussions.” space. Rounding out the proposal was 4,400 parking spaces. There are nearly 50 non-GM office tenants in the RenCen, plus more than 60 retail tenants, Edward Wujek, senior vice president of advisory and transaction services in the Southfield office of CBRE Inc., said in a November email to Crain’s. Gilbert’s years of purchases is a

stark contrast from GM, which has looked to sell or potentially shutter operations in the city, including a Courtyard by Marriott hotel across from its headquarters and its Detroit-Hamtramck Assembly plant. The plant is scheduled to end production by January 2020, pending negotiations with the UAW later this year. GM has made significant invest-

Duggan had dinner at the San Morello Italian restaurant in Gilbert’s Shinola Hotel last month, according to two sources familiar with the meeting who requested anonymity. Flight records for a private Gulfstream plane registered to Related Cos. indicate that it has landed at Coleman A. Young Municipal Airport twice in the last two months, most recently on April 14 and leaving on April 16. Prior to that, it was at the airport for about six hours on March 22, according to FlightAware.com. Gilbert has exclusive development rights to the Gratiot site, existing jails and the Frank Murphy Hall of Justice as part of a deal his Rock Ventures LLC reached last year with Wayne County to build the county a new $533 million criminal justice complex at I-75 and East Warren Avenue. The half-built “fail jail” was demolished last summer. Since then, Bedrock LLC, the real estate arm of Gilbert’s business empire, has been using the cleared lot for storing and staging equipment for Gilbert’s other downtown construction projects at the former J.L. Hudson’s department store site on Woodward Avenue and expansion of One

Campus Martius, the headquarters of Gilbert’s Quicken Loans. Dan Mullen, president of Bedrock, has previously told Crain’s the jail site will be “totally mixed-use — retail, office, residential, restaurant.” In December, Gilbert hinted a project that went beyond a typical mixed-use development was in the works. “We are working on some really exciting, unique things which I can’t talk about yet,” Gilbert told Crain’s at the time. “It’s really exciting. It’s all connected — there might be some office and residential — but there’s another theme, and I hope it comes to fruition.” One source familiar with the RossGilbert-UM talks said the site’s redevelopment hinges, in part, on how I-375 is brought to grade to remove the cavernous freeway that divides downtown from the Lafayette Park residential neighborhood. Gilbert has eyed the Gratiot site since former Wayne County Executive Bob Ficano’s administration halted construction of its longsought new jail in 2013 because of cost-overruns. In April 2016, Gilbert and Detroit Pistons owner Tom Gores said they

ments to the Renaissance Center; however, it canceled plans for a 120,000-square-foot addition and renovation in 2017. The company also halted renovations last year at its famed design studios in Michigan and another project to update its global propulsion headquarters in an effort to save money. GM’s cost-cutting measures, in-

cluding potential closures of five North American factories and slashing up to 14,000 jobs is a major part of the company’s plans to save $6 billion on an annualized run rate by 2020. The last time there was reportedly talks about GM selling its Motor City headquarters was as the company prepared for bankruptcy in 2009. It did not occur in part due to the nega-

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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 Y 2 0 , 2 0 1 9

The Renaissance Center sits on Detroit’s riverfront and has 5.5 million square feet total across office, retail and hotel space.

crainsdetroit.com

KIRK PINHO/CRAIN’S DETROIT BUSINESS

The Monroe Blocks project is slated to feature a 35-story office tower and 482 residential units, including a 17-story residential tower, plus retail and other uses in a total of 1.4 million square feet across a series of buildings.

Progress slows on Monroe Blocks project By Kirk Pinho kpinho@crain.com

tive impact it would have on the city’s downtown. When built, the modernistic Renaissance Center was known as “a city within a city.” It was meant to revive Detroit’s downtown and economy following the 1967 Detroit uprising. GM reportedly purchased the 5.5 million-square-foot facility for more than $70 million in 1996, following Ford

The former site of the failed Wayne County jail project is awaiting redevelopment. KURT NAGL/CRAIN’S DETROIT BUSINESS

selling the complex in the early-1980s to an investor group. By 2004, GM had completed $500 million in renovations to the facility, according to its website. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB Michael Wayland: (313) 446-0374 Twitter: @MikeWayland wanted to build a professional soccer stadium as the site, flanked by highrise buildings. But within 18 months, those plans had changed. By November 2017, the Gilbert-Gores group abandoned its effort to build a stadium on the unfinished jail site downtown, and instead shifted its focus to using the 64,500seat Ford Field as the team’s permanent home. At that time, Bedrock’s architects had envisioned the jail site becoming part of a constellation of new lowand mid-rise buildings dotting the city’s skyline when Gilbert was leading Detroit’s failed bid for Amazon’s second headquarters. A year later, Gilbert’s Rock Ventures inked a deal with Wayne County Executive Warren Evans to construct a 2,280-bed jail, 25 courtrooms and five hearing rooms, sheriff’s and prosecutor department offices, and a 160-bed juvenile detention facility on the I-75/East Warren site. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Dan Gilbert’s Bedrock LLC is learning that tackling a couple of billion dollars of high-rise and skyscraper construction at one time in Detroit is trickier than anticipated. Work on the $830 million Monroe Blocks project has slowed, even though heavy excavation and other site work were anticipated to take place this spring. Six months after a splashy groundbreaking on the 3.66-acre new development east of the One Campus Martius building where Gilbert’s Quicken Loans Inc. is headquartered, there were zero workers on the Monroe site, and multiple sources have said contractors and their subcontractors have been told to halt work and/or remove equipment for three to six months. Bill Emerson, CEO of Gilbert’s real estate development, ownership, management and leasing company, Detroit-based Bedrock LLC, said in a statement to Crain’s that it was navigating complex terrain with multiple high-profile building projects. “Bedrock is finalizing engineering and the sequencing of construction for the Monroe site as we have become increasingly sensitive to the significant traffic and business interruption that occurs with multiple large scale projects in a concentrated urban district,” Emerson said Thursday. “The unprecedented simultaneous ground-up development of several major projects totaling billions of dollars of investment is an intricate, complicated undertaking requiring the orchestration of multiple parties and precise scheduling. Bedrock continues to navigate and progress through this complex venture.” The general contractor on the Monroe project, Turner Construction, has not returned emails and other messages from Crain’s the last several weeks. Bedrock did not provide additional details on the time frame for construction. However, in the winter, it said that site clearing and mass excavation were to be taking place by the spring, with foundations coming in the summer. In addition to the Monroe Blocks project — which is slated to feature a 35-story office tower and 482 residential units, including a 17-story residential tower, plus retail and other uses in a total of 1.4 million square feet across a series of buildings — Gil-

bert’s team is building the J.L. Hudson’s department store site project, redeveloping the long-vacant Book Tower and Book Building and constructing the new addition to One Campus Martius. In the statement, Emerson said exterior renovation on the Book Tower project ($311 million) is “nearly complete” and that “the architectural and construction drawings are well underway as we prepare the interior for the next phase of the renovation.” In addition, the One Campus Martius addition ($95 million) is “ahead of schedule” with an expected 2020 completion. He said it is “nearly 100 percent pre-leased,” but did not respond when asked who the tenant or tenants are. Since publicly confirming a planned increase in height of the Hudson’s site tower to the north of OCM to a possible 912 feet in September, Bedrock has been working on a redesign, multiple sources have said the last several months. At the time, Bedrock was anticipated to make a final height determination by the end of January, although one has not yet been made. The sources said the redesign process has caused some delays in the construction. It was the third time the publicly revealed tower height has changed since it was originally revealed in February 2017, when it was 734 feet tall, just 7 feet taller than the 727-foot Detroit Marriott at the Renaissance Center with a cost of $775 million. Then in September 2017, another 66 feet and a sky deck were added to the building, bringing it to 800 feet in height and a $909 million price tag. The current price tag is not known, although data from Rockland, Mass.based RSMeans shows that construction costs increase about 2.2 percent per year. Similarly, construction cost data from Marshall & Swift Valuation Service shows that in 2016, the cost to build a mixed-use building in Detroit was $275 per square foot, and for 2019, it’s $302 per square foot, or an increase of 9.82 percent. Emerson said “complex foundation work has been in progress and will continue.” “The structure will begin rising above grade once the complicated foundation work is completed.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Director Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Product Manager Carlos Portocarrero, (313) 446-6056 or cportocarrero@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Riffenburg, (313) 446-5800 or driffenburg@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

REPORTERS Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care. (313) 446-0325 or jgreene@crain.com Anisa Jibrell, breaking news. (313) 446-1612 or ajibrell@crain.com Chad Livengood, senior reporter, Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl, breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho, real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor, the business of sports. (313) 446-1626 or bshea@crain.com Dustin Walsh, senior reporter, economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com

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CUSTOMER SERVICE Single copy purchases, publication information, or membership inquiries: Call (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice Chairman Mary Kay Crain President KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except the last issue in December, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2019 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

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

THE WEEK ON THE WEB

RUMBLINGS

Detroit plans $100 million repaving, streetscape plan

Songwriting symposium planned for Detroit

MAY 10-16 | For more, visit crainsdetroit.com

he city of Detroit plans to inject $100 million into repaving 100 miles of roads and streetscape improvements this year. The plan calls for work on seven commercial corridors, according to a city news release. Crews will resurface 53 miles of residential streets, 41 miles of major roads, and make fixes to five bridges, the release said. The repaving project will be funded through state and federal funds and $14.5 million in city bond funds. Resurfacing began earlier this month, city spokeswoman Tiffany Crawford said. The projects will continue until mid-November. Streetscape projects will involve widening sidewalks for café seating, as well as landscaping, separated bike lanes and new pavement, the release said. The corridors include Livernois, West McNichols, Kercheval, Joseph Campau, Bagley, Grand River, and Riopelle, Crawford said. The streetscape projects will be financed by city bond funds that will go toward plans to beautify 23 commercial corridors over three to five years, the release said. Crews are scheduled to repair or rebuild bridges at locations — including Bagley at 16th Street, West Parkway Culvert at Meadow Park Street, South Service Drive at I-96 and Evergreen Road, Chestnut at the Dequindre Cut, and Holden at Elijah McCoy — for an average price of $1 million apiece, the release said. The repair projects include a city requirement that 51 percent of workers must be Detroit residents. Contractors recruited 54.5 percent of their workers from the city last year, the release said.

BUSINESS NEWS J Just Baked, the cupcake company whose rapid growth led to its demise, is being reborn as a new concept under sandwich chain Tubby’s Sub Shops Inc., which plans to open 50 gourmet dessert shops over the next several years in Michigan and cobrand with its sandwich shops. Roseville-based Tubby’s intends to roll out the new Just Baked stores over the next three-four years, with the first opening within 90 days, according to co-owner Bill Kiryakoza. J A $7.8 million driving simulation and vehicle development center is being planned for Novi. Multimatic Sales & Marketing Inc., a subsidiary of Canada-based Multimatic Inc., is building a “state-of-the-art driving simulator” called SimCenter, which will create 50 new jobs, according to a news release from the Michigan Economic Development Corp. The privately held auto supplier will develop technology for hybrid and electric vehicles at the center, which will include conference rooms, equipment test cells, a control room and test property preparation area. J Detroit City Council’s Planning and Economic Development Committee unanimously recommended last week that the city’s land swap and incentives package for the planned Fiat

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

The city of Detroit plans to pave, repave and repair streets in Detroit this year.

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

Miles of residential streets and major roads the city of Detroit plans to resurface this year

$7.8M

How much Multimatic Sales & Marketing Inc. will spend to build building a “state-of-the-art driving simulator” center in Novi

Number of gourmet dessert shops Tubby’s Sub Shops Inc. plans to open in Michigan

Chrysler Automobiles plants project on the east side go before the full City Council for formal approval. At issue is what Auburn Hills-based FCA US LLC and the city say is a $2.5 billion investment that is expected to bring nearly 5,000 new jobs to Detroit. Jobs, money and land were the main subjects of the more than two-hour meeting focused on Detroit’s $107.6 million package of land deals for nearly 215 acres to facilitate the automaker’s investment in the Jefferson North and Mack Avenue assembly plants. J Planned park and commercial building improvements in Detroit’s Banglatown neighborhood are being boosted by a five-year, $5 million commitment by American Axle & Manufacturing. The Detroit-based manufacturer’s donation to the city’s Strategic Neighborhood Fund is part of a $35 million commitment made by seven corporations to improve neighborhoods pegged for redevelopment. American Axle’s contribution will be focused on streetscape improvements, fixing up vacant storefronts and stabilizing affordable single-family homes in Banglatown, according to a news release. J The former McLouth Steel site in Trenton has been added to the Superfund National Priorities List, prioritizing federal funding for cleanup efforts and enforcement measures. The steel-making plant that traces the Detroit River was among seven sites across the U.S. added to the list, the U.S. Environmental Protection Agency said. The Superfund site is part of a deal the Moroun family’s Crown Enterprises Inc. reached with Wayne County almost two years ago to buy

the steel plant — contingent on the fact that Crown would pour at least $20 million into cleanup and redevelopment efforts. J Business partners Josh Gardner and Lara Sfire plan to open the Film Lab this summer in a former Polish Legion of American Veterans hall in Hamtramck. A ground-floor bar would open first, screening movies weekly over drinks while the team works to fund renovations for a second-story, two-screen cinema that would debut next year. The venue will be a physical home for Cinema Lamont, a 2-year-old nonprofit founded by Gardner that aims to grow “cross-cultural understanding” through movies, he said. J Olga’s Kitchen is making its return to the city of Detroit, set to land in MGM Grand Detroit casino next month. The restaurant will serve customers 21 and older and offer a tight selection of signature options and favorites, along with salads and side dishes, such as the original Olga and the Olga salad and Olga’s Snackers, according to a Tuesday news release. Olga’s Kitchen, known for its Mediterranean-style sandwiches wrapped in “Olga” pita bread, closed its location at 1050 Woodward Ave. in Detroit, formerly the Compuware Corp. headquarters building, in 2015. J Buyer activity is ramping up across metro Detroit in agreement with normal seasonality, but tight inventory still remains a thorn in the market’s side. Heading into June, the market will see solid buyer activity as firsttime home buyers continue to be a big force, said Jeanette Schneider, vice president of management services at Re/Max of Southeastern Michigan.

NONPROFIT NEWS J A Detroit River nonprofit and local partners will plan out paths and construct a park along sections of the Michigan-traversing Iron Belle Trail using a $1.9 million Ralph C. Wilson Jr. Foundation grant. The Friends of the Detroit River, alongside nonprofit and government organizations, will use the money to finance a longplanned southwest Detroit park along the Iron Belle Trail. They’ll also finish plans for more than 3.5 miles of gaps in the trail in Detroit and the Downriver area. Officials estimate the state-long Iron Belle hiking and cycling trail is 70 percent complete. The two routes together would span about 2,000 miles between Detroit and Ironwood in the western Upper Peninsula.

he Detroit Institute of Music Education is working with the Buddy Holly Educational Foundation to bring a songwriting symposium to Detroit that would likely take over multiple downtown music venues and draw attendees from around the world. DIME, a learning institute for musicians that started in Detroit in 2014 and expanded to Denver, is helping provide facilities for the nonprofit’s yet-to-be-named event sometime next year. The Washington, D.C.-based Buddy Holly foundation already holds annual songwriting education events in England, Louisiana and Texas, said Rick French, foundation board director and chairman and CEO of Raleigh-based media agency FWV. Budding musicians receive scholarships to attend. They learn in classes from successful songwriters during the day and then perform at night. “Detroit’s an extraordinarily diverse music palate in terms of the influences and the way it has influenced music,” said French, who grew up in Rochester. “It’s really one of the places

where ... the students could explore so many different kinds of songwriting and that’s what really appealed to us.” DIME and the foundation intend the event to become annual, French said. It would sign on a host hotel and use DIME’s infrastructure at 1265 Griswold St. downtown. Other iterations have used up to eight to 10 performance venues. Music publisher BMG is a contributing funder and partner, and the foundation will offer local sponsorships. Besides scholarship recipients, other songwriters can attend the five-six days of sessions for a price that hasn’t been finalized but is usually “several thousand” dollars, French said. French said he has been seeking opportunities to create something in Detroit since he started attending the expat gathering event Detroit Homecoming (produced by Crain’s Detroit Business) in its first year, 2014. It was then he met DIME founder and President Kevin Nixon. Nixon has also known another Buddy Holly foundation board director, Peter Bradley Jr., for years.

FERNDALE DDA

Toast, a popular breakfast spot in Ferndale that opened in 2001, will double its size in six weeks if all goes according to plan.

Toast to expand in Ferndale, rework Birmingham model T oast, a staple restaurant in Oakland County where patrons can pair omelets with cocktails, is serving up some big changes. Owners are doubling the size of the location in Ferndale, redesigning its interior and adding a dinner menu, while dialing back the hours at the larger spot in Birmingham. The moves cater to a differing customer base in each city, said the restaurant’s majority owner Regan Bloom. Toast Ferndale’s been bursting at the seams; Toast Birmingham was starved of dinner guests. Construction to double the 1,400-square-foot Ferndale restaurant at 23144 Woodward Ave. is expected to wrap up in about six weeks. Bloom, who is designing the space, said West Bloomfield Township-based Dalloo Construction arranged to have most work done after the restaurant closes, allowing it to do business undisturbed.

Following a $300,000 build-out, customers can look forward to a “’60s and ’70s retro vibe” with art and décor from Amsterdam, Denmark and Germany. New French doors will open to expanded patio seating in the alley between the restaurant and New Way Bar. Bloom said she’s been seriously planning a redesign for the past couple of years, after Birmingham-based private equity firm Vision Growth Partners bought a minority stake in Toast following her ex-husband Thom Bloom’s departure from the business. A few miles north, at Toast Birmingham, the situation is sort of reversed. The restaurant at 203 Pierce St. opened in 2008, serving breakfast, lunch and dinner, with full bar service. Late last month, the decision was made to eliminate dinner. “Birmingham tends to roll up the streets at night,” Bloom said.

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