Crain's Detroit Business, June 17, 2019 issue by Crain's Detroit Business

Livengood: Back to the future on Flint water cases Page 8

How Quicken Loans brought PGA golf to Detroit Page 3

JUNE 17 - 23, 2019 | crainsdetroit.com AGRICULTURE

TAKING A BATH Farmers’ plans wash away in Michigan’s wettest season on record By Dustin Walsh dwalsh@crain.com

wenty-some miles west of Port Huron in St. Clair County, third-generation crop farmer Travis Fahley stands ankle-deep in mud where soybeans are supposed to grow. His operation, Fahley Farms, has planted no soybeans this year. In fact, 1,000 his 1,500 acres will remain bare this year as terra firma has given way to swamp during Michigan’s wettest season on record. Michigan farmers are currently plagued with soggy soil across the state, leading to the slowest planting progress the state has ever experienced for corn and one of the slowest for soybeans. As of June 12, farmers across Michigan had planted only 63 percent of planned corn seeds and 43 percent of soybean seeds, according to Theresa Sisung, associate field crops specialist for the Michigan Farm Bureau. “May to May has been the wettest season in recorded history, and it’s creating some pretty tough times for everyone,” Sisung said. “We are definitely concerned we’re going to lose farms (to bankruptcy or a selloff ) as we pile bad year on top of bad year.”

Soggy or flooded ground has delayed planting for thousands of Michigan farmers.

SEE FARMERS, PAGE 18

MICHIGAN FARM BUREAU

VENTURE CAPITAL

Arboretum breaks own state record with new $250M VC fund By Tom Henderson thenderson@crain.com

Arboretum Ventures LLC plans to announce Monday that it has finished raising a fund of $250 million, the largest venture-capital fund in state history, eclipsing the $220 million that it raised in 2015. The fundraising was accomplished fairly quickly, thanks to many of its previous investors signing on again, looking to build on the company’s track record of successful exits. The Ann Arbor company, which focuses on medical devices, diagnostics health care IT and health care service companies, didn’t file with the U.S. Securities and Exchange Commission until Jan. 30 that it was crainsdetroit.com

raising a new fund, Arboretum Ventures V LP. “My take on this fund and the ability to raise it quickly is, number one, it shows the success Arboretum has had in the marketplace and, number two, how the local ecosystem has matured,” said Tom Shehab, M.D., one of Arboretum’s three managing partners. Arboretum has now raised more than $700 million since being founded by managing partner Jan Garfinkle in 2002. She said more than 70 percent of its previous institutional investors joined in the new fund. New investors, which she is not allowed to identify, include two hospital systems and one health insurer. SEE ARBORETUM, PAGE 17

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ENERGY

Q&A: What happens if Michigan shuts down Line 5 By Chad Livengood clivengood@crain.com

A permanent shutdown of Enbridge Energy Co.’s Line 5 oil pipeline could have a major downstream impact on trade with Canada, energy supplies for multiple states and the price of jet fuel for airplanes at Detroit Metro Airport and residential propane in the Lower Peninsula. Attorney General Dana Nessel has indicated she may go to court as soon as the end of this month to try to stop the flow of oil through Enbridge’s 66-year-old underwater pipeline in the Straits of Mackinac. Enbridge has separately sought a court or-

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der enforcing its deal with former Gov. Rick Snyder to build a tunnel under the environmentally sensitive waterway to house Line 5. The Calgary, Alberta-based company took action after Gov. Gretchen Whitmer wanted to shut down Line 5 within two years — three years before Enbridge says a tunnel sitting 100 feet below the bottom of Lake Michigan could be completed. “The enormous risk (of an oil spill) that we bear alone as the state of Michigan and the Great Lakes is one that I take very seriously, and it was important to me that have a date certain for shutdown,” Whitmer said last week. SEE LINE 5, PAGE 21 // J U N E 1 7 , 2 0 1 9 CRAIN’S DETROIT BUSINESS

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HELPING WOMEN SUCCEED IN LAW

BROUGHT TO YOU BY DELTA DENTAL OF MICHIGAN Julie Fershtman

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Q&A with Julie Fershtman, equity shareholder, By Rachelle Damico | Special to

Crain's Detroit Business

rowing up, Julie Fershtman’s household phone would ring at all hours of the night. Her father, Sidney Fershtman, would receive phone calls from clients who needed him to go to jail to help them deal with a criminal issue, or from people who were locked out of the house from their spouse. “You’d think nobody would want to be a lawis yer, because you never know when someone going to call and it’s usually at an inconvenient time,” Fershtman said. “Despite that, I was able to see the difference he made for people.” Fershtman would later start a law office of her own, and has worked as a lawyer for more than 30 years. “It was the commitment that lawyers give to

Foster Swift Collins & Smith PC

The Fershtman File philosophy, Emory Education: Bachelor of Arts in political science and Law. University. Juris Doctor, Emory University School of & Smith PC Current role: Equity shareholder, Foster Swift Collins and office clerk in Career ladder: Fershtman worked as a messenger a lawyer who high school and college for her late father, Sidney Fershtman, ran her own law had a general practice law firm in the Detroit area. She 1994-2010, which practice called Law Offices of Julie Fershtman from insurance defense focused on commercial litigation, insurance coverage, two law firms, Law and equine law. In that time, she was “of counsel” to August & Kaufman Zausmer and Farms Bingham in Office of Alan Harnisch president of the Caldwell, PC in Farmington Hills. Fershtman served as had breast cancer State Bar of Michigan in 2011-2012, despite learning she Swift in 2010, where just two weeks after being sworn in. She joined Foster injury, contract and she represents clients in a range of business, personal committee and insurance coverage litigation. She serves on the executive is vice president of the firm’s Southeast offices.

published articles, Fun fact: Fershtman has written more than 400 Law & Horse including three books and two blogs. Her books, “Equine more than 12,000 Sense” and “MORE Equine Law & Horse Sense” sold which is law related to copies combined. Her newest book on equine law, Association in 2020. horses, plans to be published by the American Bar

their clients that was a real draw,” Fershtman said. Fershtman has committed to many endeavors in her career. For instance, she co-chaired the State Bar’s 21st Century Practice Task Force, which looked at problems in the legal profession. She also serves on Foster Swift’s a compensation committee and co-founded networking program within the firm to promote the advancement of women in the law. Fershtman’s clients range from major inindito businesses and surance companies viduals. Her work includes trials, arbitrations, alternative dispute resolution and appeals. She has tried cases before juries in four states and has been selected to serve as pro hac vice counsel in state and federal courts. regular basis. I

munity service.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

MICHIGAN BRIEFS

INSIDE

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

Land bank seeks plans to redevelop Ionia prison site

The Michigan Land Bank Fast Track Authority is seeking redevelopment proposals to address the 47acre Deerfield Correctional Facility in Ionia, Gongwer reported. The detention center has sat vacant since the facility’s closure in 2009. Plans to bring the facility back onto property tax rolls were halted in February after Gov. Gretchen Whitmer denied the sale to a private firm, which sought to turn the building into a privately operated federal immigration detention center. It was estimated the new plans would bring 250 jobs to Michigan. The halted detention center plans brought about the ire of Republican lawmakers, who claimed Whitmer “torpedoed the deal” due to ideological differences between the governor’s own party and what the center sought to do. Whitmer’s office defended the decision, with Tiffany Brown, Whitmer’s press secretary, saying that “building more detention facilities won’t solve our immigration crisis” and that the governor believed “separating families doesn’t reflect our Michigan values.” Potential bidders must send any questions by June 24 and finalized

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proposals are due by noon July 19. More information is available on the Michigan Land Bank Fast Track Authority website. “This property has sat vacant for many years and we hope redevelopment of this site will breathe new life into the Ionia community,” Michigan Land Bank Interim Director Jeff Huntington said in a news release. “This request for qualifications and interest allows us to get a feel for what developers want to bring to the community — and allows local officials to consider what will work best for their community in the long run.”

Consumers Energy plan to close coal plants OK’d

Michigan regulators approved a major utility’s plan to phase out its coal-fired power plants and rely increasingly on renewable sources and energy efficiency to provide electricity. Jackson-based Consumers Energy Co., which supplies power to much of the Lower Peninsula, won the OK after modifying a proposal it initially submitted a year ago. Significant components remain unchanged, including a plan to retire two generators at the Karn plant near Bay City in 2023. The utility plans to close its final three units — at the Campbell plant north of Holland — between 2031 and 2040. As part of a settlement, though,

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newable energy we’re adding to the system is the best price,” Poppe said.

New $4 million ferry for Mackinac Island

MICHIGAN LAND BANK FAST TRACK AUTHORITY

The state is seeking redevelopment proposals for the vacant 47-acre Deerfield Correctional Facility in Ionia.

Consumers Energy agreed to study whether it can retire two of three units sooner, possibly as early as 2025. “This truly ushers us into a new era for renewable energy in Michigan,” President and CEO Patti Poppe said. She told reporters on a conference call that the Public Service Commission’s blessing of the integrated resource plan “puts Consumers Energy on a path to eliminate coal, reduce carbon emissions by over 90 percent and meet our customers’ future electricity capacity needs with 90 percent clean energy resources by 2040.” The utility currently has about 1,000

megawatts of capacity from renewable sources. It will add 6,500 megawatts of renewables by 2040, including 5,000 megawatts of solar during the 2020s. The company initially proposed that all new power generation be competitively bid. The modified agreement calls for Consumers Energy to own up to half of future additional capacity and to buy the rest from third parties. “There a variety of providers for solar energy. Given what a large role we see it playing in the future, we wanted to make sure that any of the new re-

A new $4 million ferry for transporting passengers to and from Mackinac Island is coming to Mackinaw City next year. The 210-passenger boat, expected to embark from the Shepler’s Mackinac Island Ferry docks next summer, is being built by Onaway-based steel fabricator Moran Iron Works, according to a news release. “Our business is growing along with the increasing number of people, bikes and luggage that need to cross the straits to the island,” Shepler’s CEO Bill Shepler said in the release. “We’re thrilled to be able to step up and meet that demand, and at the same time give this region a boost.” The wheelchair-accessible boat will have an aft deck for luggage, bikes and strollers, the release said. It will also include enhanced air conditioning and heating to keep passengers comfortable in all weather.

Building relationships and building communities are what building business is all about. Goran Jurkovic, President and CEO, Delta Dental of Michigan, Ohio, and Indiana

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REAL ESTATE

Landlords court brokers with events, incentives By Kirk Pinho kpinho@crain.com

SPORTS BUSINESS

THE DRIVE FOR DETROIT

BRIAN SEVALD

An aerial photo of Detroit Golf Club, which is hosting the Rocket Mortgage Classic PGA Tour tournament beginning June 27.

How Quicken Loans landed a PGA Tour event for the city, and why Tiger Woods playing matters By Bill Shea bshea@crain.com

Organizers of the inaugural Rocket Mortgage Classic PGA Tour tournament still don’t know if Tiger Woods will play the event whose opening round begins June 27 at the Detroit Golf Club, but they remain firmly optimistic about the field. That’s their job, of course, to evangelize. It costs millions of dollars to sponsor and stage such an event, so everyone behind it is going to preach the gospel of how great the competition will be. And they’re not wrong. Even without Woods, who isn’t expected to make a participation decision until the end of this week, the tournament’s 156-player field includes

Need to know

Woods will decide on Rocket Mortgage Classic participation just before event 

Detroit PGA Tour event stems from long-running Quicken urge for tournament in city 

Quicken sports spending runs north of 30 percent of marketing budget 

some of the best in golf: 11 of the top 50 players in the world golf rankings have signed on to play. That includes No. 2-ranked Dustin Johnson, winner of the 2016 U.S. Open champion and a 20-time PGA Tour winner, and names such as 2019 Masters runner-up Xander Schauffele, two-time Masters champion Bubba Watson and No. 11-ranked Rickie Fowler.

Fowler, who has won five tour events, was a no-brainer because he has had a long-term endorsement deal with Detroit-based Quicken Loans Inc., and Rocket Mortgage is Quicken Loans’ consumer-facing retail mortgage app that the company has marketed heavily in recent years. The golf tournament is the PGA Tour’s first regular event in Detroit. Quicken has inked a four-year deal to stage the tournament, and it is the current focus of the company’s significant sports marketing investments. Up to 30 percent or more of Quicken’s advertising budget — estimates for the firm range from more than $300 million to $400 million in annual measured media spending — is earmarked for sports. SEE GOLF, PAGE 20

“We continue to have conversations with Tiger. We’ve known him for quite some time. He is one of these guys that has told us he’s not going to make a decision until right before the tournament. So we wait.” Jay Farner

Quicken crews, nonprofit team up on community projects By Chad Livengood clivengood@crain.com

Quicken Loans has partnered with the Arab American and Chaldean Council to clean up empty storefronts and the streetscape along Seven Mile Road ahead of the professional golf tournament at the nearby Detroit Golf Club that the Detroit mortgage company is sponsoring. Volunteers from Quicken Loans and the council have been painting vacant storefronts, landscaping and picking up trash in recent weeks on a stretch of Seven Mile from I-75 west to the Detroit Golf Club that is expected to be heavily trafficked during the June 25-30 Rocket Mortgage Classic golf tournament. As part of Quicken Loans’ fouryear sponsorship of the tournament, the company is committed to funding infrastructure improvements along Seven Mile, including a playground to be built in August in Palm-

Need to know

 Quicken Loans working with Arab American and Chaldean Council on 7 Mile improvements  Company’s four-year commitment aligns with sponsorship of Rocket Mortgage Classic golf tournament  ACC pursuing mixed-use affordable housing project at 7 Mile and John R

er Park, said Laura Grannemann, vice president of strategic investments for the Quicken Loans Community Fund. “We wanted to make sure that as we’re thinking about this golf tournament, we’re not just thinking about this week of the golf tournament, but what impact we can have in this neighborhood,” Grannemann said. “This is going to be a long-lasting impact — we hope.” SEE PROJECTS, PAGE 20

JOHN SOBCZAK / LORIEN STUDIO FOR CRAIN’S

Volunteers from Quicken Loans and the Arab American and Chaldean Council have been painting vacant storefronts, landscaping and picking up trash in recent weeks on a stretch of Seven Mile from I-75 west to the Detroit Golf Club.

Matt Schiffman and his wife spent seven days overseas in October, taking in the sights in Iceland and Ireland. It was an idyllic, one-of-a-kind trip paid for not by the Schiffmans, but by a New York City landlord and its representatives who randomly picked the Southfield-based commercial real estate broker’s business card at an event about six months earlier. Schiffman, who is a senior associate with P.A. Commercial LLC, says that’s the most expensive item he has won during a broker event put on by landlords (in this case, 601W Cos., which owns the Southfield Town Center), but the prizes raffled off are well known in the industry. Vehicle leases, vacations overseas or trips to professional sports championship series, tailored suits, grills and electronics. Use of landlord cottages and boats. iPads and other goodies. Flight vouchers. The list goes on. “You get someone big who owns millions of square feet, a prize like that is a drop in the bucket,” said Schiffman, whose initial prize was a trip to the Final Four, but he successfully negotiated a swap with 601W for the Iceland/Ireland vacation.

Need to know

 Landlords use events, gifts to court real estate brokers  Brokers rake in incentives such as trips, gift cards and electronics  Gifts themselves don’t necessarily pose ethical problems, but they could if they are not disclosed to tenants, experts say

But before brokers can win prizes, they first have to be invited and then show up to the event. It became trickier to entice those selected with just free wine and finger food, for example. More commonly these days, brokers — generally, whose primary source of income is commissions from deals — are lured with promises of $100 or $300 gift cards to use wherever they please. In return, landlords and landlord representatives get their vacant and/ or updated office space in front of brokers, who are their connections to key tenants who may be in the market for new digs in the near future. For landlords, the maxim that you have to spend money to make money rings particularly true. The ROI on a few gift cards to a select group of brokers, or two years of a vehicle lease, is well worth the upfront expense. Barbara Eaton, vice president and director of leasing and business development for Southfield-based developer and landlord Redico LLC, said 20,000 square feet at the company’s 25-story American Center office tower in Southfield was occupied as a result of one of their events. “We have been able to find prospects that way for people when they visualize the space and see the space,” Eaton said. SEE INCENTIVES, PAGE 18

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

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OU explores bringing educational programs to Marygrove campus By Sherri Welch

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Oakland University is exploring the idea of bringing for-credit and non-credit programs to the campus of Marygrove College on Detroit’s northwest side. If it did so, it would be the second university to come into the P-20 or “cradle-to-career” educational model taking shape there. The University of Michigan is leading efforts for a first-of-its kind teaching school modeled after doctor residency programs as part of the plan announced last fall for Marygrove’s campus. The Marygrove Conservancy, which owns the campus property and is leading the P-20 efforts, is committed to that model and the early educational partners on it, including UM, Detroit Public Schools Community District and Starfish Family Services, said chair Sister Mary Jane Herb, who is president of Sisters, Servants of the Immaculate Heart of Mary, which founded Marygrove College. “Oakland University is exploring possibilities on campus, and we’d be open to exploring a conversation with them,” Herb said. The conservancy has not extended invitations to other universities, “but should they reach out to us, we would be open to that, too,” she said. “The educational model is what keeps the legacy of Marygrove ... and the (Sisters, Servants of ) Immaculate Heart of Mary’s commitment to education ... alive in a new way.” The idea of bringing other OU programs to Marygrove’s West McNichols Road campus near Livernois Avenue was born out of the conversations around a teach-out agreement forged between the Detroit college, OU and the P-20 plan’s primary funder, Kresge Foundation, in connection with the college’s plan to close in December after 92 years in business and years of declining enrollment. Under the teach-out agreement, Rochester-based OU will finish teaching Marygrove graduate students who are within a year of earning their degrees, continuing online courses, said James Lentini, senior vice president for academic affairs and provost at Oakland University. “We had discussions with Kresge and Marygrove while we were focusing on teach-out ... about what the future could look like ... (about continuing) beyond the teach-out with some sort of programs on Marygrove’s campus,” Lentini said. “Michigan was early in on P-20. It’s not our intention to compete, but we’re interested in offering comple-

Marygrove College will close permanently in December after many years of enrollment decline and budget issues.

Herb

Lentini

Need to know

JJAny programs offered would be in addition to the online courses it’s agreed to teach to help Marygrove students complete their degrees JJMarygrove Conservancy says it’s open to a conversation with OU JJIt’s committed to UM which is bringing new teacher residency model to the campus, and other early partners helping to create “cradle to college” campus

mentary programs.” OU would need to explore the needs but it could be helpful to people living right around the area to take classes right there at Marygrove and online, he said. “We want to do something meaningful rather than just have a physical presence” in Detroit, Lentini said, something that fits with OU’s strengths in arts, education and professional programs. The possibility of having additional collegiate-level programs on Marygrove’s campus is powerful and compelling, said Kresge Foundation President and CEO Rip Rapson. It’s not yet clear, he said, whether that could that be through more expansive programs offered by UM, OU bringing other programs to campus

or someone else coming in. “The entry of a new player into the stew always raises a different set of possibilities, but it may be that it is what it is and nothing more,” he said. UM is bringing “a powerful model to this campus ... introducing this teacher residency model and bringing their full weight to DPSCD activities,” Rapson said. And Kresge does not want to interfere with UM’s ability to do that, he said. Could the Marygrove campus become a university center akin to the Macomb Center at Macomb Community College? “We have discussed that among ourselves,” Rapson said. “But it’s up to Oakland University and to UM (and the Marygrove Conservancy) on how the programming on the campus will be structured.” Over the past year, schools and colleges within UM have been brought into discussions about how they can contribute to the collaboration, said Elizabeth Moje, dean of the UM School of Education. “Much of the future direction of the partnership will depend on how the campus grows in these first several years,” she said. “We will all be looking closely at how we are serving young people and their families and how can we expand our efforts to reach the ambitious goals that we've set.” Decisions about additional partners, services and opportunities will be made based on an assessment of needs and with the input of community members who will be served by the campus and the collaborators who have driven the P-20 work over the past two years, Moje said.

Crain’s promotes Livengood to new role

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

Crain’s Detroit Business has promoted reporter Chad Livengood to the new position of senior editor. The promotion recognizes the increasing leadership role Livengood, who covers statewide politics and policy as well as Detroit’s resurgence, has taken at the business news publication. In his new role, Livengood will continue to report, analyze and write on the issues that matter most to Michigan businesses and its economy.

“Chad is one of the most important voices in Michigan on critical issues,” Managing Editor Michael Lee said. “He has led the way on coverage of the Livengood problems and politics of the reform of Michigan’s no-fault auto insurance laws, among many other

topics.” Livengood has led the creation of the monthly Crain’s Forum feature that seeks to highlight new ideas for tackling Michigan’s toughest problems, and his weekly podcasts feature interviews with the state’s most prominent business and political leaders. Livengood, 36, came to Crain’s in 2017 after covering the state capital for The Detroit News for five years. He is a Central Michigan University graduate.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

Detroit sports delegates aim for 2022 NFL Draft By Kurt Nagl knagl@crain.com

Detroit Lions President Rod Wood is shifting focus from landing a Super Bowl at Ford Field to targeting 2022 for the NFL Draft in Detroit, saying it could have a $200 million to $300 million impact on the local economy. “I’m optimistic, but it’s a competitive process, and we’re trying to get it here in 2022,” Wood said of the draft. “(It is) almost rivaling the Super Bowl now in terms of what it can do for a city.” Wood made the remarks last week at The Townsend Hotel in Birmingham during a panel discussion centered on the obstacles of bringing major sports events to the city. Wood was joined by Penske Corp. President Bud Denker and businesswoman Denise Ilitch. Wood had been outspoken in recent years about his desire to draw another Super Bowl to Ford Field after completing a $100 million renovation of the stadium in 2017. His thinking appears to have shifted. “Trying to get another Super Bowl is a tall task,” Wood said Thursday, adding that it would be at least another seven years before Detroit had a shot. “I think it’s more likely to go to a destination city.” The NFL Draft has ballooned into a much-ballyhooed event with significant benefits to the city where it happens. The draft in Nashville earlier this year was wildly successful, breaking a league record with an attendance of 600,000 people. It also generated an estimated $224 million in local spending.

KURT NAGL/CRAIN’S DETROIT BUSINESS

Penske Corp. President Bud Denker (left), businesswoman Denise Ilitch and Detroit Lions President Rod Wood participate in a panel discussion Thursday moderated by Carol Cain at the Townsend Hotel in downtown Birmingham.

Need to know

JJLions President Rod Wood said hosting

draft could have up to $300 million impact JJDetroit Sports Commission pushing for legislation to raise tax revenue for events attraction JJLack of large hotels, negative perceptions hinder efforts

Detroit’s downtown parks, vibrant downtown neighborhoods and Windsor backdrop are all part of the pitch to bring the NFL Draft to the city, Wood said. Cities hosting future drafts are chosen years in advance. Next year it will be in Las Vegas and Cleveland the year after. The 2022 site has not been

determined, however. As part of efforts to attract the draft and other major sporting events, the Detroit Sports Commission is making a push for legislation that would raise tax revenue to attract such events. Wood said the effort was reset when Gov. Gretchen Whitmer took office. He said the governor has indicated she supports the effort. “Hopefully it’s on a good path to get completed this year,” he said. Wood said about $10 million of cash in hand — for infrastructure and marketing — would be needed to support an NFL Draft in the city. “The issue with big events is when you bid against other cities, you have to

have the capital to support it,” he said. As for other big events, panelists expressed optimism about landing them but pointed to several barriers, most notably a lack of large hotels and lingering negative perceptions of the city. While new boutique hotels are cropping up around town regularly, a lack of large hotels is cited as a major impediment to attracting big sports events and conferences. Detroit is also still perceived by many to be dangerous. Wood said there are efforts underway to attract big hotels, typically defined as having 800 rooms or more, but developers are largely taking a “waitand-see” approach to make sure the city truly is on the rebound. Detroit has

about 2,700 hotel rooms now with another 2,000 or so expected in the next few years. As for the negative opinions, panelists agreed the city is heading in the right direction, and people need to experience it first-hand to understand that. Denker said next June will be the perfect time to do so, with the North American International Auto Show’s inaugural late spring showing. “There’s no better way to change the perception of the city than to have the spotlight on us for a few days,” he said. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Thank you, Michigan. If you missed our in-person workshops in libraries across Michigan, you can still find all our free training and tools at google.com/grow. See you around.

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Detroit airport mismanagement costs city revenue, audit finds By Annalise Frank afrank@crain.com

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Plagued by operating losses and limited use, the Coleman A. Young International Airport in Detroit was the subject of a critical audit report early this month that detailed a range of concerns from failures in management and lost revenue to dangers posed by coyotes living on the property. The Detroit Office of the Auditor General sent its findings June 3 to City Council and Mayor Mike Duggan, according to a series of documents that includes the report. It focused on July 1, 2016, to June 30, 2018. Since summer 2018, efforts have been made to right the ship. The audit centered on the Airport Department, which oversees the airfield northeast of downtown that’s best known as City Airport. While the auditor’s office found that the department was “efficient and effective” at its “core operations” and commended the reuse of a vacant building on the property as a youth aviation facility, it also cited failures in management of leases, capital assets and its books. The Airport Department hasn’t properly maintained lease agreements with airfield tenants and there was no evidence the leases were reviewed or approved by Detroit City Council as required in the city’s charter, according to the report. The department also hasn’t been reviewing how much money it’s taking in from leases, the auditor’s office reported. Rental rates haven’t been updated since 2006, the audit report said. Sixteen of the 58 tenants didn’t have leases and eight weren’t paying the amount they were supposed to. The auditor’s office also determined that due to budget pressures, the airport could be losing out on $481,000 or more in potential revenue because it’s not maintaining all facilities adequately. The report dubbed the executive terminal, flight school facility, six bays and four hangar areas as dilapidated. The figure comprises rental rates for the six bays and 90 unoccupied, rentable units in the hangars. Delaying investment in maintenance could mean more costs and liabilities down the line, the audit report warned. It’s not just about expenses, either, according to the report: Four coyote families are living at the airport and birds are residing in hangars, creating a potentially dangerous environment. In a bookkeeping issue, the report found the Airport Department didn’t have a written policy for dealing with refundable security deposits and doesn’t separate them from the department’s general funds, which makes it difficult to ensure there’s enough funds to cover them. In addition to its findings, the report made a series of recommendations. Among them were creating defined parameters for tenant leases, potentially increasing lease fees and putting in place plans to allocate funding for facility maintenance. “I don’t disagree with the (audit’s) conclusions at all,” Brad Dick, group executive for infrastructure for the city, told Crain’s. He wrote in a response letter to Auditor General

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Due to budget pressures, Detroit’s airport is losing out on hundreds of thousands of dollars in potential revenue because it’s not maintaining all facilities adequately, the auditor’s report said.

Need to know

Report on Coleman A. Young International Airport found failures in leases, buildings, books 

 City said it’s working to “tighten up” long-neglected processes  Councilman believes city is turning a corner on investing in airport

Mark Lockridge that there’s a “good action plan in place” and he’s working with the Airport Department to “‘tighten’ up these long neglected processes with the airport.” The Airport Department expects to update its security deposit procedures by June 30 and is working on placing long-term leases under contract, according to letters written by Dick and John Wallace, the Office of Departmental Financial Services agency CFO assigned to the Airport Department. The Airport Department is headed up by airport Director Jason Watt, who reports to Dick. Not sending lease contracts to the legislative body for approval is one of the most critical problems to be resolved, Dick said. It’s a long-existing issue that airport leadership is working to remedy, he said. For short-term leases, it’s working with the city Law Department and wants to present a resolution to City Council that would allow the airport to handle smaller contracts of less than 30 days on its own. The city is looking to hire a consultant that would help make decisions on how the airport should use its space and redevelop buildings in need of improvement, Dick said. The request for qualifications has a June 21 deadline. The Office of the Auditor General did not respond to a request for additional comment.

Airport’s future The Airport Department’s job is to develop, operate, lease and hold the city’s aviation facilities. The 92-yearold airport is its main holding. Its current mission is to draw the airport out of the red and make it an economically beneficial asset, according to city documents. The department recorded revenue of $1,559,811 in fiscal 2018 on expenditures of $2,276,671 for a loss of

$716,861, according to a report included in the city’s approved fiscal 2020-23 financial plan. Detroit’s adopted fiscal 2019 budget is $2.21 million. Its 2020 adopted budget is $2.35 million, followed by forecasts of $2.35 million through fiscal 2023. The number of Airport Department staff is expected to stay at four through fiscal 2023. The 264-acre airfield hasn’t had commercial passenger airline service since 2000. The advocacy group Friends of Detroit City Airport renovated and in October reopened the airfield’s old Southwest Airline Office building using donated funds. It’s part of the group’s goal to bring youth aviation education to the site. “We will develop a clear long-term strategy to support whichever path the city takes once the process has concluded,” Basil Cherian, senior policy adviser to Duggan, told Crain’s last year. A long-term study on future use of the airport is still under way. Crain’s requested Monday an update with the city on that evaluation process. The city had in recent years solicited ideas from developers about how the airfield could be used for nonaviation purposes. But in a move that signaled a commitment to the property as an airport, rather than transforming it into an industrial park, for example, the city said in March it planned to invest $4 million to replace the main runway. “That was the huge sign the city is willing to make the necessary investment in the city airport,” said Councilman Scott Benson, whose 3rd District includes the property. “The biggest concern I had was about the failure to maintain capital assets … and I’ve been very public about my displeasure with how we … haven’t loved and invested in the airport. Now we’re looking to turn that corner and start doing both.” He said the city administration and council have agreed to move forward to grow the airport and not redevelop it for other uses. He added that he hopes a significant announcement will be made within the next three months regarding the airport’s future. Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

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Quicken Loans’ headquarters is at One Campus Martius in Detroit.

CRAIN’S DETROIT BUSINESS

Quicken Loans to pay $32.5M to settle FHA lending case By Kirk Pinho kpinho@crain.com

Detroit-based Quicken Loans Inc. will pay $32.5 million to settle a federal lawsuit tied to Federal Housing Administration lending standards, according to a statement released Friday by the mediator in the case. The settlement comes with no admission of wrongdoing. The statement says the settlement consists of $25.5 million to make the government whole for losses and $7 million in interest, according to the statement from the mediator, former federal Judge Gerald Rosen. “We have always been proud of our growing participation in the FHA program. Every day teachers, police officers, factory workers and so many others who are the backbone of our communities, utilize Quicken Loans for this very important loan program,” Quicken Loans CEO Jay Farner said in a written statement. “Now that this dispute is behind us, we look forward to cultivating and expanding our relationship with both FHA and HUD so we can increase Americans’ access to home financing and home ownership.” In 2015, the U.S. Department of Justice filed a lawsuit saying that Quicken Loans originated hundreds of FHA-backed loans between September 2007 and December 2011 when they were not eligible for the program because of Quicken Loans lenders overstating a borrower’s income so they could qualify for the loans. The Justice Department also said the U.S. Department of Housing and Urban Development has paid $500 million in claims on 3,900 Quicken Loans-endorsed loans. In an interview with Crain’s on Friday, Bill Emerson, vice chairman of Quicken Loans, said the lender “nev-

Need to know

Detroit-based Quicken Loans Inc. will pay $32.5 million to settle a federal lawsuit J

J Lawsuit tied to Federal Housing Administration lending standards J The settlement comes with no admission of wrongdoing

er committed fraud or anything like that.” He said the company has done $108 billion in mortgages since 2007 and the $25.5 million settlement represents 0.02 percent of that. “We fought this case and it’s been resolved in a manner that we believe is exactly what we said we would do,” Emerson said. “If you take a look at how this case started and the demands they made of us and the dollar amounts they wanted from the very beginning, this case continued to get smaller and smaller each time we looked at it.” U.S. District Court Judge Mark Goldsmith dismissed the federal government’s lawsuit against Quicken Loans on Friday, according to court records. In April, Goldsmith ordered the two sides into mediation talks led by Rosen, a retired chief judge of the Eastern District of Michigan. Quicken Loans will continue to participate in the FHA lending program, according to the statement. “FHA relies on its partnerships with lenders, such as Quicken Loans, to advance home buying opportunities for Americans, and we look forward to continuing our relationship with Quicken Loans,” said Amy Thompson, HUD’s Assistant Secretary for Public Affairs. The lawsuit had long been on the mind of Quicken Loans founder and chairman Dan Gilbert, who started the company in 1985 and is now worth more than $7 billion, accord-

ing to Forbes. Gilbert was highly critical of the DOJ in a 2015 interview with the Detroit Free Press. “This is what happens when you dare to stand up for justice and the truth to the Department of Justice,” he told the newspaper. “This was an attempt to embarrass us and continue to pressure us to write enormous size checks to settle (allegations) to make them go away, and to admit things that did not occur. “They’re talking about an investigation that ran for three full years, 85,000 documents subpoenaed … and this is what they come up with — a few anecdotes and a few fragments of chains of emails taken out of context,” Gilbert said four years ago. In addition, the mortgage lender has more quietly stewing behind the scenes. In April 2015, a Quicken Loans web administrative address was used to register no fewer than 25 web domains aimed at the DOJ. They are domain names including DepartmentOfJusticesBullies.com, DepartmentOfJusticeShakedown. com, DOJBullies.com and DOJShakedown.com, among others. At one point in the last couple of years, Gilbert has had “bureauclowns” written on a board in a 10th floor Quicken Loans office. Quicken Loans sued days before the DOJ filed its lawsuit, but the suit was dismissed. The company said the feds violated the Administrative Procedure Act in its investigation and contended that the government improperly divined a pattern of violations based on a sampling of FHAbacked loans through Quicken Loans, rather than reviewing all loans individually. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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OPINION EDITORIAL

COMMENTARY

Bear in mind costs, risks on Line 5

$23M later, prosecutors in Flint water case hit the restart button

ov. Gretchen Whitmer surprised many when she cut a deal with legislative Republicans on no-fault auto insurance reform. She saw a path to a deal, and she took it. The lessons of that negotiation should be kept in mind as the governor takes on an epic staredown with petroleum giant Enbridge Energy L.P. over its Line 5 pipeline under the Straits of Mackinac. Enbridge made a deal with Gov. Rick Snyder before he left office to build a new pipeline, safely encased in a tunnel beneath the lake’s floor, over five years. Now Whitmer is pushing to move up the timeline for shutting down Line 5 to two years. And Attorney General Dana Nessel has threatened to sue to revoke the energy giant’s easement to run the pipeline on the Great Lakes floor. Protecting the Great Lakes is a vital goal, but there’s a balance to be struck on this topic. A too-swift shutdown of the pipeline, built in 1953, would have serious economic consequences, as Chad Livengood reports on Page 1 this week. Enbridge has a checkered record in Michigan, responsible for the 2010 oil spill near Kalamazoo that was one of the largest inland spills ever and cost more than $1 billion to clean up. Scientists last year pegged the costs of a major oil spill in the Straits of Mackinac, which would have a national economic impact that could disrupt shipping, fishing, steel production and tourism across the Midwest, at nearly double that cost. The anchor strike last year that gashed the Line 5 pipe was a wake-up call for many who hadn’t previously worried about the pipeline under the straits. But the pipeline supplies much of the state’s propane, vital for heating in much of Michigan, which uses more propane than any other state for residential uses, and Line 5 accounts for more than half of it. In addition, a shutdown of the pipeline would increase the need to ship petroleum products by truck, rail or ship on the Great Lakes, which carries its own risks. Waiting five years for a protected pipeline to be built also carries risks, certainly, but they have to be balanced against the economic impact of a shutdown of the pipeline, which would also be felt by all Michigan residents. The governor and attorney general are right to push for as quick a timeline as feasible. But court fights can drag on a long time, especially when both sides have deep pockets, and could delay the day when a more secure pipeline is in place, safeguarding both clean lakes and the state’s economy. Whitmer should honor the deal Enbridge cut with Snyder — and then demand more regular inspections of the underwater pipeline until a tunnel can be constructed to get Line 5 out of the water for good.

LETTERS

Tools should encourage redevelopment To the Editor: Regarding Chad Livengood’s article in the June 10 edition “Roads: The Growth Conundrum”: Thank you for the article identifying the current dilemma we face with our roads and the impact of new development. You can also extend the same argument for what lies beneath us: water and sewers. It really bothers me that good farmland is being paved for new development as we abandon our inner, older suburbs. I just visited a small vineyard in Detroit set up by Detroit Vineyards, and what struck me is that it is surrounded by infrastructure it doesn’t need. A huge waste of land use, in my opinion. Is it racism that fuels our inexhaustible desire to forever expand outwards, or is it our non-desirable older schools or pothole-filled roads, or maybe all of the above? I wish that we had other natural land barriers that would make outward expansion of the city impractical, but we don’t. Or that land conservancies had the financial might to buy the development rights of some farms. Or that a county could control local development so that our older communities do not continue to slip in appeal. If new development had a price tag increased by applied fees for future maintenance, it could make redevelopment of our older communities possible, desirable and practical. Are our elected leaders up to the task to the address this issue? Jim Lemire Project & Design Management Ferndale

hen state Solicitor General Fadwa Hammoud announced in February that Wayne County Prosecutor Kym Worthy would join the state’s criminal investigation of the Flint water crisis, she was asked if this was a complete restart of the 3-year-old probe. The top deputy to Attorney General Dana Nessel had just announced the demotion of special prosecutor Todd Flood from leading the criminal investigation that former Attorney General Bill Schuette launched in early 2016. But she stressed Flood would be kept on the job for his “institutional knowledge.” “We’re not throwing everything out and starting from zero,” Hammoud said at a Feb. 21 news conference. Nearly four months later, that’s effectively what has happened. In mid-April, Hammoud terminated Flood’s contract after nearly $9.5 million in expenses — and counting — for the criminal probe Schuette farmed out to Royal Oak-based Flood Law and a team of private investigators that included the retired FBI official who took down ex-Detroit Mayor Kwame Kilpatrick. In May, Hammoud’s team issued a search warrant to Flood’s team on the other side of the Department of Attorney General to secure all of the evidence he had amassed, including the one-time cell phone and iPad of former Gov. Rick Snyder. And on Thursday, Hammoud and Worthy dismissed without prejudice all remaining criminal charges against eight government officials, including involuntary manslaughter charges against former state health director Nick Lyon and the state’s former top doctor, Eden Wells, M.D. Three years of investigations and prosecutions costing taxpayers as much as $23 million in legal bills for private law firms has produced five misdemeanor convictions and zero days in jail for government officials. Claiming Flood’s investigation provided a “flawed foundation,” Hammoud and Worthy said Thursday they’ve started a new probe that has “identified additional individuals of interest and new information relevant to the Flint water crisis.” The prosecutors’ dismissal was stunning, though perhaps shouldn’t have been all that surprising given that the charges against Lyon and others started with shock-and-awe headlines for an aspiring governor (Schuette) — and then crept as slowly as imaginable through the legal system ever since. The premise of Flood’s case against Lyon, Wells and Flint’s former emergency managers Darnell Earley and Gerald Ambrose is their failure to take action after multiple red flags about Flint’s tap water — it was brown — left them criminally liable for 12 people who died from a Le-

CHAD LIVENGOOD clivengood@crain.com

“I think they charged people based on political expediency rather than really following the facts.” John Truscott

gionnaires’ disease outbreak in 20142015 in the Flint area that’s been linked to the city’s disastrous switch to Flint River water. Flood wanted to pierce the corporate veil and prove higher-ups are not immune from accountability. But Flood’s case was always met with skepticism, namely because several of the key players in the unpublicized Legionnaires’ outbreak such as Genesee County public health officials and McLaren Flint — the hospital where 11 of the 12 who died were likely exposed to the bacteria — got an unexplained pass from the prosecutor. To this day, McLaren Flint is still under scrutiny for patients who contracted respiratory infections from legionnella bacteria. And then there were other glaring questions that never got answered, like how Flood could charge one member of Snyder’s cabinet — Lyon — with involuntary manslaughter and not another — former Environmental Quality Director Dan Wyant, whose department directly regulated Flint’s water — while going after DEQ underlings with the same charges (two of them took misdemeanor plea deals). Hammoud and Worthy said they’re revisiting just who is culpable for the dozen deaths resulting from the outbreak, which a PBS Frontline investigation suggested may have been vastly understated because a spike in pneumonia deaths may be uncounted Legionnaires’ deaths. “Additionally, we will evaluate criminal culpability for all Legionnaires’ deaths that occurred after the switch to the Flint River, which was never done by (Flood),” the prosecutors said Thursday. Flood’s prosecutions also never reached the doorstep of the Karegnondi Water Authority, the entity set up by Genesee County Drain Commissioner Jeff Wright to build the pipeline that caused Flint’s emergency managers to leave Detroit’s water system after a half-century business relationship.

And, for whatever reason, Flood didn’t go after the emergency manager who set Flint on the course of joining the KWA and switching to Flint River water in the first place — Ed Kurtz, a former Baker College president and CEO. “I think they charged people based on political expediency rather than really following the facts,” said John Truscott, CEO and principal of the Lansing public relations firm Truscott Rossman. “This was not your standard straightforward and ethical prosecution.” Truscott, a Republican and close ally of Lyon’s throughout the investigation and prosecution, argued the charges were designed to give Schuette “maximum political impact” in the run-up to his campaign for the Republican nomination for governor against Snyder’s lieutenant governor, Brian Calley. Flood’s team never ruled out charging Snyder or his closest aides criminally. Lyon’s attorneys contended their client was being prosecuted to get to the governor. Lyon steadfastly refused to take a plea deal as he endured a 10-month preliminary examination while remaining director of the largest department in state government. Andy Arena, the former head of the FBI’s Detroit office during the Kilpatrick years, was Flood and Schuette’s lead criminal investigator until his contract was terminated in February. In an interview with Crain’s, Arena said as of late January, the Flood team was “not done” investigating and there were “a number of people we were still looking at” prosecuting. “When you talk about a complex criminal investigation like this, you work your way up the food chain,” Arena said. “And that’s exactly what we were doing. Where that was going to end, I don’t know. But it was going to go up as far as it could. That I can promise you.” Arena equated the Flint investigation’s approach to how the FBI took down famed New York City organized crime boss John Gotti of the Gambino crime family — by starting at the bottom of the food chain. “People at the top are always insulated,” Arena said. “And if you take your shot at the top, you’re wasting bullets. ... There was no directive to go after anybody, stay away from anybody. It was follow the evidence — and that’s what we were doing.” Not surprisingly, Arena disagreed with Hammoud and Worthy’s decision to drop charges that were based on evidence his team spent three years gathering. “Quite frankly, they own it now,” Arena said. “They’re on the clock — and they’re going to have to produce.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Next generation must learn to pick up the phone

“A

m I going to have to make phone calls?” A college junior, my company’s summer intern, uttered these words after shadowing one of my marketing/ PR colleagues on follow-up calls to media folks. Our goal was to ascertain interest in a particular story, hoping media professionals with whom we have built mutually beneficial relationships might pick up a tantalizing story. The intern sat on a conference line, listening to how a 40-something professional handled the calls. After hanging up, she uttered those words. And yet, this intern joined my marketing and public relations company this summer, insisting she wanted to learn about media relations. Media relations depends on phone calls. We email a press release or story pitch, then a couple of days later pick up the phone and dial the number, hoping to reach a real, live human being to talk about what we sent. There are so many beneficial reasons for phone calls. Maybe a journalist didn’t see the email amid hundreds that arrived that day. Perhaps it went into their junk folder. Maybe they were on deadline for an important story and hadn’t had a minute to consider another compelling idea. The phone call gets us one step closer to truly interacting as humans. As a 47-year-old entrepreneur, I know well the art of the phone call. I grew up before smartphones and social media, so phone was all we had other than snail mail. We thumbed through heavy paper phone books when we needed to find a way to contact someone, or we called information (yes, that was a thing). The phone was our line to the outside world. The summer I was 20, I interned at a local daily newspaper. My editor asked me to write obituaries. I was instructed to scan the faxes from local funeral homes and determine which recently deceased residents were the most interesting. Then, I had to call their families and interview them about their loved one. At 20, I found it horrifying to have to intrude on a mourning family in their time of sadness. Today, I see how beautiful an honor it would be. But back then, I was nervous to do it, and yet my editor asked me to, so I did what was asked of me. As my hand shook, I picked up the phone, dialed the number, and in a soft voice explained why I was calling. No one ever hung up on me. They were always touched, in fact, that I took such an interest in their family member. I gathered great stories from daring to make the call, even if it intimidated me to do so. Our intern is a smart young woman. She’s tenacious and kind, eager to learn, albeit reserved. And yet, that’s not the reason the phone calling intimidates her. I’ve had other millennials work for me, and they all exhibit the same trepidation when asked to make phone calls — even those with extroverted, boisterous personalities. Contemplating why this prospect paralyzed yet another young employee, I finally realized it’s because today’s twentysomethings are not comfortable on the phone. They never use it. They date by Snapchat and text, connect with friends over Instagram. Their homework happens online. They video-chat with best friends, but no one talks on the phone. When I was a teen, I spent late

OTHER VOICES Lynne Golodner

nights huddled under the blankets, ear resting on the genie phone in my bedroom. Be it a boyfriend or a best friend, I talked late into the night to connect with my crew.

As the mother of four teenagers, I see the same behavior — except voice-to-voice conversations are rare. My kids are up as late as I was in the same stage, except it’s their fingers doing the talking. As a professional, I can’t imagine how college students are going to immerse in the careers they aspire to if they can’t get comfortable calling someone. Yes, it can be intimidating to speak to a stranger, but paralyzing? We are doing the next generation a disservice by allowing them to avoid the very human interactions that are necessary to grow a business, succeed in partnerships and collaborate

We are doing the next generation a disservice by allowing them to avoid the very human interactions that are necessary to grow a business, succeed in partnerships and collaborate on important projects.

on important projects. Human-to-human interaction — whether in person or over the phone — must happen if we want to remain a thriving economy. Research reveals over and over again how important it is for personal recommendations, word-of-mouth marketing and human connection to take a brand from little-known to ubiquitous. And that can’t just happen in the digital sphere. Lynne Golodner is chief creative officer and owner of Your People LLC, a storytelling marketing and public relations firm in metro Detroit.

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FOCUS

WOMEN IN LEADERSHIP

HELPING WOMEN SUCCEED IN LAW

Julie Fershtman ALI LAPETINA FOR CRAIN’S

Q&A with Julie Fershtman, equity shareholder, Foster Swift Collins & Smith PC By Rachelle Damico | Special to Crain's Detroit Business

The Fershtman File

rowing up, Julie Fershtman’s household phone would ring at all hours of the night. Her father, Sidney Fershtman, would receive phone calls from clients who needed him to go to jail to help them deal with a criminal issue, or from people who were locked out of the house from their spouse. “You’d think nobody would want to be a lawyer, because you never know when someone is going to call and it’s usually at an inconvenient time,” Fershtman said. “Despite that, I was able to see the difference he made for people.” Fershtman would later start a law office of her own, and has worked as a lawyer for more than 30 years. “It was the commitment that lawyers give to

Education: Bachelor of Arts in political science and philosophy, Emory University. Juris Doctor, Emory University School of Law.

Last year, Fershtman’s collected billings from her clients totaled about $846,000. She received the Roberts P. Hudson Award last September, which the State Bar of Michigan presents to commend one or more lawyers for rendering of outstanding and unique service to and on behalf of the State Bar of Michigan, the legal profession and public. When did you know you wanted to study law?

I grew up working in my father’s law office. People would come into the office distraught because they were having a custody battle, a divorce, or dealing with a serious criminal matter. I saw people who turned to my father at an extremely personal and difficult time in their life. Seeing him show empathy and use the law to help people

Current role: Equity shareholder, Foster Swift Collins & Smith PC Career ladder: Fershtman worked as a messenger and office clerk in high school and college for her late father, Sidney Fershtman, a lawyer who had a general practice law firm in the Detroit area. She ran her own law practice called Law Offices of Julie Fershtman from 1994-2010, which focused on commercial litigation, insurance coverage, insurance defense and equine law. In that time, she was “of counsel” to two law firms, Law Office of Alan Harnisch in Bingham Farms and Zausmer Kaufman August & Caldwell, PC in Farmington Hills. Fershtman served as president of the State Bar of Michigan in 2011-2012, despite learning she had breast cancer just two weeks after being sworn in. She joined Foster Swift in 2010, where she represents clients in a range of business, personal injury, contract and insurance coverage litigation. She serves on the executive committee and is vice president of the firm’s Southeast offices. Fun fact: Fershtman has written more than 400 published articles, including three books and two blogs. Her books, “Equine Law & Horse Sense” and “MORE Equine Law & Horse Sense” sold more than 12,000 copies combined. Her newest book on equine law, which is law related to horses, plans to be published by the American Bar Association in 2020.

made me decide it was definitely the career I wanted to do. However, I never touched a family matter or criminal law matter. Why not?

My father was murdered in his law office in 1984. It’s an unsolved murder, and the possibility is that it was a client. Before he died, I planned to go into practice with my father. I was in law school at the time. That was the turning point when I decided, no, I’m never going to do this. I thought about civil litigation and that became what I wanted to do. You later opened your own practice, but then you moved away from that route. Why?

I wanted to develop a successful law practice on my own and be a rainmaker, but I didn’t

their clients that was a real draw,” Fershtman said. Fershtman has committed to many endeavors in her career. For instance, she co-chaired the State Bar’s 21st Century Practice Task Force, which looked at problems in the legal profession. She also serves on Foster Swift’s compensation committee and co-founded a networking program within the firm to promote the advancement of women in the law. Fershtman’s clients range from major insurance companies and businesses to individuals. Her work includes trials, arbitrations, alternative dispute resolution and appeals. She has tried cases before juries in four states and has been selected to serve as pro hac vice counsel in state and federal courts.

have mentors to help me on a regular basis. I had to learn that on my own. That meant how to market, which wasn’t anything that I was trained for. I found it challenging to have the energy, creativity and the drive to continue to develop my practice. In 2010, I had a full-time associate and secretary and my practice had grown to a nice level. However, I realized I was about to become president of the bar within a year. That meant a lot of travel, even around the country. I knew I wouldn’t be able to devote my time to the practice. It was at that point that I decided to merge with a firm. In 2010, I had a sizable book of business and I began seeking out compatible firms. Foster Swift was compatible in many ways, including a sincere commitment to a diverse work environment and com-

munity service. You were elected president of the State Bar of Michigan. What did that take?

To become president you need to be an elected member of the board of commissioners, which is about 31-33 lawyers and judges from all over the state. It takes a number of years of service on the board to prove your commitment and qualifications. Only four women before me were ever elected president of the bar. I was the 77th president and only the fifth woman in 77 years. It’s an interesting issue, because women either couldn’t do it or didn’t want to run. I’m happy to share we’ve had two more women since then. SEE FERSHTMAN, PAGE 11

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HUD approves sale of BrewsterDouglass site to Gilbert for $23M By Kirk Pinho kpinho@crain.com

The U.S. Department of Housing and Urban Development has approved the sale of the former Brewster-Douglass housing projects site in Detroit to an affiliate of billionaire developer and online mortgage giant Dan Gilbert for $23 million. It’s the latest key step to getting the site redeveloped more than five years after the demolition of the windowless towers that stood for years as one of the most recognizable symbols of Detroit’s decline, along with Michigan Central Station in Corktown. To replace the towers, Gilbert and his development partners plan a more than $300 million redevelopment with more than 900 residences with a mix of for-rent and for-sale units across about 22 acres. “We are still working through our due diligence inspections on the Brewster-Douglass site and expect to close (on the purchase) in early fall,” Gilbert’s Bedrock LLC said in a company statement Monday morning. It released no additional details. The disposition approval occurred last month, according to HUD spokesman Brian Sullivan. A May 17 approval letter says that $4 million of the $23 million will be placed into escrow for environmental remediation and that the remaining $19 million will be used to provide more affordable housing in Detroit, although HUD still has to sign off on the specific use of that. The letter says the property was appraised in September 2017 at $11.74 million. When details were revealed in July, the project was to include 913 residential units, with 648 apartments and 265 for-sale units, spread across the site in dozens of buildings of varying heights off I-75 south of Mack Avenue near the Brush Park neighborhood, which Gilbert has been active in redeveloping along with others. Nearby, his Bedrock real estate company and others are building the 400-plus-unit City Modern development with others across 8.4 acres; the Brewster-Douglass site is nearly three times as large at 22 acres with 29 parcels. When completed, the Brewster-Douglass project is also expected to include 3.2 acres of public space, 19,000 square feet of retail and another 60,000 square feet of early childhood education space and a hotel with approximately 80 rooms. In addition, the area’s street grid is ex-

FERSHTMAN FROM PAGE 10

A few weeks after you were elected, you were diagnosed with breast cancer. What motivated you to continue your role?

Everyone has their own story about their reaction when the doctor calls and says, “you have cancer.” In my case, I was just really angry. To be president of the bar meant that I had put decades of service in and so much of my life into even being qualified. When that diagnosis came in, there wasn’t any room for crying. It helped propel me, because I didn’t want cancer to limit me in any way. I ended up having to

POWER UP

MASTER’S DEGREES AND GRADUATE CERTIFICATES Architecture and Design Arts and Sciences Business and Information Technology Engineering

BEDROCK LLC

Dan Gilbert and his development partners plan a more than $300 million redevelopment of the Brewster-Douglass site near downtown Detroit with more than 900 residences including a mix of for-rent and for-sale units across about 22 acres.

pected to be re-established and connections across I-75 are planned. About a quarter of the rental units are slated to be affordable to those making no more than 80 percent or less of the area median income, or $39,000 a year. Construction was expected to begin this summer and built in multiple phases, with some of the first units coming online about two years from the start of construction. Bedrock is jointly developing the project with Detroit-based Woodborn Partners LLC, which is led by Clifford Brown; and New York Citybased Jonathan Rose Companies LLC, which focuses on affordable housing. Detroit-based architecture firm Rossetti Associates Inc. has been named as the project’s master planning firm. Other architecture firms could be brought in to work on it, and a general contractor and construction manager has not yet been publicly revealed.

History of site This is the most recent in a string of plans for the site, which became available for redevelopment upon completion of demolition there in 2014. The city and housing commission in 2016 applied for a $30 million Choice Neighborhoods grant from HUD for the project, which at the time was $416.7 million with 1,037 residential units spread across 25 do pretty radical surgery, but the timing of the procedures turned out to be favorable. I had surgery around Thanksgiving and my first chemo around Christmas, when not a lot of bar activities take place. I made just about every commitment with few exceptions. I was able to get through it. I also have a daughter, and I wanted her to see that you can deal with adversity and make it through, because she was watching everything. Why was it important to you to co-found a networking program for women in law?

Women lawyers lead the profession in tremendous numbers, but only about 20 percent of equity share-

acres that included not just the Brewster-Douglass site but also a pair of sites in Eastern Market. That plan would have been developed by Bedrock, Novi-based Ginosko Development Co., Columbia, Md.-based Enterprise Community Partners and KBK Enterprises, which has offices in Columbus and Pittsburgh. However, the city was not awarded the grant and in 2017 decided to not reapply. Instead, it opted to sell the property to Douglass Acquisition Co. LLC, an affiliate of Bedrock, for $23 million. There were six 14-story high-rises, two six-story buildings and apartment row houses at the Brewster-Douglass site, with as many as 8,000-10,000 people living in the buildings at one time. First lady Eleanor Roosevelt presided over the 1935 groundbreaking ceremony for what was the first federally funded public housing development to open to African Americans. It opened in 1938 with 701 units; by 1941, it had 941. During its lifetime, the complex was home to Diana Ross and the Supremes before they became Motown icons. The city has spent more than $39 million in that area since 2001 on work including infrastructure, demolition, land acquisition and historic rehabilitation, priming it for redevelopment. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB holders at a law firm are women. They don’t tend to be the rainmakers. The networking program is for women to share concerns and support and promote each other. Over the last 30 years, just about every law school shows admission criteria for its first year students. Enrollment is made up of 50 percent women. That was true of my class when I went to Emory Law School in 1983. The point of the initiative was to keep women engaged, practicing and to offer a supportive environment to help them succeed. I would encourage women to take a strong interest in developing mentor relationships with other women. It’s an effective and important way to succeed in this profession.

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Charles was ranked #7 on Forbes’ list of America’s Top Wealth Advisors and is the #1 Fee-Only Advisor on the list.**

We Uphold a Fiduciary Standard 101 West Big Beaver Road 14th Floor Troy, MI 48084 (248) 687-1258 or (888) 777-0126

www.zhangfinancial.com Minimum Investment Requirement: $1,000,000 in Michigan $2,000,000 outside of Michigan. Assets under custody of LPL Financial, TD Ameritrade, and Charles Schwab *As reported in Barron’s March 8, 2019. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices, and other factors. **As reported in Forbes September 13, 2018. The rankings, developed by Shook Research, are based on in-person and telephone due diligence meetings and a ranking algorithm for advisors who have a minimum of seven years of experience. Other factors include client retention, industry experience, compliance records, firm nominations, assets under management, revenue generated for their firms, and other factors. For fee-only status see NAPFA.org

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

Health Alliance Plan to acquire Detroit-based health plan Crain’s Detroit Business

Congratulations Honorees will be recognized at the ESD Annual Dinner on June 18, 2019, at The Inn at St. John’s in Plymouth. To attend or sponsor, visit esd.org or call 248-353-0735.

HORACE H. RACKHAM HUMANITARIAN AWARD

û Ben C. Maibach III, FESD, Barton Malow Company HONORARY MEMBERSHIP

û Mark Reuss, General Motors Company LIFETIME ACHIEVEMENT AWARD

û William A. Moylan, Jr., PhD, PMP, DTM, FESD Eastern Michigan University ESD COLLEGE OF FELLOWS INDUCTEES

û Kouhaila Hammer, CPA, Ghafari Associates, LLC û Leo Kempel, PhD, Michigan State University û Dinesh C. Seksaria, PE, Dinesh C. Seksaria PE PLLC CORPORATE PARTNER OF THE YEAR

û Walbridge

OUTREACH PARTNERS OF THE YEAR

û Eastern Michigan University û Wayne State University

DISTINGUISHED SERVICE AWARDS

û Denise Carlson, DENSO International America, Inc. û Louay M. Chamra, PhD, Oakland University û Matthew J. Chynoweth, PE, State of Michigan û Keith Lemley, American Axle and Manufacturing û Ronald Young, Ruby + Associates, Inc. STEM EDUCATOR OF THE YEAR

û Kathryn Poirier, FET, South Redford School District TECHCENTURY IMAGE AWARD

û Matthew N. Roush, Lawrence Technological University EMERGING YOUNG PROFESSIONAL AWARD

û Trevor Sherts, Ford Motor Company

ESD CONSTRUCTION AND DESIGN AWARDS

û Shinola Hotel—Bedrock; Kraemer Design Group; and Barton Malow Company û Oakland University Hillcrest Hall—Oakland University; Neumann/Smith Architecture; and Frank Rewold & Son, Inc. û Michigan State University Grand Rapids Research Center— Michigan State University; Ellenzweig & SmithGroup; and Clark Rockford Joint Venture û Wayne State University Mike Ilitch School of Business—Wayne State University; SmithGroup; and The Christman Company/LS Brinker Joint Venture C & D HONORABLE MENTION

û Western Michigan University, Valley Dining Center— Western Michigan University; SmithGroup; and The Christman Company

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Detroit-based managed-care company Health Alliance Plan is jumping back into the Medicaid HMO business in metro Detroit, signing a deal to acquire the Detroit-based Medicaid plan Trusted H P- M i c h i g a n , the insurer said Monday. Trusted HP, which covers 9,000 members, mostly in Wayne County, is formerly known as Harbor Health Plan. The company said the Lassiter deal marks HAP’s re-entrance into the state’s Medicaid HMO area called Region 10, which includes Wayne, Oakland and Macomb counties. HAP would not provide financial details of the transaction, including the purchase price. The plans manage health care needs under state contracts for people covered under the federal- and state-funded health insurance program for the poor. “We are thrilled to announce a return to offering a Medicaid option that serves the people of metro De-

Need to know

 Acquisition marks HAP’s return to Medicaid coverage in Southeast Michigan’s Region 10  Trusted HP-Michigan is former Harbor Heath Plan, originally a DMC unit  Second new owner in two years for former Harbor Health Plan

troit,” Wright Lassiter III, president and CEO of HAP’s owner Henry Ford Health System, said in a written statement. “As both a health insurer and health care provider, we are uniquely positioned to offer seamless, holistic care and coverage to our Medicaid population — a fully integrated approach focusing on quality and efficiency that creates lasting value for our patients and members.” Trusted HP-Michigan reported a net loss of $3.6 million on revenue of $26.9 million in 2018, according to state filings. Through the first quarter of this year, it had posted net income of $356,566 on revenue of $9.5 million. HAP currently offers Medicaid products only in the state’s Region 6, which includes Genesee, Huron, Lapeer, Shiawassee, St. Clair and Tuscola counties in mid-Michigan and the Thumb, where it covers about 3,500 people. The company also said

it participates in the MI Health Link Dual Demonstration Project, serving 4,500 people who are eligible for both Medicare and Medicaid in Wayne and Macomb counties. HAP said in a statement that members of Trusted HP-Michigan will be able to keep the same doctors and use their current identification cards. The two dozen employees of Trusted HP will join HAP. The acquisition is subject to regulatory approval and is expected to be completed in late summer, the company said in the statement. In 2015, much of HAP’s Medicaid business evaporated when it lost a state contract for about 85,000 Medicaid members in Southeast Michigan due to a decision by the state to reduce the number of plans in that area. Molina Healthcare bought the remaining business later that year. HAP had acquired what became HAP Midwest for $70 million four years before. The deal would mark the second new owner in two years for the former Harbor Health Plan, which sold itself to Washington, D.C.-based Trusted Health Care in early 2017. The plan was formerly owned by Tenet Healthcare Corp., parent of Detroit Medical Center, which exited the health insurance business as part of restructuring.

Payments startup to hire 100 in Southfield after raising $40 million By Kurt Nagl knagl@crain.com

A San Francisco-based payments and software company is looking to hire 100 new employees at its Southfield office after getting a $40 million infusion. SpotOn Transact LLC will use most of the investment it recently raised to fund its expansion in metro Detroit, President RJ Horsley said. SpotOn last week announced its new round of capital funding, which was led by California-based firms Franklin Horsley Templeton Investments and Dragoneer Investment Group. SpotOn, which provides payment solutions for small businesses, entered metro Detroit with the October acquisition of EmaginePOS, a software firm formerly based in Ferndale. SpotOn expanded the company from 12 employees to 59, and in April moved it to the 4000 Towne Center office complex in Southfield, where there is room to expand. The office serves as the base for the company’s restaurants division. Horsley expects to double the employee count within a year and continue growing. “We see a massive market opportunity,” he said. “Detroit has proven to be a phenomenal market from a talent perspective.” Horsley said the company has

SPOTON

SpotOn, a San Francisco-based startup that develops “point of sale” technology for small businesses, is looking to add 100 employees at its Southfield office.

“hundreds of clients,” mostly bars and restaurants, in the city of Detroit and surrounding areas. SpotOn develops technology for “point of sale” systems. In the case of a bar or restaurant, that technology includes the device a server uses to enter an order and tabulate a bill, as well as the credit card machine a customer uses to pay it. Revenue in the global payments sector hit $1.9 trillion in 2017 and is expected to grow to a $2 trillion business in 2020 and $3 trillion in 2023, according to New York Citybased management consulting firm McKinsey & Co. SpotOn, formed in 2017, is competing with companies such as Square and Clover for a chunk of the swelling sector.

Besides its headquarters in San Francisco and office in Southfield, the company has a product development hub in Chicago. New jobs at its Southfield office will include field sales, software engineers, product development and operations. Horsley said the jobs vary from entry-level to senior-level positions. Open jobs can be found at SpotOn.com. Horsley said its expanded presence in metro Detroit has been driven largely by the talent in the area. “We’ve been blown away by the talent pool,” he said. “We’ll continue to hire aggressively. We’re incredibly bullish on the Detroit market.” 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 // J U N E 1 7 , 2 0 1 9

CRAIN'S LIST: LARGEST MICHIGAN ACCOUNTING FIRMS

Ranked by number of Michigan employees Rank

Company Address Phone; Website

Managing partner(s)

Number of employees in Michigan Jan. 2019/ 2018

Number of employees Southeast Michigan Jan. 2019/ 2018

Number of Michigan Number of employees Michigan engaged in employees audit/ engaged in accounting taxes

Number of Michigan employees engaged in consulting

Number of Michigan employees engaged in other

Number of CPAs Michigan Jan. 2019/ 2018

Plante Moran PLLC 27400 Northwestern Highway, Southfield 48034 (248) 352-2500; www.plantemoran.com

James Proppe

1,666 1,632

1,183 1,154

505

355

423

383

643 631

Deloitte LLP and its subsidiaries 200 Renaissance Center, Suite 3900, Detroit 48243-1895 (313) 396-3000; www2.deloitte.com/us/en.html

Mark Davidoff

1,375 1,521

1,180 1,374

487

228

465

195

330 315

Ernst & Young LLP 777 Woodward Ave., Suite 1000, Detroit 48226 (313) 628-7100; www.ey.com

Angie Kelly, Detroit office; Jay Preston, Grand Rapids office

807 735

703 640

262

208

234

103

303 314

PricewaterhouseCoopers LLP 500 Woodward Ave., Detroit 48226 (313) 394-6000; www.pwc.com

Ray Telang

794 793

749 805

379

190

112

113

344 301

Rehmann 1500 W. Big Beaver Road, 2nd Floor, Troy 48084 (248) 952-5000; rehmann.com

Ryan Krause

705 590

293 275

191

186

114

214

245 327

BDO USA LLP 2600 W. Big Beaver Road, Suite 600, Troy 48084 (248) 362-2100; www.bdo.com

Keith Klucevek and John Marquardt

587 525

164 122

NA 167

KPMG LLP 150 W. Jefferson Ave., Suite 1900, Detroit 48226 (313) 230-3000; www.kpmg.com

Betsy Meter

404 375

322 306

181

95 84

UHY LLP Chrysler House, 719 Griswold St., Suite 630, Detroit 48226 (313) 964-1040; www.uhy-us.com

Thomas Callan

398 390

158

136

151 163

Doeren Mayhew & Co. PC 305 W. Big Beaver Road, Suite 200, Troy 48084 (248) 244-3000; www.doeren.com

Chad Anschuetz

244 225

242 223

104

95 96

Yeo & Yeo PC 5300 Bay Road, Suite 100, Saginaw 48604 (989) 793-9830; www.yeoandyeo.com

Thomas Hollerback

224 214

36 38

78 87

Crowe LLP (formerly Crowe Horwath LLP) 55 Campau Ave. N.W., Suite 500, Grand Rapids 49503 (616) 774-0774 ; www.crowe.com

Rhonda Huismann

205 207

4 10

77 84

Andrews Hooper Pavlik PLC 691 N. Squirrel Road, Suite 280, Auburn Hills 48326 (248) 340-6050; www.ahpplc.com

William J. Mulders Jr.

152 153

23 22

68 67

Maner Costerisan 2425 E. Grand River Ave., Suite 1, Lansing 48912 (517) 323-7500; manercpa.com

Jeffrey Stevens

140 110

3 3

64 55

Grant Thornton LLP 27777 Franklin Road, Suite 800, Southfield 48034 (248) 262-1950; www.grantthornton.com

Jim Tish

99 116

41 48

Baker Tilly Virchow Krause LLP 2000 Town Center, Suite 900, Southfield 48075 (248) 372-7300; www.bakertilly.com

Patrick Killeen

92 91

82 NA

36 40

Cohen & Co. B 719 Griswold St., Suite 920, Detroit 48226 (313) 424-4871; www.cohencpa.com

Robert MacKinlay

87 71

31 26

Clayton & McKervey PC 2000 Town Center, Suite 1800, Southfield 48075 (248) 208-8860; www.claytonmckervey.com

Robert Dutkiewicz

74 75

37 38

Gordon Advisors PC 1301 W. Long Lake Road, Suite 200, Troy 48098-6319 (248) 952-0200; www.gordoncpa.com

Executive commitee

65 62 C

65 62

32 33

RSM US LLP 719 Griswold St., Suite 820, Detroit 48226 (313) 335-3900; rsmus.com

Larry Keyler

55 40

MRPR Group PC D 28411 Northwestern Highway, Suite 800, Southfield 48034 (248) 357-9000; www.mrpr.com

Angela Mastroionni

54 51

28 26

Cole, Newton & Duran CPAs 33762 Schoolcraft Road, Livonia 48150-1625 (734) 427-2030; www.cndcpa.com

Arthur Cole

50 47

16 16

Croskey Lanni PC 345 Diversion St., Suite 400, Rochester 48307 (248) 659-5300; www.croskeylanni.com

David Croskey

48 48 E

26 26 E

Derderian, Kann, Seyferth & Salucci PC 3001 W. Big Beaver, Suite 700, Troy 48084 (248) 649-3400; www.DKSScpas.com

Ursula Scroggs

44 45

25 25

Mattina Kent & Gibbons 1214 N. Main St., Rochester 48307 (248) 601-9500; www.mkgpc.com

Vincent J. Mattina Jr.

40 42

25 27

16 20

Polk and Associates PLC F 30600 Telegraph Suite 2191, Bingham Farms 48025 (248) 642-5700; www.polkcpa.com

Richard Williams

40 38

15 15

Want the full Excel version of this list — and every Crain's list? Become a Data Member: CrainsDetroit.com/data This list of accounting firms is an approximate compilation of the largest such companies in Michigan. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available.

B Formerly Godfrey Hammel, Danneels & Co. PC. Bought by Cohen & Co. Ltd. of Cleveland in January 2016. C Crain's estimate. D Merged with Hantz Rhoades & Doehrer LLC , effective Jan. 1, 2017. The combined firms operate as MRPR CPAs & Advisors with offices in Southfield, Ann Arbor and Saline. E Company estimate. F Merged with Kirschner, Hutton, Perlin PC, Southfield, in Aug. 2018.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

REAL ESTATE INSIDER

From Maccabees to Century, building gets name change The Maccabees Center building in Southfield is getting a new name in honor of its owner’s upcoming 100th anniversary. KIRK The Century PINHO building at 25800 Northwestern Highway at Civic Center Drive is also undergoing a renovation with work including a new tenant lounge and fitness center, plus updates to the cafeteria, courtyard and lobby. (From Maccabees to Century: It has a nice little ring to it, metrically. #Poetry) The building, which totals 308,000 square feet, is 77.2 percent occupied, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. The asking rate is $17.95 per square foot per year, CoStar says. “When completed, these improvements will position The Century as a true Class A office destination for decades to come,” AJ Weiner, managing director in the Royal Oak office of Chicago-based brokerage firm JLL, said in a statement. It is owned by Livonia-based Schostak Bros. & Co., which was founded in 1920. Built in 1986, the building was part of a glut of new office space that

38,000 square feet but was using it only as meeting space. They left “a couple months ago” around February or March, Cavazos said, adding that the building is about two-thirds full and leases for $12 per square foot. “IBM used to be the sole tenant in the building. It was built for them,” Cavazos said. Plus: Naming and signage rights are available. Southfield Centre was also built in the 1980s as part of the suburban office building boom.

158-year-old building in Ypsi being reborn

COSTAR GROUP INC.

The building formerly known as Maccabees Center is now called The Century after a rebranding.

came online in the suburbs around that time.

IBM leaves building constructed for it in ’80s Elsewhere in Southfield: The Southfield Centre building that for decades housed IBM has scrubbed

the company’s name from the side of its building now that it has relocated. “They had to take their signage down,” said Jeffrey Cavazos, vice president of brokerage for health care services for Southfield-based Farbman Group. He said the company took about

A $10 million-plus mixed-use redevelopment of a Civil War-era building is nearing completion. The Thompson Block Building is being turned into restaurant space and 20 loft apartments by developer 3Mission Design & Development, which is based in Ann Arbor. According to a press release, it was used as a war barracks for African American soldiers when it was built in 1861. The Mash Whiskey Bar and Thompson & Co. take up about 11,000 square feet and the residential component is about 21,000. The architect on the project is Ann Arbor-based Mitchell Mouat Architects and the contractor is East Lansing-based Kincaid Building Group. Financing is through TCF Bank,

the Michigan Economic Development Corp., Michigan Community Capital and a property tax abatement from Ypsilanti. The project is expected to be complete this fall.

Why is Molina trying to unload its Troy building? California-based Molina Healthcare is not commenting on why it is listing its local headquarters in Troy for sale. This comes just a few months after I reported that it was consolidating its downtown Detroit office north up I-75 into the building it owns at 880 W. Long Lake Road at Crooks Road. Molina paid $11 million ($55.69 per square foot) for the 197,500-square-foot building in February 2014 for its Michigan headquarters, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. It was built in 1999 and renovated in 2015, the listing says. Barry Swatsenbarg, executive vice president in the Southfield office of Colliers International Inc., which has the listing for an undisclosed price, didn’t say much in an email when asked about it. “Tremendous activity, considering multiple options,” he said. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Little Caesars Arena tabbed for LEED Silver certification By Bill Shea bshea@crain.com

Detroit’s Little Caesars Arena, the sports and entertainment venue that opened in September 2017, has earned the third-highest green building certification, its operator said Tuesday. The 20,000-seat taxpayer-subsidized sports and entertainment arena was awarded the silver level Leadership in Energy and Environmental Design rating, better known as LEED, from the nonprofit Washington, D.C.-based U.S. Green Building Council. The council promotes sustainability in building design, construction and operation. The certification was announced by the Ilitch organization, which financed more than half the construction cost and operates the publicly owned building under a long-term concession management agreement. The arena is the 13th building in the city to receive LEED Silver certification, according to a review of USGBC data. The certification was awarded April 26, according to the USGBC. There are about 30 sports venues with LEED certifications at the college and professional level. Buildings can earn four levels of LEED certification, according to the USGBC: Certified (40–49 points), Silver (50–59 points), Gold (60–79 points), and Platinum (80+ points). LCA earned 51 points. “Little Caesars Arena was built with an end-user approach through every decision that was made, including a primary focus on sustainability and being a caretaker of the environment ...,” Chris Granger, group president for sports and entertainment at Ilitch Holdings Inc., said in a statement. “As one of the busiest arenas in the

Little Caesars Arena opened in 2017 in Detroit.

world, we will continue to pursue innovative ways to improve the guest experience and operate efficiently through responsible sustainability processes.” The 885,000-square-foot arena’s LEED scorecard can be viewed online at usgbc.org/usgbc-detroit-region. To maintain certification, the building’s operator must re-apply within five years. The Ilitch organization said that the arena’s certification is attributable to many factors: J An erosion and sedimentation control plan approved by the U.S. Environmental Protection Agency. J The arena was awarded all five available points under the Development Density and Community Connectivity

LARRY PEPLIN FOR CRAIN’S

credit. J Efficient water fixtures have reduced the use of potable water by more than 40 percent. J Energy cost savings are more than 17 percent. J More than 20 percent of the building’s materials have been manufactured using recycled materials. J The Ethylene tetrafluoroethylene (ETFE) roof uses natural light to reduce the need for daytime lighting. J Solar heat gain is controlled. J Construction materials were selected to promote healthy air quality for visitors by reducing exposure to harmful emissions. J The ventilation system meets the standards for indoor environmental quality.

J Lighting controls are provided for 100 percent of building occupants and 100 percent of shared multi-occupant spaces. J The arena received an exemplary rating for alternative and public transportation access. J More than 13 percent of the building’s materials were locally sourced. The U.S. Green Building Council said that the advantage of LEED-certified buildings is that they attract tenants, cost less to operate and boost employee productivity and retention. Construction of the arena, which sits at I-75 and Woodward Avenue, began in 2014. Since opening, its events have drawn more than 4 million ticketed guests. The building is the home venue for the Ilitch-owned Detroit Red Wings and the Tom Gores-owned Detroit Pistons, both of which play 41 regular-season games in the building each year. It replaced Joe Louis Arena and The Palace of Auburn Hills. Other activities in the building include concerts, pro wrestling and ice skating. The Ilitch organization on Tuesday also noted some of the arena’s other honors and efforts: In November 2017, Little Caesars Arena was awarded SAFETY Act Certification, the highest level of protection awarded by the U.S. Department of Homeland Security; in July 2018, it partnered with KultureCity to make all events hosted at the arena sensory-inclusive; and in October 2018, the National Weather Service recognized Little Caesars Arena as “StormReady” and certified to spot, report and prepare for a wide range of weather conditions. Sports Business Journal/Sports Business Daily named

the venue its Sports Facility of the Year award winner in 2018. Owned by the city’s Downtown Development Authority and operated by the Ilitch family’s Olympia Entertainment, the arena was financed with a mix of downtown property tax captures and private funding that pays off construction bonds. The cost of the building and immediately surrounding development on the 12-acre arena site has been pegged at $863 million, which includes $398 million in taxpayer-backed funding. Little Caesars Arena is the anchor of the Ilitches’ District Detroit mixed-use development unveiled in 2014 that called for 50 surrounding blocks to be rehabilitated into an area of new housing, retail, restaurants, bars, offices and public green space. The Ilitches said the project would be largely finished by the time the arena opened in 2017, but only some of it has actually been built and criticism of the family has mounted in recent months for failing to deliver what the public was led to believe would be finished by 2017. The family, through Ilitch Holdings President and CEO Christopher Ilitch, has said the construction timeline from 2014 may have been too “aggressive” and blamed collapsed deals with development partners for delays. He also has said more development, particularly the long-promised housing, would still happen. The Ilitches said the district has created thousands of jobs and delivers an estimated $2.1 billion in total economic impact. Crain’s reporter Kirk Pinho contributed to this story.

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

$4.9M greenway bridges gaps to Detroit riverfront By Annalise Frank

Need to know

afrank@crain.com

The city of Detroit is starting to build a $4.9 million greenway and bike path that will draw a 1.2-mile line to the riverfront. Construction on the previously announced Joseph Campau Greenway begins as Detroit seeks to connect more areas of the city to its RiverWalk. The popular pedestrian track along the Detroit River is part of a waterside district that’s being converted over the years from industrial to public recreational use. The latest trail will stretch from the intersection of East Vernor Highway and Joseph Campau Avenue on Detroit’s east side to the riverfront. It requires building new paths and updating existing ones that are marred by broken concrete, flooding and other issues, a city news release said. The project cost also includes improving recreation areas and pedestrian road crossings along the route; adding benches, cameras, emergency call boxes, mile markers and more lighting; separating the path from residences using landscaping; and installing green stormwater infrastructure to cope with flooding. Construction is expected to finish by fall 2020, the release said. The first phase, between the RiverWalk and Robert Bradby Drive, started in May. It’s being paid for with $1.9 million through the Community Development Block Grant program and $1.2 million out of bonds allocated for road improvements. The second, $1.8 mil-

JJPath to stretch from intersection of East Vernor and Joseph Campau to RiverWalk JJConstruction started in May, with plans to replace broken concrete and build new path sections JJCity wants more neighborhoods to be able to reach RiverWalk through connected trails

CITY OF DETROIT

Creating the 1.2-mile Joseph Campau Greenway requires building new pedestrian and cycling paths and updating existing ones with new features including mile markers, benches, lighting and landscaping.

lion phase would start in spring, paid for through future Community Development Block Grant funds. The Detroit General Services Department and the nonprofit Detroit RiverFront Conservancy will manage

the Joseph Campau Greenway. An east riverfront framework released in 2017 by the Detroit RiverFront Conservancy included plans for the Joseph Campau Greenway, as well as the Beltline Greenway. The

State takes over reporting on arts’ economic impact in Michigan By Sherri Welch swelch@crain.com

Detroit-based arts advocacy group Creative Many may be shutting its doors at month’s end, but a national project it helped bring to Michigan to shine a light on the arts and culture sector’s economic impact in the state will continue — at least for the near term. The Detroit-based nonprofit worked to bring what was then called the Cultural Data Project to Michigan in 2010, six years after its national launch. The multistate database gathers national economic impact information from participating nonprofit arts groups in several states. At first, it was administered by one of its initial funders, the Pew Charitable Trusts in Philadelphia. Today, it’s administered by DataArts, a national nonprofit housed within the National Center for Arts Research at Southern Methodist University in Dallas. Included in the earliest participating arts group were 32 of the state’s 50 largest nonprofit arts and cultural groups, including: Cranbrook Educational Community in Bloomfield Hills; The Henry Ford in Dearborn; College for Creative Studies in Detroit; Grand Rapids Art Museum; Grand Rapids Public Museum; Interlochen Center for the Arts; and Upper Peninsula groups such as Ironwood Theatre and DeVos Art Museum at Northern Michigan University in Mar-

quette. Masco Corp. and other members of the Council of Michigan Foundations Arts Affinity Group and the Michigan Council for Arts and Cultural Affairs Weinfeld provided grants to Creative Many to engage the state’s arts groups and to share the sector’s impact. The state arts group requires its grantees to enter their economic data into the DataArts platform. So do the Southeast Michigan arts funders that share a grant application process — namely Kresge, Fred A. and Barbara M. Erb, Hudson-Webber and DeRoy Testamentary foundations, W. Kim Heron, senior communications officers for Kresge, confirmed. One of the “carrots” to get arts groups to enter their data was the fact that foundations can pull reports from it, helping eliminate some duplication of reporting efforts for grantees. According to Creative Many’s 2018 “Creative State Michigan Nonprofit Report,” based on fiscal 2015 information from DataArts, 410 of the state’s nonprofit arts and cultural organizations or 16 percent were participating at that point. In 2015, those organizations con-

tributed $1.25 million in direct expenditures to the state’s economy. The report also found: Nearly 89,000 people in Michigan were employed in the creative industries in 2014, earning $5 billion in wages. J Participating arts groups paid nearly $291 million in salaries, payroll taxes and fringe benefits that supported a total of 25,144 jobs. J The nonprofit arts and culture sector engaged over 91,000 total people including paid employees, volunteers and contractors. J Visitors and tourists to Michigan spent $1.3 billion with Michigan arts and cultural groups and events in 2016, reflecting 12.6 percent of total direct spending for all Michigan leisure travel. Arts and the creative industries are a primary economic driver in the state, both in terms of job and wealth creation, said Creative Many Vice Chair Arnold Weinfeld, interim director of the Institute For Public Policy and Social Research at Michigan State University. “It’s important that state policy makers and even local policy makers understand that impact … so they can support the work of the sector, state arts agencies and local arts commissions and create space within their economic development plans to understand the importance of arts and culture.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

Beltline has been delayed due to difficulties acquiring or securing necessary land. Ultimately, the conservancy wants to develop a 5.5-mile section of riverfront reaching from the Ambassador

Bridge to the west to just east of the MacArthur Bridge at Belle Isle to the east. It’s 80 percent done with the first phase: 3.5 miles on the east riverfront between Gabriel Richard Park and Joe Louis Arena, according to its website. The completed eastern portions and connected Dequindre Cut biking and walking path see around 3 million visitors a year, according to the conservancy. “In the past, the riverfront was so industrial you could barely see it, and you definitely couldn’t get to it,” Mayor Mike Duggan said in the release. “Thanks to years of hard work, that’s no longer the case, and residents now deserve safe, beautiful connections to the riverfront. The Joseph Campau Greenway will provide residents with a safe and reliable non-motorized path connecting them to the RiverWalk, and other connections to resources and amenities across the city.” Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

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2019

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CALENDAR WEDNESDAY, JUNE 19 Hardware Tech Summit. 9 a.m.-4 p.m. June 19. PlanetM. One-day conference will include “physical product” innovators, local and global hardware-focused investors, Michigan manufacturers and engineering firms and other resources to help hardware innovators scale for success. Summit includes: pitch competition, keynotes,

DEALS & DETAILS panel talks, exhibition floor and match meetings. Lexus Velodrome, Detroit. Free. Contact: Dan Radomski, email: dradomski@ltu.edu; phone: (248) 2042219; website: planetm.com/hardware

THURSDAY, JUNE 20 Southwest Detroit Business Association Community Investment Breakfast. 7-9:30 a.m. June 20. Break-

fast will include more than 300 community and government leaders, entrepreneurs and residents for a morning of networking and a program to acknowledge the contributions made by the association. Keynote speaker is Pamela Lewis, director of the New Economy Initiative. MotorCity Casino Hotel Sound Board. $100. Contact: Stephen Jones, email: events@southwestdetroit. com; phone: (313) 842-0986.

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Health Alliance Plan Sheri Chatterson has been named vice president of Provider Network Management at Health Alliance Plan (HAP). With more than 15 years of experience in the health care industry, Chatterson is responsible for growing, maintaining and creating efficiencies to enhance HAP’s network of more than 27,000 healthcare providers. The addition of Chatterson in this role is key as HAP continues to expand its reach in all lines of business throughout Michigan, positioning itself for long-term growth.

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Gavin McGuire has been named Chief Operating Officer of the Boys and Girls Clubs of Southeastern Michigan. McGuire has 20 years of experience in the nonprofit sector driving initiatives in youth and community development, establishing staff infrastructures and securing diverse revenue streams. He last served as the Executive Director of the Andrew and Walter Young Family YMCA in Atlanta and as Chief Operating Officer of Usher’s New Look. He is the founder of Success 360 and McGuire Impact Group. PROFESSIONAL SERVICES

Baker Tilly Baker Tilly, a leading advisory, tax and assurance firm, welcomes Jason Bodmer, CPA/ABV, ASA as Senior Manager to our Valuation & Litigation Advisory Services team. With 15+ years of experience, Jason has performed business valuation and forensic accounting services on over 500 litigation matters. He has assisted clients through all phases of the litigation process, including discovery, mediation, arbitration, Preserve your career change and trial.for Jason also sits on the years to come. MICPA’s Litigation & Business Valuation Task Force.

NEW GIG?

Jason Kessler, formerly with AIMCO, has joined Edward Rose & Sons, a real estate development company headquartered in Bloomfield Hills, as its COO. Kessler will be working with Warren Rose, CEO, to bring a synergy to the operations of the four divisions comprising Edward Rose & Sons. “We envision Kessler’s addition to the team as a great opportunity to capitalize on his substantial property management and leadership experience in major markets. I am excited to be working with Jason to extend our presence in housing markets throughout the nation, with a focus on providing an exceptional living experience for our residents and rewarding career experience for our staff, along with continued advancements into new technologies,” stated Mr. Rose.

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Quinn Kiriluk, in his newly expanded role, will serve as Executive Vice President, Corporate Real Estate and Chief Marketing Officer. In this role, Quinn will continue to grow KIRCO’s corporate real estate Plaques • Crystal keepsakes initiatives and strategic Frames • Other Promotional Items partnership with Hedrick Brothers Construction in Florida. As CMO, Quinn will continue to champion the planning, development, and execution of KIRCO’s internal and Laura Picariello external branding, marketing, and advertising initiatives.

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Adam Manix’s role within KIRCO MANIX has expanded to Director, Corporate Real Estate. Adam will play a significant role in identifying and securing new construction and corporate real estate opportunities, as well as managing client relationships. He is currently pursuing his Executive MBA at the University of Michigan’s Ross School of Business.

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MERGERS & ACQUISITIONS J Detroit-based private equity firm Huron Capital Partners LLC’s heating, ventilation, and air conditioning installation, retrofit and repair services platform, Pueblo Mechanical & Controls LLC, Tucson, Ariz., an HVAC company, has acquired the Arizona operations of Westover Corp., Denver, Colo., an HVAC company. The transaction is the fourth add-on acquisition completed by Pueblo. Also, Huron Capital’s High Street Insurance Partners commercial and personal insurance platform, Traverse City, has acquired KorthaseFlinn Insurance & Financial Services, Boyne City, an independent insurance and financial services firm. Websites: huroncapital.com, pueblo-mechanical.com, westover-usa.com, highstreetpartners.com, korthaseflinn.com J National Health Investors Inc., Murfreesboro, Tenn., a real estate investment trust, has acquired Brighton Manor, Brighton, a 73-unit assisted living/memory care facility for $13.5 million and will lease the facility to an affiliate of Comfort Care Senior Living. Website: nhireit.com J Kotz Sangster Wysocki PC, Detroit, a business law firm, acquired Van Eck Law PC, Rockford. The acquisition positions the firm for continued growth in corporate and business law in western Michigan. Websites: kotzsangster.com, vanecklaw.com

CONTRACTS J BMG Media Co., Birmingham, a digital design firm, has been selected to rebrand Wabeek Country Club, Bloomfield Hills, while also designing a new website and overseeing the clubwide implementation of advanced automation technology. Website: bmgmediaco.com J DeMariaBuilding Co. Inc., Detroit, a construction firm, will manage the construction of the athletic improvements at De La Salle Collegiate High School, Warren, in a project that includes new turf on the athletic field including earthwork and an underground detention basin, grand stands, press box and scoreboard. Website: demariabuild.com J Detroit City Football Club, Hamtramck, a semi-professional soccer club, has a partnership with Baker College, a college with eight locations in Michigan, for 2019 to present all Detroit City FC livestreams. Websites: detcityfc.com, baker.edu

EXPANSIONS J Art Van Furniture LLC, Warren, has opened a 48,000-square-foot showroom at 1032 S. Rochester Road, Rochester Hills. Website: artvan.com J Athletico Physical Therapy, Ann Arbor, physical therapy, orthopedic rehabilitation, sports medicine and athletic training company, has opened a new location at 3343 West Road, Trenton. Phone: (734) 561-0072. Website: athletico.com/Trenton-Woodhaven J A new franchise location of PuroClean, Tamarac, Fla., a property damage remediation company, has opened at 5776 E. Grand River Ave., Howell. Phone: (517) 292-8700. Website: PuroClean.com/ph-mi

SPOTLIGHT Michigan Science Center names new leader

The Michigan Science Center has named Saint Louis Science Center executive Christian Greer as its new president and CEO, following a nearly yearlong search. Greer succeeds Tonya Matthews, who left the science center in Detroit last July after leading it for five years. Greer Greer, 49, brings nearly 30 years of museum and science center experience. He’s held leadership positions at Adler Planetarium in Chicago, Denver Museum of Nature & Science, Chicago Architecture Foundation and Shedd Aquarium in Chicago, where he launched the Midwest Regional Underwater Robotics Competition. Most recently, Greer has served for past five years as chief officer of science, education and experience at the Saint Louis Science Center, one of the only free nonprofit science museums and one of the largest in the country, according to its website.

Henniges Automotive names new CFO

Henniges Automotive Inc. has named longtime financial executive L. Brooks Mallard as its CFO. Mallard, 52, fills the role that’s been vacant since Larry Williams was promoted to the company’s CEO job in 2016. Williams became the Auburn Hills auto supplier’s permanent Mallard CEO in April after serving on an interim basis for more than two years. Mallard previously served as CFO for Charlotte, N.C.-based residential and commercial window and door manufacturer Jeld-Wen Holdings Inc. Before that, he was the finance director of global banking for TRW Automotive — before it was acquired by ZF Friedrichshafen AG in 2015 — and vice president of finance and IT for electrical equipment manufacturer Cooper Industries Inc.

Ascension Michigan CEO to move to corporate role

Joseph Cacchione, M.D., is leaving his CEO role at Ascension Michigan to be executive vice president of clinical and network services for St. Louis-based Ascension Health. Cacchione has been in the job less than a year. He took the helm of the 15-hospital regional system in September after a Cacchione brief time as its interim leader. His last day is July 1, according to a news release from Ascension Michigan. Health care consultation veteran Thomas Stover, M.D., who recently served as interim president and CEO of Ascension Borgess Health in Kalamazoo, will become interim CEO of Ascension Michigan.

June 17, 2019

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Page 17 1

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CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0485 or email sjanik@crain.com www.crainsdetroit.com/classifieds

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Left to right: Arboretum managing partners Jan Garfinkle, Tom Shehab and Tim Petersen.

ARBORETUM FROM PAGE 1

“The new limited partners who came in are incredibly valuable to us both as investors and as partners,” Shehab said. “As we invest in the health care market, an important part of that is building relationships with those in the market.” One of the previous Arboretum investors is Ann Arbor-based Renaissance Venture Capital Fund, which made its first investment in Arboretum’s second fund in 2008, literally a day after Renaissance closed on its first fund, and it has invested in every subsequent fund. “We invest in venture capital funds all over the U.S., and Arboretum’s funds have consistently been one of our best performers. By any definition, they are top tier,” said Chris Rizik, Renaissance Venture’s CEO and fund manager, who declined to disclose the size of his most recent investment. “It has been such a treat watching Arboretum grow in 15 years from a small, upstart local venture fund into one of the truly great health care funds in the nation, and doing it all from a single office in Ann Arbor,” he said. “They’ve provided excellent returns to their investors, but just as importantly, they’ve helped thousands and thousands of patients with new diagnostic tools and treatments. And at the same time, they’ve helped grow the startup ecosystem in Michigan. You can see the substantial growth of venture capital and entrepreneurial startups in our region, and Arboretum has played a big part in that growth.” Rizik’s willingness to reinvest has been helped by some large exits by Arboretum in recent years:  Ann Arbor-based HealthMedia Inc. was sold for $200 million.  Ann Arbor-based Accuri Cytometers Inc. was sold for $205 million.  Ann Arbor-based HandyLab Inc. was sold for $275 million.  CardioMEMS Inc. of Atlanta was sold for $435 million.  Marlborough, Mass.-based Boston Scientific Corp. agreed to buy Minneapolis-based NxThera Inc. for up to $406 million.  San Bruno, Calif.-based nVision Medical Corp. was sold for up to $275 million  Ann Arbor-based NeuMoDx Molecular Inc. has signed an agreement to be bought by Germany-based Qiagen NV for $306 million. In addition, Ann Arbor-based Esperion Therapeutics Inc. (Nasdaq: ESPR); Goleta, Calif.-based Inogen Inc. (Nasdaq: INGN) and Santa Clara, Calif.-based Si-Bone Inc. (Nas-

daq: SIBN) had public offerings. Arboretum’s success has drawn national attention. On June 5, Garfinkle began a one-year stint as chairman of the Washington-based National Venture Capital Association. And Shehab is chairman of the Ann Arbor-based Michigan Venture Capital Association. Before Arboretum’s $220 million fund in 2015, the previous largest fund in state history was the $180 million Michigan Growth Capital Partners II, raised in 2013 by Farmington Hills-based Beringea LLC. “This is great news for Tim (Petersen, one of Arboretum’s managing partners), Jan and the others on the Arboretum team,” said Charlie Rothstein, Beringea’s founder and senior managing director. “And it’s great news for the state of Michigan as we change the dialogue in the state.” Beringea has coinvested with Arboretum in two companies: Novibased Delphinus Medical Technologies Inc., a maker of ultrasonic devices to detect breast cancer, and New York-based ReThink First, an online platform to provide services for the autism community. “It’s been a fantastic partnership, working with them in developing these portfolio companies. I’m a big fan of everything Arboretum. They are terrific citizens of our industry.” Arboretum has invested in 48 companies over the years. Six of its 22 current portfolio companies are in Southeast Michigan — Ann Arbor-based Fifth Eye Inc., Strata Oncology Inc, NeuMoDx, ArborMetrix Inc. and Swift Biosciences Inc. and Delphinus. According to Petersen, on average they employ 48, with a range of nine to 106. The six have raised a total of $261 million in capital, with Arboretum the largest investor in five of them. Arboretum’s new fund will put a dent in a predicted shortfall by Michigan’s VC firms in funding for follow-on financings for existing portfolio companies. According to the annual report released in April by the Michigan Venture Capital Association, the state’s VC firms said they had $337 million available for follow-on financings but would need about $967 million over the next two years. “The need is so great in Michigan. This helps with that,” said Ara Topouzian, the MVCA’s executive director. “Arboretum is the leading venture-capital firm in the state, so this will help the entrepreneurial startup community. It’s exciting any time you see this kind of activity.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

ENGINEERING Grakon, LLC has a job opening in Livonia, MI: • Thermal Engineer (TE001): Identify & resolve product thermal issues within a project. Coordinate thermal design reviews with project teams. Drive implementation of cost effective thermal designs & engineering changes. To apply, submit resume to Jobs@Grakon.com and reference ID#. ENGINEERING Mercedes-Benz Research & Development North America, Inc. in Ann Arbor, MI seeks a Senior Engineer, Active Safety & Testing to identify emerging topics which could have impact on one of the relevant regulatory affairs topics. Job code: LB-AAMI. Mail resume: Attn: HR Dept, 309 N Pastoria Ave., Sunnyvale, CA 94085. Must reference job title and job code.

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FARMERS FROM PAGE 1

Fahley, 42, is more than a month late planting his corn crop and isn’t planning to wait for the ground to dry. He’s relying on crop insurance, which covers the loss of crop yields for farmers when natural causes prevent crops from being planted. The deadline for full coverage was June 5 for corn and June 15 for soybeans. “We still have to make mortgage payments, equipment payments and land lease payments. Some guys put fertilizer down. We’ve got bills to pay and aren’t going to get any cash back from the field this year,” Fahley said. “You put all this money into the dirt and it’s a gamble, a roll of the dice that everything is going to go right to make a profit. We were dealt a bad hand this year.” Boughton Farms in Marshall is looking to avoid using crop insurance, if they can, by betting on a corn shortage that could shoot prices up later in the season. The farm had planted 220 acres as of June 11 with hopes of getting 600 acres out of the farm’s available 700 acres planted this year. “We’re able to finally get in the fields, so we’re trying to find dry ground to plant,” Andrea Boughton said. “Our plans are just constantly changing. We start with one plant in the morning and that might change two or three times throughout the day. We’re trying to get more corn because we think the corn market will pick up. We’re taking a gamble that we can get a better price on the market later.” Corn futures rose more than 14 percent in May, reaching a three-year high in the month of $4.38 per bushel. The U.S. Department of Agriculture is projecting the average U.S. corn yield at 166 bushels per acre, down from its previous estimate of 176 bushels per acre, according to its July report released last week. That translates to more than 1.4 billion fewer bushels expected this year, representing the largest projection cut in U.S. history. Experts predict prices could top $5 a bushel this year, but it’s a bittersweet occurrence for farmers as the quality of the corn that will be reaped later this summer could be low due to soil conditions; in addition, the prices may

INCENTIVES FROM PAGE 3

She declined to reveal the tenant or other specifics, but CoStar Group Inc., a Washington, D.C.-based real estate information service, says the asking rate for American Center is $19.50 per square foot per year. At that rate, that’s $390,000 annually in Redico’s coffers as a result of the event. The company earlier this month also held events at One Towne Square and Two Towne Square office buildings in Southfield. It’s not just in Michigan. Eaton said in Hawaii, where the company owns property, one giveaway was a bottle of wine and a puddle-jumper flight, one which takes travelers from one island to another. In St. Louis, it was playoff hockey tickets. “What landlords like is the opportunity to have a smaller group of people that they can select and bring them deals, but also have some time to work with them and talk with them,” Eaton said.

Splashier events Broker accounts differ on just how long these kinds of events with incentivized attendance have been going

The farm of Roger Weiss near Frankenmuth is largely submerged following heavy rain that has continued for much of the planting season.

MICHIGAN FARM BUREAU

fluctuate because of forces such as trade disputes with China and others. U.S. soybean exports were down 4 percent in May as the trade dispute between the U.S. and China continues with soybean exports down 53 percent on the year, according to USDA data. “Prices should see a benefit from a lower production, where demand is constant,” Daniel Hussey, market strategist at Zaner Financial Services, told Barron’s last week. “Right now, it’s all about how many acres we get planted. Later, it’s about what affects the plants’ ability to yield.” Sisung said while many farmers are taking that gamble on corn in hopes of higher prices, the quality of that corn

will decide the purse. “It’s been cool and wet and just plain flooded,” Sisung said. “Of what’s been planted, only 41 percent of the crop (coming out of the ground) is consid-

Boughton is making the bet on corn. The Boughtons usually split their acreage between corn and soybeans, but plan to reduce their soybean acreage and plant 450 acres of corn to capitalize on higher prices. “We’re always “Our plans are just constantly watching the marchanging. We start with one ket, watching plant in the morning and that where it’s projected to go,” Boughton might change two or three said. times throughout the day.” Assessing what — Andrea Boughton, Boughton Farms crops to plant and seeking new opered good to excellent condition. All portunities are what every farmer in the compounding factors make for a Michigan is doing now, Sisung said. “Everyone is pretty limited on opscary scenario for farmers.”

tions this late in the season, but they are definitely all asking what else they can do with the land. ... Some won’t survive,” Sisung said. For farmers like Fahley, a negative outlook is just seeing the mud, not the harvest. “Sure, this is one of the worst seasons my family’s seen,” Fahley said. “But you have to be optimistic or this industry is going to eat you alive. So you put your nose down, put your heart in it, do the hard work and hope things work out for you in the end.”

on. Some say just a few years; others say decades. When AJ Weiner entered the business, the incentives to show up weren’t as splashy. “A free sandwich and a beer isn’t enough anymore,” Weiner, managing director in the Royal Oak office of Chicago-based brokerage JLL, said with a laugh. The so-called broker open house was a staple of commercial real estate. Networking with other brokers, trading business intelligence, is all but mandatory. Today, specific brokers are invited to specific events. “The theory has shifted to say I want to make sure the top brokers in town know about this specific vacancy,” said Weiner, who is managing director in the Royal Oak office of Chicago-based brokerage JLL. “It’s a better bang for the buck.” Case in point: JLL once hosted about a dozen of the top office brokers in the region for dinner at the Capital Grill restaurant in Troy. There was a video presentation on the Grace Lake Corporate Center in Van Buren Township, the former Visteon Village space. A broker’s business card was drawn, and he was fitted for a brand new suit. “We got it leased,” Weiner said, to

CitiMortgage with about 65,000 or 70,000 square feet. “It’s easy upfront money to get the word out.” Yet lavish events to showcase space are nothing new. Steve Morris, managing principal of Farmington Hills-based real estate firm Axis Advisors LLC and an adjunct professor at the University of Michigan’s Stephen M. Ross School of Business, has been in the business for decades. He said in his career, he has seen everything from helicopter rides to showcase space at Liberty Center in Troy to belly dancers at the Silver Triangle Building in Southfield. In One Detroit Center, before it was renamed Ally Detroit Center, there were people on stilts and clowns. One broker told of an event in Atlanta in which “drifting” cars were brought into vacant industrial space.

And she said there are no ethical concerns about the incentives. “The primary goal of any CCIM (designated) broker is to match the client with the right space. That’s done by running appropriate financial and market analyses to provide a data-driven decision to the client. It’s an objective analysis free of any outside influence. Strong ethics is a cornerstone of the institute and CCIMs worldwide.” Jennifer Cordon Thor, associate professor of management in the Oakland University School of Business Administration, said the gifts themselves don’t necessarily pose ethical problems. “It depends on how upfront and honest the brokers eventually are with their customers,” she said. “When you retain a broker to show you properties, you are doing so based on the assumption that they are going to take your needs into account, your knowledge of the market, and show you what is best for them. The act of giving the gifts isn’t necessarily unethical. It’s if these gifts influence the decision on what properties they ultimately show.”

Incentives don’t seal deal Brokers say the gifts don’t sway recommendations to their tenant clients. Levi Smith, principal of the P.A. Commercial brokerage, said the events “make things easier for people.” “The landlords are thinking that by paying money, you’ll be higher on the list for the showing or tour, which isn’t

necessarily true,” he said. “If you’re listening to your tenant, you can narrow it down to five or six buildings. Either the landlord is going to be there or not. Whether they gave you a $50 or $100 gift card to see their building doesn’t make a difference.” Rob Meneghin, a senior associate in Southfield-based brokerage firm Advocate Commercial Real Estate Advisors of Michigan LLC, said the events have been non-factors in his interactions with his tenant clients. “In my experience, there has never been a correlation between completing a transaction and receiving a $100 gift card.” Barbara Crane, a San Antonio-based broker who is president of the CCIM (Certified Commercial Investment Member) Institute, a commercial real estate trade group, said incentives for brokers “are nothing new.” “It’s also important to note that the use of incentives at all is very much market driven,” she said in an emailed statement. “If the market is booming, incentives aren’t even necessary. In a market with heavy competition, however, they’re employed to draw interest from brokers to tour the property. That’s where their influence begins and ends.”

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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GOLF

FROM PAGE 3

Quicken doesn’t disclose details about its ad spending, but CEO Jay Farner confirmed the approximate percentage that’s spent on sports-related marketing. The company landed its media buying last year with Universal McCann, which opened an office for 150 employees in the Gilbert-owned First National Building in Detroit. Having Woods would make the dollars spent on the Rocket Mortgage Classic even more effective. He won this year’s Masters, reigniting a wave of interest in one of golf’s storied careers and whose presence in a tournament fuels additional attendance and media coverage. “We continue to have conversations with Tiger. We’ve known him for quite some time. He is one of these guys that has told us he’s not going to make a decision until right before the tournament. So we wait,” said Farner. He was Quicken Loans’ chief marketing officer before becoming CEO in 2017, so he knows in intimate detail the value that Woods would bring to Rocket Mortgage’s brand marketing at the tournament. The company’s relationship with Woods dates to 2014 when Quicken Loans replaced AT&T as title sponsor of The National played in suburban Washington, D.C. That PGA Tour event’s charity component and organizer was Woods’ foundation. It was during those 2014 talks between Quicken Loans and the PGA Tour about sponsoring The National that the seeds of a Detroit event were planted, Farner said. “Right from Day 1, we also expressed to the PGA that our end mission was bringing a great event to Detroit,” he said. From there, it was a matter of scheduling and timing. Events come and go on the PGA Tour calendar, and the opportunity to bring a tour stop to the Motor City finally emerged when Quicken’s sponsorship deal with The National was ending after

DETROIT GOLF COURSE

The clubhouse at the Detroit Golf Club.

the 2017 event and a replacement couldn’t be found. The PGA Tour announced a buy-out of the final years of its contract with the Congressional Country Club to host the tournament, and Quicken Loans agreed to sponsor The National in 2018 before taking on the title sponsorship of the new event in Detroit. The National was usually a June event, and the PGA Tour was moving other events around on its schedule, so the timing worked out to stage a tournament in Detroit when the weather is nice. “We have a limited window of when we can really host a great event,” Farner said. He praised all involved in getting the tournament launched. “When you’re putting things together on a tight timeline, you need everybody focused on the task at hand. It was a long process. Everyone understood the end goal. We kept working through it as the years went by,” Farner said. Once the opportunity arose to get a tour stop in Detroit, Quicken committed to its four-year sponsorship deal. Financial terms were not dis-

closed, but such contracts are typically in the single-digit millions annually. If things prove successful, it’ll continue past 2022. “We’ll keep evaluating as the years go on,” Farner said. The Rocket Mortgage Classic is the PGA Tour’s first regular event in Michigan since the Buick Open ended in 2009 because of the recession. That tournament had been played in suburban Flint since 1958. Quicken’s past relationship with Detroit Golf Club, a private Donald Ross-designed course than opened in 1899 near Palmer Park, made it the logical place to play the tournament. Quicken Loans founder and Chairman Dan Gilbert has invested billions in Detroit and had made the city a priority for his business and philanthropic endeavors. “In looking at our options, the Detroit Golf Club was our clear choice. They’ve been nothing but great,” Farner said. “They had been working with the PGA, on and off, on course changes (necessary for tour-level play).” Before creating the Rocket Mortgage Classic, Quicken Loans in 2016 attempted to create a toehold for pro

PROJECTS

“It’s a four-year commitment (by Quicken Loans). So every year after that we’re going to concentrate on moving further and further back from the streets into the neighborhood.”

FROM PAGE 3

About 400 Quicken Loans employees along with volunteers from the Arab American and Chaldean Council spent two days earlier this month doing cleanup and painting along Seven Mile. The Quicken Loans Community Fund has not made any set dollar amount pledge toward neighborhood improvements, but is discussing a number of projects with community stakeholders, Grannemann said. “We’ll continuously evaluate what’s needed in that neighborhood and respond accordingly,” she said. For the Arab American and Chaldean Council, Quicken Loans’ focus on the neighborhood is welcomed by an organization that owns six buildings near Seven Mile and John R roads that house its social service programs, behavioral health services, food pantry and the city of Detroit’s health department. “It’s a four-year commitment (by Quicken Loans),” said Fred Batayeh, community outreach coordinator for the council. “So every year after that we’re going to concentrate on moving further and further back from the streets into the neighborhood.” The council is in the process of ramping up its economic redevelop-

golf in Detroit with the idea of an exhibition that would have paired Rory McIlroy and Fowler with celebrities Justin Timberlake and Mark Wahlberg playing at the Detroit Golf Club. It would have aired as a special on the Golf Channel and CBS, but it never progressed past the idea stage. “We knew it wouldn’t have the impact of bringing a major PGA Tour event to the city would have, but it was another opportunity to create something cool for our city,” Farner said. “We like trying to create neat, never-done-before events. If we can do it in our home city, even better.” Why spend marketing dollars on golf when you’re an online mortgage giant? “When we started looking at the PGA six or seven years ago, we were drawn to it based on the demographics,” Farner said. “With our client base and demo, golf fell into that.” In addition to the new PGA Tour tournament, Rocket Mortgage is the official mortgage sponsor of the PGA Tour and PGA Tour Champions (formerly the called the Senior PGA Tour). Quicken Loans’ sports marketing spending has been on a lot more

Fred Batayeh

JOHN SOBCZAK / LORIEN STUDIO FOR CRAIN’S

Fred Batayeh, community outreach director, (left) and James Murray, executive director of the Arab American and Chaldean Council.

ment work along the corridor, where the organization has had a presence since the mid-1990s. The council is developing plans to build a mixeduse affordable and senior housHassan ing complex at John R and Seven Mile with groundfloor retail. The redevelopment project could include 42 one- and two-bedroom apartments as well as a 10-unit row of three-bedroom townhomes. “The idea is to bring back the housing, bring back the people and then you have the business owners that will

than golf. It previously was involved in motorsports, putting its name for a time on one of the two NASCAR races at Michigan International Speedway and sponsoring drivers with Hendrick Motorsports, Richard Childress Racing, and Stewart-Haas Racing in full and partial-season deals. In September 2013, Quicken inked a deal with the Detroit Lions to turn 62 seats in one section of the southwest corner of Ford Field into the “Quicken Loans Dream Seat” of black leather recliners embroidered with the company’s logo. Large high-definition LCD televisions were mounted in front of each seat. As part of the deal, Quicken became the team’s official mortgage lender, and it sponsored a club lounge for suite or club-level ticket holders and has branding throughout the stadium. It also has sponsorship deals with the Detroit Red Wings and the Detroit Belle Isle Grand Prix. Quicken also has invested in collegiate sports marketing. It has run sweepstakes to win season tickets at schools, and in 2011 was the title sponsor of the “Carrier Classic” between Michigan State University and the University of North Carolina basketball teams played on the flight deck of the U.S. Navy aircraft carrier USS Carl Vinson. In 2014, Quicken Loans was co-sponsor (along with Berkshire Hathaway’s Warren Buffett and Yahoo Inc.) of an NCAA men’s basketball tournament bracket contest that would pay $1 billion to anyone who correctly predicted the winner of every game. (No one did.) The mortgage company also gets brand recognition from Gilbert’s ownership of the Cleveland Cavaliers. He bought the NBA club in 2005 as head of an investment group for $375 million, and the deal included a naming rights provision that rebranded Gund Arena as Quicken Loans Arena. In April, its named was changed to Rocket Mortgage FieldHouse. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19 follow,” said Kimberly Hassan, program development specialist for ACC, which is headquartered in Troy. The council is partnering with Samaritas (formerly Lutheran Social Services of Michigan) on the project, which hinges on seeking low-income housing tax credits from the state in October in order to break ground next spring. Royal Oak-based Schneider + Smith Architects is the architect on the project. The Seven Mile corridor between Woodward and I-75 is not one of the neighorhoods targeted by Mayor Mike Duggan’s administration for private and philanthropic investments. But the leaders at ACC believe there’s potential, given the large tracts of vacant land that surround the corridor and its close proximity to Eight Mile and McNichols roads. They also believe the golf tournament could bring renewed focus to the neighborhood. “It’s an area that isn’t on the target, but I think would have a big impact if the population were to come back and build up,” Hassan said. “There’s a lot of room for growth in this area, which I think is a great opportunity for our organization and for those looking for new places to live.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 1 7 , 2 0 1 9

LINE 5 FROM PAGE 1

The increasingly heated rhetoric has set up a showdown between the Canadian oil pipeline giant and two Democratic statewide officeholders who made campaign promises a year ago to their party’s eco-conscious base that they would shut down the underwater pipeline. Here are questions and answers about Line 5 and the potential impact of permanently shutting down the pipeline. Where does Line 5’s oil come from and go?

Enbridge’s Line 5 pipeline originates in Superior, Wis., and travels 645 miles across both of Michigan’s peninsulas, crossing the St. Clair River into Sarnia, Ontario, where it feeds Imperial Oil, Suncor and Shell oil refineries and one propane refinery with light crude and natural gas liquids, respectively. The oil comes from both the Canadian tar sands in northern Alberta as well as the Bakken shale formation in North Dakota, Montana and Saskatchewan, Canada. Up to 10,000 barrels a day of oil extracted in the northern Lower Peninsula is added to Line 5 in Lewiston, according to a Line 5 study commissioned by the National Wildlife Federation. Line 5 carries 544,000 barrels of light crude and natural gas liquids daily, but not all of the oil goes to Canada. Other pipelines distribute its crude oil to the Marathon Petroleum Corp. refinery in Detroit and the PBF Energy and BP-Husky refineries in Toledo. The oil also travels east on other Enbridge pipelines to a Valero refinery in Montreal and a United Refining Co. refinery in Warren, Pa. All told, the pipeline’s crude oil capacity amounts to 42 percent of the 1.3 million-barrel daily refining capacity at eight refineries in three U.S. states and two Canadian provinces, said Brendan Williams, vice president of government affairs for PBF Energy. “That’s a large crude supply that, regionally for everybody, is going to be very hard to replace in full,” Williams told Crain’s. For competitive reasons, the individual refineries won’t divulge how much of their oil feedstock comes directly from Line 5. And Enbridge won’t disclose how much oil flows to each of its customers. How reliant is Michigan on Line 5 for energy?

When it comes to liquid propane, Michigan is very reliant on the pipeline. In 2017, Michigan residents and businesses used 489 million gallons of propane gas, making the state the second-largest consumer of propane behind California, according to an industry study conducted by ICF International. And because Michigan is a colder, big state with a large rural population, the Great Lakes State is No. 1 in residential use of propane gas for heating, cooking, water heaters and clothes drying. About 75 percent of Michigan’s propane in 2017 went to residential uses, according to ICF International. The National Propane Gas Association says 55 percent of Michigan’s annual propane supply — or 269 million gallons in 2017 — comes from Line 5’s natural gas liquids that are fractionated by Plains Midstream

Path of a pipeline Enbridge Energy Co.’s Line 5 pipeline carries 540,000 barrels of light crude oil and natural gas liquids daily from the start of its Lakehead pipeline system in Superior, Wis. to refineries in Sarnia, Ontario. The oil originates from both Alberta, Canada’s oil sands and the Bakken oil and gas shale formation in North Dakota, Montana and Saskatchewan, Canada. From there, the light crude can continue east to refineries in Ontario and Quebec or go south to Detroit and Toledo’s oil refineries. 1. Superior, Wis.: The 30-inch wide Line 5 pipeline runs 645 miles from northern Wisconsin to southwest Ontario.

N UN AD ITE A DS TA

2. Rapid River: Plains All American Pipeline L.P. operates a propane refinery there that supplies 65% of U.P.’s propane supply.

Superior, Wis. 1

3. Lewiston: Northern Michigan oil is onloaded onto Line 5.

Line 5’s path through Michigan

2 Rapid River

4. Sarnia, Ontario: Plains Midstream Canada’s refinery in Sarnia refines natural gas liquids from Line 5 and sends liquid propane (LP) back across the St. Clair River. As much as 80 percent of the Lower Peninsula’s propane supply is imported from this Sarnia plant.

3 Lewiston

5. Marysville: DCP Midstream Partners stores propane from the Sarnia refinery underground and is the main distribution point for Lower Peninsula propane dealers.

Sarnia Marysville 5

Detroit 6

7 Toledo

6. Detroit: Marathon Petroleum Corp.’s refinery in southwest Detroit receives light crude oil from Line 5 in a separate pipeline that runs from Port Huron down to Detroit and Toledo. Marathon operates the only gasoline-producing oil refinery in Michigan. 7. Toledo: PBF Energy (formerly Sunoco’s refinery) and BP’s refineries in Toledo both receive light crude oil from Line 5. Both refineries produce the majority of the jet fuel used at Detroit Metro Airport.

Source: Crain’s Detroit Business research

Propane usage by the numbers In 2017, Michigan’s total propane consumption was second in the nation behind California. For just residential propane use, Michigan is the largest user nationally. Here’s how the 489 million gallons consumed in 2017 breaks down: Usage

Millions of gallons

Residential

367

Commercial

Agriculture

Industrial Portable cylinders (BBQs, recreational vehicles) Internal combustion engines

6 14 30

Canada in Sarnia and the Upper Peninsula town of Rapid River. Natural gas liquids from Line 5 accounted for 83 percent of the propane that’s fractionated in Sarnia, according to one independent analysis. The finished propane is then exported back into Michigan across the St. Clair River through a different pipeline and stored at a DCP Midstream Partners underground gas storage facility in Marysville. “I’ve been told by my colleagues in Canada that if Line 5 were to be shut down, whatever propane they (produce in Sarnia) would go eastward to serve the needs of eastern Canada,” said Jeff Petrash, vice president and general counsel of the National Propane Gas Association. About 65 percent of the U.P.’s propane comes the Rapid River facility and 50 percent of the Lower Peninsula’s propane comes via the natural gas liquids transported on Line 5 and refined in Sarnia, according to the Michigan Propane Gas Association. But by volume, the Lower Penin-

sula consumes about 95 percent of the state’s propane, dwarfing the sparsely populated U.P. “They like to make it out that it’s a U.P. problem, but honestly it’s a problem for the whole state,” said Don Steckman, general manager of Ferrellgas U.P. in Negaunee. Without Line 5, where would Michigan get its propane?

Propane dealers would be forced to buy wholesale propane from outof-state markets and ship it in by truck or rail. “Realistically, you’re talking about companies going down into southern Illinois, Arkansas, Missouri, Kansas, Iowa — places like that,” Steckman told Crain’s. Ferrellgas, the largest dealer of propane in the U.P., sells 9 million gallons of propane annually in the Upper Peninsula, 600,000 gallons of which is trucked in from Wisconsin, Steckman said. “Anyone talking about shutting it down immediately … it’s very, very irresponsible,” Steckman said. “Because it’s going to cause a lot of problems.” Steckman said his company and competitors face another obstacle in that their trucks are built for Michigan’s heavier weight limits and transporting propane in-state from Rapid River and Marysville, meaning they’d have to purchase or lease different trucks to haul propane from out-of-state. The propane industry estimates the loss of Line 5 would result in 30,000 truckloads and 9,600 rail cars of propane. “The trucks don’t exist, the drivers don’t exist, the rail cars don’t exist,” said Derek Dalling, executive director of the Michigan Propane Gas Association. London Economics International LLC, a Boston-based consultancy, conducted an analysis last year for the National Wildlife Federation that was paid for by the C.S. Mott Foundation in Flint. The LEI analysis downplayed the potential cost increase from putting propane on trucks and shipping it

from Superior, Wis., into the U.P. and across the Mackinac Bridge. London Economics estimated it would add five cents to the cost of a gallon of propane, which has hovered around $2 for the past year. “Michigan prices swung from $0.86 per gallon to $3.50 per gallon over the past few years. The small price increase from using alternatives to Enbridge Line 5 would be lost in the noise of typical price volatility,” London Economics analysts wrote in a July 2018 report. What would happen to crude supplies if Line 5 shuts down?

A risk analysis conducted by Michigan Tech University researchers in 2018 concluded that shutting down Line 5 would set off a chain reaction in the market as the refineries in Detroit and Toledo would be competing with the Sarnia refineries for scarce crude oil supplies from Chicago and other markets. Because other pipelines are at capacity, the crude oil would likely have to be shipped by truck and rail at a higher cost. “Michigan consumers would feel the Canadian refinery supply loss effects of a Line 5 outage even though Michigan normally receives little gasoline, diesel, or jet fuel imports from the Ontario refineries,” the Michigan Tech study said. Enbridge’s other major pipeline in Michigan — Line 78 (formerly Line 6) running from Chicago to Stockbridge and then splitting off to Toledo, Detroit and Sarnia — is designed to handle heavy and medium crude oils, but is running near capacity, company spokesman Ryan Duffy said. Line 78 cannot handle natural gas liquids used to make propane, butane and other gas products, Duffy said. The Toledo refineries produce “the vast majority of” jet fuel for airplanes at Detroit Metro Airport and also supply jet fuel to airports in Akron, Cleveland, Columbus, Dayton, Fort Wayne, Grand Rapids, Indianapolis, Pittsburgh and Toledo, according to PBF Energy’s Williams.

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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 // J U N E 1 7 , 2 0 1 9

THE WEEK ON THE WEB

RUMBLINGS

Google making $17 million expansion in Detroit, Ann Arbor

PlanetM offers grants to Israeli mobility firms

JUNE 7-13 | For more, visit crainsdetroit.com

oogle is expanding its Detroit and Ann Arbor office footprint with a $17 million investment. Mountain View, Calif.-based Alphabet, the parent company of the tech behemoth, said its office footprint in those two hubs will grow to 210,000 square feet. The company has no less than 164,000 square feet in those two locations, meaning that its footprint could increase by as much as 28 percent. Additional details were not revealed. Crain’s reported in January that Google is expanding its existing 29,000-square-foot location in a new building attached to Little Caesars Arena. The company has about 100 mostly sales employees in the Detroit office, which in November replaced its former location in downtown Birmingham. It moved from about 17,000 square feet at Willits Street and North Old Woodward Avenue in a building owned by Boston-based International Real Estate Corp. The Detroit office is an ode to the city’s culture yet with the high-end amenities typical of the Bay Area tech scene. The walls are lined with the works of local artists or Detroit-specific curios. Its client entertaining area, called the Belle Isle Room, is papered with historic postcards of Belle Isle, complete with the iconic G representing Google in the middle. In Ann Arbor, Google has a 135,000-square-foot complex at 2300 Traverwood Drive owned by First Martin Corp. that opened in 2017 after it consolidated its employees there under one roof. Google moved out of its original Ann Arbor space at the McKinley Towne Centre in 2015, moving some employees to an office near Briarwood Mall and others into the Traverwood site while it underwent renovations. Google employs more than 600 people in Michigan, it said in a news release. Google officially announced its expansion plans last week during a Grow with Google event in Taylor. Grow with Google is the company’s program providing free digital skills training to businesses and job seekers. Three Michigan events are scheduled this week, with other stops planned in Grand Rapids on Wednesday and Jackson on Friday. “We see the value of being in southeast Michigan; that’s why we’ve been here for over 13 years,” Google CFO Ruth Porat said in a statement. “Through Grow with Google, we’re also committed to helping people across the state get the skills they need to succeed in today’s increasingly digital workplace.”

BUSINESS NEWS J General Motors Co. plans to invest $150 million in the Flint Assembly Plant to increase production of Chevrolet Silverado and GMC Sierra heavy-duty pickups. The automaker said the investment will “enhance the

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Google’s office next to Little Caesars Arena officially opened in November.

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

$39.1M

Amount earned by Detroit Pistons Star Blake Griffin in the past year

305

Number of students impacted by the closure of Marygrove College in Detroit

$150M

Amount GM says it will invest to boost truck output in Flint

plant’s conveyors and other tooling to increase production capacity.” The work is expected to be completed in the first half of 2020. J Automotive seating supplier Lear Corp. plans to permanently close its plant in Taylor in a move that will affect 76 employees. The Southfield-based company will close its Taylor Plant by Oct. 21, according to a WARN notice filed with the state. J Management at Bayview Yacht Club is planning a $3.7 million to $4.3 million overhaul of the private sailing club on Detroit’s east side as it looks to turn the tide on declining membership. An extensive renovation of the historic club at 100 Clairpointe St. is scheduled to begin this fall, with the 12,688-square-foot club complete by July 2020. J On the latest Forbes list of the world’s highest-paid athletes, Detroit Pistons forward Blake Griffin’s salary of $39.1 million ranked 31st in the rankings. At No. 57 was new Detroit Lions defensive end Trey Flowers with $30.2 million in earnings. J Urban One Inc. has entered into an agreement to sell its WDMK 105.9 Kiss-FM radio station and three translators to Naples, Fla.-based Beasley Broadcast Group Inc. for $13.5 million in cash. The sale leaves Urban One with only “Hot 107.5” WGPR in Detroit, which it operates under a local management agreement that expires at the end of this year.

J Activist investor Jonathan Litt is threatening a proxy fight next year at Taubman Centers Inc. if the Bloomfield Hills-based mall operator doesn’t take steps to improve its performance, including exiting Asia or divesting its top-performing properties. In a letter to shareholders last Tuesday, Litt said he planned to nominate directors at the 2020 meeting unless the company makes “meaningful progress.” J An international design team led by a French firm and several local partners has created the winning design for a new cultural district taking shape in Detroit’s Midtown neighborhood. With its vision for Detroit Square, a team including Paris-based Agence Ter with Detroit-based Akoaki LLC, Harley Etienne, assistant professor in the University of Michigan Urban and Regional Planning program, and Ann Arbor-based Rootoftwo LLC was named the winner of the DIA Plaza/Midtown Cultural Connections international design competition Monday morning.

DEVELOPMENT NEWS J A project aimed at redeveloping a contaminated former manufacturing site in Plymouth has received brownfield funding from the Michigan Department of Environment, Great Lakes and Energy. The Plymouth Brownfield Redevelopment Authority was awarded a $1 million grant to revitalize the blighted property at 100 S. Mill St. in Plymouth. J Transtar Autobody Technologies Inc., which supplies paint, primers and specialty coatings to the aftermarket industry, is expanding its headquarters and manufacturing plant in Brighton with the construction of a $1 million training and color coating development center. The 6,000-square-foot center is set to be built to the north of the current property. J A proposed garden for Detroit’s Belle Isle by Dutch designer Piet Oudolf is starting to take shape. Construction started last week on the 2.5acre garden that’s expected to open in fall 2020. Organizers say 18,000 plants being grown for the site have been ordered for a planned installation in September.

he state is deepening its relationship with Israel’s startup scene with a new grant program designed to provide funding to Israeli companies seeking to test and pilot their mobility technologies in Michigan. Grant recipients of the Israel Michigan Autonomous Technologies Collaboration program will have access to the state’s roadways and facilities, including the American Center for Mobility, to test and pilot their technologies, according to a Thursday news release. The program was launched as part of a partnership between the Michigan Economic Development Corp.’s mobility arm PlanetM, the Michigan Israel Business Accelerator (MIBA) and the Israel Innovation Authority, the release said. Companies will also have access to Michigan’s technology incubators, accelerators and industry leaders. Through the program, companies can run clinical trials, adjust their technology to meet the market’s needs, and gain “regulatory experience and commercialization channels,” according to the application’s website.

The program backs technologies in areas including autonomous and connected vehicles, smart manufacturing and more. “We’re excited to see this program come to fruition,” Seun Phillips, managing director of PlanetM at the MEDC, said in a release. “Our goal with this program is to provide a clear, accelerated path toward real-world deployment here in Michigan for Israeli startups developing new mobility technology, providing them with the resources and funding they need to be successful.” Representatives from PlanetM are announcing the program at EcoMotion in Tel Aviv, a conference that showcases the country’s smart transportation, according to a release. Michigan’s mobility landscape will allow Israeli startups to test and deploy their products in extreme weather conditions, a key piece to advancing the global development of mobility technologies, the release said. Applications for the first round of recipients are open through Sept. 3. For more information, visit planetm. com/test-and-pilot.

RON & ROMAN LLC

Detroit Axe plans to open in the fall a Corktown location, which will have a large sign advertising the business and welcoming visitors to the Detroit neighborhood.

Detroit Axe to expand to Corktown, Partridge Creek O

wners of Detroit Axe in Ferndale will swing into Detroit’s Corktown neighborhood and Clinton Township with a pair of new locations as they carve out a larger footprint for the ax-chucking company. A new 7,000-square-foot location in Detroit got the thumbs up from the city’s building department this week. Construction on the leased property at 1375 Michigan Ave. is expected to start in the next couple of weeks, said Brian Siegel, co-owner of the business with Geoff Kretchmer. At the same time, work on the location at the Mall at Partridge Creek is expected to start soon. The business partners signed a long-term lease for a 3,700-square-foot space across from Bar Louie. Both are expected to open sometime in October.

“The trend across the country is to have a more interactive experience when you go out casually,” said Siegel, who is also CEO of the Jewish Community Center of Metro Detroit and co-owner of Joe Dumar’s Fieldhouse in Shelby Township and Detroit. Detroit Axe was met with a young market hungry for unique experiences since opening in Ferndale in late 2017. Traditional bar games such as pool and darts are being overshadowed by fresher gimmicks, such as ax-throwing and fowling. In the past couple of years, however, the ax-throwing craze has caught on across the country. Several establishments — the HUB Stadium in Auburn Hills and Total Sports in Clinton Township are a couple of examples — have added the activity.