Crain's Detroit Business, July 29, 2019 issue by Crain's Detroit Business

What’s up with Eastern Market’s historic district status? Page 4

Birmingham project vote turns rancorous

JULY 29 - AUGUST 4, 2019 | crainsdetroit.com

Page 3

2019’s fastest-growing companies

eeping a business growing is a challenge; managing rapid growth profitably is an even bigger one. This week, Crain’s looks at 50 companies that are doing just that in our annual Fast 50. You’ll find companies riding the construction boom, making big acquisitions and even finding growth in the automotive business.

Company capsules, pages 10-16; list, page 17

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Deal creates one of region’s largest foster care providers

By Kirk Pinho

Methodist Children’s Home Society acquires Community Social Services By Sherri Welch swelch@crain.com

Redford Township-based Methodist Children’s Home Society has acquired Community Social Services of Wayne County, creating one of the largest foster-care providers in the region, according to the two agencies. The deal, six months in the making, ensures CSS foster care, substance abuse, transitional living for young mothers and senior services will continue, as the longstanding nonprofit with earlier ties to the Roman Catholic Archdiocese of Detroit shuts down its own operations. The deal reflects increasing pressures on social service nonprofits to crainsdetroit.com

increase collaboration and add capacity for data reporting that government and other funders are increasingly requiring. The addition of CSS programs aligns with Methodist’s new strategic plan to offer services for the whole family, rather than just children, in a bid to keep families together and prevent circumstances that lead to orphaned and homeless children, President and CEO Kevin Roach said. Both organizations offer foster care. CSS also brings substance abuse, transitional living for pregnant and young mothers, and senior services. SEE FOSTER CARE, PAGE 24

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CSS’s Chuck Jackson (left) and Methodist Children’s Kevin Roach

Fast-growing United Shore to grab more space kpinho@crain.com

Mat Ishbia is running out of space — again. Amid a rapid expansion of his Pontiac-based mortgage company United Shore Financial Services LLC, he has put a massive building under contract across the street across from his current headquarters that would more than double its real estate footprint in the Oakland County seat if the deal gets finalized. The goal, he says, is to keep the company — which just a year ago moved into its new building — from not having enough space as he projects growing to about 7,000 employees by 2025, up

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from the 4,100 he has today in 610,000 square feet at 585 South Blvd. “The issue is, where do I fit everybody,” he said. The answer: the 900,000-squarefoot building across the street at 750 South Blvd., which would bring the company’s headquarters campus to 1.5 million square feet across 150 acres, starting with taking about 200,000 square feet immediately and then expanding as current tenant leases expire in the coming years. It would be connected to the existing headquarters by a bridge/ skyway spanning 1,200 or so feet and requiring city approval. SEE UNITED SHORE, PAGE 21

19 S I N E S S // J U LY 2 9 , 2 0 CRAIN’S DETROIT BU

panies 2019’s fastest-growing com Special to Crain’s Detroit Business By Rachelle Damico |

survey elcome to Crain’s Fast 50, our annual on metro of the fastest-growing companies Detroit’s business scene. are based on reIn the ranks of this year’s list, which fingerprints the see you’ll years, three sults for the past business lives: the of many of the trends shaping our real estate prices construction boom fueled by rising entrepreneurial and downtown Detroit’s resurgence; that offer overnight expansions; and big acquisitions growth. by pure percentage We don’t pick the companies in our companies all rank growth alone. Instead, we revenue growth beresearch database by percentage dollar amount of revtween 2015 and 2018, and also by then added togethenue growth. The two rankings are er to create the list. 1. Piston Group

Revenue 2015: $930,800,000 Revenue 2018: $2,864,525,000 208 Three-year percentage change: What it does: Automotive supplier How it grew: Continued growth from the $175 million acquisition of Takata Corp. subsidiary Irvin Automotive Inc., which added new products and manufacturing locations. Former Piston Vinnie Johnson’s company has also seen growth from existing customers, added new ones and launched programs with new OEMs over the past three years. Footnote: Holding company for Piston Automotive, Irvin Automotive, Detroit Thermal Systems and Airea

2. United Shore

Real estate investment trust Agree Realty Corp.’s headquarters is on Long Lake Road in Bloomfield Hills.

Vinnie Johnson, owner of Piston Group

COSTAR GROUP INC.

How it grew: New construction and historic preservation projects have contributed to growth. Projects fueling growth include Ford’s Michigan Central Station renovation and Corktown campus, Bedrock LLC’s Book Tower renovation, Little Caesars World Headquarters Campus Expansion and Wayne State Mike Ilitch School of Business.

3. McNaughtonMcKay Electric Co. Revenue 2015: $702,000,000

Revenue 2018: $1,523,000,000 Three-year percentage change: 117 What it does: Electric/electronics distributor How it grew: Growth from the acquisition of Fort Worth, Texas-based electrical distributor Reynolds Co., which was finalized in January 2018. The acquisition added 17 branch locations to the business, said Don Slominski, president and CEO.

4. Superior Industries International Inc. Revenue 2015: $727,946,000

Revenue 2018: $1,501,827,000

8. Victory Automotive Group Inc.

Revenue 2015: $1,223,719,479 Revenue 2018: $1,864,567,545.94 Three-year percentage change: 52

United Shore Financial Services headquarters How it grew: The primary drivers in in revenue growth include increased pricing the scrap metal commodity market. In

10,000 housing sites across the country, In said president and COO John McLaren. addition, the company developed

What it does: Automotive dealerships How it grew: Strategic dealership acquisitions and growth from its proprietary membership and maintenance program, Car Doc.

10. Credit Acceptance Corp. Revenue 2015: $825,300,000

Revenue 2018: $1,285,800,000 56 Three-year percentage change: What it does: Financial institution How it grew: Continued growth in consumer loan originations.

11. Clark Hill PLC Revenue 2015: $139,815,000

Revenue 2018: $295,900,000 112 Three-year percentage change: What it does: Law firm

How it grew: The company has experienced growth nationally and internationally since merging with Texas-based Strasburger & Price in 2018, adding offices throughout the U.S., Ireland

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

MICHIGAN BRIEFS

INSIDE

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

Traverse City seeking cruise ships after port certification Transformation of the former coal dock into the publicly accessible Discovery Pier is smoothing the way for more passenger-carrying cruise ships to visit Traverse City. The facility in December was certified as a cruise port by the U.S. Coast Guard, the Traverse City Record-Eagle reported. Local officials who want to grab a piece of growing Great Lakes cruise ship activity have organized as the Traverse City Cruise Ship Consortium. “We’re just opening for business, so we won’t see much business for two years,” Mike Wills, the group’s chairperson, told the Traverse City Record-Eagle. Consortium members include the Discovery Center — Great Lakes (on behalf of Discovery Pier), Traverse City Tourism, Downtown Development Authority and Downtown Traverse City Association, Traverse City Area Chamber of Commerce and Leelanau Peninsula Chamber of Commerce. Discover Pier’s certification will allow smaller cruise ships to tie up to shore, making it easier for passengers to disembark for day activities. Cruise ship passengers traditionally have

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shuttled ashore to Traverse City from vessels anchored in deep water. Large cruise ships set to visit town this year and in 2020 still will use tenders, Wills said. But smaller cruise ships — those under 250 feet long — soon will be able to tie up at Discovery Pier. Smaller vessels are growing in popularity among the cruising public, said Stephen Burnett, executive director of the Great Lakes Cruising Coalition, a bi-national private industry organization that promotes cruising. Market forces in the industry appear primed to bring more passengers to the freshwater seas. “Cruising has segmented into specialty cruises,” Burnett said.

Michigan to get $4.6M in Equifax settlement

Equifax Inc. will pay Michigan more than $4.6 million as part of a $700 million agreement to resolve U.S. federal and state investigations into the 2017 hack that compromised some of the most sensitive information of more than 140 million people, Bloomberg reported. It is the largest data breach enforcement action in history. “Companies that profit from personal information have an extra responsibility to protect and secure that data,” FTC Chairman Joe Simons said in a statement. “Equifax failed to take basic steps that may have prevented the breach.”

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nearly all their value. At the time, Equifax’s stock lost more than a third of its value within days.

State to receive $1M to improve workforce data

DAN NIELSEN/TRAVERSE CITY RECORD-EAGLE VIA AP

Mike Wills, chair of the Traverse City Cruise Consortium, stands on Discovery Pier near the tall ship Manitou, in Greilickville. Transformation of the former coal dock into the publicly accessible Discovery Pier is smoothing the way for more passenger-carrying cruise ships to visit Traverse City.

Equifax will pay as much as $425 million to compensate consumers and provide credit monitoring to those whose information was exposed under a settlement announced Monday by the Federal Trade Commission. Equifax will separately pay $175 million to 48 states, the District of Columbia and Puerto Rico, and an additional $100 million to the U.S. Consumer Financial Protection Bureau. The company must also spend at least $1 billion to improve its data se-

curity, according to a settlement filed in a class-action lawsuit against Equifax. The agreement resolves a nearly two-year investigation by all 50 states and the FTC into the massive breach that compromised sensitive information including Social Security numbers and dates of birth. Equifax, based in Atlanta, has largely bounced back since the company disclosed the breach in September 2017 with shares recovering

Michigan is one of 10 states that are receiving federal grants designed to improve the quality of data about the workforce. Michigan, like most of the states, is receiving about $1 million from the U.S. Department of Labor in Workforce Data Quality Initiative grants It says the money will help the states build and improve databases that contain information about training programs and employment services. The databases also allow for collection of information about participants in those programs. The databases will allow states such as Michigan “to conduct research and analysis aimed at determining the effectiveness of workforce and educational programs.” The other states receiving grants are California, Colorado, Idaho, Illinois, Maine, North Carolina, New Jersey, Texas and Wisconsin.

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Q&A

RESTAURANTS

Michigan’s marijuana point man steering evolving industry

A mad dash to keep restaurants running as Epicurean Group shatters

By Dustin Walsh dwalsh@crain.com

The laws and regulations that referee Michigan’s nascent marijuana industry are complicated. It’s a new industry with billions of dollars of potential business activity, but also with great risk. Since 2016, Andrew Brisbo has overseen the development of those rules. First in 2016, leading the state’s effort to establish and regulate a successful medical marijuana industry. Then, following the passage of Brisbo adult-use recreational marijuana by voters in November 2018, Brisbo set forth to ensure the state devours marijuana’s elusive black market and replaces it with an effective, well-regulated legal industry. In May, Gov. Gretchen Whitmer signed an executive order to create a unified agency, the Marijuana Regulatory Agency, with Brisbo as its leader. Earlier this month, the agency issued emergency rules to outline how the new adult-use market will function, as well as the license application and how the state’s medical and recreational industries will interact. Brisbo vows the new rules provide regulators and interested businesses ample time to prepare for when the state will begin accepting recreational business applications on Nov. 1. Crain’s senior reporter Dustin Walsh chatted with Brisbo over the phone last week as the regulator was attending a marijuana regulators’ event in Alaska.

By Annalise Frank afrank@crain.com

Friendship Circle Executive Director Rabbi Levi Shemtov checked his phone at 3:30 in the morning on July 21. He learned two things: around 25 employees had been terminated from the nonprofit’s vocational-training cafe, and the company contracted to run that cafe had ceased operations. It seemed that Epicurean Group — the company formed in 2012 out of the remains of serial restaurateur Matt Prentice’s restaurant group and bought by metro Detroit native and investor Ryan Moore six months ago — was dissolving without warning, leaving its around 150 employees in a lurch. That began a mad dash.

Across Epicurean’s six or so restaurant and catering properties, business connections, management takeovers and volunteerism combined to keep the restaurants running and staff employed. Detroit-based Epicurean’s operations comprised the Nomad Grill in the Best Moore Western Premier Detroit Southfield Hotel, the No.VI Chop at the Four Points Sheraton in Novi, Soul Cafe under Friendship Circle’s umbrella in West Bloomfield, catering businesses and a cafe in the Michigan Design Center in Troy.

Former owner Stanley Dickson Jr. sold Epicurean in January to Moore. Moore said at the time that he acquired a majority stake in Epicurean but that Dickson still had a “financial stake in the business.” Dickson last week said he had sold 100 percent of the company, but had an option to buy back a “significant percentage.” Dickson declined to comment last week on his current relationship with Moore. He cited the likely possibility of upcoming litigation, but said no legal action had commenced as of yet. Moore told Crain’s by phone last Wednesday that “we are happy to share the facts of what actually occurred and will do so very soon.” He declined to elaborate. SEE EPICUREAN, PAGE 24

REAL ESTATE

Aug. 6 vote to decide fate of Birmingham project proves divisive This garage would be demolished and replaced under the plan that would bring an RH store to the city. LARRY PEPLIN FOR CRAIN’S

Crain’s: You’ve issued the emergency rules and appear to be moving forward with the regulatory framework. How do you think the rollout is going thus far?

Brisbo: We are still on schedule. We’re getting a lot of feedback from stakeholders and we’ve heard overwhelming positive feedback about the rules. We really tried to mirror what we did on the medical side so everyone knew what to expect, as we anticipate many of the businesses on the medical side will seek licensure on the adult-use side. Our social equity program (which is designed to provide assistance for starting a marijuana business to residents negatively impacted by marijuana laws), I’m really proud of what our team has done: Do the things that are impactful to people in this state. What we did is really try to pull out some of the challenging issues from those trying to achieve licensure, capitalization, reducing the paperwork that needs to be submitted, etc. We’re overall pleased with where we are now. We believe we’ve given municipalities enough time and applicants enough time before we start taking applications in November. What have you learned from the mistakes that occurred during the medical rollout?

I don’t know if I’d call them mistakes, but the challenging aspects. We heard from a lot of people that wanted to operate a small business that the barrier to entry was too high. In the medical area, there were certain disqualifiers, such as the rules around those with marijuana convictions. SEE BRISBO, PAGE 25

By Kirk Pinho kpinho@crain.com

A group of Birmingham residents opposed to an Aug. 6 bond question has swayed potential voters enough to threaten a $140 million real estate development anchored by a luxury homegoods store. The final week of a bruising campaign around the city selling up to $57.4 million in bonds will help determine the fate of a plan by a joint venture to build a project that would include a 55,000-square-foot RH (formerly Restoration

Hardware) store plus a large parking deck and additional retail, residential and office space. It's been a contentious 12 weeks in the swank Oakland County community, with both bond issuance proponents and opponents claiming campaign finance infractions and leveling First Amendment violation accusations, resulting in a federal lawsuit stemming from a recent City Commission meeting. There's also another federal lawsuit surrounding the project by a developer not selected. Bond issuance advocates say those opposed

to the plan have been spreading misinformation, increasing opposition levels in polling. One poll at the end of May, said one campaign representative, put public support at 45 percent with opposition at almost 30 percent; as of late last month, it was 38.4 percent in support and 37.9 percent opposed. Those who were leaning no tended to firm up their opposition in that month-long period. The sample size for both polls was 200 and the margin of error was 6.9 percent. SEE PROJECT, PAGE 22

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Opponents say designating Eastern Market as a local historic district would impact this building on Russell Street, which Sanford Nelson and his investors plan to tear down, and the annual Murals in the Market program and future development.

Eastern Market historic district proposal to be studied, not implemented on interim basis The Detroit City Council is not pursuing creating an interim local historic district for Eastern Market for the time being, but has auKIRK thorized a study PINHO to be conducted about whether it should become a designated one. The move last week came after Eastern Market Partnership President Dan Carmody sent a letter in opposition to its creation to Mayor Mike Duggan and each of the nine council members saying that the interim historic district designation would threaten the popular Murals in the Market event scheduled this year for Sept. 14-21 and would slow down redevelopment in the city’s food district. “I don’t know how you negotiate with 25-30 artists,” he said in an interview with Crain’s. “With the mural festival, there is a concept and it oftentimes happens in real time.” Under an interim local historic district or a designated/permanent local historic district, virtually any physical change outside of ordinary maintenance to any building in Eastern Market — ranging from things like masonry work to demolition — would have to be approved by the Historic District Commission. That would add another layer of approval needed for improvements and changes by any landlord in the proposed district bounded by Gratiot Avenue, Mack Avenue, the Chrysler Service Drive and St. Aubin Street. It could also prevent Detroit-based Firm Real Estate from tearing down a 15,000-square-foot Russell Street property if it doesn’t get the HDC’s blessing. “Projects like the annual mural festival will be jeopardized by having to go through a new review process less than sixty days prior to the event,” the letter reads. It also says

“Projects like the annual mural festival will be jeopardized by having to go through a new review process less than sixty days prior to the event.” Dan Carmody in letter

the Eastern Market Partnership is in favor of studying the local historic district possibility and “how a local historic district fits into a group of other land use regulatory changes that are coming out of the Greater Eastern Market Framework Plan (GEMFP) process set to be completed later this year.” The partnership, formerly Eastern Market Corp., also said that adding a new layer of approval for things like building modifications in the food district “will slow development,” and that there had been “no communication” about the matter with the partnership or area businesses prior to the request for a local interim historic district being made. “We see the need to study how a local historic district could fit into other regulatory land use regulations,” Carmody said Monday. “How does this all fit together so we end up with the best set of tools to both preserve the authenticity of Eastern Market and also not injure its vibrancy by putting too many layers of approvals?” Even though a request for the creation of an interim district and a study had been pending before the Historic District Advisory Board for more than a decade, it wasn’t until May that Detroit City Council member James Tate requested a resolution authorizing the creation of one. Tate could not be reached for comment. Eastern Market’s future has been

the subject of discussion in recent months as new landlords buy occupied and vacant buildings there. There have been concerns about rising rents as the new building owners, particularly Sanford Nelson and his investors with Firm Real Estate, fix up properties that they and others say have suffered from years of deferred maintenance. Nelson and Ben Hall, a co-owner of Russell Street Deli, had a public falling out stemming from a building repair dispute, and the deli is anticipated to close in September. Other tenants like Mootown Ice Cream & Dessert Shoppe LLC, Farmers Restaurant, Adam’s Meat LLC and Cultivation Station Inc. have closed. However, Jose’s Tacos announced plans to open in the market and Well Done Goods by Cyberoptix is moving from a Gratiot Avenue space Nelson owns into a larger, soon-to-be-renovated space in the area. Nelson, the son of serial entrepreneur Linden Nelson, and his investors — who include Marvin Beatty and Don Foss — are not the only new landlords in Eastern Market cut from a different cloth than those of old. Others are Detroit developers and economic development professionals Roger Basmajian and George Jackson and New York City-based developer ASH NYC, replacing the street-level business operators in Eastern Market that traditionally owned their own properties (and sometimes others). Nelson said earlier this month that eight of his buildings are under renovation, and that work on the Supino Pizzeria/Russell Street Deli/ Mootown/Zeff’s building should be done soon. Nelson has also said that rents in his properties will be “market rate” and he plans on carving out affordable space for artists and food users as his overall vision for his portfolio progresses. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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Seabury: The first book came about because Delta Dental Foundation had contracted me to do a literature review of all the children’s books on oral health so they could provide that to schools. As I worked on the review I realized there were two gaps in the literature--one in an accurate baby-board book, and two, in a book for children that talked about why our primary teeth, or baby teeth, are important. When I turned in the review, I told the director about the gap and she recommended that I write the books to fill it. “I Need My Teeth” is about a little boy who wants to buy a robot toy. He asks the tooth fairy to take all his teeth at once and leave him $20 for all his primary teeth so he can buy this toy. He then realizes all the things he needs his teeth for. Primary teeth are important for growth, development, speech, and social and emotional health. It was mentioned to us that this would make a great topic for a school assembly. I wrote that and it has been performed for at least 50,000 students. More books came out of that, including a children’s book on asthma with Johns Hopkins. Burns: Do you see some parallels between your priorities and the opioid crisis? Seabury: There is definitely some correlation with opioid prescription through dental offices, though they have worked a lot on diminishing that. I don’t think you can be in any type of health arena and not be in some way looking at the opioid epidemic.

Brian Peters, CEO, Michigan Health and Hospital Association

Larry Burns: How has the Michigan Health and Hospital Association evolved over the years? Brian Peters: When I came to the Michigan Hospital Association nearly 30 years ago, we were an organization focused almost exclusively on what happened inside the four walls of a traditional acute care hospital. At that time Michigan was home to well over 200 hospitals, virtually all of them independent. Today the number of hospitals has greatly diminished to just over 130 statewide. The number of patient beds has literally been cut in half over that period of time as a result of new technology and prescription drugs, payment reform and, mainly, from consolidation because most hospitals are now part of multi-hospital systems. Burns: As it relates to the Michigan Health and Hospital Association, what are some of the merging activities in pediatrics? Peters: We’re focused on children’s health in a new and energetic way. We created a dedicated Michigan Health and Hospital Association council on children’s health with representatives from major children’s hospitals and pediatrics programs to focus on what makes a difference. You have to start with the fact that

two out of five Michigan children are covered by Medicaid. Our advocacy is designed to ensure we don’t take for granted that public health care programs are adequately funded to provide children with access to all the services they might need. The Association has also been very focused on safety and quality improvement, working with our member organizations. For example, we have achieved a 68 percent reduction in unnecessary early elective deliveries since 2010, thanks to the work of the Michigan Health and Hospital Association Keystone Center. This reduces complications that often occur with medically unnecessary early elective deliveries. We were one of the first states in the country to really get our arms around that issue and I’m very proud of that work. Burns: What can we look for from Michigan Health and Hospital Association in the future? Peters: Social determinants of health is one of the major focal points for the Association in the years ahead. It’s one thing to provide outstanding quality care in a health care setting, but, quite honestly, the more impactful element is what home environment patients return to after being discharged from the hospital or following an appointment with a physician. That is critical to their health and wellness going forward, from food and security to transportation challenges. That’s a new dynamic that we understand better now than ever before, and that’s a real positive.

David Gamlin, Executive Vice President, Midnight Golf

Larry Burns: Tell us about Midnight Golf. David Gamlin: We don’t play golf at midnight, but the program was based on the Midnight Basketball model that sports and life skills are connected. We spend 30 weeks training young people, starting with high school seniors, helping them transition to college, making sure everybody gets to college, stays in college and graduates. Then we make sure they have a career to begin when they graduate from college. We have doctors. We have attorneys, teachers and a whole cadre of professions that are evolving through the participation of these young people. We’ve worked with close to 3,000 young people since 2001. Burns: How does golf fit in? Gamlin: Golf is still one of the top relationshipdeveloping tools you can have in business. We talked to young people about golf, not to encourage them to be Tiger Woods or play on their college golf team, but as a great skill to have in their bag of tools. The golf course is where they make deals. That’s where people meet each other. We ask young people: if golf is a tool, guess what other tools you should have? How to write well, speak well, negotiate, manage money, create a good resume, get to

college, pay for college, stay in college: all those are examples of things we teach them over 30 weeks. Burns: Who are some of your partners? Gamlin: We have a lot of terrific grant-making partners, including the Jamie and Denise Jacob Family Foundation, Skillman Foundation and Dresner Foundation. Another of our significant partners is the McGregor Foundation. Ally is also one of our big partners; some of our mentors are Ally employees. Burns: How can people get involved? Gamlin: Midnightgolf.org is our website and that’s the connecting point for volunteering, mentoring, donations and events. We’ve been very successful at helping more than 70 percent of our students graduate from college, which is well above the national average. Nearly 100 percent of our students go to college. Our students have ended up at about 160 different colleges, approximately half of them in Michigan. But we’ve had a student attend the University of Peking in China, as well as Stanford University, Brown University and many other Ivy League institutions and a lot of historically black colleges. Burns: What makes Midnight Golf unique? Gamlin: We don’t come to this space through the traditional education youth-development route but from a business perspective. We create, develop and nurture talent, regardless of their education focus, to prepare them to succeed no matter where they end up.

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The two-bedroom units in North Pine Street Townhomes in Detroit’s North Corktown will average 1,500 square feet with three-story elevations, attached garages, outdoor art installations and tree farms.

Oakland Housing shifts focus to North Corktown

$3 million, 14-unit condo complex is first project as nonprofit targets neighborhood for middle-income homes By Sherri Welch swelch@crain.com

A nonprofit developer founded in the wake of the Great Depression to create housing affordable for autoworkers has been quietly developing and financing affordable housing for the middle class in Oakland County for decades and, more recently, in Detroit. Now it’s shifting its focus to Detroit’s North Corktown neighborhood. Oakland Housing Inc. is constructing a $3 million, 14-unit condominium complex to enable middle-income earners to make a permanent home in the neighborhood as property values rise with Ford Motor Co.’s development of the nearby historic Michigan Central Station. One of the biggest challenges nationally and in Detroit is that construction costs are rising faster than incomes, and that’s pricing middle-income people out of homes, Oakland Housing Executive Director Kate Baker said. There are government programs to help low-income people get into home ownership, she said. Those programs assist people who earn 80 percent or less of area median income. Oakland Housing provides housing and financing targeted to people earning 80 percent-120 percent of median income to ensure mortgages for homes in desirable areas are affordable. “The people in the middle are squeezed. Their incomes are too high to qualify for rental subsidies but often not high enough to buy quality housing near where they work,” Baker said. “We want to keep you near work, in a great neighborhood,” she said, while also helping to build generational wealth for middle-income families through home ownership. Oakland Housing targets “opportunity neighborhoods” near good schools and employment centers,

“The people in the middle are squeezed. Their incomes are too high to qualify for rental subsidies but often not high enough to buy quality housing near where they work.” — Kate Baker, Oakland Housing Executive Director

where prices are rising so homeowners can build equity, Baker said. Founded in 1935 by James Couzens, a former Detroit mayor and U.S. senator, Oakland Housing completed its first community development in 1936 in West Bloomfield. Since then, it’s helped develop a total of 250 homes in Pontiac, Rochester Hills, Troy and Detroit, where it built seven homes over the past 15 years with Slavik Building & Development in Woodbridge Estates, about a mile north of its new development site. Oakland Housing broke ground in April on the North Pine Street Townhomes development in North Corktown, just north of the Michigan Avenue business district and two blocks north of Michigan Central Station. The project is a block north of I-75 on Pine Street, between Rosa Parks Boulevard and 14th Street. Baker said she expects people to be moved into the homes by year’s end. The nonprofit developer is working with the North Corktown Neighborhood Association and the Corktown

Business Association to spread the word about the new homes that it will finance for middle-income earners. Already, it’s secured presale commitments for five of the 14 townhomes — three from renters in the neighborhood, Baker said. The two-bedroom units in North Pine Street Townhomes average 1,500 square feet with three-story elevations, exterior and interior urban design elements, attached garages, outdoor art installations and tree farms. Detroit-based Steven C. Flum Inc. is project architect and Pontiac-based West Construction Services is general contractor. The property sits on about a quarter of the 4 acres Oakland Housing has acquired in North Corktown along Pine Street, between Vermont and Wabash, over the past dozen years, she said. The nonprofit developer is working with neighbors in the area as it makes plans for the other property. Baker said there is interest in open space and farm space, so Oakland Housing hasn’t made any plans for another development for middle-income earners in the neighborhood at this point. Over the past 85 years, the nonprofit has built up a $10 million reserve from market returns and people paying back mortgages at low interest rates, Baker said. It’s looking for additional opportunities to make quality housing affordable for middle-income earners in North Corktown, whether as a builder or mortgage lender, she said. “We’re looking for interested and creative developers to help us figure out how to best use our funds to get middle-income housing developed, or included in other projects,” Baker said. “We expect to work in North Corktown for years to come.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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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 LY 2 9 , 2 0 1 9

OPINION OTHER VOICES

COMMENTARY

Common sense, not tax increases, will fix the state’s roads

Whitmer opens door to tying pension financing to road funding

arsh winter conditions this past year ripped up our roads and left us with the question looming larger than ever: “What can we can do to get the road system repaired and maintained?” It became clear we needed to get smart fast. “Getting smart fast” began with 12 transportation committee hearings over seven weeks. We talked to everyone, public and private. If they were involved in roads, we invited them to come and give us their thoughts. How do you fix something if you don’t know how it works? We, as legislators, needed to know how building roads works and the outcome was a deep look at the process and some true fixes became obvious. I wanted to explain to people in straightforward language, no double talk, what we had learned about what it was going to take to fix the roads. So, this spring I embarked on a tour of open-to-all “roads town halls” all across the state — in both communities large and not so large. There is much we can do besides the old path of just raising taxes. How about good policy changes that get us spending smarter the money we get from, you, the taxpayer? Here’s an idea: since most agree the worst roads are “local”— that is, from driveway to highway — let’s take away procedural barriers preventing local governments from making repairs. Michigan is the most restrictive state in what we don’t allow locals to do. We need to join the other 49 and be more helpful in getting those local roads fixed. Let’s set up an innovation board that will work with MDOT to investigate new technologies and designs that might help us maintain what we fix. Let’s make sure every tax dollar

JACK O’MALLEY State Representative

paid at the pump goes to the roads. Michigan has the eighth highest taxes paid at the pump in the country. There’s $855 million dollars ready to be added to the road budget in the House budget plan that makes that change. Sounds like a winner to me. In every town hall, heads nod in agreement when I present the common-sense suggestions. But the governor’s 45-cent per gallon gas tax increase gets hooted down. There are so many ways we can stretch our dollars. It was amazing to me that this has never really been a serious part of the discussion until now. I am thrilled that the work from the House Transportation Committee that I chair is leading the way in the current discussion. As I have stated from the outset a plan is not just a budget. It is a quality budget with smart policy to make those dollars work harder and go farther. After hours of study and committee hearings, 14 town halls and over 2000 miles traveled, I have spread the word. Common sense has a strong foothold in the House Republican efforts to get our roads fixed without raising your taxes! Let’s hope the governor sees the light. State Rep. Jack O’Malley represents the 101st District, which includes Leelanau, Benzie, Manistee and Mason counties.

ov. Gretchen Whitmer has already shot down a Republican-conceived idea of borrowing $10 billion to pump money into the state’s school employees pension fund in order to free up cash in the state budget for road repairs. But the Democratic governor is now open to extending the final date for paying off the unfunded liability of the Michigan Public Schools Employees Retirement System by five or 10 years as part of a broader road-funding plan. “Some of these pieces that we’re hearing about from internal Republican conversations are maybe something worth keeping on the table,” Whitmer said last week when asked about changing the amortization schedule for MPSERS. “But many of them are not — selling bridges or bonding off of a pension fund, like what happened in the city of Detroit. We’ve seen what happens when you do that and they’re not real solutions.” Whitmer wants nothing to do with the pension bonding scheme — crafted by the West Michigan Policy Forum in an effort to lower the state’s annual payments to MPSERS by $1 billion — because of the inherent risk involved in borrowing billions of dollars to invest at a time when the stock market is already at an all-time high. Republican proposals to sell off the Blue Water Bridge or stateowned rest stops are a nonstarter for a first-year governor who has staked her political future on eliminating Michigan’s infrastructure spending deficit. But a second trial balloon floating around Lansing right now involves stretching out the amortization schedule for paying off the school employee pension fund by five to 10 years from the 2038 date set by former Gov. Rick Snyder’s administration. Whitmer’s new willingness to discuss tinkering with the financing of MPSERS comes after she said she talked last week with Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield. The Legislature has been in a summer recess for nearly five weeks without a deal in place on road funding and the state’s $57 billion budget. “Certainly when they come back and are ready to engage in a substantive way, we’ll have a discussion of what pieces stay on the board,” Whitmer said after attending an affordable housing event in Detroit. Extending the MPSERS amortization by five years could generate $477 million in savings per year to the School Aid Fund; a 10-year extension could generate about $800 million in savings per year, according to one estimate that’s been given to the governor’s office. All of these financing plans re-

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Motorists are usually irked to learn that a sizable portion of the taxes they pay at the pump don’t go toward the roads.

CHAD LIVENGOOD clivengood@crain.com

volve around one goal: replacing revenue public schools would lose if the Legislature removes the 6 percent sales tax on gasoline. This is a line-in-the-sand policy goal of Chatfield (and his three predecessors) because motorists are usually irked to learn that a sizable portion of the taxes they pay at the pump don’t go toward the roads. Chatfield won’t go along with any road-funding plan that does not remove the sales tax on gasoline and replace it with a revenue-neutral tax increase on gasoline and diesel fuel. “I think it’s one of the most unfair tax policies in our state — and the conditions of our roads proves it,” Chatfield said in an interview with Crain’s. “I’ve said from the very beginning of this term when having the discussion of roads: I will not have any conversation about new revenue until every penny at the pump goes towards roads. ... And we’re going to do that.” The plan being discussed among Republican legislators involves raising the fuel tax by 15 cents, roughly the equivalent of the amount of sales tax per gallon that’s currently siphoned off at the pump. Dragging the financing of the school employee pensions into the road funding debate reflects how complicated and contorted this issue has gotten for Republicans hunting for any and all alternatives to Whitmer’s disliked 45-cent-per-gallon fuel tax hike to raise $2.5 billion in new revenue.

Chatfield said extending out the payment schedule for school employee pensions is “an idea that needs to be explored and not solely because we’re having a roads conversation.” “Most people in the state don’t realize that the first $3.5 billion that we give to the School Aid Fund goes to pensions,” Chatfield said. “And that number will quickly rise to $5 billion per year unless we address that issue.” But there’s a great deal of uneasiness within the coalition that put Whitmer in the governor’s office over tinkering with pension funding as a means to milking the state’s coffers for money to replace lost sales tax revenue in the name of fixing the unbearable roads. “We’ve got to be very careful with how all of this gets done,” said Doug Pratt, director of public affairs for the Michigan Education Association, which represents 125,000 active and retired educators. Pratt argues that using the pension fund as a state government refinancing tool to extract cash for roads could destabilize the lifetime pensions of 315,000 vested members of MPSERS and “saddle future taxpayers with a huge debt” to pay off. “Just saying we’re going to refinance this mortgage and use it for roads, that’s not a real solution,” Pratt said. “If the point of this is just to move money around on the ledger sheet, that doesn’t make any sense to taxpayers.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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

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

Crain’s HR Summit to tackle how CEOs, HR leaders interact

LETTERS

Tunnel project solution to Enbridge Line 5 concerns To the Editor: We agree with the July 14 opinion piece written by Elise Matz; no one wants to see a repeat of the winter 2014 “polar vortex,” when propane prices spiked more than 80 percent. As Ms. Matz shared, Enbridge is one of the largest users of electricity in the U.P. — electricity powers the pump stations along the pipeline. If Line 5 were to be shut down, it can be assumed that electric rates — residential and industrial — would go up. Enbridge also pays significant property taxes along the Line 5 pipeline. A shutdown would mean a loss of more than $2.6 million in property taxes to the counties and local communities just within the U.P. alone. In many of the more rural counties, we are the largest taxpayer. Another enormous impact — the challenges residents would face in receiving the propane on which they depend every day. Line 5 supplies more than 65 percent of the propane to the Upper Peninsula. That is more than 30 million gallons per year. The reality is that Michigan consumers also would see a cost increase in propane if Line 5 were to be unavailable. A 2017 study by an independent company hired by the state confirmed that propane prices would go up. The study also found it would take more than 2,100 tanker trucks or 800 rail cars every day to deliver the amount of energy carried through Line 5. And we know trucks and rail cars are subject to factors that in most cases do not impact pipelines. An extended blizzard, for example, could take trucks off the road for days. If you have back-to-back blizzards or a generally poor winter, those compounding factors could lead to propane being in short supply, causing price spikes. Not only does the potential shutdown of this crucial infrastructure pose monetary concern, it also would put Michigan’s energy security at risk, making homes and businesses vulnerable to energy supply disruptions, market volatility and subsequent economic disadvantages. The Michigan Environment Great Lakes and Energy Agency reported last year the absence of Line 5 would lead to an additional $120 million in gasoline costs that Michigan consumers currently avoid thanks to Line 5. Officials at the East Toledo refinery have said a disruption to Line 5 could force the closure of the facility. Toledo refineries served by Line 5 supply the majority of the aviation fuel at Detroit’s Metropolitan Airport, which accounts for more than $10 billion in economic stimulus to southeast Michigan and sustains 86,000 jobs. We agree with residents and visitors alike that Michigan and the Great Lakes hold resources that must be protected. That’s why Enbridge views the Line 5 Tunnel Project as the safest way to move propane and other energy sources at the Straits of Mackinac. A tunnel would help ensure no disruptions to propane supplies and dramatic price increases like what we saw during the polar vortex winter. The tunnel project is the solution;

Enbridge’s Line 5 pipeline runs through the Straits of Mackinac.

it will serve not only the U.P., but all of Michigan, with a safe, reliable energy supply on which Michigan can continue to depend while protecting

the Great Lakes. Brad Shamla Vice president, U.S. Operations Enbridge

Crain’s Detroit Business is introducing a new event for 2019, the Crain’s HR Summit, aimed at giving the “nerve centers of business” a forum about leading HR practices and how to help their organizations succeed. The event features include a discussion on what a CEO wants out of HR leaders featuring Cathy Kosin, CEO of Oswald Cos.; Anthony LaVerde, CEO of Emagine Entertainment; Shelby Langenstein, chief people officer of Emagine; and Carrie Elaine Tingle,

SAFETY IS YOUR BUSINESS, TOO

executive director of HR and community affairs, Bridgewater Interiors. The summit will also include interactive discussions of hot topics in human resources, and an awards presentation for honorees of Crain’s Excellence in HR Awards. The event runs 9-11:30 a.m. Aug. 8 at the Townsend Hotel, 100 Townsend St. in Birmingham. Tickets are $85 each or $1,000 for a reserved table of 10 and are available at crainsdetroit. com/hrsummit.

In strengthening our natural gas infrastructure, we don’t

take breaks. This year alone, we’ll perform 300,000 inspections and replace 200 miles of lines. And we’ll monitor those lines every second of every day. But we need you to be on the lookout as well. If you notice a natural gas odor, gather your employees and leave the area. Then, call 911 before calling DTE’s gas line at 800-947-5000. We’ll do our part to keep you safe. You can help too.

Highest in Customer Satisfaction with Business Natural Gas Service in the Midwest, Two Years in a Row. For J.D. Power 2018 award information, visit jdpower.com/awards.

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

2019’s fastest-growing companies By Rachelle Damico | Special to Crain’s Detroit Business

elcome to Crain’s Fast 50, our annual survey of the fastest-growing companies on metro Detroit’s business scene.

In the ranks of this year’s list, which are based on results for the past three years, you’ll see the fingerprints of many of the trends shaping our business lives: the construction boom fueled by rising real estate prices and downtown Detroit’s resurgence; entrepreneurial expansions; and big acquisitions that offer overnight growth. We don’t pick the companies by pure percentage growth alone. Instead, we rank all companies in our research database by percentage revenue growth between 2015 and 2018, and also by dollar amount of revenue growth. The two rankings are then added together to create the list. 1. Piston Group

Revenue 2015: $930,800,000

Revenue 2015: $702,000,000

Three-year percentage change: 208

Revenue 2018: $1,523,000,000

What it does: Automotive supplier

Three-year percentage change: 117

How it grew: Continued growth from the $175 million acquisition of Takata Corp. subsidiary Irvin Automotive Inc., which added new products and manufacturing locations. Former Piston Vinnie Johnson’s company has also seen growth from existing customers, added new ones and launched programs with new OEMs over the past three years.

What it does: Electric/electronics distributor

2. United Shore Financial Services LLC

8. Victory Automotive Group Inc.

4. Superior Industries International Inc.

Three-year percentage change: 52

Revenue 2015: $727,946,000

Revenue 2018: $1,501,827,000 Three-year percentage change: 106 What it does: Auto parts and equipment

Revenue 2018: $1,340,000,000

How it grew: Expanded operations in Europe, including the acquisition of German-based aluminum wheel supplier Uniwheels AG for $715 million in 2017.

What it does: Mortgage lender How it grew: Loan production volume climbed to $41 billion in 2018. At the end of 2018, loan production marked a 41 percent increase year-over-year and the company earned 22 percent of market share within the wholesale mortgage lending business.

How it grew: Growth from the acquisition of Fort Worth, Texas-based electrical distributor Reynolds Co., which was finalized in January 2018. The acquisition added 17 branch locations to the business, said Don Slominski, president and CEO.

Revenue 2015: $510,126,000 Three-year percentage change: 163

COST

3. McNaughtonMcKay Electric Co.

Revenue 2018: $2,864,525,000

Footnote: Holding company for Piston Automotive, Irvin Automotive, Detroit Thermal Systems and Airea

Real Real Lake

Vinnie Johnson, owner of Piston Group

5. Soave Enterprises LLC

Revenue 2015: $1,232,000,000 Revenue 2018: $2,051,871,000 Three-year percentage change: 67 What it does: Diversified management holding company

Revenue 2015: $1,223,719,479 Revenue 2018: $1,864,567,545.94 United Shore Financial Services headquarters How it grew: The primary drivers in revenue growth include increased pricing in the scrap metal commodity market. In addition, the company delivered and sold a 120-unit residential tower in Naples, Fla., in 2017 and 2018.

6. Sun Communities Inc. Revenue 2015: $674,731,000

Revenue 2018: $1,126,825,000 Three-year percentage change: 67 What it does: Real estate operations How it grew: Sun has continued its growth trajectory to include the acquisition of 29 more manufactured housing and RV resort communities, comprised of over

10,000 housing sites across the country, said president and COO John McLaren. In addition, the company developed approximately 1,300 expansion sites adjacent to existing communities and opened its first RV resort development, Cava Robles RV Resort, located in Paso Robles, Calif.

7. The Christman Co. Revenue 2015: $120,140,000 Revenue 2018: $305,150,661 Three-year percentage change: 154 What it does: Construction management, general contracting, design/build, facilities planning and analysis, program management, real estate development, self-perform skilled construction trades

What it does: Automotive dealerships How it grew: Strategic dealership acquisitions and growth from its proprietary membership and maintenance program, Car Doc.

9. General RV Center Inc.

Revenue 2015: $582,000,000 Revenue 2018: $955,612,730

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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 LY 2 9 , 2 0 1 9

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What it does: Automobile dealership How it grew: An increase in sales, including cars, trucks and SUVs from FCA, Cadillac and Honda. The company has increased inventory for pre-owned vehicles, invested in a business development center and seen repeat business from existing customers.

Real estate investment trust Agree Realty Corp.’s headquarters is on Long Lake Road in Bloomfield Hills. COSTAR GROUP INC.

15. The Colasanti Cos. 13. Hatch Stamping Co. Revenue 2015: $142,648,985

10. Credit Acceptance Corp.

Revenue 2018: $262,759,000

Revenue 2018: $1,285,800,000

How it grew: Strong demand for stamping and assemblies and other manufacturing services, including e-coat, tool design and prototyping. The company has also seen value from vertical integration.

Revenue 2015: $825,300,000

Three-year percentage change: 56 What it does: Financial institution How it grew: Continued growth in consumer loan originations.

11. Clark Hill PLC Revenue 2015: $139,815,000

Revenue 2018: $295,900,000 Three-year percentage change: 112 What it does: Law firm How it grew: The company has experienced growth nationally and internationally since merging with Texas-based Strasburger & Price in 2018, adding offices throughout the U.S., Ireland and Mexico.

Three-year percentage change: 84 What it does: Manufacturing

14. Agree Realty Corp.

Revenue 2015: $69,965,866

How it grew: “Colasanti’s relationships with the developers leading the revitalization of the region have sustained the company’s record of steadily increasing revenues,” said Mark Fitzpatrick, vice president of business development. “Additional work in new market segments, particularly in the public sector, have also contributed significantly.”

18. The Mars Agency

Three-year percentage change: 112

Revenue 2018: $110,892,847

What it does: Real estate investment trust

Three-year percentage change: 102

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How it grew: Invested $1.7 billion in development and acquisitions of net lease properties, which includes more than 650 properties in 46 states.

How it grew: The agency has seen growth from launching Marilyn Predictive Commerce Intelligence, an AI designed commerce intelligence platform built for marketing to shoppers. The agency brought on new clients across a variety of sectors — including consumer packaged goods, home, hardware, personal care, lawn care, casual dining, grocery and sporting goods.

Revenue 2018: $121,300,000

How it grew: Infrastructure utility investments, solid growth at DTE’s non-utility businesses and flat operating and maintenance costs have all contributed to growth.

What it does: General contracting and construction management and design/ build; self-perform concrete services

RACHEL BAUER

Revenue 2018: $14,212,000,000 What it does: Energy company

Three-year percentage change: 68

Revenue 2015: $55,009,000

12. DTE Energy Co. Three-year percentage change: 37

Revenue 2018: $171,300,000

Revenue 2018: $148,195,000

15. Devon Industrial Group

Revenue 2015: $10,337,000,000

Revenue 2015: $102,000,000

Revenue 2015: $62,900,000

Three-year percentage change: 93 What it does: Construction management, general contracting, program management, design build, pre-construction and decommissioning services How it grew: Successfully branched out into the higher education market, but most of the growth has come from repeat business in the automotive sector.

What it does: Marketing

Footnote: Revenues 2015: Ad Age Datacenter and Agency Report 2016. AdAge.com/agencyreport2016

SEE NEXT PAGE

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

SPECIAL REPORT: CRAIN’S FAST 50 18. BorgWarner Inc. Revenue 2015: $8,023,200,000

22. Flagstar Bancorp Inc.

Revenue 2018: $10,529,600,000

Revenue 2015: $825,000,000

Three-year percentage change: 31

Revenue 2018: $1,122,000,000

What it does: Develop, engineer and manufacture components and systems for propulsions systems for combustion engine, hybrid and electric vehicles.

Three-year percentage change: 36 What it does: Financial institution

How it grew: Organic growth and strategic acquisitions.

How it grew: Multiple strategic branch acquisitions and a continued focus on building and growing national business lines within their commercial portfolio.

20. Alta Equipment Co.

22. Loc Performance Products Inc.

Revenue 2015: $303,200,000

Borg

Revenue 2015: $84,000,000

Revenue 2018: $443,000,000

Revenue 2018: $142,000,000

Three-year percentage change: 46

Three-year percentage change: 69

What it does: Heavy construction equipment, material handling equipment, industrial equipment, cranes

What it does: Large fabricated structures, final drives, suspension and track systems for Army combat vehicles

How it grew: Growth has stemmed from expansion into the Great Lakes region, said Ryan Greenawalt, CEO. “In 2017, Alta expanded both the industrial and construction equipment businesses in the Illinois market with the completion of two separate acquisitions,” he said.

How it grew: Over the past several years, the U.S. Army has been completing major vehicle upgrades and Loc has been awarded over $1 billion in business as a result, said Lou Burr, CEO. Loc is restoring lost mobility on Bradley Fighting Vehicles and making new armored cabs for the Army Multiple Launch Rocket System.

20. Spence Brothers Revenue 2015: $43,646,369

Revenue 2018: $92,900,000 Three-year percentage change: 113 What it does: General contractor; construction manager How it grew: Entry into the multi-family market in East Lansing and a booming market in northern Michigan, including Traverse City, Alpena and the Upper Peninsula. Nearly tripled sales in northern Michigan.

24. The Suburban Collection

Lipari Foods is based in Warren.

25. Fori Automation Inc. Revenue 2015: $164,000,000

Revenue 2015: $2,001,506,567

Revenue 2018: $240,000,000

Revenue 2018: $2,619,738,317

Three-year percentage change: 46

Three-year percentage change: 31

What it does: Design and build of automated material handling, assembly, testing and welding systems for the automotive, aerospace, agriculture, recreational vehicle and alternative energy industries.

What it does: Automobile dealerships How it grew: Growth from seven added brands and locations, 520 new team members and a 9.5 percent increase in new and pre-owned vehicle sales.

How it grew: Diversification strategies

26. Motor City Electric Co.

5 Year Loan/7 Year Amortization Commercial Finance $25,000,000

Revenue 2015: $265,640,000 Revenue 2018: $377,933,000 Three-year percentage change: 42

TRANSPORTATION COMPANY

LOC/Term (5/5)/EOL C&I $6,000,000 AUTOMOTIVE PLASTIC INJECTION MOLDING COMPANY

LOC/Term/CREM C&I $3,330,000 PRODUCE SUPPLIER

Revolving Line of Credit & Term Loan Asset Based Lending $5,250,000 MACHINING MANUFACTURER & MATERIAL HANDLING EQUIPMENT COMPANY

that include investing in new product development for assembly, testing, welding and material handling systems. The company began focusing on automotive opportunities outside of its traditional assembly equipment in 2008, including welding systems, material handling systems and automation systems for both global automotive car manufacturers and tier one suppliers. Fori has also expanded into aerospace, military, recreation vehicle, construction and agriculture, heavy metals and alternative energy industries. The company also expanded globally, with design and build facilities in China, Korea, India, Germany, Brazil, Mexico and Spain.

What it does: Electrical contractor

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29. Lipari Foods LLC Revenue 2015: $646,000,000 Revenue 2018: $861,000,000

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Rev

How it grew: Organic growth in their current markets as well as an aggressive strategy of acquiring and integrating smaller companies into their Warren-based operation, said Thom Lipari, president and CEO. The company has also added three new product categories, including specialty grocery, international foods and heath and wellness, which expanded sales with existing customers.

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Footnote: Purchased by Miami private equity firm, H.I.G. Capital on Jan. 8.

27. Carhartt Inc.

Revenue 2018: $1,021,944,708

Revenue 2015: $691,000,000

Rev

Three-year percentage change: 33

How it grew: Major projects during the time frame include Little Caesars Arena and the Cannelton Hydroelectric Project, an Ohio-based hydroelectric power plant that provides renewable generation to Ohio, West Virginia, Virginia, Kentucky and Michigan.

30. LaFontaine Automotive Group Revenue 2015: $768,430,310

Three-year percentage change: 33 What it does: Automobile dealerships

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Three-year percentage change: 58

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What it does: Managed cloud and security services, IT operations and application hosting

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Revenue 2018: $926,500,000 Three-year percentage change: 34 What it does: Apparel manufacturer

Revenue 2015: $644,812,000 Revenue 2018: $866,199,000

Three-year percentage change: 34 What it does: Auto parts and equipment Member FDIC

Netherlands-based supplier of camera-based vision systems for vehicles. The company has also seen growth from MirrorEye, a camera monitor system that provides drivers with enhanced visibility and eliminates blind spots created by mirrors.

32 Lo Ho

How it grew: Acquisitions and investment in technology have contributed to the company’s growth. In 2017, the company purchased Orlaco Products BV, a

How it grew: An expanding customer base and an increase in sales have contributed to growth.

Revenue 2015: $81,000,000 Revenue 2018: $128,000,000

How it grew: Larger clients and accelerating demand for managed services for security, governance, risk management and compliance drove revenue growth.

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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 LY 2 9 , 2 0 1 9

39. H.W. Kaufman Group Inc./ Burns & Wilcox Ltd. Revenue 2015: $1,830,000,000

Revenue 2018: $2,250,000,000 Three-year percentage change: 23

BorgWarner in Auburn Hills (above) and a Carhartt store in Detroit (below)

What it does: Provides insurance services including distribution, brokerage, underwriting, reinsurance, real estate, premium financing, inspections, audits, risk management and third-party claims administration How it grew: Organic growth, acquisitions and hiring quality revenue-producing talent all contributed to the company’s growth, said Daniel T. Muldowney, executive vice president and CEO.

39. ChemicoMays LLC Revenue 2015: $100,000,000 Revenue 2018: $146,000,000 Three-year percentage change: 46

32. Universal Logistics Holdings Inc.

Revenue 2015: $1,128,773,000 Revenue 2018: $1,461,708,000 Three-year percentage change: 29 What it does: Transportation and logistics How it grew: They have won several automotive logistics projects. In 2018, the company made four acquisitions in the intermodal drayage space.

33. MPS Group Inc.

How it grew: Growth from its propriety and patent technology called OVISS, which offers order visibility, tracking, invoicing, real-time event reporting and delivery confirmation for auto transports. In addition, the company has increased its asset light concentration along with gaining market share in both the OEM and remarketed sectors. Footnote: Bought by Washington, D.C.-based private equity firm The Carlyle Group in September 2017.

35. MJC Real Estate Co. Inc. Revenue 2015: $74,160,876

Revenue 2015: $76,000,000

Revenue 2018: $116,043,626

Revenue 2018: $120,000,000

Three-year percentage change: 56

Three-year percentage change: 58

What it does: Residential, apartment, commercial construction, builder and developer

What it does: Waste management, paint shop management and industrial cleaning and maintenance How it grew: Additional plants and locations, expanding customers and industries and the acquisition of Gibsland, La.-based oil and gas drilling services firm EnE Consultants LLC.

34. Frank Rewold and Son Inc. Revenue 2015: $91,853,750

Revenue 2018: $139,610,061 Three-year percentage change: 52 What it does: Construction management, general contracting, design/build How it grew: Growth is attributed to repeat and referred clients. Notable construction projects include Hillcrest Hall, a $77 million Oakland University student housing complex that opened in 2018. Additionally, the company has a five-year bond program with Rochester Community Schools, built a new student housing residence at Lawrence Tech, Lawrence Tech University East Hall, and added to the headquarters of Carhartt Inc.

35. United Road Services Inc.

How it grew: The resurgence in the building business combined with a new emphasis on building and holding residential luxury apartment projects.

37. The Macomb Group Inc. Revenue 2015: $180,000,000

Revenue 2018: $250,000,000 Three-year percentage change: 39 What it does: Distributor of pipe, valves, fittings, heating and cooling, control and instrumentation, boilers, pumps repair, steam products, sanitary piping products, fire protection How it grew: External growth and acquisitions into the North Carolina and Indiana markets. The acquisitions enabled the company to drive down purchase costs and allowed for increased sales in those markets.

38. Arbor Bancorp Inc. (Bank of Ann Arbor) Revenue 2015: $53,745,000 Revenue 2018: $89,129,000 Three-year percentage change: 66

Revenue 2015: $500,000,000

What it does: Bank

Revenue 2018: $660,000,000

How it grew: Organic growth continued, said Charlie Crone, executive vice president and chief revenue officer. The company continues to see organic growth from acquisitions, including the 2017 purchase of Bank of Birmingham.

Three-year percentage change: 32 What it does: Vehicle logistics for vehicle manufacturers, remarketers, auctions, dealers and internet vehicle transactions nationally

What it does: Chemical manufacturing, chemical management How it grew: New contracts with aerospace, electronics and defense and government customers. In addition, the company partnered with suppliers.

41. Amerilodge Group LLC Revenue 2015: $36,998,741

Revenue 2018: $64,807,044 Three-year percentage change: 75 What it does: Hospitality How it grew: Continued expansion of new hotels in Indiana and Michigan, said Asad Malik, CEO and president.

42. George W. Auch Co. (dba Auch Construction)

Community

Revenue 2015: $136,472,512

Revenue 2018: $191,790,830 Three-year percentage change: 41 What it does: General contractor and construction manager How it grew: Growth driven primarily from work with existing clients in educational, health care, municipal, commercial and higher education market sectors. During that period the company added new clients, primarily in those sectors, which has allowed for continued growth.

Respected

42. Oliver/Hatcher Construction and Development Inc. Revenue 2015: $43,000,000 Revenue 2018: $72,000,000 Three-year percentage change: 67

Women Leaders

What it does: Construction manager, general contractor and design/build How it grew: The company extended into new markets, leading to an increase in revenue and hiring. Additionally, the company has benefited from construction growth. “The warehouse and logistics market is an area of significant revenue advancement for us,” said Paul Hatcher, president. “Among our recent, significant projects is a 1 million square foot fulfillment center in Livonia.”

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // J U LY 2 9 , 2 0 1 9

SPECIAL REPORT: CRAINâ&#x20AC;&#x2122;S FAST 50 44. WorkForce Software LLC

Revenue 2015: $65,900,000

45. Meritor Inc.

Revenue 2015: $3,505,000,000 Revenue 2018: $4,178,000,000

Lear Corp. headquarters in Southfield.

46. Atwell LLC

Revenue 2015: $86,300,000 Revenue 2018: $127,000,000

Revenue 2018: $102,000,000

Three-year percentage change: 19

Three-year percentage change: 55

What it does: Leading global supplier of a broad portfolio of axle, brake and suspension solutions to original equipment manufacturers and the aftermarket for the transportation and industrial sectors.

What it does: Civil engineering, land surveying, land solutions, land planning, environmental consulting, natural resource management, program management and construction management

How it grew: The company nearly tripled earnings per share, reduced total debt by almost 14 percent and completed acquisitions that expanded the business.

How it grew: A focus on real estate and land development, power and energy, and oil and gas markets have fueled the companyâ&#x20AC;&#x2122;s growth. In addition, the company has invested in retaining and attracting talent, expanded into areas that include Ann Arbor, Cadillac and Shelby Township, and has clients that include some of Michiganâ&#x20AC;&#x2122;s largest private and public companies, said Tim Augustine, senior vice president.

What it does: Workforce management How it grew: An increase in subscriptions from the companyâ&#x20AC;&#x2122;s cloud-based WorkForce Suite. The company has grown to 3.4 million users across more than 60 countries.

BLOOMBERG NEWS

Three-year percentage change: 47

47. Masco Corp.

Revenue 2015: $7,142,000,000 Revenue 2018: $8,359,000,000 Three-year percentage change: 17 What it does: Manufactures products for the home improvement and new home construction markets How it grew: Over the past five years, the company has achieved sales and earnings per share growth through a combination of continued focus on cost control, favorable tax rate changes, acquisitions and new product and program launches.

48. Neapco Holdings LLC

Revenue 2015: $647,000,000 Revenue 2018: $822,000,000 Three-year percentage change: 27 What it does: Designs, manufactures and distributes driveline systems and service parts

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How it grew: Neapco has increased revenue consistently over the past several years in North America, South America and Europe by developing differentiated solutions, with an enhanced focus on quality, delivery and service. The company has expanded product offering as well as the number of customers.

48. Systems Technology Group Revenue 2015: $99,000,000

Revenue 2018: $142,000,000 Three-year percentage change: 43 What it does: Information technology consulting and software How it grew: Growth from Fortune 500 company clients for services that include artificial intelligence, virtual reality, connected vehicle services and mobility and cloud services, said Anup Popat, CEO.

50. Lear Corp.

Revenue 2015: $18,211,400,000 Revenue 2018: $21,148,500,000 Three-year percentage change: 16 What it does: Automotive supplier

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How it grew: Continued investment in innovation and acquisitions that include AccuMED, a North Carolina-based fabric manufacturer, and Eagle Ottawa LLC, an Auburn Hills-based automotive leather supplier for $850 million.

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // J U LY 2 9 , 2 0 1 9

CRAIN'S LIST: THE FAST 50

Company Address Rank Phone; website

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Piston Group, Southfield

$2,864.5 $930.8

208%

$1,933.7

United Shore Financial Services LLC, Pontiac

1,340.0 510.1

163

829.9

McNaughton-McKay Electric Co., Madison Heights

1,523.0 702.0

117

821.0

Superior Industries International Inc., Southfield

1,501.8 727.9

106

773.9

Soave Enterprises LLC, Detroit

2,051.9 1,232.0

819.9

Sun Communities Inc., Southfield

1,126.8 674.7

452.1

The Christman Co., Detroit

305.2 120.1

154

185.0

Victory Automotive Group Inc., Canton Township

1,864.6 1,223.7

640.8

General RV Center Inc., Wixom

955.6 582.0

373.6

Credit Acceptance Corp., Southfield

1,285.8 825.3

460.5

Clark Hill PLC, Detroit

295.9 139.8

112

156.1

DTE Energy Co., Detroit

14,212.0 10,337.0

3,875.0

Hatch Stamping Co., Chelsea

262.8 142.6

120.1

Agree Realty Corp., Bloomfield Hills

148.2 70.0

112

78.2

Devon Industrial Group, Detroit

121.3 62.9

58.4

Jim Riehl's Friendly

359.4 235.9

123.5

The Colasanti Cos., Macomb

171.3 102.0

69.3

The Mars Agency, Southfield

110.9 55.0

102

55.9

BorgWarner Inc., Auburn Hills

10,529.6 8,023.2

2,506.4

Alta Equipment Co., Livonia

443.0 303.2

139.8

Spence Brothers, Ann Arbor

92.9 43.6

113

49.3

Flagstar Bancorp Inc., Troy

1,122.0 825.0

297.0

Loc Performance Products Inc., Plymouth

142.0 84.0

58.0

The Suburban Collection, Troy

2,619.7 2,001.5

618.2

Fori Automation Inc., Shelby

240.0 164.0

76.0

15 Automotive Group Inc., Warren 15 Township 18 18 20 20 22 22 24

Combined 3-year revenue Revenue Revenue % Revenue Revenue growth ($000,000) % change change growth growth rankings 2018/2015 2018-2015 ranking 2016-2013 ranking

25 Township

26 27 27 29

Motor City Electric Co., Detroit

$377.9 $265.6

42%

$112.3

Carhartt Inc., Dearborn

926.5 691.0

235.5

Stoneridge Inc., Novi

866.2 644.8

221.4

Lipari Foods LLC, Warren

103

861.0 646.0

215.0

LaFontaine Automotive Group,

104

1,021.9 768.4

253.5

Secure-24, Southfield

105

128.0 81.0

47.0

Universal Logistics Holdings Inc., Warren

107

1,461.7 1,128.8

332.9

MPS Group Inc., Farmington

108

120.0 76.0

44.0

Frank Rewold and Son Inc. ,

111

139.6 91.9

47.8

United Road Services Inc., Romulus

113

660.0 500.0

160.0

MJC Real Estate Co. Inc. , Macomb

113

116.0 74.2

41.9

The Macomb Group Inc.,

114

250.0 180.0

70.0

Arbor Bancorp Inc. (Bank of

115

89.1 53.7

35.4

H.W. Kaufman Group Inc./Burns & Wilcox Ltd., Farmington Hills

118

2,250.0 1,830.0

420.0

ChemicoMays LLC, Southfield

118

146.0 100.0

46.0

Amerilodge Group LLC,

120

64.8 37.0

27.8

105

George W. Auch Co. (dba Auch

121

191.8 136.5

55.3

Oliver/Hatcher Construction and Development Inc., Novi

121

72.0 43.0

29.0

103

WorkForce Software LLC, Livonia

122

102.0 65.9

36.1

Meritor Inc., Troy

123

4,178.0 3,505.0

109

673.0

Atwell LLC, Southfield

124

127.0 86.3

40.7

Masco Corp., Livonia

127

8,359.0 7,142.0

118

1,217.0

Neapco Holdings LLC, Farmington Hills

128

822.0 647.0

175.0

Systems Technology Group

128

142.0 99.0

43.0

Lear Corp., Southfield

131

21,148.5 18,211.4

125

2,937.1

30 Highland Township 31 32

33 Hills

34 Rochester 35 35

37 Sterling Heights

38 Ann Arbor), Ann Arbor 39 39

41 Bloomfield Hills

42 Construction), Pontiac 42 44 45 46 47 48

48 (STG), Troy 50

Combined 3-year revenue Revenue Revenue % Revenue Revenue growth ($000,000) % change change growth growth rankings 2018/2015 2018-2015 ranking 2016-2013 ranking

This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. LIST RESEARCHED BY SONYA D. HILL

LIST RESEARCHED BY SONYA D. HILL

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

Ross Perot Jr.’s firm may develop former Pinnacle site By Kirk Pinho kpinho@crain.com

Wayne County is considering whether to purchase the former Pinnacle Race Course property in Huron Township in an effort to have Ross Perot Jr.’s Texas-based real estate company redevelop about 650 contiguous acres. Hillwood Enterprises LP was one of two companies to submit a plan to turn the closed and razed property into a mixed-use development that would be centered on industrial use, Khalil Rahal, assistant Wayne County executive, said earlier this month. “When Hillwood submitted their offer, they let it be known that they are an industrial developer who sees that the township wants to see more attractive types of uses, and they are willing to do that because they have done that in other towns” by working with other developers, Rahal said. It would be the latest former race track to get renewed life, after redevelopment plans for the former Hazel Park Raceway and Northville Downs properties have been started and debated in the last two years. But before a Pinnacle redevelopment can happen, the county would have to exercise its right of first refusal to purchase the approximately 320acre race track site, which is sandwiched between a pair of county-owned properties to the east and west, making a total development area of about 650 acres. The state and township have already declined to purchase it.

The Pinnacle Race Course in Huron Township closed in 2010 and the property was later demolished.

Need to know

Mixed-use development would be centered on industrial use 

 Wayne County would have to exercise right of first refusal to purchase 320-acre site  Huron Township race track was open 2008-10, later demolished

“It’s in our lap,” Rahal said. The purchase price would be for $4.8 million in back-due taxes on the race track site that had been owned by Post It Stables Inc., which had until March 31 to redeem the property from foreclosure but failed to do so. The county treasurer’s office currently owns the property. Hillwood is also working with Detroit-based real estate firm Sterling Group on the project, Rahal said. The

COSTAR GROUP INC.

McKinney declined comment Monday. The county declined to reveal how much New Era offered for the property. Huron Township Supervisor David Glaab did not return messages seeking comment. The county wants to avoid the property going to a tax-foreclosure auction. “The worst thing that could happen is it goes to auction because then a speculator can pick that property up, sit on it, wait for the zoning they need, sue for zoning,” Rahal said. During a public Huron Township meeting last month, Hillwood CEO Todd Platt said, “We are not trying to buy this in a public auction and have an adversarial relationship with the community. We’re here to see if there’s a way that we can collaborate with each other,” according to a WDIVTV (Channel 4) report at the time.

two companies have worked together before on the Shelby Township distribution center for Amazon.com Inc. on the site of a former Visteon Corp. auto parts plant. “We are still in discussions with the county and the township and have no update to provide,” said Elizabeth Carpenter, a Hillwood spokeswoman, said Monday in an email. Rahal said the RFQ was active for 49 days and sent to more than 900 companies in an effort to solicit offers. Just two responses were received: One from Hillwood and another from Detroit-based New Era Community Group Inc., which is run by Delores McKinney, its president and founder. Rahal said New Era was “never able to provide proof of sufficient financing in order to make the county comfortable to exercise the right of first refusal in the time we need.”

New Era has proposed the Michigan Entertainment Complex for Athletes, a $60 million to $90 million indoor and outdoor athletic facility with hospitality, educational and culinary space, according to promotional materials on the company’s website. Rahal said the county was not “provided any proof of sufficient financing in order to make the county comfortable to exercise the right of first refusal in the time we need.” The race track was open 2008-10, and it had been listed for sale for $8 million three years ago. The county spent $26 million during the Robert Ficano administration putting infrastructure to the site to get the track open, Rahal said during an interview earlier this year. At the time of the 2016 property listing, demolition on the site was taking place as a result of the county threatening a nuisance abatement lawsuit. The massive property on Vining Road between Sibley and Pennsylvania roads, featured a 1-mile horse-racing track, a 12,000-square-foot pavilion with restaurant and bar equipment, 15 horse stables and significant paved parking space, according to the listing from Southfield-based Signature Associates Inc., which had marketed the property. The county issued a request for qualifications in January, with responses due by March 15. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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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 LY 2 9 , 2 0 1 9

State health chief: Medicaid work rules will drive up uncompensated care, cost lives By Chad Livengood clivengood@crain.com

ACME — The state’s top health official predicted Thursday that Michigan’s forthcoming work and employment-reporting requirements for low-income adults on Medicaid will lead to more uncompensated care for hospitals and lower life expectancies. Robert Gordon, director of the Michigan Department of Health and Human Services, said his agency is trying to take proactive measures to educate the nearly 680,000 low-income adults in the Healthy Michigan program about the Legislature’s work requirements that go into effect Jan. 1, 2020. “It would be easy for me in my seat to say, ‘This is not our fault, it is not our problem, just let the chips fall,’” Gordon said during an appearance at the Michigan Association of Health Plans’ annual conference at the Grand Traverse Resort and Spa. “We want to communicate exactly the opposite of that: It is our problem, it is all of our problems. We all know that without insurance, there will be more people in emergency rooms, there will be more uncompensated care costs. More importantly, there will be more people suffering and more people living less long than they should.” Gordon shared the stage earlier this month at the MAHP conference with Anita Fox, director of the Department of Insurance and Financial Services, for a joint interview conducted by Crain’s Senior Editor Chad Livengood.

“We’re trying to make the process as smooth and reduced friction as possible. What we know from other states is that people don’t comply with these requirements, not because they’re not working … because they don’t know how.” Robert Gordon

Fox and Gordon addressed a range of topics and issues affecting the state’s health insurers and medical providers, from multimillion-dollar information technology challenges at both state agencies to an ongoing study of creating a state-run reinsurance pool for high-risk, high-use medical users. But the biggest looming issue facing the state’s health insurance companies that operate Medicaid managed care plans for the state is the specter of tens of thousands of Healthy Michigan enrollees being thrown off the program next year for failing to meet the new work requirements. Democratic Gov. Gretchen Whitmer has opposed the Republican-controlled Legislature’s mandate requiring able-bodied Medicaid

Gordon

Fox

Need to know

 DHHS director worried about effects of Medicaid work requirements  State agencies trying to educate Healthy Michigan recipients about new rules  Insurance chief says surprise billing practices will be "addressed one way or another"

recipients ages 18-62 report at least 80 hours a month of work or job-training activities to the state in order to keep their taxpayer-funded health care. The law provides exemptions for pregnant mothers, adults caring for children under age 6, people with disabilities, caretakers of disabled dependents and individuals with a medical condition that prevents them from working. During his opening remarks, Gordon said the administration is “trying to stop something really bad from happening.” Gordon later said the department is “working day and night” on educating Medicaid recipients on why and how they will have to go about reporting their efforts to work at least 20 hours per week, find work or get retrained. State officials have studied lessons learned from Arkansas’ rollout of Medicaid work requirements, which resulted in more than 18,000 low-income adults or 7 percent of the expanded population losing their insurance. At a 7 percent loss rate, that would amount to nearly 48,000 Medicaid recipients in Michigan. “We’re trying to make the process as smooth and reduced-friction as possible,” Gordon said. “What we know from other states is that people don’t comply with these requirements, not because they’re not working … because they don’t know how.” Last month, the Senate passed a bipartisan two-bill package that would curtail some of the reporting requirements for Medicaid recipients. A bill sponsored by Sen. Curtis Hertel Jr., D-East Lansing, would change the day for Medicaid recipients to report their work hours from the previous month from the 10th day of the month to the last day. Senate Majority Leader Mike Shirkey, R-Clarklake, sponsored the second bill that would create an exemption for the monthly reporting requirement if DHHS has other data to confirm the individual is working, such as a pay stub from income-verification requirements. “It is a credit to supporters of work requirements that they acknowledge this need that it will move us away from forcing somebody who’s work-

ing, where we have their data, to also report,” Gordon said. “We’ll just be able to move them into the exemption pile.” Gordon said the department is developing “a simple process” for Medicaid recipients to report their working status by automated phone or online. DHHS plans to mail every Medicaid recipient a letter explaining the mandate as well as sending them text messages, though Gordon said “these tools that we have are of limited effectiveness.” Whitmer has asked the Legislature for $10 million to fund a public education campaign about the work requirements. With less than six months to go before the work rules go into effect, the GOP-run Legislature has not yet approved the funding request. But the state officials acknowledged even a public awareness campaign could have shortcomings.

“You can write all of the content in the world, you can put it up on websites, we can have apps and if it doesn’t reach the right group of people in the right time ... it doesn’t matter.” Anita Fox

“You can write all of the content in the world, you can put it up on websites, we can have apps and if it doesn’t reach the right group of people in the right time ... it doesn’t matter,” Fox said. Fox encouraged health insurers to educate Healthy Michigan enrollees on the work requirements.

Surprise billing During the hourlong interview before about 400 attendees at MAHP’s annual conference, Fox addressed the emerging issue of so-called “surprise” and balance billing practices by hospitals that send patients bills for out-of-network support services such as the anesthesiologist, the radiologist or an ambulance service. The state insurance department wants to lower the rate of billing disputes it has to arbitrate between insurers, medical providers and health care consumers, Fox said. One potential legislative solution insurance companies are advocating for is to set a fee schedule based on a percentage of Medicare rates for outof-network providers who perform work at a hospital but are not part of a negotiated network with the insurer. “It is a problem and it is going to be addressed one way or another,” Fox said. “... If we can’t come to an agreement about how to allocate it between us, let’s have the Legislature do it so at least the results are clear.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

CANNABIS REPORT Coverage of an emerging industry in Michigan

The state’s legalization in 2018 of recreational cannabis use marks its entry into the marketplace. Follow our coverage as activity in this emerging field heats up and as key players look for roles in the cannabis industry.

Visit crainsdetroit.com/cannabis

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

DEALS & DETAILS EXPANSION

NEW PRODUCTS

J SFL Companies, a logistics services company, has expanded and moved its headquarters from 3254 University Drive, Suite 180, Auburn Hills, to 303 E. Third St., Suite 200, Rochester. Phone: (859) 344-5100. Website: sflcompanies.com

J Edcor Data Services LLC, Troy, an education benefits administration software provider, has introduced a Freedom Student Loan Assistance Program, designed to help employers administer employee repayment programs for their employees’ student debt. Website: edcor.com

CALENDAR THURSDAY, AUG. 1 Professional Edge Workshop. 8-9:30 a.m. Birmingham Bloomfield Chamber. Chamber member and ambassador Ken Seawell leads a workshop titled “Investing in Relationships: The Art of Investing in Long-term Mutually Beneficial (Business) Relationships.” Birmingham Public Schools, Beverly Hills. Free. Email: thechamber@bbcc.com

UPCOMING EVENTS Employee Turnover Trends in Oakland County. 1:30-3 p.m. Aug. 6. Oakland County Michigan Works! and Workforce Intelligence Network. Oakland County employers were surveyed on employee turnover in Southeast Michigan. Survey findings include: Employee turnover rates and related costs; effective management and communication strategies; removal of barriers to work success; employee training, including onboarding programs; promotion pathways and employee feedback mechanisms. L. Brooks Patterson Building 41W Conference Center. Free. Con-

DETROIT ARCHITECTURAL GROUP

Alrig USA is planning an $11 million development that includes five buildings and a community park in Woodhaven.

tact: Liz Rivard-Weston phone: (248) 858-0922; email: rivardwestone@ oakgov.com. Website: eventbrite. com/e/ocmw-employee-turn over-survey-highlights-briefing-tickets-64001533309 National Association of Women Business Owners Greater Detroit Chapter Women on Shore 2019. 5:30-8:30 p.m. Aug. 7. The Seventh Annual Women on Board event’s theme is “Connecting Capital, Capitol, Community and Confidence to Grow Your Business.” Waterview Loft, Port Detroit. $165 nonmember VIP; $145 nonmember dinner only; $150 member VIP; $125 member dinner only. Contact: Michele Leno, email: admin@nawbogdc.org; phone: (313) 961-4748 Website: nawbo.org Second Annual Detroit Chinese Business Association Venture Club Banquet. 5-8 p.m. Aug. 12. DCBA. Speaker: Winston Wenyan Ma, CEO, China Investment Silkroad in Beijing and adjunct professor, NYU. Bloomfield Hills Country Club. $100 members; $150 nonmembers. Website: dcba.com

$11 million development, park with amphitheater planned in Woodhaven By Kurt Nagl knagl@crain.com

Developers are planning an $11 million development and a new park with an amphitheater on a 9-acre piece of land in Woodhaven that has sat vacant for 30 years. The five-building, 30,000-squarefoot Park Promenade will go up at the corner of Allen and West roads with the existing Meijer there serving as its anchor, according to a news release. Bingham Farms-based Alrig USA Development is the developer, Wyandotte-based Detroit Architectural Group is the architect and the general contractor has yet to be selected. Chick-fil-A has signed on to be the first tenant and will occupy one full building in the development. It would be the 13th store in Michigan for the Atlanta-based chicken sandwich chain, according to its website. The company had a slow start in the market but appears to be growing its footprint in Michigan quickly.

Need to know

JJ30,000-square-foot commercial

development with five buildings planned JJLand has been vacant for 30 years JJBingham Farms-based Alrig USA is the developer

Other tenants have not been named. The buildings are suited for retail, office and health and wellness, the release said. “Regional and national tenants alike — from food and beverage to health and wellness concepts — have shown significant interest in and excitement about this project,” Brandon Schram, who is heading up the project for Alrig, said in the release. The city of Woodhaven approved the project last week. Groundbreaking is scheduled to take place this fall, and tenants are expected to open in the spring.

The site was formerly occupied by a pipeline coating company. The developer is working with the Michigan Department of Environment, Great Lakes and Energy to designate the project as a brownfield site. It is seeking grants and incentives for the project totaling $2 million. Alrig will also build a 1-acre community park tied into the development. It will include an amphitheater, playground, pond and green space. Once delivered, the city of Woodhaven will maintain the park, the release said. The size of the amphitheater is still being worked out. “The park will be a cornerstone of the project — a gathering place the encourages a healthy lifestyle while providing entertainment and enrichment for the entire community,” Jeff Harris, city administrator of Woodhaven, said in the release. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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Brieden Consulting Group is please to announce that Debbie DoBiesz has been promoted to Vice President. Debbie will be responsible for the development of our client management and administrative staff, as well as managing the oversight of process improvement initiatives. Brieden Consulting Group is a Michigan based employee benefits management and consulting firm, specializing in self-funded employer plans, enhancing each client’s culture by engaging leadership and enabling technologies.

Enterprise Community Partners Enterprise Community Partners is pleased to announce that Melinda Clemons has been promoted to Vice President and Detroit Market Leader to expand its work in creating healthy, equitable communities, starting with affordable homes. Melinda will continue her leadership in advancing local programs, polices, and socially driven capital. A Detroit native, she is passionate about fostering inclusive growth and plans to expand programs that advance economic mobility to close the racial wealth gap.

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UNITED SHORE FROM PAGE 1

“Every few years, it seems like they are almost doubling their size,” said Eric Banks, principal, partner and executive director of brokerage services for Bingham Farms-based Dominion Real Estate Advisors. He worked on the sale of United Shore’s previous building in Troy, which is 275,000 square feet. “It’s quite extraordinary.” It’s the latest move in the long-game battle for talent and market share between United Shore, of which Ishbia is president and CEO, and Detroit-based Quicken Loans Inc., headed up by founder and chairman Dan Gilbert.

By the numbers Here is an approximate breakdown of the costs for the new United Shore Financial Services LLC headquarters campus: Acquisition of 750 South Blvd.: Approximately $50 million, according to a source familiar with the matter 

 Initial build-out of 750 South Blvd.: $25 million  Bridge construction between 585 South Blvd. and 750 South Blvd. and future build-out: $80 million  Acquisition of 585 South Blvd.: $40 million

Build-out of 585 South Blvd.: $60 million 

Booming business

Existing tenants

Ishbia says United Shore, the nation’s largest wholesale mortgage lender, had a record $41 billion in mortgages last year and is on pace to do $100 billion this year, shattering 2018’s number. Data from Bethesda, Md.-based trade industry publication Inside Mortgage Finance show that United Shore had $17.56 billion in mortgages in the first quarter, about $5 billion less than Quicken Loans’ $22.5 billion but far ahead of United Shore’s best quarter last year, which was $11.372 billion. Preliminary second-quarter data show that United Shore did $28.3 billion, putting 2019 at $45.86 billion for the first half of 2019 and on pace for $91.72 billion for the year. IMF preliminary data has Quicken at $32 billion, putting it at $54.5 billion for the first two quarters, on pace for $109 billion. Ishbia anticipates $220 billion by 2025. It’s an ambitious, lofty goal, but one Ishbia believes is achievable. He said more than half of the mortgage business used to be done through independent mortgage brokers who can shop for the best rates for consumers with Flagstar, Quicken Loans, United Wholesale and other lenders. But during the economic collapse 10 years ago, many of them went out of business. “What we are seeing is that channel went from 56 percent of the market down to 7 percent, and now it’s back to 20.3 percent in the first quarter. We think that’s going to get to 30 to 40 percent in the next five years,” Ishbia said. “If the broker channel doubles its presence but the $1.1 trillion mortgage market stays the same, we double our business because we are only in the broker channel.”

United Shore Financial Services LLC says it is honoring the existing leases of the tenants currently in the roughly 900,000-square-foot building it plans on buying at 750 South Blvd. in Pontiac for its corporate headquarters expansion, which would begin with Mat Ishbia’s company taking 200,000 square feet. Those tenants are:

No time to build The first phase of United Shore’s headquarters move was revealed two years ago amid a company growth spurt that prompted it to pay $40 million for the building and 60 acres of property at 585 South Blvd. and spend an additional $45 million renovating it with employee perks like a $2.9 million full-size basketball court, gym, health clinic, massage parlor, Starbucks and other amenities. Ishbia, speaking earlier this month in a glass conference room on its third floor, said the new building would feature similar levels of employee amenities, one of the key ways it attracts and retains talent. By the time the first quarter rolls around, around 4,700 people are expected to be working in the building, about double what moved into it. Ishbia said he could have built a new building on land he owns but it would not have been constructed in time to meet the company’s growth trajectory. “The building is already in place,” he said of 750 South Blvd. “I need the



XALT Energy LLC, 50,000 square feet.

erae AMS USA Manufacturing LLC, 160,000 square feet. 



Fanuc America Corp., 325,000 square feet.

Automotive Media Group, 150,000 square feet. 

Source: United Shore Financial Services LLC

200,000 square feet now.” The move comes just two years after Ishbia revealed that he had outgrown the 275,000-square-foot building in Troy at 1414 E. Maple Road, where much of its growth from 400 employees in 2010 to 2,100 employees in 2016 took place. He doesn’t anticipate seeking tax incentives for the project. He turned down $1.9 million in brownfield financing last year. “We are not going to request anything,” he said.

Local rivalry The two mortgage giants have locked horns more publicly in recent months even though they primarily operate in different branches of the mortgage industry, with Ishbia making the case that United Shore is a better place to work than Quicken (both companies tout their workplace culture) and Gilbert executives questioning United Shore’s reported $1.086 billion in revenue in 2017. There was also a kerfuffle over fliers outside Quicken offices last year. Quicken Loans’ parent company, Rock Ventures LLC, had $6.56 billion in revenue in 2017, according to the most recent Crain’s Book of Lists. That’s up 0.9 percent from its $6.5 billion in 2016 revenue. United Shore grew 26.7 percent in the same time period, increasing revenue from $857 million to $1.086 billion, the company reported to Crain’s (Quicken has called into question those revenue figures). Rock Ventures ranks No. 2 on Crain’s list of the top 200 private companies in Southeast Michigan. Quicken Loans has also rapidly expanded its footprint post-recession following a move from the suburbs to downtown Detroit. It started off with 1,500 employees and has ballooned to more than 17,000 spread across renovated skyscrapers and midrises, mainly in and around Campus Martius. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

21 21

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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 LY 2 9 , 2 0 1 9

PROJECT

mation, the city has engaged in argumentation, violation the policy of the state of Michigan that ‘a public body shall maintain strict neutrality in each election and that a public body or a person acting on behalf of a public body shall not attempt to influence the outcome of an election.’” Downtown Publications reported that complaint was dismissed.

FROM PAGE 3

“The plan and the ballot issue would complete the vision laid out by the city over the last 20 years. Unfortunately, residents are being bombarded with lies and misinformation from the ‘no’ campaign, which has caused confusion over an otherwise positive and straightforward issue,” said Emily Bir, senior project manager at former Michigan Republican Party chairman Bobby Schostak’s Birmingham-based consulting firm Templar Baker Group, which has been hired by the development group, Woodward Bates Partners LLC. Critics argue that the process and project itself have been flawed from the beginning, citing a raft of issues ranging from the project architect’s early involvement with a request for proposals to questioning whether the large parking deck that would be partially paid for with the bond money would really address the city’s parking woes. They also argue that an existing parking deck that would be demolished and replaced should instead simply be repaired for far less cost, and allege that the developer got a sweetheart deal in a land lease. Clinton Baller, a critic who founded Troy-based Avid Payment Solutions and is running for a seat on the Birmingham City Commission, said the amount of activity around the bond issue is unprecedented. “Nothing has ever occurred in Birmingham like this,” said Baller, who started the Balance for Birmingham political action committee, one of two groups along with David Bloom’s Birmingham Citizens for Responsible Government, opposing the proposal.

Do-or-die vote on Aug. 6 After polls close Aug. 6, residents will learn whether the $140 million mixed-use development has cleared perhaps its most daunting hurdle: the public vote. Passage means the development moves forward. A defeat means it dies. “There was never discussion at any of the committees in the history of the project of a Plan B,” said Joseph Valentine, the city manager. Although the project’s roots can be traced back to the mid-1990s and the adoption of the Downtown Birmingham 2016 Master Plan, the project began moving forward in earnest in May 2016, when the city issued a request for qualifications for developers to develop the roughly 4-acre property west of Old Woodward Avenue and north of Willits Street at the north end of the central business district. Four responded: Morningside USA out of Chicago; Woodward Bates Partners LLC; Southfield-based Redico LLC and Birmingham-based architecture firm McIntosh Poris Associates; and Birmingham-based TIR Equities LLC, which is run by Ara Darakjian of Pierce Street’s Darakjian Jewelers Inc. TIR Equities has filed a federal lawsuit against the city for what it describes as a selection process rife with favoritism in what it called “an unjust, unfair and unconstitutional ‘competitive’ bidder selection process.” (The city denies wrongdoing.) By May 2018, the city’s Ad Hoc Parking Development Committee recommended Woodward Bates Partners to the City Commission,

Disagreement over details

A rendering of the RH store planned for downtown Birmingham if the measure passes.

which directed city staff to negotiate with the developer on the property. By June TIR Equities was eliminated from consideration. In the end, Birmingham selected Woodward Bates Partners as the development group, which counts local real estate executives as its members: Ron Boji, president of Lansing-based developer The Boji Group; John Rakolta Jr., chairman and CEO of Detroit-based construction giant Walbridge Aldinger Co.; Paul Robertson, chairman of Bloomfield Hills-based homebuilder Robertson Bros.; and Victor Saroki, founder of Birmingham-based Saroki Architecture. As part of the plan, the existing parking deck and surface lot with about 745 spaces would be demolished and make way for a real estate development with 30 rental residential units, 25,000 square feet of office space and a total of about 65,000 square feet of retail space across multiple buildings. In addition, there would be 1,159 parking spaces. Counted in the retail space is the anchor RH store, which would take the place of the Corte Madera, Ca-

lif.-based (NYSE: RH) retailer’s 23-year-old, 10,000-square-foot location in the Somerset Collection in Troy. Valentine said in the spring that the new parking structure would be funded with $7 million from the Birmingham parking system’s reserve funds; $3 million from a parking structure special assessment district; and the balance from the bond issue.

Dueling complaints The campaign has been fraught with spats. Earlier this month, Baller and Bloom, who formed the Birmingham Citizens for Responsible Government group, sued the city, Mayor Patty Bordman and Tim Currier, the city attorney, over alleged violation of their First and Fourteenth Amendment rights for a July 8 incident during which Bordman and Currier said Baller and Bloom couldn’t speak about the issues pertaining to the proposal during a public comments portion of a City Commission meeting. The case is in U.S. District Court.

Downtown Birmingham has seen a swell of new construction.

RH/SAROKI ARCHITECTURE

Bordman declined comment. Complaints were also lodged with the Michigan Secretary of State earlier this month against Bloom’s and Baller’s groups for not including disclaimers about who was paying for signage, a website and a mailer critizing the proposal. Downtown Publications reported that the state Bureau of Elections dismissed the complaint against Bloom’s group because unclear images of the signage were provided to the bureau; the complaint against Baller’s group was upheld and he was issued a formal warning. The same day Birmingham resident Jay Shell lodged the complaints against Bloom’s and Baller’s groups, Baller filed one against the city claiming that a city mailer about the bond issue crosses into the realm of political advocacy. “In a mailer published last week online, promoted in Facebook ads, and due to be sent to all Birmingham residents within the week, the city has labeled opposition opinions as ‘myths,’” Baller wrote. “Going far beyond providing purely factual infor-

LARRY PEPLIN

The flaws in the plan are numerous, Baller says. For example, the city says there would be a net increase of 414 or so parking spaces, but critics calculated that based on various zoning requirements, the development would actually create a net loss of 33 spaces. (The city responds by saying that a study determined that 278 spaces were needed for the development.) Boji said two buildings in the second phase will have their own parking (73 spaces) that isn’t included in the 1,159 spaces, and that RH will only need 92 spaces, not the 220 or so that Baller says. Baller says “the city is making shit up” when it comes to the parking space projection for RH. “Even with everything fully developed there will still be a net gain of over 300 parking spaces to meet future demand if needed,” Boji said. Critics also say the city is not getting fair market value for the land, which Baller says is about $11 million an acre. (A roughly 0.6-acre parcel of property at Old Woodward Avenue and Brown Street downtown to the south sold for $7 million, or $11.6 million per acre, 3 1/2 years ago and is now under construction as the Daxton Hotel.) Tiffany Gunter, assistant city manager for Birmingham, said the city is expecting to lease the 0.295 acres of land on which the RH store would be built to Woodward Bates and receive between $146,000 and $158,000 per year (with annual cost escalators tied to the consumer price index) in lease payments and about $300,000 a year in property taxes. The parcel was appraised at $2.4 million, or $8.14 million per acre, she said. The remainder of the first phase — the parking deck and the Bates Street extension, plus first-floor retail in the garage — would be on the remaining 1.831 acres, which would remain owned by the city. The remaining acreage making up the second phase is anticipated to be leased to Woodward Bates, although a formal agreement has not been made. In addition, the parking garage at 333 N. Old Woodward Ave. that would be torn down is structurally safe and only needs small fixes totaling about $6.3 million, critics say. The city agrees that it is safe but says $2 million in repairs are needed every 5-10 years. But it also says “There are potential hazardous conditions that must be addressed now.” In the end, Valentine says, the project is all about parking, which is at a premium in a city where its five publicly owned decks totaling 3,487 spaces are, on average, 97 percent full daily. “I think the fundamental issue here is that the city has a need to address parking in the downtown, and that shouldn’t be lost in this conversation,” Valentine said. “That has been the genesis for this whole project coming together ... Demand is going to grow because the demand for development exists.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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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 LY 2 9 , 2 0 1 9

FOSTER CARE FROM PAGE 1

Methodist will begin offering those services along with the merged foster care, residential care, adoption and independent living services it has long offered and new substance abuse services it launched in Detroit early this year. The combined nonprofit will serve 2,500 children and families a year, including 300 children in direct foster care. Some number of the roughly 50 employees remaining at CSS will be offered positions at Methodist as it takes over operation of the programs. But an undetermined number of positions will be consolidated with its own 150 employees, Roach said. While there are no plans for CSS directors to join Methodist’s board, CSS President and CEO William “Chuck” Jackson will join Methodist as chief strategy officer. “Over the years, (CSS) had just simply not done the work it needed to remain competitive,” Jackson said. CSS operated for 67 years as Catholic Social Services of Wayne County until 2013, when it broke from the Archdiocese of Detroit amid a consolidation of Catholic charities in the region. Years of lack of investment in infrastructure, especially around data collection to measure impact, hampered CSS’ ability to remain competitive in bidding for contracts and grants, Jackson said. That led to the loss of a contract worth more than $500,000 with the Michigan Department of Corrections in 2017, and more recently, a $140,000 grant from United Way for Southeastern Michigan, Jackson said. CSS tried to cut its costs by reducing employees and putting one of its two buildings up for sale, but it still wasn’t able to make the needed investments in its operations. “It came down to a desire to increase our impact ... and a recognition that we were not able to be able to do

EPICUREAN FROM PAGE 3

An early-morning text Alerted by text early Sunday, Rabbi Shemtov opened his email and saw two letters sent from Ryan Moore's address at Epicurean just after midnight — one from Moore, and one forwarded along. "I didn't sleep much since then," Shemtov says. The emailed letters, both obtained by Crain's, said that "recent developments" had "forced" the Epicurean Group to "make some very difficult decisions with respect to its business." The email sent to employees said their "at-will employment with the Restaurant is being terminated" as of the end of the day Saturday, July 20; that wages would be paid through last date of employment; and that restaurant management would transition back to Dickson. Dickson told Crain's last week that he wasn't approached to buy back Epicurean. He aimed in selling the company to retire and leave the restaurant business behind. He emphasized that Epicurean properties aren't under his ownership, and said it was "a little concerning" that the email "kind of implied that (the employees) were coming back on my payroll." But regardless, Dickson scrambled early last week to

LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

The building at 1600 Blaine in Detroit will be transferred to Methodist Children’s Home as part of the deal.

that on our own,” Jackson said. Data collection and evaluation has not historically been a part of the way social services agencies do business, said Liz Gordillo, a program manager at Grand Valley State University’s Dorothy A. Johnson Center for Philanthropy. But social services agencies and the nonprofit sector as a whole are increasingly facing demands from government, foundation funders and donors for more information on where dollars are being spent and what impact they have, she said. At the same time, funders and donors are directing more of their support directly to programs rather than infrastructure or capacity building, with fewer unrestricted dollars to use for infrastructure investment, said Gordillo.

“This is a new way of doing business for social services agencies in the nonprofit sector, reporting and using evaluation for learning within your organization, having standardized evaluation and processes to collect and report data to secure new funding,” she said. The addition of CSS’s programs builds on new child-abuse-prevention and substance-abuse services that Methodist launched early this year at Durfee Innovation Society, the former school in central Detroit renovated by the nonprofit Life Remodeled. “Abuse and neglect doesn’t happen in a vacuum,” Roach said. “We knew it was critical if we were going to help these children ... we had to take care of the entire family.” Methodist and CSS saw that togeth-

er, they could have a larger impact on strengthening those families, he said. Through the deal completed July 12, CSS transferred its programs, contracts and an apartment building at 1600 Blaine St. in Detroit, which provides transitional housing for previously homeless mothers, to Methodist Children’s. No money changed hands in the sale. Methodist also will take on a month-to-month lease CSS had in Dearborn as a space to provide some outpatient substance abuse services. Other substance abuse programs, along with foster care, and senior programs transferred by CSS will now be offered at Methodist Redford and Durfee sites, Roach said. The combined organization will operate on an annual budget of just under $15 million.

help connect former employees with paychecks. The status of the company and its ownership is murky. It appears that Big Red Orchard, a 90-acre farm in Washington Township that Moore bought last fall and folded into Epicurean, is still functioning. But Moore is seemingly no longer involved in other Epicurean properties, according to several former employees interviewed by Crain's, as well as Dickson. Dickson and former Epicurean President Eric Djordjevic declined to comment specifically on Epicurean's financial health. Moore was spending time seeking additional investors for Epicurean, according to a source with knowledge of the situation who spoke on the condition of anonymity. In the week before the layoff notice was sent out, some extra wine stock was seen being sold, and efforts were made to sell an unused food truck.

jobs had been secured for virtually all former employees. Shemtov, the executive director of the Friendship Circle nonprofit in West Bloomfield, said he never planned to close Soul Cafe. Epicurean operated the venue on a contract since it opened in 2016, but Friendship Circle owns the space and equipment. The 50-seat cafe trains and employs individuals with special needs — 10 as of Tuesday, out of around 25 employees. "The mission is too important to shut down," Shemtov said. But, "for half a day, we didn't know: Are all the employees going to come back? With this kind of chaos, would they come back after being terminated?" After Shemtov woke, he rattled off a 3:47 a.m. email to three board members. The list included Elliott Baum, the board vice president who also owns Walled Lake-based Blue Ribbon Restaurants, a Famous Dave's franchisee with four Michigan locations. "Can you discuss this any time on Sunday?" Shemtov wrote. "... We need a plan." Baum was on a conference call by around 8 a.m. He called his accounting team and Shemtov wrote a letter to employees Sunday and by Monday, the cafe was open, with Baum volunteering his employees' time to handle back-end tasks such as finance and payroll.

Now, Friendship Circle is paying the employees and buying the food. Shemtov said that Epicurean was about breaking even on the cafe. Baum said his company will continue to backstop until a more permanent solution comes together. Former Epicurean catering operations Epic Kosher Catering and Milk & Honey also will continue to operate under Friendship Circle for now. The Michigan Design Center's onsite, 42-seat cafe in Troy was closed last Monday due to insurance issues after Epicurean terminated its contract. But it reopened Tuesday, said Susan Todebush, executive vice president and general manager. Epicurean had run an eatery for six years at the showroom center that serves designers, architects and consumers. Dickson connected Todebush on Monday with Gordie Kosch of Rochester-based Kosch Catering. Todebush said Kosch came an hour after they spoke on the phone. "We hammered out our catering agreement on the spot," Todebush said, and the three existing employees were rehired. She expects new ideas to come out of the deal. No.VI Chop, the Epicurean restaurant at the Four Points Sheraton in Novi, is still open and staff are being paid, hotel general manager Keith Alexander confirmed last week. He declined to say with whom the staff are now employed. The Southfield hotel that houses

Sunday scramble Liz Bakunovich, former director of catering for Epicurean Catering and Events, said she found out via the midnight email alongside other management. "We were all in the same boat," she said. But the Epicurean properties reopened with little or no time closed, and as of last Thursday, Dickson said

Methodist, which has been in operation since 1917, holds an investment portfolio that provides distributions to support its operations. According to its audited financial statement, which include the results of its investment portfolio as well as operations, it had $78.5 million in net assets at the end of 2018. On an operational basis, it had $8.3 million in non-investment, operating revenue in 2018, up about $800,000 from the year before with increases in government funding and contributions. Its expenses for 2018 were $8.8 million, up from about $8.5 million in 2017. Revenue for CSS dropped to $4.57 million in its fiscal 2018 ended June 30, down from $5.3 million the year before. It reported a loss of $436,962, following near-break-even results of just under $55,000 over expenses in 2017. Its net assets totaled $2.58 million at year’s end, down from $3.02 million in 2017. The social services nonprofit put its main location, a 35,000-square-foot building at 9851 Hamilton Ave., northwest of Detroit’s New Center area, up for sale before the Methodist deal. The move was one way CSS hoped to generate cash to reinvest in its infrastructure, Jackson said. CSS expects to close in August on the sale of that building. Jackson declined to identify the buyer, citing a confidentiality agreement, but said he expects the sale will bring $700,000$900,000 when completed. With more programs under its management, Methodist Home is now looking at a few other locations in Detroit to lease or buy, Roach said. “We truly believe that we can further grow and expand these programs and services with our treatment model in treating the whole child and family unit and tackling challenges they face, such as grandparents raising their grandchildren, substance abuse, and mental health.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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Nomad Grill is now operating it and paying its employees, said Sahil Chaturvedi, general manager of the Best Western Premier. Plans for the future are still being "looked into," Chaturvedi said.

Buying Big Red, Epicurean Moore, principal of Conlan Abu, a holding company registered in Agoura Hills, Calif., near Los Angeles, also bought Big Red Orchard in a $2.45 million deal in September. Moore told Crain's in January that since moving to southern California, he had dreamed of owning a farm and restaurant. After buying Big Red, Moore acquired Epicurean Group in January from Dickson, who had owned the hospitality company since buying the assets of the now-defunct Matt Prentice Restaurant Group in 2009. Moore and his family moved back to the region in July 2018 and planned big changes. He opened a 49-seat restaurant at Big Red in September called Beef & Jeff's Meatery & Smokehouse. It is now closed, at least temporarily, according to a sign taped to the door. Calls to Big Red were not returned. The farm has been closed for the summer. A Big Red representative said last week in a message that the orchard would reopen in "just a few weeks."

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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 LY 2 9 , 2 0 1 9

BRISBO FROM PAGE 3

The requirement for capitalization also made it challenging for many. So we set out to provide clarity on what those qualifiers were, but also understanding the capital requirements were a barrier. (Creating the medical regulatory framework) was the first time we’ve done this in the state. We put out the rules just a couple of weeks before we started accepting applications. So now we’re putting out the rules (for adult-use recreational) several months before we accept applications. People who want to pursue licensure have a lot of time to know what the regulatory framework is going to look like. When we get to the point of taking applications, everyone is going to be prepared on how they want to approach it. Despite recreational legalization in several states, the black market remains strong. How are you combating that to ensure a successful legal market?

The black market still persists. The success of the regulated market should decrease the black market. But we need to create a regulatory environment that allows businesses to get into the market quickly and be successful — to create a price point (for marijuana) that makes (the legal market) more desirable. We continue to work with our law enforcement partners, to be a resource for them, so they can work to get the black market businesses out of the market. I think a lot of this is about educating everyone on what the legal environment looks like, especially local elected officials and law enforement. Convince them that taking action against the black market is not anti-marijuana, but pro-regulated market. Tamping down the black market is not disrespecting the will of the voters, but making good on their will that a well-regulated market is successful.

On that note, we’ve seen many municipalities in other states opt out, leaving consumers to either travel considerable distances to secure marijuana or rely on the available black market. This seems to exacerbate the black market problem, no?

Anything that allows the black market to flourish concerns me. Providing access is key to a successful legal market, but there are multiple methods for providing access. We respect the will of communities to prevent a brick and mortar store in their jurisdiction, so we have regulated delivery service to allow access to those that don’t live near a retail establish-

“The success of the regulated market should decrease the black market. But we need to create a regulatory environment that allows businesses to get into the market quickly and be successful — to create a price point (for marijuana) that makes (the legal market) more desirable.” ment. Once we have a successful program, those communities on the fence will see this regulated market is flourishing and that will provide them a sense of comfort to participate and thus improve access. It’s incremental. We’re trying to replace a black market that’s been in place for 100 years and that doesn’t happen overnight. We’re starting hear conversations that people have a good understanding of the regulatory environment. That’s continuing to move in the right direction and we

play a critical role in getting that information out so we can have a successful and well-regulated industry. The black market also feeds on the hodgepodge of states that have legal weed and those that don’t — operators can sell for higher prices in states that don’t have legal access. Do you think federal legalization would solve many problems for state regulators?

I think it’s just a change. Easier? Harder? That can be interpreted a lot of different ways. There’s no guide for how to approach the evolution of the industry across the country. I think depending on how (federal legalization) is approached, it can have impacts on how we administer our programs. The economics of the black market are shifting as more states are coming on board with medical and adult-use programs. That eliminates some of the black market. But no matter what happens you have to be careful your state does not become a black market supplier for other states, which is why we’re working closely with our law enforcement partners. CBD oil (cannabidiol, designed to provide medical benefits without getting “high”) is everywhere. I see it’s now even sold at my local Kroger store. Are you surprised by its availability?

It’s hard for me to be surprised by anything anymore. CBD is a hot commodity. It’s popping up everywhere, but there isn’t a clear direction on what can and can’t be done in that space. In the lack of regulatory guidelines, people will fill in that vacuum. And they have. We’re working with the agriculture department ... about how that’s being regulated. It’s a challenge when the industry gets way out ahead of regulation, because then you’re trying to pull everyone back in while trying to be respectful of the operators who have invested in the space. A lot of this is still undefined. There’s also the public heath concern. As a regulator, we’re here to ensure the safety of the public. We just want to see clarity on the regulatory envi-

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EPICUREAN RESTAURANT GROUP

The interior of the Nomad Grill at the Best Western Premier Detroit Southfield Hotel, which is continuing to operate.

‘A perfect recipe' With Big Red and Epicurean under one umbrella, Moore's strategy was to transform the company into a regional farm-to-table force, with restaurants serving produce grown on orchard grounds. "Honestly, after the transition, it was a perfect recipe, as we had a

strong culture and were prepared to grow," said Eric Djordjevic, who ran Epicurean as its president for nearly eight years before stepping down in April, approximately three months after Moore became owner. He is now running food and beverage for the Inn at St. John's in Plymouth, he said. Executive Chef Kevin Green also left around the same time, Djordjevic

confirmed. "Ryan (Moore) came with an interesting business plan that appeared to align with what we needed to take Epicurean into the next generation," he said. He said that after a few months, he "saw the culture changing dramatically from what we had built over the last eight years ..." Djordjevic said he

ronment on CBD in the future. Across the U.S., businesses have largely maintained a zero-tolerance policy on marijuana despite legalization. But they are definitely assessing their drug-testing policies. Do you see attitudes changing as the industry normalizes?

I think you’ll see an evolution in a couple of ways. Those industries where there’s not a direct safety concern, they are already starting to look at their drug-testing policies. They can have whatever policy they want, the law dictates that. But when you’re looking at people where safety is a concern, that’s harder to change. One of the concerns is measuring whether someone has used marijuana in accordance with the law outside of the workplace versus whether they are impaired. That presents a challenge. Many companies have continued their zero-tolerance policies because there’s nothing reliable to measure impairment versus someone using the product lawfully. The science (on testing) needs to catch up so employers have a better resource to help inform their policies. I do think that’s critical. Let’s fast-forward to next year, when licenses are being issued and the industry is finally taking off under your framework. How would you define success?

A successful rollout is grounded in clarity. We don’t advocate for communities to take a certain approach. So as long as we provide the information so they can decide how to participate and we provide quick and clear licensure, that’s successful. It’s really about creating an environment where the industry flourishes and where we see the black market is diminished because of that success. We also have to be prepared to continue to evolve with the industry. We built in flexibility so we can do just that. Private industry always moves ahead more quickly than government responds, so our ability to adapt will also dictate our success. felt service, quality and attention to employees were suffering. He no longer saw it as his company to run — though Dickson owned it since 2009, Djordjevic had become its leader — and decided to leave it to Moore. Moore made positive, structural changes to Epicurean and sought to make its properties into a close-knit team, the source who spoke on the condition of anonymity said. At its peak, Epicurean had about 15 businesses, including restaurant Coach Insignia, which closed in 2017 after 13 years on the two highest floors of the Renaissance Center. The group currently lists eight businesses on its website, though one, the Plaza Deli in Southfield, has closed. This isn't the first time a business associate involved in the restaurant group has surprised Dickson. Epicurean was formed after Matt Prentice, facing a mountain of debt, was forced to sell the company to Dickson to keep it alive. Prentice stayed on after the 2009 sale to run operations, but abruptly left in March 2012, leaving Dickson a reluctant restaurateur at the helm of some of metro Detroit's most recognizable names at the time. "This organization has been a big part of my life for several years," Dickson said. "It's had its ups and its downs. It's had the highest highs and the lowest lows." Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

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

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

THE WEEK ON THE WEB

RUMBLINGS

Gemphire to combine with Boston-based company

Quicken Loans outing gooses Tigers attendance

JULY 19-25 | For more, visit crainsdetroit.com

emphire Therapeutics Inc. plans to combine with Boston-based NeuroBo Pharmaceuticals Inc. through a stock swap that will create a publicly traded company owned primarily by NeuroBo shareholders. In the proposed reverse merger, Livonia-based Gemphire (NASDAQ: GEMP) will change its name to NeuroBo Pharmaceuticals, and the combined company will be led by NeuroBo’s current president and CEO John Brooks, according to a news release Wednesday. Gemphire President and CEO Steve Gullans will be one of six directors for the new company, the release said. The deal calls for about 96 percent of the company to be owned by NeuroBo shareholders. A dollar value estimate for the all-stock deal was not disclosed. Gemphire’s market capitalization was about $11.3 million as of Friday. It is unclear where the post-merger company will be headquartered or what the future will be for Gemphire, but experts say it could be the end for the company. Messages were left with Gullans on Wednesday, as well as with spokespeople for Gemphire and NeuroBo. Gemphire also signed a deal with Beijing SL Pharmaceutical Co. Ltd., allowing the Chinese company to take Gemphire’s signature drug gemcabene to the Far East market, the release said. In the deal, Beijing SL pays Gemphire $2.5 million up front. Royalties from the successful commercialization of the drug would go to the combined NeuroBo company. “We don’t know that they’re shutting down the Gemphire stuff, but I wouldn’t be surprised if it’s the end of Gemphire not just in the name, but the end of Gemphire,” said Erik Gordon, professor at University of Michigan’s Ross School of Business. “They’ve been trying to peddle the company for a long time.” Gemphire was dealt a series of devastating blows last year. After the health of some patients declined in a pediatric trial when they used the company’s gemcabene drug, developed to treat liver disease, the FDA halted clinical trials. Although this followed previous reports of successful trials on adult patients, the company’s stock plunged and it lost most of its value. “When the FDA puts you on clinical hold and you’re a small company burning through cash, you got to get that resolved right away or you’re headed into the ditch,” Gordon said. “They did not get it resolved quickly.” Gemphire was trading at 72 cents per share as of closing Wednesday. The new, combined company — to be traded on the NASDAQ under the ticker NRBO — will focus on developing a treatment for diabetic neuropathic pain with its lead experimental drug NB-01, which is in late-stage, or phase 3, clinical development.

BUSINESS NEWS J The tax incentive package for Fiat Chrysler Automobiles’ $1.6 billion

BLUEWATER TECHNOLOGIES GROUP INC.

Bluewater’s building at 24050 Northwestern Hwy in Southfield, which it still occupies, was sold to Novi-based Applied Imaging last year.

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

$400 million Amount of incentives lined up for FCA’s planned Detroit engine plants

$800,000

Cost of building up Spirit Plaza, which will be a permanent park in downtown Detroit

Number of jobs to be created by expansion of software provider Llamasoft’s Ann Arbor headquarters

conversion of two Detroit engine plants into a new Jeep assembly plant and other investments in Southeast Michigan could top $400 million after additional tax increment financing measures are tacked onto the deal. The Michigan Strategic Fund’s board approved a Brownfield Act 381 Work Plan for redevelopment of the automaker’s idled Mack Engine II plant at Mack and Conner avenues that will capture $93 million in local and school taxes generated at the site over 30 years. J Supply chain management software provider Llamasoft Inc. is investing $10.7 million to expand its Ann Arbor headquarters and create 70 jobs. The move fits into the fast-growing company’s aggressive expansion plan and would allow it to attract and retain talent, according to a memo from the Michigan Economic Development Corp. J Ford Motor Co.’s second-quarter net income plummeted 86 percent to $148 million as the automaker took special charges related to its ongoing global restructuring and made costly updates to high-volume utility vehicles. But excluding the one-time items, Ford’s earnings before interest and taxes fell just 2 percent from a year earlier, to $1.65 billion. J Home sales in metro Detroit took a dip in June, an unusual turn for what is historically one of the busier months of the year. Sales of single-family homes and condominiums in Wayne, Oakland, Macomb and Livingston counties in June slipped by 4.4 percent to 5,441 from

the same period last year. J A fire last Monday at the Ilitch-owned former Gold Dollar bar outside downtown Detroit is being investigated as arson. The decrepit building at Cass Avenue and Charlotte Street was destroyed by the fire and will likely have to be demolished, Detroit Fire Department spokesman Dave Fornell told Crain’s last week. J The Michigan State Housing Development Authority has awarded low-income housing tax credits to five projects in Detroit that would attract more than $100 million in new investment and create or preserve 536 housing units. The 9 percent low-income housing tax credits will subsidize the construction of 235 housing units in Detroit, 218 of which will be reserved for individuals earning between $16,050 and $42,800 annually. J Troy-based food management company Continental Services has purchased a Pittsfield Township-based vending machine supplier, marking its sixth acquisition in two years. The purchase of Northern Vending Co. grows Continental’s client base as it continues to seek expansion, according to a Tuesday news release. J Bluewater Technologies Group Inc. is pouring $34 million into a new headquarters in Novi in a move from its home in Southfield that will generate 81 additional jobs.

CITY NEWS Spirit Plaza in downtown Detroit will become permanent, City Council members last week voted 5-4 in favor of keeping the park. New construction on the plaza, to truly “make it more permanent,” is planned to cost $800,000 and include a stage, playground, better seating, bike stations and enhanced green space, said Brad Dick, general services director for Detroit. J Detroit City Council unanimously passed an ordinance aimed at cutting greenhouse gas emissions in the city by 30 percent in the next five years. The ordinance forces the administration to measure the city’s emissions each year, said Councilman Scott Benson, who drafted the ordinance over the past three years. J Detroit bankruptcy creditor Financial Guaranty Insurance Corp. is trying to exit its ownership stake in the redevelopment of the Joe Louis Arena property on the Detroit River by selling to a local developer. J

sea of orange shirts took over the Detroit Tigers’ game last Wednesday, goosing the team’s paid attendance at the game to 33,735, one of the biggest crowds of the season. The orange shirts were courtesy of Quicken Loans, One Reverse Mortgage and other companies, which treated employees to an afternoon at the ballpark to celebrate a record quarter for the mortgage giant. The company said more than 10,000 employees attended the game. Paid attendance figures represent tickets sold and don’t reflect how many people attended the game, because of potential no-shows. Quicken Loans hit a record high of $32 billion in mortgage originations for 2019’s second quarter, up from $21.1 billion in 2018’s second quarter. The orange shirts they wore to the game read “Best Quarter Ever.” Winning records draw fans, and the Tigers’ struggles in the standings have crimped attendance. The Tigers have averaged 19,864 fans per home game so far this season as of last Thursday, according to ESPN.com. The team is in the middle of a re-

QUICKEN LOANS

More than 10,000 employees from Quicken Loans and its sibling companies wore orange shirts that read “Best Quarter Ever” when they attended a recent Tigers game.

building period and its 30-67 record as of last Thursday was the worst in baseball. Weekday afternoon games like Thursday’s tend to be popular for corporate group sales. The Quicken Loans employees saw the Tigers shut out 4-0 by the Philadelphia Phillies.

PETER BAKER STUDIOS

Orchard Lake Country Club is finishing up $7.1 million in renovations started last November.

Orchard Lake Country Club wraps up $7.1M renovation O

rchard Lake Country Club has wrapped up most of the $7.1 million overhaul of its clubhouse and lake house that began in late November. The private club in affluent Orchard Lake in Oakland County reopened its 59,000-square-foot clubhouse and nearby 6,000-square-foot lake house around Memorial Day, said Peter Swick, chief operating officer and general manager of the course. Crews are still putting the finishing touches on the property, including a new porte-cochère that is scheduled to go up at the end of the season. The member-funded renovations include new interior and extensive structural work on both buildings. The lake house was outfitted with an expanded terrace and new deck overlooking Orchard Lake. The clubhouse has new fitness equipment and locker rooms, as well as a new pro shop and kitchen. “As with any club, you need to make sure that your amenities are

keeping pace with the changing pace of the membership,” Swick said. Orchard Lake Country Club has about 600 member families — one immediate family counts as one membership no matter the size, Swick said. He declined to offer further details on the membership structure, including the cost of initiation fees and yearly dues. He said membership numbers have remained steady over the past decade. The country club was established in 1926 and offers an 18-hole championship golf course, sailing, paddle boarding and racket sports, according to its website. Connecticut-based C2 Limited Design Associates, which has been contracted for several high-profile projects such as Congressional Country Club in Maryland, led design for the renovations. Royal Oakbased Ronnisch Construction Group Inc. managed the project, and the architect was Farmington Hillsbased Nudell Architect.

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