Crain's Detroit Business, Sept. 9, 2019 issue by Crain's Detroit Business

Q&A with Bosch executive Charlie Ackerman

Tayion Collection aims to bolster big-box, online presence Page 6 Tayion designer Montee Holland

Page 3

SEPTEMBER 9 - 15, 2019 | crainsdetroit.com POLITICS

Coulter tries to fill Patterson’s shoes without being lame duck

RETAIL

TAKING CHARGE — WITH AN ASTERISK

State’s largest tobacco-store chain blocked from pot market By Dustin Walsh dwalsh@crain.com

The state has stubbed out potential growth for Michigan’s largest tobacco retailer. The Troy-based Wild Bill’s Tobacco, with more than 100 shops in Michigan and Ohio, sought to enter and dominate Michigan’s marijuana dispensary market, but regulators denied all of the group’s applications last month. In another blow last week, Gov. Gretchen Whitmer blanket order banned the sale of flavored electronic cigarettes — Wild Bill’s operates upwards of 20 vape shops called Mr. Vapor. The company is likely to see sales impacted by the ban, which is expected to take effect in the next few weeks. And pot isn’t going to make up the difference.

ave Coulter wants a honeymoon before he decides whether he wants to get really committed to his new job. After being drafted to be Oakland County executive for the next 16 months on the day of L. Brooks Patterson’s funeral, CHAD Coulter is trying LIVENGOOD to stand up a new administration in Pontiac while mapping out an agenda in a headquarters named after his Republican predecessor. “The mandate that I have has an asterisk by it in my view,” Coulter said last week in an interview with Crain’s. “I have to earn people’s trust.” Coulter, who just a month ago was the outgoing mayor of Ferndale, finds himself in a rather unusual place in the upper echelons of Michigan political leadership, having gained control of the state’s wealthiest county through a messy transition of power that didn’t resemble the orderly transactions of governing that Patterson instilled for a quarter century. But now that he’s on the job, it stands to reason that Coulter might actually want to run for the seat next year, crimping the political ambitions of two fellow Democrats: Oakland County Treasurer Andy Meisner and county commission Chairman Dave Woodward, who had been separately plotting for months — if not years — to try to capture Patterson’s crown. During the interview in his new office, I asked Coulter a direct question: “Is there any circumstance in which you’ll run for this seat?” Coulter paused and didn’t give a direct answer. “Is there any circumstance that I would run for this seat? Umm. You know,” he replied, before trailing off.

SEE WILD BILL’S, PAGE 19

NONPROFITS

Investment brings new life, new jobs for RecoveryPark By Sherri Welch swelch@crain.com

After working for more than a decade to launch its first social enterprise, RecoveryPark is poised to break ground in November on a commercial-scale hydroponics greenhouse that will create jobs and eventually, equity ownership for Detroiters facing employment barriers. The $10 million project on East Palmer Street near Chene will bring farming — albeit a different type — back to a part of the city that was once home to flower and vegetable seed producer D.M. Ferry & Co. and establish Detroit’s first commercial-scale hydroponics grower. It’s attracted three high-profile investors: Stephen Polk, CEO of Birmingham investment company Highgate LLC.; Jim M. Nicholson, co-chairman, PVS Chemicals Inc.; and Walter Tripp Howell, retired international director of Jones Lang LaSalle in Washington, D.C., and an ex-pat of the Detroit area, who learned of the project during the 2018 Detroit Homecoming.

JOHN SOBCZAK / LORIEN STUDIO FOR CRAIN’S

SEE COULTER, PAGE 18

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SEE GREENHOUSE, PAGE 20

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Tiny, shiny things

Motion Dynamics makes some of the smallest industrial objects in the world

In this package

JJMotion Dynamics makes some of

the smallest industrial objects in the world. This page JJBreathing easier with Newaygo-based company’s oxygen tank flow technology. Page 11 JJSparta-based Speedrack makes

storage systems for Amazon, other mega-retailers. Page 12 JJNorton Shores paper supply business grows through acquisitions. Page 14 JJMuskegon Angels pivots to investing that keeps companies local. Page 15

Miscellaneous parts manufactured by Motion Dynamics Corp. compared with the tip of a mechanical pencil. MOTION DYNAMICS CORP.

elements it’s composed of and the it, scientific group that discovered the Naval Ordnance Laboratory. Fruitport is an aptly named small Motion Dynamics has an exclusive town near Muskegon that is surfor contract to sell the part to Airbus rounded by apple orchards. as long as it makes its A350 airplane, It’s also home to Motion Dynamics because no other manufacturer has Corp., a high-tech manufacturer that figured out how to tool it to the commakes some of the smallest industrial goes pany’s specifications. The spring objects on earth. Most of its products into the hydraulic system and helps are components sold to medical deto control the flaps. vice manufacturers. Some are sold “We’ll be making this part after I’m computer-chip makers. The largest f- dead,” joked company President one it makes is a three-inch-by-hal Chris Witham. inch spring made of nitinol that is sold Another nitinol product the comto Airbus. repany makes is a thin wire stent to Nitinol is a nickel-titanium alloy pair arteries. The wire is formed with distinguished by its shape memory a small circle at one end. and superelastic characteristics. NitiSEE TINY, PAGE 12 nol is a trade name taken from the

By Tom Henderson thenderson@crain.com

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MICHIGAN BRIEFS

INSIDE

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

Michigan to ban flavored e-cigarettes

As Gov. Gretchen Whitmer pledges to make Michigan the first state to ban flavored e-cigarettes, a national vaping association says businesses will “not go down without a fight.” Sweet and fruity vape flavors target youth, Whitmer said in a news release, and she aims to protect young people from possible harmful effects of nicotine vaping products. The Democratic governor ordered the Michigan Department of Health and Human Services to issue emergency rules banning retail and online sales of flavored vapes, the release said. The rules will also prohibit “misleading marketing” of vapes as “clean,” harmless or safer than regular cigarettes, according to the release. The move comes after state Chief Medical Executive Joneigh Khaldun declared youth vaping a public health emergency. The rules will be filed within weeks, Whitmer spokeswoman Tiffany Brown said in an email. They immediately take effect at that time, and from then businesses will have 30 days to sell off their products and comply. The ban lasts six months and can be re-upped for another six months.

The Michigan health department plans to make permanent rules for when the temporary ban expires. “As governor, my number one priority is keeping our kids safe,” Whitmer said in the release. “And right now, companies selling vaping products are using candy flavors to hook children on nicotine and misleading claims to promote the belief that these products are safe. That ends today. Our kids deserve leaders who are going to fight to protect them. These bold steps will finally put an end to these irresponsible and deceptive practices and protect Michiganders’ public health.” The rules would be a blow to the retail industry that has grown up around e-cigarettes, with vape shops popping up in seemingly every town over the past several years. The industry has often pitched itself as an alternative that can help smokers quit. But vapes have also been wildly popular among teenagers, with some high schoolers referring to school bathrooms as “Juul rooms” after the most popular vape brand.

MSU fined $4.5 million in Nassar case

The Education Department is fining Michigan State University a record $4.5 million and demanding sweeping changes after determining that it failed to respond to sexual as-

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Michigan will become the first state to ban flavored e-cigarettes.

sault complaints against Larry Nassar, a former sports doctor at the school who also worked at USA Gymnastics. Shortly after the penalty was announced Thursday, the university said its chief academic officer resigned. President Samuel Stanley Jr. said Provost June Youatt stepped down and that the school “must have a culture of accountability.” Education Secretary Betsy DeVos

announced the penalty after the school settled with the department to resolve two investigations. DeVos said that Nassar’s actions were “disgusting and unimaginable” but that so too was the university’s response. “Too many people in power knew about the behaviors and the complaints and yet the predators continued on the payroll and abused even more students,” DeVos said in a call with reporters.

Michigan will receive about $35 million in new federal funding this year to track opioid deaths and to support prevention, treatment and recovery programs. This $7 million of funding from the Centers for Disease Control and Prevention and $28 million from the Substance Abuse and Mental Health Services Administration is on top of $11.1 million awarded last month to boost efforts at community health centers and other treatment sites, said federal officials. Overall, the Trump administration has announced $1.8 billion in funding to states to combat the opioid crisis that is killing about 130 Americans each day, including more than five Michiganders. Great Lakes states are set to receive $206 million by the end of the year. In 2018, overdose deaths in Michigan declined slightly to 2,531 from 2,665 in 2017, according to estimates from the Centers for Disease Control and Prevention. About 1,941 of those deaths were attributed to opioids.

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HEALTH CARE

The neurology, orthopedics and wellness multi-specialty building is under construction at Memorial Healthcare in Ossowo. MEMORIAL HEALTHCARE

How a rural hospital carved a specialty niche By Jay Greene jgreene@crain.com

Memorial Healthcare, a 161-bed rural hospital in Owosso, faced a critical decision. The Affordable Care Act was kicking in and other small hospitals were being advised to join larger health systems for survival. The board of trustees of nonprofit Memorial was warned by its former CEO and a consultant that its future was either to struggle, or merge with a bigger hospital system. CEO Brian Long, who was brought in as CFO in 2011 and became CEO in early 2013, said Memorial and its board, which heatedly debated the issue for nearly five years, eventually chose door No. 3: Stay independent and expand its reach beyond Shiawassee County in central Michigan with its popula-

tion of 68,000 to neighboring counties of Saginaw, Clinton, Bay, Ingham and Genesee. Besides covering more territory, the evolving plan, described by board Chair Greg Bontrager and Vice Chair Tony Young, was that Memorial should also hire more staff doctors, recruit other specialists, add satellite clinic offices and focus on improving quality of care across its 34 specialties and service lines. But the key component of the survival strategy — and now a major area of investment — was to focus heavily on neurology and building a practice focused on multiple sclerosis that could draw patients from miles around. “What we chose to do was to pick a service line or two that we could be world-class in and provide services not only to our community”

but to a larger market that could attract patients from hundreds of miles away, Long said. “Not every hospital can be excellent in everything,” he said. “Even the larger organizations, like the Cleveland Clinic, they’ve got comprehensive services but they’re known for heart. ... Memorial Hermann Cancer Center in Texas, a very large facility, they’re known for cancer.” Young, who is president of Young Chevrolet Cadillac in Owosso, said when he joined the board in 2013 the debate to sell or affiliate with a larger health system had split the board with several resigning. He favored the hospital remaining independent, building up existing services, improving quality and patient and employee satisfaction.

Q&A

Brian Long

SEE NICHE, PAGE 20

SPORTS BUSINESS

Bloomfield Hills Country Club to renovate Harry Colt-designed golf course

On talent, Bosch opts to build it instead of buying

By Kurt Nagl knagl@crain.com

By Chad Livengood clivengood@crain.com

Bosch North America has hit a talent wall in a labor market with high demand for software engineers and low supply. Instead of trying to “buy” scarce engineers, the industrial automation and automotive mobility tech supplier is trying to build its talent needs within the ranks of its workforce at its North American headquarters campus in Farmington Hills and Plymouth, said Charlie Ackerman, senior vice president of human resources at Bosch. Ackerman recently sat down with Crain’s Senior Editor Chad Livengood for a podcast interview about how Bosch is launching a software engineering apprenticeship program to address a fast-growing shortage of engineers using existing employees within the company. This interview has been edited for clarity:

“What we chose to do was to pick a service line or two that we could be world-class in and provide services not only to our community” but to a larger market that could attract patients from hundreds of miles away.

BOSCH NORTH AMERICA

Charlie Ackerman, senior vice president of human resources at Bosch North America. Crain’s Detroit Business: How does Bosch approach talent development and how is it different than just looking outside of your own walls for new talent? Ackerman: First, what we need to

recognize is why. Why are we faced with this type of situation? It’s all based upon the technological advance that we’re seeing in the marketplace today. When you look at so many different innovations that are impacting the market ... they’re pretty vast — and it’s coming faster

and faster and faster. So when we see those types of technological advancements, we have to respond. And we have to create a culture for people to learn much quicker, expand their network. ... We’re trying to make sure that what differentiates us is rapidly building those systems, those programs to upskill our talent, but then also if we need external (talent), develop those programs to bring that type of talent into the workforce. SEE BOSCH, PAGE 17

Bloomfield Hills Country Club is planning a major renovation of its Harry Colt-designed golf course that seeks to preserve its century-old heritage. Officials of the exclusive private club at Long Lake and Lahser roads plan to begin the project in fall 2020 and complete it by the following spring in 2021, said club President Fred Hubacker, who is also managing director at consulting firm Conway MacKenzie. Club members voted in favor of the project in May. Hubacker said the project was important to members because it involved replacing the irrigation system and several other upgrades, such as replacing and reshaping bunkers. “Obviously weather is a factor when we do a project like this,” he said. “It’s not a complete redo in terms of the architecture. We don’t think there will be any major disruption (to play). We hope to completely avoid anything in the middle of the season.” The project will be member-fund-

Need to know

 Construction to begin fall 2020; completion by following spring  Course, laid out in 1912, is only one in U.S. designed solely by Harry Colt  Architects from Traverse City, Netherlands to team up for project

ed and in the millions of dollars, but club officials declined to say the total cost. Repairs to the club’s only course would complement big renovations made to the clubhouse a couple years ago that included a new ballroom and dining rooms. The club has about 240 active members and has seen a “significant uptick” in membership in the past several years, said Jared Chorney, general manager of the club. He said that having a fresh course is certain to draw more interest in the club. “We are approaching our cap,” he said. “There will come a time when there will be a waitlist for the club and that will certainly be very soon.” SEE GOLF, PAGE 21

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REAL ESTATE INSIDER

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KIRK PINHO/CRAIN’S DETROIT BUSINESS

The Founders outpost in Detroit is just one of dozens of craft beer businesses to open in the last several years in metro Detroit.

Affordable plans for every business?

Area’s craft beer space is smaller than an Amazon warehouse, holds 93 firms A new report by the Southfield office of CBRE Inc. says the craft beer industry’s real estate footprint in metro Detroit has more than quadrupled in less than a decade. That adds more fuel to the sentiment that the reKIRK gion’s and state’s craft beer PINHO industry is one of the more dominant in the nation. However, it comes as some wonder whether the craft beer binge of the last decade is in the hangover phase, as 15 Michigan breweries have closed in the last year. Since 2010, the industry in metro Detroit has grown by more than 680,000 square feet to north of 873,000, according to the CBRE report, called Michigan Craft Beer Taking Flight. Sure, that’s smaller than some Amazon distribution facilities around here, but that space accommodates 93 businesses. That’s 37 microbreweries (267,249 square feet); 51 brewpubs (445,249 square feet); three regional breweries (59,675 square feet) and two contract breweries (101,000 square feet). I’ve included CBRE’s definitions of those terms below. In just the last five years, there have been 58 new craft beer businesses totaling north of 540,000 square feet opening in the region, according to the report. There has been more than 50,000 square feet of new craft beer space added each year since 2012, although year-to-date 2019 is less than that. It was 2015 that was by far the largest, when 227,000 new square feet across 24 new businesses opened. “The craft brew industry has taken flight in Michigan, and we are seeing significant growth all across the state,” Scott Young, first vice president with CBRE’s Retail Practice Group, said in a press release. “People want experiences and the craft brew scene is one of the best examples in retail today of creating a unique environment to draw in consumers.” My colleague Dustin Walsh says in his “Is Michigan’s brewing industry all tapped out?” story in our Aug. 26 edition that 22 new breweries have opened in Michigan since Aug. 20, 2018.

Definitions Brewpub: A brewery that sells 25 percent or more of its beer on site. Contract: A business that hires another brew-

ery to produce its beer. Microbrewery: Produces 15,000 or less barrels of beer per year, and 75 percent-plus of its beer served off-premises. Regional brewery: Annual beer production between 15,000 and 6 million barrels.

New owner for old DPD building in the North End A long-vacant former Detroit Police Department building in the North End neighborhood may get a new lease on life. The building at 210 E. Bethune St. sold for $350,000 to an entity registered to Edmond Demaj of Kode Labs, based on Clifford Street in Detroit. It had been used as horse stables and a precinct office for the police department, according to a listing by Detroit-based brokerage Summit Commercial LLC, which handles real estate transactions for the city. City spokesman Tim Carroll said the police department last used the property in 2005 but no other information was available. An image archived with the Detroit Public Library says it was built in 1898. Messages left with Demaj through Kode Labs last week were not returned, although a Planning and Economic Development standing committee agenda says that EBE Bethune LLC plans to “renovate the structure into commercial office space.” I’ll let you know more when I get the info.

An industrial slowdown ahead? CBRE Inc. released a new report on industrial markets around the country, and there are some interesting industrial stats to take into consideration as the year begins to wind to a close. This year is nowhere on pace to match the pace of construction from 2018, when 6.4 million square feet of new space was built. So far, just 900,000 square feet has gone up, which compares with 700,000 in 2014; 2.4 million in 2015; 2.3 million in 2016; and 2.7 million in 2017. Dan Labes, executive managing director in the Southfield office of brokerage firm Newmark Knight Frank, said that although new construction starts dipped in the fourth quarter last year and first quarter this year, there has been an increase the last two quarters. 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 // S E P T E M B E R 9 , 2 0 1 9

Trinity Health, Anesthesia Associates reach settlement on lawsuits, noncompetes Need to know

By Jay Greene jgreene@crain.com

Trinity Health Michigan and Anesthesia Associates of Ann Arbor PLLC have signed a new five-year agreement that ends dueling lawsuits against each other and frees A4 providers in Grand Rapids from their noncompete Casalou agreements. “The new agreement preserves a long-term relationship we have worked so hard to build,” Gregory Bock, CEO of A4, said in a statement to Crain’s. “It was important for us to find a way to continue to integrate our physicians in Trinity Health Michigan’s network of care, given their strength and our mutual commitment to the quality of patient care.” The agreement allows A4’s anesthesiologists to continue treating patients at Trinity Health’s five Southeast Michigan hospitals. Trinity had threatened not to renew contracts after June 2020. In exchange, A4 will allow its providers at Mercy Health St. Mary’s hospital in Grand Rapids to choose where they practice, releasing them from noncompete agreements and “allowing them to continue to work and live in the community that they have been serving, including continued service at Trinity’s Grand Rapids facility,” Bock said. Trinity Health is in the process of transitioning its anesthesia services to another model, the joint statement said. Last week, St. Mary’s signed an agreement with Anesthesia Practice Consultants PC to take over from A4 after its contract expired Aug. 31. APC has 124 physicians and 80 CRNAs and certified anesthesiologist assistants and also serves Spectrum Health hospitals. In a statement, Trinity said it plans to hire about 14 anesthesiologists from A4 to staff St. Mary’s and continue to contract with APC. “A4 and Trinity Health Michigan have

JJTrinity Health and A4 reach settlement on anesthesiology after monthslong dispute JJAgreement continues

Count on it.

relationship on five Southeast Michigan hospitals Bock

JJAllows A4 providers in Grand Rapids to leave company

worked together for decades, in what has been a very good and productive relationship,” Rob Casalou, president and CEO of Trinity Health Michigan, said in a statement. “We both recognize the strength and commitment to the quality of patient care we each offer, and we are focused on moving forward to continue providing high quality and stable services to our patients.” Trinity Health Michigan operates eight hospitals in Michigan, including the five hospitals of St. Joseph Mercy Health System in Ann Arbor, Chelsea, Howell, Livonia and Pontiac, and the three Mercy Health hospitals in Grand Rapids and Muskegon. Nationally, Livonia-based Trinity Health operates 93 hospitals in 22 states and has annual operating revenue of $18.3 billion. Anesthesia Associates of Ann Arbor was established in 1968 and is now owned by Siromed Physician Services, one of the largest providers of anesthesia and pain-management services in Michigan with more than 120 anesthesiologists. A4 provides services to 11 hospitals, including four Beaumont Health hospitals in Wayne, Dearborn, Trenton and Taylor, six ambulatory surgery centers and four chronic pain-management clinics. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

OptimizeRx acquires New Yorkbased RMDY Health for $16 million By Anisa Jibrell ajibrell@crain.com

Digital health messaging company OptimizeRx Corp. in Rochester is purchasing East Rockaway, N.Y.-based RMDY Health, a software as a service platform for digital therapeutics products, for $16 million. The acquisition expands OptimizeRx’s (NASDAQ: OPRX) patient engagement platform by adding three client areas — including payers, medical device and medical associations, according to a Thursday news release. The company’s products help with a variety of communications between patients, providers and patients. The RMDY Health platform also broadens the reach of OptimizeRx’s network of electronic health record and electronic prescribing providers through using patient apps and web access as an extra channel for digital heath messaging, the release said. This marks the second patient engagement-focused acquisition for the Rochester-based company within the last year. In October, OptimizeRx acquired interactive health messaging company CareSpeak Communications Inc., according to a release. “We welcome the RMDY team and their powerful SaaS platform to support our mission of improving medication adherence and care coordination,” OptimizeRx CEO William Febbo said in a news release. “This acquisition is especially timely, given how stakeholders are increasingly shifting their budgets to digital delivery as the preferred method of communicating to physicians and patients.”

Need to know

JJAcquisition expands OptimizeRx’s patient engagement platform JJMarks the second patient engagement-focused acquisition for the Rochester-based company within the last year

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JJTransaction is expected to close within the next 30 days

RMDY Health provides a cloud-based platform for pharmaceutical companies, device makers and others, to create their own digital health and care management programs, according to the company’s website. The acquisition is expected to close within the next 30 days, depending on certain closing conditions, the release said. When the transaction is completed, RMDY Health shareholders will receive $8 million in cash and $8 million in equity. OptimizeRx did not immediately respond to a request for additional details. RMDY Health’s employees based in the U.S. will use OptimizeRx’s New Jersey headquarters, while its technology team will stay in Tel Aviv, Israel. OptimizeRX, which provides electronic discounts to patients for prescription drugs from drug makers, generated $21.2 million in revenue in 2018, up 75 percent from $12.1 million in 2018. The company employs around 12 people in Rochester Hills and more than 30 employees on the East Coast. Anisa Jibrell: (313) 446-0495 Twitter: @anisajibrell

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The Tayion Collection’s display on the showroom floor at fashion trade show MAGIC Las Vegas in August.

Tayion Collection aims to bolster big-box presence

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TAYION COLLECTION

A high fashion dress suit company based in Taylor is readying to boost its big-box presence with no middleman in between. With its new headquarters and expanded portfolio, Tayion Collection Inc., led by longtime designer Montee Holland, is moving to cement a sales and support team and broaden its internet and media presence to bring those goals to fruition. For 13 years, Holland’s design company leaned on a traditional licensing model, paying out royalties to a licensee in exchange for manufacturing, sales and distribution capabilities. But toward the end of 2016, the Detroit native and Marine Corps veteran decided to sever his licensing agreement once he discovered his licensee was underreporting unit sales. “Things started to get muddy,” Holland said. After nixing the agreement, the company took two seasons off to restrategize and reshape its business model, according to Holland. Today, the business is handling its own distribution processes at its new base in Taylor, while manufacturing primarily takes place in a factory in Turkey. Tayion has about 150 specialty store accounts across the U.S., but Holland expects to double that figure by next month as the company moves to ramp up its big-box presence and aims to finalize talks with potential retailers over the next month, including Macy’s. Tayion, which employs four, plans to add three to four sales representatives to oversee the different regions across the U.S., according to Holland, who currently has a distribution deal with Atlanta-based K&G Fashion Superstore. Aside from sales representatives, Holland plans to hire an additional 12-15 employees over the next year, including positions such as chief financial officer and warehouse manager, along with office and customer

Need to know

JJTayion moved into its new

5,000-square-foot headquarters in Taylor last week JJCurrently, Tayion produces 2,000 suit units per month JJBusiness received $10 million in growth capital in April

Montee Holland

Tayion has about 150 specialty store accounts across the U.S., but Holland expects to double that figure by next month as the company moves to ramp up its big-box presence and aims to finalize talks with potential retailers over the next month, including Macy’s. service posts. Currently, Tayion produces 2,000 suits per month, with plans to reach $7 million in annual revenue in 2020. Last week, the firm moved into its new 5,000-square-foot headquarters

in Taylor, which serves as a showroom, office space and distribution center, Holland said. The showroom will be used to present the Tayion lines to clients by appointment only. Part of why Holland chose Taylor is for easy access to the Detroit Metropolitan Airport in neighboring Romulus for clients and the company's team. Previously, the business was based in an 800-square-foot showroom and work space in Canton Township. Known globally for its wool and polyester lines including T-Fusion, which launched in 2005, the company recently expanded its portfolio to include blazers, shirts and ties, denim, an outwear line for men and women, and more, thanks to $10 million in growth capital. In April, Holland was among a select bunch who were handpicked from a pool of 3,000 applicants to participate in a diversity retail-vendor development program called Workshop at Macy’s in New York City. There, he captured the interest of an investment group, New Yorkbased global finance lender MBE Capital Partners LLC, which approved Holland for a $10 million line of credit to help him scale his business across the country and abroad, according to a news release. Part of the investment was used to bring the Tayion line to fashion trade show MAGIC Las Vegas in August, where it nabbed the Best in Show award. Throughout Holland's career, his designs have been worn by a number of celebrities, including actors Sean Blakemore and Morris Chestnut, along with high-profile pastors Marvin Winans and Marvin Sapp, according to the company’s website. Established in 2003, Tayion lines can be found in stores such as Van Dykes Mens Clothing and The City Warehouse, both based in Southfield, and more. Anisa Jibrell: (313) 446-0495 Twitter: @anisajibrell

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

OPINION COMMENTARY

What should we ban next? I

t’s not every day the governor decides to unilaterally put an entire sector out of business. But that would appear to be the bottom-line effect of Gov. Gretchen Whitmer’s order last week to ban the sale of flavored electronic cigarettes. The order has to send a chill through any business that sells a legal product that somebody doesn’t like. E-cigarettes, or “vapes,” let people get a fix of nicotine by inhaling the vapor from a heated liquid. Retailers and other e-cigarette businesses encompass literally hundreds of small businesses, and most of the product they sell won’t be legal. The stores can still sell e-cigarettes and liquids that taste like tobacco. Dedicated “vape shops,” of which there are many, are going to have a tough time surviving. Whitmer cited reports of hospitalizations involving e-cigarettes and rampant use by teenages among the reasons for the emergency order. Vaping is unquestionably a problem among young people — where kids used to smoke cigarettes in school bathrooms, they now call the bathroom the “Juul room.” Juuls are more popular than old-fashioned cancer sticks among young people now. However, the Legislature only last year passed a package of laws regulating e-cigarettes, banning their sale to people younger than 18. The candy and fruit flavors Whitmer is seeking to ban are certainly appealing to young people. But they’re also appealing to adult smokers who want to quit smoking and have looked to e-cigarettes as a help. How many will switch back to their Marlboros? Or switch to homebrewed vape juice, which would seem to carry risks all its own. It also won’t work. People who want a pleasant-tasting nicotine fix can go to Ohio, and a black market for vape juice will spring up. Sellers of bootleg e-cigarettes will make a lot of money. Many of the lung conditions that have hospitalized a few users have been tied to online sales of liquids based on cannabis that contain THC,

MICHAEL LEE malee@crain.com

the ingredient that gets you high. This new ban won’t touch such sellers, who are already breaking the law, and it will encourage users to seek out black market sources. The ban is well-intentioned. It’s hard to argue that fruit-flavored vapes improve society. They might improve cigarette smokers’ health, but not too many people would argue that should come at the expense of hooking a new generation on nicotine. It may well be that we’re on a slow path to a national ban. As long as it comes about as part of a legislative process that allows for debate and takes into consideration all the risks and benefits, that’s as it should be. But for now, businesses that employ hundreds or thousands of people and have invested in store buildouts and other infrastructure have to scramble to figure out how to survive. A unilateral ban raises the question of what other products or activities that carry health risks might the right official deem an emergency. Diabetes is an epidemic — ban soda? Heart disease is the number one killer — ban steak? There doesn’t seem to be any immediate threat of those. But it’s becoming harder to tell what might happen. Michael Lee is the managing editor of Crain’s Detroit Business.

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.

LETTERS

Manufacturing absent from 40 under 40 list To the Editor: Did you notice, as I did, that not one of the Crain’s 40 under 40 were in manufacturing? In a city rooted in manufacturing? Yes, we need to diversify, and yes we should be encouraged by business diversification, but

not one? If not in Detroit, then where? Tom Doran Plymouth

SEND YOUR LETTERS J Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: mlee@crain.com

Home-sharing exacerbates lack of affordable housing

decade ago, Detroit made headlines for its infamous decline. Rows of vacant and blighted buildings illustrated on the covers of newspapers created a prominent mental image of a city in decline. The Great Recession precipitated an epic housing crisis. The effects were acutely felt in our city where tens of thousands of homes and buildings fell victim to foreclosure and blight. From 2000 to 2010, the city lost nearly 240,000 residents, shrinking our tax base and resources. In recent years, we have seen a shift in this narrative. Detroit, in the media, is now a tale of resurgence, a city rising from the ashes. We are happy to see improvements. Many of us who grew up here supported the city through its ups and downs. However, many continue to live in neighborhoods where blight and overgrown lots, not shiny new developments, remain a common sight. Far too many Detroiters struggle to attain a decent standard of living, a living that provides them a living wage, affordable housing, access to fresh groceries and basic services. While strategic investment and sustainable development is important to the city’s growth, many investors buy up properties, at times entire vacant blocks, and wait to cash out instead of rehabilitating them. Others have distorted buildings across the city from potential housing into an investment, turning them into hotels instead of homes through such platforms as Airbnb and VRBO. Prior-

OTHER VOICES Janeé Ayers

Apart from the decrease of housing supply, a lack of access to resources for homeownership also drives the housing crisis in our city. itizing cash over community and investors over residents spurs gentrification, especially in places like Midtown and downtown. Every time a house or apartment is rented as a hotel instead of a home, the supply of affordable housing decreases. This forces residents and tourists to compete for what is left and raises the market value of housing units to unaffordable levels for many residents. Eventually, this affects entire neighborhoods, making affordable housing less available and basic services less accessible. Apart from the decrease of housing supply, a lack of access to resources for homeownership also drives the

housing crisis in our city. The majority of Detroiters rent instead of own. According to a study by the Urban Institute, “fewer than half of the city’s black residents, who make up 80 percent of the population, own their homes.” In addition, according to a city of Detroit study, nearly 60 percent of Detroiters are “rent-burdened,” meaning they pay more than 30 percent of their income on rent. Predatory lending, foreclosures, historical redlining practices and rising rents have hurt black homeownership. Rents have climbed from an average of $650 to $820 per month in the past 10 years. Taking steps to improve pathways to homeownership is vital to fighting the housing crisis. To fight the housing crisis effectively, we have to come together and tackle the myriad issues that contribute to this problem. Many of the Detroit residents interviewed by the Urban Institute noted that the city’s housing crisis “is a symptom of broader societal issues… [that] led to massive instability in neighborhoods. You can’t just create products to address these issues, you’ve got to drive deeper, into deeper challenges.” I agree: There isn’t just one solution. We need to approach this crisis and tackle these inequalities from multiple angles. Let’s take steps to increase the supply of affordable, livable housing by reforming and regulating home-sharing platforms. Improving access to homeownership will benefit all. Janeé Ayers is an at-large member of the Detroit City Council.

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Davidoff leaving Deloitte to lead Fisher Group By Dustin Walsh dwalsh@crain.com

Mark Davidoff, managing partner of the Michigan office for Deloitte LLP, will retire from the business advisory firm at the end of the year to run the financial activities of one of Detroit’s wealthiest families. Davidoff, 60, will leave Deloitte after 14 years to serve as the president and CEO of The Fisher Group LLC, which handles the financial affairs of the Max Fisher family, effective Jan. 2, 2020. He succeeds Ira Jaffe, current CEO of Southfield-based law firm Jaffe, Raitt, Heuer & Weiss PC, in the role. Jaffe will remain in various capacities with the Fisher Group, the company said in a press release. Davidoff said with Deloitte’s mandatory retirement age of 62 approaching, the Fisher Group opportunity was serendipitous. “This was an opportunity that pre-

Davidoff

sented itself and given the importance of the Fisher family to Detroit ... (it was a) perfect alignment for what I am passionate about,” Davidoff told Crain’s. “This was an opportunity that only comes once in a

career.” He said Deloitte has a succession plan in place, but declined to discuss who would replace him at the firm. Davidoff will work closely with

Doug Stewart, the executive director of the Max M. and Marjorie S. Fisher Foundation, to engage in a larger impact for the foundation and the family’s assets, he said. Davidoff joined Deloitte in 2005 and became the managing partner for the state in 2011, overseeing 1,200 employees based in Detroit, Grand Rapids and Midland. There he led many of the firm’s most progressive initiatives, including a board member training group specifically for women. Prior to joining Deloitte, he served as the COO and executive director of the Jewish Federation of Metropolitan Detroit. Today, Davidoff is one of the most

Need to know

JJStarts on Jan. 2, 2020 JJWill lead Fisher family investments JJPlans to continue board service

well-known names in Southeast Michigan business and philanthropic circles. Last year, he led the overhaul of the Michigan Israel Business Accelerator, leading a $1 million fundraising effort as well as mission trips to connect local businesses to Israel’s strong tech sector. He also currently serves as chairman of the Detroit Symphony Orchestra and serves on the boards of

the United Way for Southeastern Michigan, Business Leaders for Michigan and the Detroit Economic Club. “It has been my privilege serving with Mark on a variety of boards over the past three decades and look forward to partnering with him to evolve solutions addressing the family’s needs,” said Phillip Fisher, son of Max and Marjorie Fisher, in a statement. Davidoff earned a bachelor’s degree in accounting from Wayne State University and a master’s from Northwestern University. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Crain acquires online news organization GenomeWeb Crain Communications Inc., parent of Crain’s Detroit Business, has acquired GenomeWeb, an online news organization serving the global community of scientists, technology professionals and executives who use and develop the latest advanced tools in molecular biology research and molecular diagnostics. GenomeWeb’s editorial mission is to cover the scientific and economic ecosystem spurred by the advent of high-throughput genome sequencing. The brand operates the largest online newsroom focused on advanced molecular research tools in order to provide readers with exclusive news and in-depth analysis of this rapidly evolving market. “We are excited to add GenomeWeb to our family of brands,” KC Crain, president and chief operating officer of Crain Communications, said. “GenomeWeb’s history and expertise in journalism, and their commitment to top-level reporting, makes it an attractive business and a perfect complement to our family of business-to-business brands.” GenomeWeb was launched in 1997 and has a staff of 30 employees located in New York. GenomeWeb’s leadership team includes Bernadette Toner, CEO, and Greg Anderson, chief operating officer. The official acquisition date was Sept. 1, 2019. GenomeWeb will join Crain’s portfolio of brands, which also includes: Crain’s Chicago Business, Crain’s New York Business, Crain’s Cleveland Business, Automotive News, Automotive News Canada, Automotive News China, Automotive News Europe, Automotive News Mexico, Automobilwoche, Autoweek, Ad Age, Creativity, Modern Healthcare, Staffing Industry Analysts, Pensions & Investments, Plastics News, Plastics News Europe, Plastics News China, Rubber & Plastics News, European Rubber Journal, Tire Business, Urethanes Technology International and Plastics & Rubber World.

SOMETIMES, DATA IS THE BEST MEDICINE. An emergency room is designed to treat immediate, often lifethreatening conditions. Among all this chaos, Dr. Phillip Levy, assistant vice president of Translational Science and Clinical Research Innovation at Wayne State University, saw a hidden opportunity: A patient’s data offers clues into not only their health, but into the overall health of the community. Project PHOENIX is born. As a resident, Dr. Levy was taught that an emergency room doctor had to see beyond the emergencies. The patients represented how the health care system was performing for the people of the city. He learned that in most cases, there was a larger, longerterm issue that was the root cause, and he was driven to imagine a world where population health care was an effective way to improve overall health. PHOENIX — which stands for Population Health Outcomes and Information Exchange — is a shared database that identifies diseases affecting a particular area, the precise risk factors that cause them, the opportunities to address them and the ability to track the health outcomes after interventions have been put in place. When a patient is a symptom. The health care world has many ways to treat patients, but Dr. Levy wanted to treat the long-term issues that were causing large parts of the population of Detroit to be sick. He wondered why he saw so many relatively young patients with consequences of uncontrolled hypertension. Using de-identified data from multiple sources, he

WARRIOR STRONG

was first able to identify census tracts where blood pressure control appeared to be the worst. Remarkably, he was able to see that each neighborhood had a unique constellation of underlying contributors to this problem. Suddenly, it was clear: By identifying the patterns hidden in data, he would be able to drive innovative solutions from beyond the field of medicine to make a huge difference in the health of the people that live in our community. Thinking beyond medical intervention. Data is more than a patient’s vitals on a chart. It’s a diagnostic tool that helps the health care community improve people’s lives for years to come. Car registration data may uncover an area where transportation is old and unreliable, making getting to a doctor practically impossible. Foreclosure data may indicate that a patient is at risk of being homeless, and stress comes with that. “Patient data” in the near future is going to be completely reimagined to represent every person’s individual risk factors. And the effect of every intervention can be tracked and measured to see how effective it was. It’s health that should be rising. Not the cost of it. PHOENIX shows how data can save lives and take costs out of the health care system. Instead of decades of treatment for high blood pressure, lower-cost, proactive care could help us avoid having to treat it altogether. And that’s Warrior Strong.

TO LEARN MORE ABOUT PHOENIX, VISIT MED.WAYNE.EDU/DATA-MAPPING

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FOCUS

CRAIN’S MICHIGAN BUSINESS: WEST MICHIGAN

Tiny, shiny things

Motion Dynamics makes some of the smallest industrial objects in the world

In this package

JJMotion Dynamics makes some of the smallest industrial objects in the world. This page JJBreathing easier with Newaygo-based company’s oxygen tank flow technology. Page 11 JJSparta-based Speedrack makes storage systems for Amazon, other mega-retailers. Page 12 JJNorton Shores paper supply business grows through acquisitions. Page 14 JJMuskegon Angels pivots to investing that keeps companies local. Page 15

Miscellaneous parts manufactured by Motion Dynamics Corp. compared with the tip of a mechanical pencil. MOTION DYNAMICS CORP.

By Tom Henderson thenderson@crain.com

Fruitport is an aptly named small town near Muskegon that is surrounded by apple orchards. It’s also home to Motion Dynamics Corp., a high-tech manufacturer that makes some of the smallest industrial objects on earth. Most of its products are components sold to medical device manufacturers. Some are sold to computer-chip makers. The largest one it makes is a three-inch-by-halfinch spring made of nitinol that is sold to Airbus. Nitinol is a nickel-titanium alloy distinguished by its shape memory and superelastic characteristics. Nitinol is a trade name taken from the

elements it’s composed of and the scientific group that discovered it, the Naval Ordnance Laboratory. Motion Dynamics has an exclusive contract to sell the part to Airbus for as long as it makes its A350 airplane, because no other manufacturer has figured out how to tool it to the company’s specifications. The spring goes into the hydraulic system and helps control the flaps. “We’ll be making this part after I’m dead,” joked company President Chris Witham. Another nitinol product the company makes is a thin wire stent to repair arteries. The wire is formed with a small circle at one end. SEE TINY, PAGE 12

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Breathing easier with Newaygo-based oxygen technology AIRS designs oxygen flow monitor to save lives By Tom Henderson thenderson@crain.com

It’s going to be a busy and pivotal six months for Advanced Interactive Response Systems LLC, a medical-device company based in The Stream, a co-working space in downtown Newaygo. Valerie Obenchain was notified in August by officials in Australia that she had been granted a patent for the company’s main product, an oxygen flow monitor for those using oxygen tanks. The company had two previous patents granted in the U.S. — the first in 2014, just after the company was formed — and is expecting patent approval in Canada and Europe. Obenchain, a respiratory therapist with more than 20 years of experience at a variety of hospitals, including Sparrow Hospital in Lansing and Spectrum Health in Reed City, has just started raising a Series A funding round of $1.5 million and has been in talks with the Grand Angels of Grand Rapids, the Belle Angels of Detroit and InvestDetroit. She expects approval soon from

ADVANCED INTERACTIVE RESPONSE SYSTEMS LLC

Valerie Obenchain, CEO and founder, Advanced Interactive Response Systems LLC based in Newaygo.

the U.S. Food and Drug Administration to begin selling her device, with sales expected to start in the first quarter of 2020. Oxus Inc. of Auburn Hills will be the contract manufacturer for the monitor, which will retail for $1,500. Currently, caretakers can set the percentage of oxygen delivered to patients. Air in rooms is about 21 percent oxygen. Patients with respiratory issues might need oxygen at 30 percent, for example, or 36 or 40. But valves on tanks are notoriously inaccurate and currently no one really knows the level of oxygen being delivered. If the valve is set at 30 percent but is delivering at 38, the tank will run out of oxygen much faster than expected. The AIRS monitor will also track heart rates in real time. The monitor alerts users or care givers in extended-care facilities or hospitals when oxygen tanks are getting low, have the wrong concentration or when heart rates become abnormal. The alert is delivered both to the device and through an app. “I kept seeing issues with patients running out of oxygen or getting low. I knew I could design something,” said Obenchain, who also has a business degree from Cornerstone University. “Early in my career, a patient died because his tank had run dry. He was at home and was rushed to the hospital but died.”

She hired an electrical engineer to fine-tune her design and work on a prototype, and she applied for the first U.S. patent. Obenchain launched the company with $250,000 of her own money. “I cashed out my retirement. It was everything I had,” she said. She then raised a seed round of $540,000 from accredited investors, including some physicians she knows. One of her investors was Dr. Bob Joyce, director of the respiratory therapy program at Ferris State University and a longtime emergency-medicine physician. “There’s not another product to fill the void in the market,” he said. “Valerie’s product is the only one that monitors concentrations of oxygen from the hose to the nose.” Obenchain’s biggest validation came in January 2018 at a pitch event in Chicago, when she won one-third of the $1 million in grant money at stake at the annual IPF Catalyst Challenge, hosted by Three Lakes Partners, a venture philanthropy committed to improving the lives of those with Idiopathic Pulmonary Fibrosis. AIRS will target patients with chronic obstructive pulmonary disease, an umbrella term describing such progressive lung diseases as emphysema, chronic bronchitis and nonreversible asthma. SEE OXYGEN, PAGE 16

Heart care close to home Appointments are now available

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Get the heart care that’s right for you at ascension.org/detroitheart

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Racking up growth as e-commerce booms Sparta-based Speedrack makes storage systems for Amazon and other mega-retailers By Tom Henderson thenderson@crain.com

E-commerce has been a boon for Speedrack Products Group Ltd. of Sparta, a manufacturer of storage racks that was founded in 1954 and has long provided large, welded steel racks for automakers to store pallets filled with parts until needed for manufacturing. But as e-commerce exploded in the last decade, huge distribution centers and warehouses sprung up across the country, filled with products stacked up on acres of racks, driving sales and revenue growth for Speedrack. Amazon’s mammoth distribution centers, which contain towers of racks, are mostly filled with Speedrack’s rack systems. Other customers include General Motors, Ford, Dow Corning, Magna Seating, Walgreen’s, Ralph Lauren, Caterpillar, the QVC television network and Art Van. Speedrack’s racks are so structurally sound that company engineers have even designed massive racks that can bear the entire loads of the outside walls and ceilings of some warehouses. James Johnson, the company’s president, said one growing market for those rack-supported structures is the booming craft whiskey industry, which needs sturdy rack systems to hold barrels of whiskey as it ages. One customer Speedrack has provided racks to is Michter’s Distillery in Kentucky, a maker of high-end spirits. “It’s not a big business for us, but it’s a fun business,” said Johnson. “When e-commerce started, our business really began to build up as all that inventory moved from retail stores to warehouses, and it has to be set on something,” said Johnson. “Since 2012, we’ve had a rapid trajectory upward. If we had twice the manufacturing capacity, we could fill it.”

Johnson

Speedrack was founded in Skokie, Ill., was later bought by a private equity firm and fell on hard times. Ron Ducharme, a Muskegon area businessman, bought the company in 1989 and moved its headquarters to Sparta. Speedrack employs about 50 at its headquarters, including upper management, accounting and finance, structural engineers and project managers. It employs more than 300 in all. It has a 350,000-square-foot manufacturing plant in Quincy, Mich., where huge machining and welding equipment, some 200 feet long, turns rolls of steel into tubular racks capable of holding huge weights. An 80,000-square-foot plant opened in Litchfield in 2017. Johnson said revenue this year will be about $150 million, up from about $120 million last year. He said the company has doubled production capacity in Quincy over the last six to seven years. The Quincy plant opened in 2003. Speedrack’s previous owner had opened one plant in Alabama and one in West Virginia to save on labor costs over what they had been in the Midwest. “Those were never going to be world-class manufacturing plants,” said Johnson. Eventually, Ducharme had all of the massive equipment in those plants dismantled and moved to Michigan, with some assistance from the Michigan Economic Development

TINY

FROM PAGE 10

gvsu.edu/SupportLakerEffect

It is then chilled, which causes the circle to lose its shape, making the stent look like a long thin wire. The wire is inserted via a catheter through an artery until the physician gets it where he wants it. As the wire warms up from the internal body temperature, the end of the wire regains its circular shape, opening up the blocked artery. Another nitinol product is a 4-foot item that looks like a very thin piece of yarn, just 70 one-thousandths of an inch in diameter. It is extremely flexible, and when you pull it and stretch it out, you can see it is made up of a long string of coils, about 8,000 in all. It is a component in a device to treat stroke victims. The company makes an even thinner coil from nitinol, about one-third the width of a human hair, which is used to repair aneurysms. “Fruitport is just a dot on the map, but we ship to 19 different countries and 31 states,” said Witham, whose company makes upwards of 3,000 different parts a year, many of them on

Vargo

Witham

Corp. in getting the Quincy facility up and running. All that machinery can be considered green. More than 70 percent of Speedrack’s products are made from scrap steel, melted in what are called mini-mills, which use electricity instead of traditional blast furnaces to make the coils of steel Speedrack uses as raw material. Johnson said he is considering a third plant, which would likely be based either on the East Coast or the West Coast to be closer to big customers in those regions. “Our stuff doesn’t ship well, so we’ll probably expand beyond Michigan to one of the coasts.”

Jo runs emp any we c find Th in C and M of V dlin liard larg eral lion cust

m a c h i n e s equipped with microscopes so workers can see what they are machining. He said that 5 percent of company revenue comes from sales to China, from whom it purchases no raw

material. Witham holds up a tiny glass vial, filled nearly to the top with what looks like tiny bits of gold dust. But the jar isn’t filled with bits of dust. It is filled with machined parts that go on tools that test new computer chips. Each speck is actually a gold-plated coil. There are 50,000 of them in the small vial, worth a total of about $1,000. Witham has another vial. At the bottom are about 500 almost-invisible silver specks. Each speck is smaller than a grain of salt. They are platinum-plated coils that attach to stents and serve as visual markers for doctors as they insert the stents. The vial holds about $500 worth.

The date on a penny shows the scale of parts manufactured by Motion Dynamics. MOTION DYNAMICS

All in the family Motion Dynamics owes its success in part to the fact that it didn’t work out when Witham’s father, Richard Witham, went to work in 1963 at a Muskegon store called F&F Grocery that was owned by his father. After two years, Richard left the grocery and got a job at

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Johnson said the company, which runs two 10-hour shifts a day, would employ more, but “we haven’t added any employees in the last year because we can’t find them. The last two years, finding employees has been difficult.” The company also has sales offices in Chicago, Nashville, Columbus, Ohio, and Quincy, Ill. Michael Vargo is president and CEO of Vargo Solutions, a material-handling systems integrator based in Hilliard, Ohio. Vargo designs and builds large distribution centers, which generally range from half a million to a million square feet. Amazon is a major customer, and other customers in-

clude Target, the Gap and American Eagle. Speedrack is a major supplier to Vargo of the rack components, which are accessed by conveyor belts. “Inside the distribution centers are two-, three- and four-level storage modules. Speedrack engineers them and is very creative in their designs,” said Vargo, who has been a customer of Speedrack for 30 years. “As e-commerce has grown, Speedrack has set the standard for the rack industry. Their competitors are always trying to emulate what Speedrack is doing. “Ron Ducharme has set the bar. He’s established a culture there that is second to none. I wish the people in the

industry would copy their culture, not just their designs. They’re fun to partner with.” While one west Michigan firm, Speedrack, supplies rack systems that Vargo installs for Amazon, another west Michigan firm, Dematic Corp. of Grand Rapids, provides the conveyor systems to move Amazon products from the racks to the trucks. “It’s interesting that the largest suppliers of equipment to Amazon are two companies in Michigan,” said Johnson.

a local company called Michigan Spring. He worked his way up the ranks and eventually bought the company, selling it in 1986. As part of that sale, Richard had to sign a five-year non-compete agreement. In 1992, he founded Motion Dynamics. Meanwhile, Chris graduated from

what was then called General Motors Institute in Flint, now known as Kettering University. After graduation, he worked 19 years as an engineer for General Motors, then three for Herman Miller before joining Motion Dynamics in 2001 as its 12th employee. At the time, the company specialized in selling copper wiring for the electronics and automotive industries, with about 10 percent of sales to makers of medical devices. A year or so after joining the company, Witham attended a trade show and formed a relationship with a sales rep in California who was well connected to the medical-device community, and Motion Dynamics made a strong pivot to supplying that market. Today, the company has 170 employees, adding 40 in the past 12 months, with projections to add 20-40 over the next three to four years. Witham said it has been growing revenue about 20 percent a year. They expect revenue of more than $30 million this year. Motion Dynamics moved into a new 38,000-square-foot building five years ago and is adding a 33,000-squarefoot, $5 million addition that is expect-

ed to be finished on Dec. 1. One very satisfied customer is John Danko, the strategic buyer for Senior Metal Bellows of Sharon, Mass., a 60-year-old company that makes precision components that must operate in harsh conditions. Its customers include defense contractors, aerospace, oil and gas, medical and semiconductor manufacturers. Danko said his company has about 1,000 suppliers on its approved-supplier list, none of them better than Motion Dynamics, which since 2003 has supplied a wide range of springs in various sizes. “I tried so many spring suppliers that crashed and burned. I can’t tell you how good these guys are. Their quality is 98 to 100 percent. The other suppliers were 50 to 60 percent. They’re the perfect supplier. They’re so good, we decided to let them do the testing on their parts and to trust their results. We take their data and accept it, and we never do that. These parts have very tight tolerances. They go into jet engines, there are military applications, they go into oil and gas operations thousands of feet below sea level. Failures can be catastrophic.”

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

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Paper supply business grows through acquisitions By Tom Henderson thenderson@crain.com

A series of five major acquisitions of distribution companies in the last six years has grown Norton Shores-based Nichols Paper & Supply Co. into a business with 240 employees, a fleet of 30 large semis delivering products daily and expected revenue this year of more than $125 million — a steady climb upward from when it hit $25 million in 2000. Nichols distributes a wide range of paper and cardboard Olthoff supplies, cleaning products and safety equipment; its customers include hospitals, schools and corporations. The company stocks upwards of 7,500 different products in its 350,000 feet of warehouse space across the Midwest. Brands it stocks and sells include Rubbermaid, 3M and Georgia Pacific. It sells to about 5,000 customers, all in the Midwest.

The company’s most recent acquisition was the purchase in June of DawnChem in Cleveland, which included a 30,000-square-foot warehouse and sales office. Previous acquisitions were of Industrial Cleaning Supply Co. of Waterford in 2013; Kellermeyer Co. of Bowling Green, Ohio, in 2014; Professional Sanitary Supply in Detroit in 2015; and Spectrum Janitorial Supply in Indianapolis in 2017. When asked about further acquisitions, Mike Olthoff, the president and CEO, first said: “Right now, we’re just trying to get our arms around what we have. As of Aug. 29, I’m happy. Talk to me in September.” But, he adds: “We’re always looking. I’m talking to a couple of companies right now, but nothing is imminent.” Nichols Paper also has a sales office and warehouse in Traverse City; a facility in Grand Rapids where it stores lines of equipment the company also sells, including floor polishers and vacuums; a warehouse in Holland; a sales office in Rochester Hills; and a sales office in Decatur, Ill. Nichols was founded by a pair of

brothers in a small warehouse in downtown Muskegon in 1936. The first plant manager was Mike’s father H.K. Olthoff, who, along with his partner George Cayo, bought the company in the mid-1950s. Mike’s brother, Jim, bought Cayo’s interest in 1970. Mike bought out his father H.K.’s interest in 1974, and the two brothers were co-CEOs until Jim retired in 1995. Fifteen years ago, Nichols bought a 105,000-square-foot former Penske warehouse and distribution center, which is its chief distribution center and headquarters, just south of Norton Shores. About 65 work there, including packaging engineers to help customers design better packaging for shipping. Despite all it holds and its huge banks of racks, the warehouse feels uncluttered and airy. The walls of the adjacent office are lined with large, colorful original works of art. One piece of art is a large version of the company’s logo, which is split into four quadrants, with elements signifying career, health, family and community. “You need all four to be in balance with your life,” said Olthoff, who co-founded the Muskegon Angels in

2013. That investor group tries to help local businesses for sale find local buyers, instead of being bought by out-of-state companies or private-equity firms seeking to reduce

costs by trimming employment. (See related story, Page 15.) Nichols’ motto is: “Not defined by the products we sell, but the problems we solve.”

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

Muskegon Angels pivots to investing that keeps companies local By Tom Henderson thenderson@crain.com

The Muskegon Angels LLC have changed their business model this year, focusing much more intently on funding businesses in Muskegon County after having branched out over the years to invest across Michigan. “We had got away from our mission and had started investing all over Michigan, and our members wanted to refocus on western Michigan and Muskegon,” said Eric Seifert, the group’s administrator. Seifert said one new focus for the angels is helping local businessmen Seifert and women buy local companies for sale, instead of letting them be sold to companies, private-equity funds or individuals based elsewhere. “Private equity comes in and they want to cut employment,” he said. “Local owners are more supportive of the community. They sponsor softball teams and events, they want to buy from local companies. We have three of those deals in the hopper right now. One is helping a guy buy a $50 million revenue company that he can’t afford on his own. And the MEDC [Michigan Economic Devel-

opment Corp.] called on one deal and asked for our support.” The Muskegon Angels were founded in 2013 and now have 25 members. Seifert said the new focus also will target areas his members are more familiar with, such as manufacturing, machining and distribution, rather than high-tech business such as software that they had grown to be a focus, a trend in angel investing elsewhere that perhaps his group wasn’t as suited for. He said investing in older industries may have a smaller financial return and not have some of the home runs that investing in tech startups can have, but there is a social return in helping local companies keep local ownership. Seifert’s background aligns with the revised investment focus. A former community banker, for 10 years he was an advisor with the Michigan Small Business Development Center, which is affiliated with Grand Valley State University in Grand Rapids. His specialty was helping the owners of second-stage companies plan their exit strategies. He now runs his own Muskegon-based firm, Left Coast Capital Resources LLC, which helps companies plan their exits and find buyers. Seifert said the group has invested about $3 million in its 14 portfolio companies, typically taking less than a 10 percent ownership stake in a company. SEE ANGELS, PAGE 16

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“The key is hiring great people, people who are better than you are, and then allow them to do what they do well,” said Nichols. “Efficiency is so important to us. Margins are so thin in this industry, they’re like grocery-store margins.” Olthoff said that while much of his business is conducted electronically now, he likes to keep an oldschool feel to things. His staff mails about 1,000 hand-written notes to customers a year, thanking them for their business. “It’s high tech, high touch,” said Olthoff. “People buy from people at the end of the day, but they need a reason to buy from you. Our goal is to be one of the major companies in the Great Lakes region for the products we sell. There’s a lot of business in the Great Lakes region we don’t have.” Dan Dunn is materials manager of Kentwood-based North America Fuel Systems Remanufacturing LLC, a joint venture between Daimler Truck North America and Bosch that employs about 140 and manufactures fuel systems and components. Nichols has been a supplier since he joined the company in 2002. “I really enjoy good service with Nichols. I like their breadth of products,” he said. “We’ve consolidated as much of our spend with them as possible.”

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DEALS & DETAILS

CALENDAR

CONTRACTS

TUESDAY, SEPT. 10

THURSDAY, SEPT. 12

For the Health of America: A Vision for the Future of Health Care. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Blue Cross Blue Shield Association President and CEO Serota Scott Serota shares insights on the challenges facing the health care system today — and the steps health insurers and their partners are taking to build a stronger health care system for the future. Ford Field. $45 members, $55 guests of members. Website: econclub.org

Smart Cities: A Connected Way Forward. 11:30 a.m.-1:30 p.m. Washtenaw Economic Club. Camilo Serna, vice president, corporate strategy at DTE Energy, discusses how Serna the organization is working with cities in the Detroit area to create smart cities and what the longer-term vision is for the utility. $77.50 nonmembers. Washtenaw Community College. Phone: (734) 677-5060. Email: washtenaweconclub@wccnet.edu. Website: wec. wccnet.edu

WEDNESDAY, SEPT. 11

UPCOMING EVENTS

Social Media for Business Growth. 9-11:30 a.m. Oakland County One Stop Shop. Terry Bean, founder of Networked Inc. and Motor City Connect, will discuss why networking works, how to be ready to network anywhere, which online sites are worth the time, how to identify ideal referral partners, the components of a solid ask and how to grow a business. L. Brooks Patterson Building Conference Center, Waterford Township. $40. Contact: One Stop Shop, email: smallbusiness@oakgov.com; phone: (248) 858-0783.

Masterful Networking: A Workbook. 8-9:30 a.m. Sept. 17. Troy Chamber of Commerce. Barry Demp of Barry Demp Coaching LLC will discuss techniques to achieve successful networking connections. Topics include: Behavior and attitude, relationships and communication, building powerful networking habits, networking as part of a solid business plan and mapping out networking. Marsh & McLennan Agency, Troy. $15 members, $25 nonmembers. Website: troychamber. com/events

nologies.com, braviacapital.com Desai/Nasr Consulting Engineers, West Bloomfield Township, a structural engineering firm, has joined IMEG Corp., Rock Island, Ill., a national engineering firm with more than 40 U.S. locations. Websites: imegcorp.com, desainasr.com J

J Village Green Cos., Southfield, a property management company, has assumed responsibility as the property manager for Escher, a 317unit newly constructed apartment community in Rockville, Md. The management transition occurred on Aug. 1. Website: villagegreen.com

MERGERS & ACQUISITIONS Bravia Capital, New York, a private equity firm, has become an investor in Lightning Technologies, Oxford, industrial pallet manufacturer. Financial details were not disclosed. Websites: lightningtechJ

NEW SERVICES J Individual Communicators Network, Detroit, a network of business communications professionals, has developed a new website at icnnetwork.org

Submit Deals & Details items to cdbdepartments@crain.com

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ANGELS FROM PAGE 15

It had one big exit in 2017 when Grand River Aseptic Manufacturing Inc. of Grand Rapids was sold to Chevy Chase, Md.-based private equity firm Arlington Capital Partners, a deal that Seifert said brought a 3X return to the angel group. Seifert said the Muskegon Angels basically took 2018 off as they decided on their investment pivot. Their return to investing coincides with a recent growth in angel investing statewide. According to a report by Ann Arbor Spark, which is active in angel

OXYGEN FROM PAGE 11

Gary Abusamra is president and CEO of Auburn Hills-based Oxus Inc., launched in 2010 by former Delphi engineers to commercialize a portable oxygen concentrator. It also makes medical devices on a contract basis and will make Obenchain’s. “She’s linking into the telemedicine market,” he said. “Everyone is looking at increasing efficiencies in health care, and telemedicine will be a big part of that.” The oxygen flow monitor will provide the bulk of company revenue. It is a Class 2 device, which requires more regulatory hurdles before approval to go to market than Class 1 devices. In the meantime, AIRS has been generating what Obenchain described as modest revenue by selling a Class 1 device, plastic tubing that humidifies the oxygen as a patient

September Economic Development Forum. 8-9:30 a.m. Sept. 18. Troy Chamber of Commerce. Topic: The Aerotropolis Advantage. The Detroit Region Aerotropolis is a four-community, two-county public-private economic development partnership focused on driving corporate expansion and new investments. Rehmann, Troy. Free members, $15 nonmembers. Website: troychamber.com/events Top of Troy: Women of Influence. 8-9:30 a.m. Sept. 26. Troy Chamber of Commerce. Four female business leaders discuss the challenges they faced on their paths to success, the key tools they have used to remain focused along the way, the hard decisions they are faced with on a daily basis and how being a woman has affected the choices they made. Panel includes: Lara Dixon, principal, Troy Athens High School; Lenora Hardy-Foster, president and CEO, Judson Center; Angelique Strong Marks, director, general counsel, corporate secretary and compliance officer, Mahle Industries Inc. and Cheryl Yuran, group vice president and chief human resources officer, Plex Systems. Moceri Learning Center, Beaumont Hospital Troy. $15 members, $25 nonmembers. Website: troychamber.com/events More Calendar items can be found at crainsdetroit.com/events.

investing through its Michigan Angel Fund, there were 859 angel investors who invested $52 million in 84 companies last year, compared to 797 angels who invested $41.8 million in 70 companies ion 2017. Two new angel groups have formed this year, the Detroit-based Woodward Angels, in cooperation with the Grand Angels, and the Birmingham Angels. Here are some of the Muskegon Angels’ portfolio companies: J American Glass Mosaics of Norton Shores, a company launched in 2013 to make mosaic glass tiles such as those used in back splashes from recycled glass J Ablative Solutions Inc., a medical-device company in Kalamazoo

that in January raised $77 million in what was then the largest venture-capital round ever raised in Michigan. In June, Detroit-based StockX broke that record when it raised $110 million. J Micro-LAM of Kalamazoo, a maker of laser-based cutting tools for the machine industry J Tetra Discovery Partners Inc. of Grand Rapids, a pharmaceutical company targeting Alzheimer’s J UV Partners Inc. of Holland, which has developed a device that uses ultra violet light to reduce the number of infections acquired in the hospital

breathes it in, eliminating the patient discomfort and frequent nose bleeds that come from breathing oxygen from tanks at zero humidity. The tubing retails for $49.99. The largest market for the flow monitor will be long-term health care facilities, with the second largest being home health care patients and third hospitals. AIRS has a management team of six and 10 1099 contractors. She said she will convert those 10 to full-time employees when she finishes raising her A round. “AIRS is a company we are looking at,” said Tim Parker, president of the Grand Angels, which has had preliminary discussions about an investment. “We like them for their patented technology that appears to solve a true need and makes for a better patient experience. We also like their revenue traction and the product’s ability to work within the mechanics of current systems.”

Jason Pliml is a technology business consultant with the Grand Valley-based Michigan Small Business Development Center. “Valerie is a persistent, passionate entrepreneur who the SBDC tech team has coached on a range of medical device commercialization topics. It’s been exciting to see how much progress she’s made on regulatory compliance,” he said. Obenchain has been coached, and is a coach, too. She was a winner at a Dolphin Tank pitch event put on in Grand Rapids by the Michigan Women’s Foundation in 2015. That event put her in contact with the attorneys who drafted her documents for investors. Since then, both she and her CFO, Diana Kasza, have been coaches for those pitching at subsequent Dolphin Tank events.

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

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

Whitmer installs new Strategic Fund board By Chad Livengood

Gov. Gretchen Whitmer is installing her own appointees on the Michigan Strategic Fund's board of directors as part of her reorganization of the state's economic development agencies. Whitmer on Friday made seven appointments to the board that approves tax incentives for business development projects managed by the quasi-governmental Michigan Economic Development Corp. The Democratic governor also designated MEDC CEO Jeff Mason as president and chairperson of the Michigan Strategic Fund board. Whitmer's appointees to the Michigan Strategic Fund board include:  Britany Affolter-Caine, of Ypsilanti, executive director and program manager of University Research Corridor.

 Ronald Beebe, of Midland, principal owner and chief executive officer of Euclid Industries Inc., Brinn Performance Inc., Awrey Bakeries, Griffin Thermal Products and Milling Precision Tool Corp.  Paul Gentilozzi, of Lansing, a race car driver and managing partner of 3GT Racing and president of Gentilozzi Real Estate.  September Hargrove, of Detroit, vice president of global philanthropy and head of Detroit philanthropy for JPMorgan Chase & Co.  Charles Rothstein, of Farmington Hills, founder and senior managing director of the private equity investment firm Beringea LLC.  Susan Tellier, of Caledonia, president of JetCo Packaging Solutions in Grand Rapids.  Cindy Warner, of Traverse City, founder and chairperson of the consumer data privacy firm 360ofme Inc.

BOSCH

the mobility business and writing a lot of software.

clivengood@crain.com

FROM PAGE 3

So what type of approaches have you taken to upskill the existing workforce?

If you were to look in some of our existing manufacturing organizations, we already had existing apprenticeship programs. What we had to do is make sure those apprenticeship programs were revisited, redesigned and made sure that the technological changes that are happening there in those facilities that we’re now teaching them a better way to ensure that they understand how to interface with that technology. So we had to basically go in and do an upgrade. One thing that’s very, very exciting that we have is we’ve introduced an app (that) helps people understand their personal digital literacy. You take a personal assessment. And after that assessment it gives you feedback about where you stand compared to other people in the same type group. And this is within your own company?

We piloted it earlier this year, and we’re at the point where we’re pushing this throughout the organization. It’s a great opportunity to use this type of technology to help people become aware of where they are in the continuum of digital literacy. What kind of data comes out of this that you use to upskill those digital skills?

The app prescribes a next type of training for them, whether it’s machine learning, artificial intelligence, blockchain technology, scrum methodologies. All of these new types of technologies, we have the ability to see what, recognize that and then turn around and customize training specifically for that division or department. So it’s basically identifying your shortcomings?

That’s right. On an aggregate level. With your apprenticeship programs, how are you changing them to do them more internally, particularly in software development? You all are in

Yeah, it’s quite a bit. Before I came in here, I went and looked today at how many jobs do we have open in engineering just here within the Farmington Hills and Plymouth offices, and I saw 113. ... We had over 80 percent of those positions in software engineering or some form of software engineering, whether it’s system architecture, systems design, some form of coding that we really need. ... In assessing ‘Do we have the type of talent we need for this coding capability?’ ... well, in the market right now, no we don’t. It’s very simple to see we’ve got this demand, but the supply on the market is really not there. And then we get into a situation of either making a decision: Do we buy the talent or build the talent? Because of the labor economics — the high demand, low supply — it makes better sense for us to go build the talent. That’s why we have the software developer apprenticeship program. How did you develop that program?

We pulled the resources together and within one week we were able to develop our standards for a software development and submitted that to the U.S. Department of Labor on the first of July. And they have our standards now ... and they’re in the process of reviewing that. ... We’re putting the infrastructure in place to run that particular program — and very quickly.

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Business Analyst - Financial Systems The role of the Business Analyst is to ensure the operational efficacy and excellence of an organization. The business analyst designs and documents work flow, manages and provides solutions to new business unit ideas, trends, and concepts appropriately through the latest technological paths. The business analyst understands the customer’s business requirements and business process management, and then translates them to software requirements. This is a 4-6 month temporary position and is health benefit eligible.

This seems like maybe not a crisis for you, but it’s becoming an alarm bell.

It is. ... Like everyone else, it’s taking longer to fill jobs than we would want. But if you can bring a person into the organization with less experience, we can build that type of experience, as long as we get them into the organization. ... And once they come, they have a tendency to stay at Bosch. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Coulter to zero in on development, health care issues By Kirk Pinho

of White Lake Township and Michael McCready of Bloomfield Hills filling economic development roles. “Economic development is a particular area of interest and focus of mine,” Coulter said, noting that he’s not sure whether he will retain Kowall and McCready, the latter whose appointment to the Economic Development and Community Affairs director position is being held up by the county commission over his votes in the state Legislature repealing the state’s prevailing wage and curtailing minimum wage and paid sick time laws. “I don’t know, I don’t know. I’m having these one on ones with everyone who reports directly to me. I’m, I think, meeting Mike (McCready) later this week.” The ideological differences between Coulter and Patterson are large, however, and how the new executive pursues economic development in the coming 16 months can be seen in a few areas. For example, Patterson was famously a champion of suburban sprawl, even putting his mantra on the county’s own website: “I love sprawl. I need it. I promote it. Oak-

land County can’t get enough of it.” Coulter, on the other hand, wants to encourage denser communities however he can. “I’m more interested in trying to populate our existing areas,” Coulter said. “But I wouldn’t put some sort of moratorium on it. I mean, it’s a free country and the growth is going to happen where the market wants it to go. But I am a big champion of redeveloping our older areas and making them more attractive.” And Coulter has long been a proponent of a regional transit system, while Patterson was long viewed as an obstacle to one. The former views that as a key to business attraction and recruitment, pointing to Amazon.com Inc. specifically seeking such transit options for its employees during its frenzied and highly public search for its so-called “second headquarters” in 2017 and 2018. “The (economic development) philosophy should be independent of partisan politics, and the philosophy should be in an era where we have historic investments in infrastructure that are beginning to fail,” said Vicki Barnett, Patterson’s Demo-

cratic opponent in 2016. “We can no longer afford sprawl, and we have to find a way to redevelop the existing infrastructure in Oakland County and build on that, and stop building roads to nowhere and concentrate on our inner ring suburbs.” He comes to power with perhaps less political capital than he would like, assuming the executive duties through appointment than election. He said Marcia Gershenson, then the acting board chair, reached out to him on the morning of Patterson’s funeral after David Woodward controversially rescinded his resignation from the board and his chairmanship so he could seek the executive appointment. He said she asked him if he would be interested in the executive position. The following day, during an hourslong board meeting, Coulter was voted into office in an 11-10 partisan vote after several failed procedural wranglings by the GOP. The matter is still being contested by the Oakland County Republican Party in court. But all the same, he has taken over stewardship of a county economy that has added what University of Michigan economists said in April was 126,500 jobs this decade, averaging 2.1 percent job growth per year. That comes after falling 2.2 percent annually during the 2000s as the recession took its toll and 156,500 jobs with it. During the 1990s, county job growth was 2.8 percent per year on average, for 182,000 jobs. And last year, the unemployment rate was 3.3 percent, well below the national average of 3.9 percent. It has attracted high-profile investment and new North American corporate headquarters, but has seen political and economic sea changes in the last decade or so. It wasn’t long ago that the county was considered a bastion of Republican politics. All six countywide positions — executive, sheriff, prosecutor, clerk/register of deeds, treasurer and water resources (formerly drain) commissioner — were held by Republicans. There was a time in recent memory when the county board had four Republicans for every Democrat. Cracks in the GOP stranglehold

Patterson’s departed deputies and putting his own touch on the county, particularly in the health department and economic development. He portrays himself as pro-business, touting some of Patterson’s economic development initiatives. As mayor of Ferndale, he founded a Mayor’s Business Council modeled after Patterson’s Main Street Oakland County program that has spurred downtown economic development in the county’s older cities. Technically, Coulter has more than seven months to decide whether to seek the Democratic nomination in the August 2020 primary. But realistically, he’ll probably have to decide by January whether he’s in or out. One big reason is Coulter’s decision to be on the ballot next year will influence his political power, particularly on the looming regional issue of whether a transit millage should be placed on the ballot next year. Second, Coulter’s ability to govern and build his own team inside the L. Brooks Patterson Executive Office Building would almost certainly be affected by whether he’s got an expiration date next to his asterisk.

Who would leave their job in the public or private sector to come work for Coulter if they knew it was a oneyear gig? He’s going to face that question from prospects to fill a handful of deputy county executive and department director-level positions in the coming weeks. Coulter, who left a job as director of external affairs at The Children’s Foundation to become county executive, said he hopes to “offset” the inherently lower pay for government service and possible 16-month term with the prospect of being “a change agent” in county government. Hilarie Chambers, a longtime Democratic political aide, quickly agreed to be Coulter’s chief deputy executive, leaving her post as chief of staff to Secretary of State Jocelyn Benson. “But the other reality is, and I hope I’ve been demonstrating this, is I didn’t broom everybody out,” he said. “And I think if we get the right team in place that is actually making the kinds of positive impacts in these areas ... maybe the next county executive, whoever it will be, will say, ‘No, I’m good there. ... And we’ll keep doing that.’”

If Coulter wants to stand for election next year, he’ll have the luxury of having already assembled his own team. Frank Houston, a former chairman of the Oakland County Democratic Party and Coulter ally, thinks the new county executive needs a few months to prove his leadership chops before making a decision on 2020, which could change Meisner and Woodward’s political calculus. Coulter would have the power of incumbency to fend off opponents in a primary and use in a head-to-head matchup against the Republican nominee in a county that’s been trending Democratic in recent election cycles. “Any Democrat who runs against him as an incumbent would be a fool,” Houston said. Woodward recognizes his window of opportunity to be in the executive’s office may have passed after his plan to resign and get appointed fell apart before Patterson was even buried. The Royal Oak Democrat said he’s more focused on showing that his party can run the county smoothly after decades of GOP rule. “We need to set a pause and focus

kpinho@crain.com

David Coulter has assumed leadership of the state’s economic development powerhouse as the new Oakland County executive and already made a big change: firing the chief deputy who had been in charge of it. That isn’t to say that Coulter, the first Democrat to hold the executive position in county history after L. Brooks Patterson’s death and a bloody and partisan appointment process, will clean house and turn the county’s potpourri of business attraction and economic development initiatives topsy-turvy. You can expect some of Patterson’s efforts, such as Main Street Oakland County established in 2000 to reinvigorate historic downtowns, to probably stay unchanged during Coulter’s partial term. Ditto the Oakland County Business Roundtable, a group of more than 100 business, government and education representatives Patterson set up in 1993 to make recommendations that are largely rubber-stamped by the county. Both programs, long feathers in the late Republican stalwart’s hat, were singled out in an hour-plus interview with Crain’s last week as good ideas that were implemented and had a direct positive impact in Coulter’s hometown of Ferndale. Yet there are sure to be changes ahead, with a Democrat leading the county’s 1.25 million people as executive and a slim 11-10 Democratic majority on the county commission. First of them: Coulter, the former mayor of Ferndale who previously was a county commissioner, said that he broomed out Timothy Meyer, the former Oakland Community College chancellor who became a deputy county executive in charge of economic development in February 2018, because he “wanted a clean start there.” He didn’t elaborate. Coulter said he would seek deputies who have expertise in areas like economic development and health care, two of his key issues, and hire them soon. But, for the time being at least, Coulter has a pair of former Republican state lawmakers in Mike Kowall

COULTER FROM PAGE 1

“It’s hard to come into a job for 16 months and offer a vision and earn that trust you just talked about,” I replied. “And the problem is, if I go political — and I was being honest when I told you before I’m trying to put off the political decisions as long as I can just so I can focus, to be honest with you,” he said. “If I were to tell you no, then literally I would become a lame duck tomorrow.” Coulter learned the lame duck lesson back in the spring when he announced he wouldn’t run for re-election as Ferndale’s mayor and suddenly lost command of his City Council. “They got a lot more independent when they realized I wasn’t going to be around,” said Coulter, who was planning to run for the Michigan House next year before County Commissioner Marcia Gershenson called on Aug. 15 to gauge his interest in being appointed county exec the next day. Coulter said he’s focused on getting his first budget passed by the Sept. 30 deadline, filling the seats of

JOHN SOBCZAK / LORIEN STUDIO

Some of former Oakland County Executive L. Brooks Patterson’s signature efforts will stay unchanged during Dave Coulter’s partial term, Coulter said.

became apparent in 2008 with the election of Andy Meisner and Jessica Cooper as Democratic candidates for treasurer and prosecutor, respectively, to unseat Pat Dohany and defeat David Law, both Republicans. Fellow Republican John P. McCulloch, the longtime water resources commissioner and county political power player, only beat a Democratic challenger by 74 votes that year. Four years later, Republican Bill Bullard Jr. lost the clerk position to which he was appointed to Lisa Brown, a Democratic former state lawmaker. McCulloch lost to Jim Nash, another Democrat. And now with Coulter replacing Patterson, only Republican Sheriff Michael Bouchard remains. And the shift in politics has been coupled with a renewed interest in Detroit. Companies from around Oakland County have been moving their offices to the city in tandem with young adults — the largest workforce demographic in the U.S. — wanting to work and live in walkable areas. Ally Financial had explored building a new headquarters in Oakland County but ultimately moved its hundreds of employees into a Dan Gilbert-owned skyscraper. Google left Birmingham to move to an office next to Little Caesars Arena. Microsoft bolted from Southfield to take a large footprint in the One Campus Martius building. LinkedIn, Twitter, IBM and other tech companies all have presences in the city, not north of Eight Mile Road. Coulter is aware of that, and doesn’t find the region’s version of tenant musical chairs particularly productive, much as Patterson did not. “I don’t disagree with Brooks,” he said. “That’s a zero-sum game for the region, right? If you’re just poaching companies from Macomb and Wayne and they are poaching them from Oakland, that would not be my strategy. To me, the way you approach that is to be actively engaged with regional development and try to work together to bring firms and employers from outside the region here, that would be the ultimate goal.”

on the governing of Oakland County,” Woodward said last week. “That’s where my head is right now.” “That is more important than the electoral contest of 2020 at this moment,” he added. Meisner, who reported nearly $270,000 in cash on hand at the end of July for a possible county executive campaign, did not return a message seeking comment. Coulter, who served on the county commission from 2003 to 2010, emphasized he has a good working relationship with both men. But Oakland County’s new boss-by-appointment said his first two weeks in office have been so busy trying to get organized that the thought of running for the seat hasn’t crossed his mind. “I just haven’t thought about it. I really haven’t,” Coulter insisted. “Give me a little honeymoon to get through the budget, get the leadership team in place, address the major things that we have to do and then I’ll think about it.”

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

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

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

WILD BILL’S FROM PAGE 1

The Michigan Marijuana Regulatory Agency in August denied 38 license applications filed by president and co-owner of the tobacco chain, Mazin Samona, and his in-house attorney Paul Weisberger. It’s the second attempt by the group to get approval for dispensaries in Battle Creek, Bangor, Lansing, Sturgis, Walled Lake, Bay City, Kalamazoo, Adrian and growing operations in Lansing and Bangor. Samona and Weisberger played at least a minor role in defining Michigan’s regulated marijuana industry. Samona and Weisberger were both active in discussions with legislators about making licenses difficult to obtain. Weisberger was even appointed by then-Gov. Rick Snyder in 2018 to serve on the 17-member Michigan Marihuana Advisory Panel to make recommendations on how to implement the state’s marijuana laws. The duo went on to form Oasis LLC, doing business as Oasis Wellness Centers, and sought to become one of Michigan’s largest marijuana retail chains. But their plans went awry in September 2018 when the board they were advising denied their applications. According to records obtained by Crain’s through the Freedom of Information Act, the now disbanded Bureau of Medical Marijuana Regulation board denied Oasis’ applications on the grounds of “consideration of the integrity, moral character and reputation of the applicant” and because the applicant the group failed to disclose Samona’s criminal history. Samona holds a 95 percent interest in Oasis and Weisberger controls the remaining 5 percent. Samona, Weisberger and other executives from Wild Bill’s did not respond to several requests for comment. Oasis appealed that decision to the Department of Licensing and Regulatory Affairs and an investigation into that decision by an administrative law judge began last December. The criminal conduct from Samona’s past includes pleading guilty to several counts of assault by physical menace in New Jersey involving “prostitutes” in 1988, a misdemeanor guilty plea for fourth-degree criminal sexual conduct in Detroit in 1981 and another misdemeanor for falsifying a birth certificate under a fictitious name to obtain a driver’s license, according to state records. The board alleged Weisberger reported on the group’s application that Samona’s first 1998 charge was larceny, not assault by physical menace. Doug Mains, a partner at Honigman Miller Schwartz and Cohn LLP in Lansing who helped draft the Michigan proposal, said this type of error was almost guaranteed to get a denial from the board — which was disbanded by Whitmer earlier this year and moved all licensing to the Marijuana Regulatory Agency under Executive Director Andrew Brisbo. “We saw a lot of this with the board initially,” Mains said. “Nondisclosure is something they took a hard stance on. If you didn’t disclose a criminal arrest or misstated it, even if it was 35 years ago, they thought you were misleading them. We learned early on that it wasn’t what you disclose that’s going to hurt you, but what you didn’t disclose.” But the administrative judge in the appeal didn’t agree with the board. The judge determined this mischaracterization didn’t negatively impact the “moral character” of Weisberger

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Wild Bill’s in Ferndale is part of the state’s largest tobacco retailer. A push by its president for nearly 40 marijuana licenses was rejected by state regulators.

or Samona, according to the state records. Samona’s criminal record didn’t end there, however, as the judge commented in a proposal for decision filed July 2. “If the above 3 offenses were the only brushes Mr. Mazin Samona had with the law, the undersigned administrative law judge would likely find that Mr. Samona had obviously matured over the ensuing 35 years ... and would find Mr. Samona qualified and suitable for licensing under the

“If you didn’t disclose a criminal arrest or misstated it, even if it was 35 years ago, they thought you were misleading them. We learned early on that it wasn’t what you disclose that’s going to hurt you, but what you didn’t disclose.” — Doug Mains, partner at Honigman Miller Schwartz and Cohn LLP

Michigan medical marijuana act. However, that is not the situation at hand,” the judge said in the decision. The application also omitted a misdemeanor charge for violating the Michigan Tobacco Products Act, which Samona pleaded guilty to in 2004. The application only mentioned that Samona, who at least coowns more than 100 tobacco shops in Michigan and Ohio, was charged for violating the Michigan Tobacco Products Act in 1997 along with 22 other individuals, according to the state’s records, but that those charges were ultimately dropped. Samona did not reveal on Oasis’ application that he served 18 months probation and paid a restitution of $500,000 as part of the misdemeanor guilty plea, state records say. During the appeal, Samona testified that the group would never have filed so many applications had it considered a denial possible. “If a person knew that they had the risk of being denied a license, a businessman with any common sense would pay the $6,000 fee and file one application for a medical marijuana license to test the waters and access the chances of obtaining a license ...,” the records said Samona testified. Oasis’ 38 applications cost $228,000

in nonrefundable fees and likely much more in investigative fees. Alex Leonowicz, COO and general counsel for cannabis grower and retailer Redbud Roots LLC, said the state hit the company with a $63,000 investigative fee and that Oasis likely had similar costs. Leonowicz said Oasis also bought its way into several local licenses by acquiring interests in unopened shops that already received local approval. “They spent the most money on buying majority interests in these shops,” Leonowicz said. “The licensing fees are the least expensive thing they did.” Despite the application errors, the administrative judge agreed with Samona and ruled in favor of Oasis stating the group “is clearly and convincingly qualified and suitable for licensing” on the grounds that the offenses were many years ago and Samona has operated Wild Bill’s with no issues for more than 15 years. Unfortunately for Oasis, the judge’s decision isn’t binding, and the Marijuana Regulatory Agency denied Oasis’ licenses for a second time anyway. Oasis has the option to appeal the decision again through the traditional court system, but as of Sept. 6 had yet to do so. Denials are relatively uncommon, especially after an administrative judge rules in your favor, Mains said. “Honestly, I’ve never had an application denied. We’re like 125 or 130 for 125 or 130,” Mains said. “It’s really uncommon, but it’s certainly within the agency’s power to do so.” Mains and Leonowicz agree that the regulatory agency is wary of oversaturating the market by approving too many licenses, which could lower marijuana prices to a point where businesses would shutter, and Oasis’ denial could be a sign of things to come. “(The state) doesn’t want a flooded market. They are wary of it,” Leonowicz said. “I don’t think we’re at a stage where we’d see a lot more denials yet, but theoretically, (the agency) can approve the cream of the crop. They can have a lot of leeway on who they approve because there’s no shortage of applicants.” Without commenting directly on Oasis, Leonowicz said the stringent rules for preventing any malfeasance is a wanted protection for operators like Redbud. “It’s not like we’re selling candy bars; it’s a controlled substance,” he said. “One or two bad apples could have serious consequences.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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GREENHOUSE FROM PAGE 1

Detroit-based Nextek Power Systems is also considering an equity investment, its CEO Paul Savage confirmed. Those investments will make up about a third of the $12.5 million raised to cover bridge operational funding for the nonprofit RecoveryPark over the past several months and construction and startup costs for the climate-controlled greenhouse operation, which is set to launch in August 2020, RecoveryPark CEO Gary Wozniak said last week. A 28-year loan backed by the U.S. Department of Agriculture and U.S. Small Business Administration and a 10-year loan backed by the U.S. Small Business Administration, both made through the Greater Nevada Credit Union’s Greater Commercial Lending arm to for-profit company RecoveryPark JV LLC, are set to close in October, rounding out funding, Wozniak said. Wozniak projects the greenhouse operation, run by the for-profit company, will yield $6 million in revenue its first year and $18 million annually within four years with two planned expansions that will triple its “acres under glass.” RecoveryPark has already proven the business model through pilot hydroponics and high-tunnel or soilbased growing operations a couple of blocks away near its headquarters on Chene, Wozniak said. It has contracts to supply lettuce to Detroit wholesale distributor Del Bene Produce that produced $180,000 in revenue last year and are set to do about the same this year. It’s now in talks with retailers including Nino Salvaggio and Meijer, Wozniak said. Next to tomatoes, leafy greens are the second most in-demand vegetable, he said. And recent romaine lettuce recalls have spurred demand for hydroponically grown lettuce and greens even more. The greenhouse will help RecoveryPark achieve its social mission, said Wozniak, who is himself a recovering addict and ex-offender.

NICHE FROM PAGE 3

“I started pushing the (question), what would the community gain from a merger?” Young said. “The hospital was losing a little money, but had money in the bank.” Bontrager, the former president and COO of the American Cancer Society, joined the board in 2015 when members were still considering offers to sell. One was an equity sale of Memorial to a partnership between the University of Michigan and Sparrow Health System. He said all major health systems offered to buy or affiliate, including McLaren Health Care and Ascension Health. “(Sale) didn’t make sense to us business leaders on the board,” Bontrager said. “... Under Brian’s leadership, we thought we could make a profit on our core business and also build up two or three clinical services.” Long said over a 10-year period Memorial increased the number of its employed doctors to 80 from about 18 in a range of primary care and specialties, including internal medicine, pediatrics, obstetrics and gynecology, general surgery, gastroenterology and endocrinology. Memorial, with 1,200 employees

C R A I N ’ S D E T R O I T B U S I N E S S // S E P T E M B E R 9 , 2 0 1 9 “Our mission is to create jobs for people with barriers to employment: people coming out of prison and/or drug treatment programs,” Wozniak said. “Our vision is to do that by creating jobs in the food industry and eventually we’ll transfer majority ownership to the workforce in those businesses.” The new greenhouse will also help change the way consumers view food by establishing local, hyper-fresh options and local accountability for the quality of that food, he said.

Joint venture RecoveryPark JV will be jointly owned by the nonprofit RecoveryPark as minority owner and the equity investors holding a combined 70-percent stake. RecoveryPark will look to buy back equity from the investors over 10 years, before transitioning ownership to employees, Wozniak said. Automotive and manufacturing veteran Charles Motley has joined the new company as COO. Motley, 47, brings 25 years of experience at manufacturing companies, most recently serving as vice president of manufacturing at Wixom-based gun sight manufacturer Trijicon Inc. With his experience and expertise in construction and team management, process flow, lean systems and continuous improvement skills, “he’s taking us from being a church committee to being a real business,” Wozniak said. Motley, a native Detroiter, said he was attracted by the opportunity to give back at this point in his career. “We’re committed to taking ... not just the greenhouse (but) the whole area ... from being blighted to being a stronger economic centerpiece for the city,” he said. Beyond their investments, each of the equity investors brings specific expertise and is helping mentor the startup greenhouse company, Wozniak said. Polk has given advice on managing the stress of pulling together financing for the greenhouse while balancing operational and funding needs for the nonprofit. Nicholson was instrumental in driving to hire someone like Motley to lead the greenhouse opand 200 physicians on its staff, also expanded outward into at least 25 satellite clinics that includes nearby Chesaning, Durand, Perry, Laingsburg, Ovid, Elsie, CoLong runna and Auburn. “We needed to expand our market” share to add patients and revenue, Long said. But Young said the board knew patients wouldn’t come or tell their friends about their experiences if quality wasn’t as good or better than the larger hospitals, so at every meeting trustees asked questions how the quality improvement program was going. “The quality of services that we offer, based on all those indicators, have seen significant increases from prior years” in all areas, Long said. As a result, Memorial scored a B grade this year in The Leapfrog Group patient safety scores, three stars (of five) in patient satisfaction as measured by the Hospital Consumer Assessment of Healthcare Providers and Systems, and three stars (of five) in the Medicare Hospital Compare quality ratings. It also rates above av-

Justin Phillips, farm associate at RecoveryPark, harvests greens from the nonprofit’s pilot hydroponics growing operation. BILL BOWEN

erations. Howell has brought an understanding of the farm-to-table movement and marketing for the food industry. The RecoveryPark greenhouse venture has a lot of interesting facets and is a good approach to helping Detroit, Polk said. “It’s early on, (but) we’re excited about it.” When you look at the neighborhood where the new greenhouse will be located, it’s a tough area to build a food economy, he said. But RecoveryPark’s plan will reclaim land and put it to good use. The goal of helping people come back from addiction and other challenges is also a beneficial project for Detroit, Polk said. And the opportunity to turn it into a profitable venture is also interesting. “They’ve had a good start getting their products from the existing test facility into local restaurants. People like the homegrown aspect of it,” he said. “With the local food scene in Detroit, I think the drive for local produce will continue to grow.”

Howell said he’s been interested in agriculture since he was growing up in Grosse Pointe. That interest and his desire to make a difference in Detroit drew him to the RecoveryPark greenhouse project. “I’ve been an investor in a series of restaurants in the Washington, D.C., region, and I’ve found that the lettuce product is hard to get a hold of, expensive, and when we receive it on the East Coast, there’s so much that’s thrown away,” he said. The opportunity to have something grown locally, harvested locally and consumed within days of being harvested is attractive, he said. Coupled with that, “I think the fact that the Department of Agriculture is getting involved in a farm that’s in an urban setting ... is a next-generation move,” Howell said. “The way the social side meets the for-profit side is just a good model for so many things. I really want to see this succeed.” Demolition of a former Kroger store and former potato chip manufactur-

ing building at 2259 East Palmer St. near Chene, about two miles north of Detroit’s Eastern Market, is underway to make room for the new, 2-acre greenhouse. Site preparation is set to begin Nov. 1. The greenhouse itself will be assembled from a kit shipped here by Netherlands greenhouse manufacturer Gakon Horticultural Projects. Hamilton Anderson Associates is the local architect on the project and O’Brien Construction as general contractor. Next summer, Motley said, he’ll look to hire and train 12-15 people coming out prison and/or drug recovery programs. Through a contract with the nonprofit RecoveryPark, they’ll be lined up with supportive services like transportation. The greenhouse will operate yearround with a continuous growth cycle, with seeding at one end of a large pond of water and trays of plants slowly moving across the water over 12-14 days for harvesting on the other end. Motley projects the annual costs to

erage in employee satisfaction, and care of patients for sepsis care, colonoscopy and preventive measures, Medicare data shows.

Expanding neurology was a risky proposition for a small hospital, but one Memorial’s board, management and staff readily accepted, Long said. “It was very risky, but let’s look at the other side of that risk and what’s happened to independent hospitals that are rural referral centers in the past,” Long said. “They’ve either gone one of two directions. They’ve significantly downsized and reduced the services to community you’ve been part of or they’ve been forced to, if you will, collaborate or affiliate with larger organizations.” Bo Snyder, a health care performance excellence consultant in Kalamazoo, said Memorial has been growing its neurology and other clinical programs in slow, incremental ways to minimize risks. “They take a step, check it, if going well, then continue. If not, stop,” said Snyder, who has consulted with Memorial. “If you have a grandiose plan and you are staffing up (as Memorial is), you need to see the volumes grow. It is highly risky, but they are doing it incrementally and they are comfortable” with the results. Snyder said one of Memorial’s advantages is that some patients in other markets may not have access to a neurology program that is as integrated with other specialties and offer oneday testing as Memorial.

“There could be an upper bound” to their growth, he said. “The longterm risk is that Memorial builds a better mousetrap for neurology care but the other hospitals copy that and build one, too.” But Young and Bontrager said they don’t have major concerns that competing hospitals will catch on to Memorial’s innovative approach to neurology care. “It is always a concern. We need to stay one or two steps ahead of other competitors,” Young said. “We plan on being five to six years ahead of everybody.”

Positive financial trend From 2013 through 2018, Memorial’s total revenue grew 70 percent from $104 million to $177 million. During that same period, net income also grew 25 percent from $4.4 million in 2013 to $5.5 million in 2018, totaling $18.1 million over that six-year period, according to Memorial’s audited financial statements. In 2018, operating income grew to $8.4 million, a 394 percent increase from $1.7 million in 2017, which was the first year in at least six years the hospital turned an operating profit. During the first six months of 2019, Memorial has continued to grow with $115.6 million in net operating revenue, $5.3 million in operating income with total net income of $14.4 million. Those six month numbers are up 17 percent, 84 percent and 193 percent, respectively, than the same period in 2018. “We introduced investment back into the organization, income went down, but from 2016 to 2019 that investment came to fruition” and operating income steadily went into the black, Long said.

Critical hire, neurology expansion decision While the hospital’s long-term plan evolved over a five-year period, Long said one of the best decisions Memorial made was in 2010 when executives hired a young neurologist named Rany Aburashed, D.O., and began to build the hospital’s neurology department. Long said he and Aburashed shared similar visions and agreed on a plan to create a destination neurology program that would continue general neurology but also specialize in multiple sclerosis. Later the plan evolved into specializing in muscular dystrophy, Alzheimer’s disease, dementia

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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 // S E P T E M B E R 9 , 2 0 1 9 operate the greenhouse will run about $800,000. RecoveryPark will get three cents of every dollar of revenue from the joint venture as a royalty, he said, projecting that will be about $350,000 the first year and increase with each expansion. The joint venture company will also pay a set amount each month per employee to RecoveryPark to provide wrap-around support services. By the time the greenhouse has 6 acres of crops, RecoveryPark should be receiving about $1 million each year from the for-profit joint venture, enough to be self-sustainable, Wozniak said. While the greenhouse takes shape, Motley is working with Detroit companies Skidmore Studio and Nebulous Concepts LLC on brand development and marketing. He believes it’s important to include RecoveryPark’s mission on packaging, if possible, to help people understand why buying the product is important, he said. The new company plans to take taste testing of its leafy product — possibly under the “RecoveryPark Farms 313” brand — directly to retail locations in January and hopes to have contracts with retailers in place by about the end of the first quarter, Motley said. “We’re building brand awareness through wholesale, (but) expect to see retail sales really be a big part of the growth.” Initially, the greenhouse will focus on growing baby leaf lettuce “but we’re doing a lot of research over the next three or four months to say ‘OK, these are other options that consumers are looking at that might fit our portfolio,’” Motley said.

Going forward As Motley takes on oversight of the greenhouse operations, Wozniak and RecoveryPark will look to new pastures. The nonprofit will look to shift the high-tunnel growing it’s done in recent years to a niche farming business or education and community gathering program, Wozniak said. The nonprofit will shrink to four to six employees. It will focus on providand head and facial pain. “What I was able to do at the time (was to) sell him (Long) that neurology is very important in the future of health care,” Aburashed said. “I still truly believe neurology is the one field in medicine that is being actively conquered as we speak.” Aburashed said medical specialties such as cardiology have taken massive strides the past 30 years in improving heart care, but much remains unknown about the brain. “Dementia, Alzheimer’s, MS, these tough diseases are the ones that remain the final frontier. This is the future in health care with the number of baby boomers aging and the number of neurologists needed,” he said. Long said he also felt neurology was a gem of a clinical service that the hospital could create into a highly successful niche program. But he didn’t expect it to grow to become what it is now. “Had either one of us sat down nine years ago and said to the board, or to probably anyone else that at some point .... We’re gonna have, nine neurologists or a dozen neurologists — they would have probably asked us to see a neurologist,” Long said.

Neurology focus Since 2010 when Aburashed was

ing support services for greenhouse employees and developing other social enterprise pilots such as new lines of tomato seeds, an indoor fish farm and/or a small greenhouse to grow starter plants for other growers. RecoveryPark currently operates on a $1.2 million budget with nine fulltime employees after laying off employees last year when it shut down the high-tunnel growing operation to save money on heating costs over the winter and let the ground regenerate. Part of moving forward will be settling old debts. “We’ve got a lot of debt on our balance sheet and are looking for creative ways (to settle it),” Wozniak said. RecoveryPark has pitched the idea of converting debt to stock ownership in RecoveryPark Farms, the nonprofit’s holding company for the social enterprises, and is working on deals to convert $1.8 million of debt into stock ownership in the holding company. If it’s successFreeman ful in those conversions, it will be left with 57-percent ownership in the holding company. The Max M. and Marjorie S. Fisher Foundation, which made a $400,000 program-related investment loan to the nonprofit in 2016, is in the process of looking at the conversion terms, said Meredith Freeman, who is serving as interim executive director of the Fisher Foundation while Executive Director Doug Stewart is on sabbatical. “I really applaud them for their commitment not only to the city and the neighborhood but to keeping that social aspect in place around making sure they are employing those who have challenges to employment. ... they’ve never let that go,” she said. “It could have been easier business-wise to let that go, but they made that commitment, stuck to it, and we are really happy to support that.” Sherri Welch: 313 (446-1694) Twitter: @SherriWelch hired, Memorial Healthcare’s neurology inpatient market share has grown, increasing to 20 percent in 2018 from 15 percent in its primary Shiawassee County market. Outpatient neurology has held steady at 49 percent, but that doesn’t account for a large increase of patients coming in from outside of the hospital’s immediate markets, Long said. Other competing systems in neurology include hospitals part of McLaren Health Care, Sparrow Health System, Genesys and Covenant HealthCare. “We are seeing the piece of the (market share) pie grow in MS and as it grows we are drawing a lot more numbers outside of our primary and secondary markets. Overseas, Alaska, the Deep South, the Southwest, Mid-Michigan and Indiana,” said Long. Since 2011, neurology visits have increased 729 percent at Memorial from 1,738 to 14,424 in 2019. In the U.S., some 1 million people are affected by MS, including about 20,000 in Michigan. Patients come to Memorial from all over, officials said, some traveling more than 15 hours to receive specialized care. “We started out with a single neurology practice and we now have eight neurologists that are employed and providing services,” Long said. “We’ve

crainsdetroit.com

The clubhouse at the Bloomfield Hills Country Club.

GOLF

FROM PAGE 3

Golf course architects Mike DeVries, principal of Traverse Citybased DeVries Designs, and Frank Pont, owner of Netherlands-based Infinite Variety Golf, are teaming up to deliver the project, along with New Jersey-based golf course builder LaBar Golf Renovations. In addition to bunker and irrigation upgrades, drawings call for the third hole to be converted from a roughly 400-yard par 4 to a long 255yard par 3, while the par 4 fourth hole will be lengthened but kept as a par 4. A major impetus for renovation is the course’s status as the only one left in the country that was designed solely by Colt. Born in 1869, the renowned English golf course architect designed more than 300 courses around the world. Colt completed layout of the Bloomfield Hills course in 1912. His legacy still lives on at courses in the U.S. that he designed with partners such as Charles Alison and John Morrison. “It’s a really special opportunity to embrace the history of our course and its lineage with H.S. Colt,” Chorney said, adding that members voted “overwhelmingly” to OK had revenue growth in many areas, mostly attributed to the (80) employed doctors, but neurology is a big service segment and it’s responsible for a good deal of this growth.” Through the first six months of this year, Memorial has treated 1,700 multiple sclerosis patients of a total of 3,390 patients with complex neurological conditions. Because of the increase in neurologists and expanded specialties, Memorial has reversed its patient mix. From 2010 to 2015, Memorial treated 80 percent general neurology patients and 20 percent MS and specialty neurology patients. Now, those numbers have flipped with 85 percent specialty neurology and 15 percent general neurology patients. “I had my MS patients who came into the general clinic and I would diagnose them and take care of them. It grew organically, patient to patient,” Aburashed said. When Cote joined Memorial from the University of Michigan, “She had a belief like I did that the way we were approached the disease was wrong,” Aburashed said.

NOW Center Because of the neurology growth, Memorial’s board last year approved a plan to spend $30 million on what is

BLOOMFIELD HILLS COUNTRY CLUB

the project. Bloomfield Hills Country Club joins several other private clubs in metro Detroit that plan to or have recently completed major work to their clubhouses and courses. Nearby Oakland Hills Country Club is planning a $12 million upgrade to its esteemed South Course beginning Oct. 1. Following course improvements made to suit Detroit’s first ever PGA tournament, Detroit Golf Club is undergoing $4.5 million in clubhouse repairs, and Orchard Lake Country Club recently finished a $7.1 million renovation of its clubhouse. Capital investments in private clubs are made not only to keep current members happy, but to lure new members as well, especially for padding during leaner economic years. Initiation fees, annual dues and the sponsorship requirements to be considered for membership vary from club to club. Bloomfield Hills Country Club officials declined to offer details of its structure, but Chorney said the club isn’t interested in netting a ton of new members. “We really love the intimacy of the club,” he said. “That’s not something we want to jeopardize.” Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl tentatively called NOW Center: Neurology, Orthopedics and Wellness, a 104,000 sq.-ft. building on its campus that is expected to open in mid-2020. “We had a groundbreaking in May and will locate all neurology, orthopedics and wellness into a patient-focused center,” said Long, adding that Memorial plans to give the center another name before it opens. All neurology services will be integrated with Memorial’s orthopedic practice, rehabilitation services and a new community wellness center that will offer massage, yoga and other alternative medicine treatments. The new outpatient center is designed to include offices for more than nine neurologists and expanded treatment rooms. One of the advantages in having all neurology specialists nearby is each one can see a patient and walk down the hall to discuss the case with another. “(A patient) comes in and we just have a collaborative discussion about how we’re gonna approach it,” he said. “So whatever your ailment is — complex headache, facial pain, anything — we have the ability to meet real quick. It’s been a kind of synergy that makes for great patient care.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Director Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Portfolio Manager Tim Simpson, 313-446-6788 or tsimpson@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Riffenburg, (313) 446-5800 or driffenburg@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Senior editor, Chad Livengood, (313) 446-1654 or clivengood@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

REPORTERS Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care. (313) 446-0325 or jgreene@crain.com Anisa Jibrell, breaking news. (313) 446-1612 or ajibrell@crain.com Kurt Nagl, breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho, real estate. (313) 446-0412 or kpinho@crain.com Dustin Walsh, senior reporter, economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com

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

THE WEEK ON THE WEB

RUMBLINGS

New York architect selected for Book Tower

Nessel gets involved in Epicurean Group case

AUGUST 30-SEPTEMBER 5 | For more, visit crainsdetroit.com

DA Architecture out of New York City has been hired as design architect for Dan Gilbert’s Book Tower and Book Building redevelopment on Washington Boulevard downtown. Among the changes in plans for the iconic 38-story tower that opened in 1926 after being designed by Louis Kamper more than a century ago include increasing the planned residential space and scaling back the hospitality and office component as design plans change. In addition, ODA, which is also working on a project on Detroit’s east riverfront, plans to open up a longsealed atrium and make the 487,000-square-foot building accessible to the public from all four sides. “We think for what this building represents and the kind of work we are going to do there, it is right up our alley,” said Eran Chen, founding principal of ODA, in an interview. “It’s reimagining the future based on the roots of the past and that’s something extraordinary. It’s essentially 100 years that have passed where this building experienced the changing landscape of Detroit: 50 years of ambitious growth and 50 years of decline and deterioration.” When $618.1 million in tax incentives was approved for the Book Tower/Book Building project and three other new construction efforts totaling $2.14 billion 16 months ago, the Book Tower/Book Building restoration was expected to cost $313 million. The plans at the time called for 95 residential units; an approximately 200-room hotel; 106,000 square feet of office space; 50,000 square feet of conference and event space; and 29,000 square feet of first-floor retail. A 400-space parking deck was also planned. Today, the plans have shifted, said Melissa Dittmer, chief design officer for Bedrock, Gilbert’s real estate company that has amassed a portfolio of more than 100 properties totaling north of 18 million square feet, mostly in Detroit. She said plans are now for about 25,000 square feet of retail; about 40,000 to 50,000 square feet of office space; approximately 120 hotel rooms; and about 200 to 220 residential units. It’s expected to be complete in 2022. The move comes more than four years after buying the Book Tower, Book Building and a 30,000-squarefoot squat community center building for $25.1 million, and three years after exterior work had started. “Facade restoration should be done within the next quarter,” Dittmer said in an interview. “That includes masonry restoration, copper replication and replacement, and a complete cleaning and stabilization of masonry. It includes caryatids and corbelling and ornamentation that you have throughout all of the facades, and more than 2,200 windows have been replaced.” One of the key components to the renovation for Dittmer is reopening the atrium space. The project is also to include restaurants and bars and other public spaces, Dittmer said.

ODA ARCHITECTURE

Dan Gilbert’s Bedrock LLC selected ODA Architecture of New York as design architect for its renovation of the Book Tower downtown. A rendering shows the 486,760-square-foot building’s entrance.

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

$4 million

Donation to Motown Museum by record label’s founder Berry Gordy

873,000

Total square footage occupied by the craft beer industry in metro Detroit

2,200

Number of windows that have been replaced at the Book Tower and Book Building

BUSINESS NEWS J Belgium-based cinema operator Kinepolis Group NV has agreed to buy MJR Digital Cinemas, a Bloomfield Hills-based movie theater chain with 10 locations. The move marks the European company’s entrance into the U.S. market. The company based in Belgium has 53 cinemas in Europe, as well as 44 in Canada after a 2017 acquisition of theater group Landmark Cinemas. Reuters reported MJR’s value, including its debt and equity, as $152.25 million. J Detroit Public Library has eliminated fines for overdue items in a bid to bring old patrons back into the fold, part of a national trend of eliminating the fees that amount to a rounding error in the library system’s overall revenue. Starting Sept. 1, the library did away with late fees and wiped out past overdue fines at each of its 22 branches around the city for the first time in its 154-year history. J Berry Gordy, the man who built the Motown Records empire, has given $4 million toward expansion of the museum commemorating his record label’s legacy. Motown Museum said the contribution from Gordy, 89, makes him the largest individual donor to its fundraising campaign. J The business partners who launched the popular Chartreuse

Kitchen & Cocktails in Midtown have nailed down a building in Milwaukee Junction where they hope to spread their culinary wings. Restaurateur Sandy Levine and chef Doug Hewitt purchased a vacant building at 2929 East Grand Blvd., where they plan to open a fine dining restaurant and cocktail bar called Freya & Dragonfly. J A new report by the Southfield office of CBRE Inc. says the craft beer industry’s real estate footprint in metro Detroit has more than quadrupled in less than a decade. Since 2010, the industry in metro Detroit has grown by more than 680,000 square feet to north of 873,000. J Monroe-based MBT Financial Corp., parent company of Monroe Bank & Trust, has completed its merger with First Merchants Corp. of Muncie, Ind., in an all-stock deal valued at $230 million. J Soph Inc., part of a German company that also has an operation in China, has started U.S. manufacturing in Fenton of the company’s Magbo magnetic mold clamping system for making quick mold changes. Soph began running a machining center at its Fenton facility in mid-August.

HEALTH CARE NEWS A dispute over anesthesia services between Trinity Health Michigan and Anesthesia Associates of Ann Arbor has led Trinity to sever its relationship with A4 at its Mercy Health St. Mary’s hospital in Grand Rapids and contract with Anesthesia Practice Consultants of Grand Rapids. The disagreement stems from A4’s decision earlier this year to terminate contracts with most health insurers, including Priority Health and Blue Cross Blue Shield of Michigan, over what it says are low reimbursement rates for its medical services. J The Detroit Wayne Mental Health Authority is changing its name on Oct. 1 to the Detroit Wayne Integrated Health Network. The name reflects a trend in health care that looks at treating people in a holistic approach, which includes addressing mental and behavioral health needs, but also medical, social and dental issues. J

ttorney General Dana Nessel has filed motions to intervene in a lawsuit tied to Epicurean Group, a portfolio of metro Detroit hospitality companies that sold in January and abruptly laid off all employees six months later. Nessel said she is intervening because the new owner’s complaint failed to provide for payment of wages owed to its former Epicurean employees after publicly folding in July. The company employed more than 150. Epicurean Group buyer Ryan Moore filed a lawsuit against former owner Stanley Dickson Jr. in an effort to reverse the more-than-$1 million deal and get his money back in addition to more than $25,000 in damages for alleged breach of contract, fraud and misrepresentation, Crain’s reported. The motions follow a series of complaints Nessel’s office received from former employees saying they

haven’t been fully paid, the release said. Nessel’s office was also informed that money deducted from paychecks for July has not been remitted to the appropriate insurance carrier, the motion says. Dickson told Crain’s he does not litigate matters in the media but he “is confident that the judicial system will find justice.” A message seeking comment was left for Moore’s lawyer on Thursday. “While decisions were being made to sell a company, its workers appear to have been left in the dark and without pay,” Nessel said in a release. Nessel has the power to intervene in any case to “protect the rights of the people” in Michigan, the press release said. Epicurean has its roots in longtime serial restaurateur Matt Prentice’s restaurants. Prentice ran well-known names including Coach Insignia and No.VI Chop House.

ULY INC.

Detroit-based Xenith LLC announced that Oakland Raiders receiver Antonio Brown will use its Xenith Shadow helmet.

Helmet spat ends in a win for Gilbert’s Xenith A

spat between an NFL player and the league ended last week in a promotion win for Dan Gilbert’s football helmet company. Oakland Raiders wide receiver Antonio Brown has chosen to don a helmet made by Detroit-based Xenith LLC after losing a fight to wear a prized helmet design that the NFL deems too old to be safe. Brown will wear the Xenith’s flagship helmet, the Xenith Shadow, the company announced in a news release. The company is majority-owned by Quicken Loans Inc. founder Dan Gilbert. Xenith’s helmet features the company’s “shock matrix” technology for absorbing hits, more ventilation and a polymer shell. “My name is Antonio Brown and I choose Xenith,” Brown said in a promotional video. “Xenith allows me to be able to be flexible when I’m running 20-21 miles an hour down field ...”

The company did not specify whether the choice is part of a paid endorsement deal, but the release said, “Xenith and Antonio Brown look towards the future in creating a partnership that is larger than football.” Brown, who was acquired by the Raiders from Pittsburgh in March, picked the new helmet after he lost a battle with the NFL over his Schutt Air Advantage helmet. He wanted to keep using it though it is no longer allowed, because helmets a decade or older can’t be recertified for safe use. Schutt said it stopped making the helmet three years ago and its technology is outdated. Xenith, which also debuted a line of clothing last year, was launched in 2004 by former Harvard University quarterback Vin Ferrara. Gilbert bought a majority stake in 2015. It makes helmets mostly for high school sports teams, but also for a few dozen players in the NFL. Competitors include Schutt, Riddell and Rawlings.

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FROM PRO HOCKEY PLAYER TO DAD

TO COLLEGE GRADUATE, HE SCORED THE ULTIMATE HAT TRICK

Danny DeKeyser admits his success didn’t take the most traditional path. A standout Bronco hockey player, he left WMU in his junior year to sign with the Detroit Red Wings—a team he’d idolized as a kid. Inspired to set an example for his daughter, he returned to Western to finish his degree. A strong assist from WMU staff and coaches helped Danny to make his goal while playing in the NHL and skate from textbooks to record books. Unforgettable bonds. Unbreakable spirit. Western Michigan University.

wmich.edu