Crain's Detroit Business, Dec. 2, 2019 issue by Crain's Detroit Business

THE CONVERSATION As the CEO of Ignition Media Group and founder and president of Archer Corporate Services, Dennis Archer Jr. finds himself at the intersection of old and new Detroit. PAGE 22

CRAINSDETROIT.COM I DECEMBER 2, 2019

MICHIGAN’S MARIJUANA MARKET MUDDLE

CANNABIS

TECHNOLOGY

A leaner Compuware is growing again BY CHAD LIVENGOOD

On the fourth floor of the building where Quicken Loans Inc. is headquartered in downtown Detroit, there’s a graveyard of sorts for a mainframe software company that once occupied all 16 floors. Tucked in the middle of Compuware Corp.’s lone remaining floor of the building that O’Malley once bore its name is a room that was packed with 75 racks of mainframe servers just five years ago. Dozens of standing signs on the floor mark the birthdate and death of back office functions — finance, payroll, product invoicing and business analytics, to name a few — that are no longer run on “big iron” mainframes that Compuware owns and now run on cloud services such as Amazon Web Services, Microsoft Azure, NetSuite Inc. and Salesforce.com. Today, there are just two IBM mainframes running a tech company that has gone back to its roots of developing operating software for mainframe computers that still power the functions of major banks, insurance companies and airlines. This certainly isn’t Peter Karmanos Jr.’s Compuware anymore. The shedding of 13 tons of mainframe equipment saved Compuware $6 million a year as the company slimmed down to leaner operations following private equity firm Thoma Bravo LLC’s purchase of the mainframe business for $2.4 billion five years ago this month. “It’s not only cheaper, it’s better and faster,” Compuware CEO Chris O’Malley said of outsourcing non-competitive operations to third-party cloud-based vendors.

Few welcoming communities, delays in licensing growers and high prices keep conditions strong for the black market | BY DUSTIN WALSH

our out of five Michigan municipalities have closed their borders to marijuana businesses. Many are taking a “wait-and-see” approach, allowing for the pros and cons of adult-use legalization — sales were set to begin Sunday — to play out before allowing businesses to open. Others are simply concerned of the impact the drug will have on their communities writ large. The shortage of welcoming communities and questionable regulatory measures coupled with the fact that the Michigan Marijuana Regulatory Agency didn’t license growers first has already led to a shortage of product. That shortage has driven up prices for marijuana — as high as $480 per ounce for high-end medical marijuana in Michigan, compared with just $300 per ounce for the same product on the illegal market.

It all adds up to a high likelihood that the marijuana black market will continue to flourish.

See MARIJUANA on Page 21

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See COMPUWARE on Page 19

IN FOCUS: THE AREA’S BEST-MANAGED NONPROFITS PAGES 10-13  Winner: Living Arts builds a strong culture for clients and employees Finalists: Chaldean Community Foundation; Downtown Boxing Gym; The Henry Ford

NEED TO KNOW

THAT FEELING WHEN ...

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  AD GIANT TO TAKE BUILDING ADIENT GAVE UP ON THE NEWS: The world’s largest holding company of advertising and marketing agencies plans to open a large hub downtown Detroit in a move that could bring more than 1,000 jobs to the city. London-based WPP plc — which includes GTB, VMLY&R, Burrows, Hudson Rouge, Iconmobile, Xaxis and Zubi — expects to move into the vacant Marquette Building at 243 W. Congress St. The move is being helped by a $1.65 million Michigan Business Development Program grant from the Michigan Strategic Fund. WHY IT MATTERS: The move will fill in a building whose renovation plans were halted when automotive seat maker Adient Inc. abandoned plans to move its headquarters from Plymouth to the downtown Detroit building. It also beefs up the advertising business — whose presence in Southeast Michigan had declined over the decades — in downtown Detroit.

 CEO OF AMERICAN CENTER FOR MOBILITY OUT AFTER 9 MONTHS THE NEWS: Nine months after he was brought aboard to steer the American Center for Mobility into its next chapter, Michael Noblett is no longer the organization’s CEO, Automotive News reported. Without saying whether Noblett was fired or he resigned, officials at the autonomous-vehicle proving

ground in Ypsilanti Township said Monday that COO Mark Chaput is interim CEO as a “national search is carried out” to find Noblett’s successor.

WHY IT MATTERS: This marks the second search for a leader for the autonomous vehicle test bed in less than a year. Noblett was hired in February following a protracted hunt for an executive who could elevate ACM’s profile and attract more companies interested in using the autonomous- and connected-vehicle testing facility. The center said little about the reasons for the departure, but Crain’s quoted an ACM leader last month as saying the facility had not taken off as quickly as hoped.

 BUDGET IMPASSE TAKES TOLL ON SERVICES THE NEWS: With lawmakers on holiday for deer season and Thanksgiving, impacts from Gov. Gretchen Whitmer’s budget moves are beginning to be felt more strongly. Sheriffs are starting to cut loose up to 119 deputies whose jobs are state-funded, small-town hospitals will start confronting a $26 million funding cut and private college

2 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

students are in limbo on $2,400 per student in financial aid that was eliminated, the Associated Press reported. WHY IT MATTERS: Increased attention on the effects of the cuts could pressure legislators and the governor to find common ground on a supplemental budget that could restore some of the cuts. The Legislature returns on Tuesday.

 GILBERT LIEUTENANT LEAVES FOR NEW JOB

New freeway to be torn up A half-mile of newly poured concrete that failed inspection will be ripped up on northbound I-75 in Oakland County, delaying a portion of the modernization project until next year. The left two lanes of the freeway from 13½ mile to 14 Mile and some shoulders will be replaced. The problem: The contractor used an “incorrect mix” for that portion of freeway, the Michigan Department of Transportation said. The cost of the mistake, estimated at a $500,000 repair, will be borne by the contractor, a joint venture of Wixom-based Toebe Construction LLC and Chicago-based Walsh Construction Co. Work on I-75 earlier MDOT is still deciding in the project. | LARRY when the replacement will PEPLIN FOR CRAIN’S occur.

THE NEWS: The communications chief for Dan Gilbert’s Detroit-based Bedrock LLC real estate company is leaving to go back to Dallas. Whitney Eichinger, Bedrock’s vice president of communications and one of Gilbert’s top lieutenants, said her last day was Friday and she will start today with a company she left in 2014: Southwest Airlines Co. Eichinger, 43, will be managing director of culture and engagement, according to a Southwest news release. WHY IT MATTERS: Bedrock has seen some other shakeups recently: Matt Cullen was named CEO in August and Jim Ketai became the second high-profile executive departure over the summer, following Dan Mullen. Also, Gilbert suffered a stroke in May, though executives have previously stressed to Crain’s that operations have been running smoothly in his extended absence.

CORRECTIONS  An article titled “Bills would let landlords crack down on support animals” on Page 13 of the Nov. 25 edition misstated a title for I. Matthew Miller, a member of the property management section for Farmington Hills-based law firm Swistak Levine PC. The article should have said that

he is also chairman of the legislative committee of the Property Management Association of Michigan.  A Nov. 25 Deals and Details item misstated the location of American Graphics Printing Co. It is based in Clinton Township.

NONPROFITS

FOOD AND DRINK

Local Area Agencies on Aging step up fundraising Move comes as senior population grows BY SHERRI WELCH

Southfield-based ad agency Doner filmed six online-only commercials Nov. 11 for the historic Altes beer brand that relaunched under a new startup this spring. Starring Gary Pillon as Santa Claus and Jimmy Doom as a bartender, the short videos were filmed at the oldest bar in Detroit, the Two Way Inn. | ANNALISE FRANK/CRAIN’S

CRAFTING THE RETURN OF ALTES Santa goes belly up to bar to revive an old-Detroit beer brand BY ANNALISE FRANK

Santa Claus sidles up for a drink at the oldest bar in Detroit, the Two Way Inn. A bartender cracks open an Altes — the historic Detroit beer that’s now being shipped across the state as it makes its crafty return. It’s a snowy Monday morning in mid-November and Southfield-based ad agency Doner is shooting a series of six holiday-themed commercials set to roll out via social media. The first comes Thanksgiving Day. The videos — which Doner hopes will go viral — are part of the longtime marketing firm’s pro-bono work for a beer brand that it originally promoted more than 60 years ago.

Altes, a lager born in Detroit around 1910, is back. Detroit National Brewing Co., a team of three metro Detroit natives who wanted a unique path into the craft beer industry, is the culprit. The beer came into existence at Tivoli Brewery on the city’s east side, was well-drank by Detroiters for decades, stopped its Detroit production in 1973 and then entirely disappeared in the 1990s. In the 1960s, Altes sponsored the Detroit Lions and Tigers. It resurfaced in fall 2016 at Traffic Jam and Snug in Midtown Detroit. There Eric Stief, 48; Carl Erickson, 47; and Patrick Kruse, 49, started experimental brewing to test the popularity of their new version of the crisp lager.

They poured in a total of $100,000 of their own money to start the business. The Altes trademark was available so they obtained it from the U.S. Patent and Trademark Office. “It’s self-financed. We’ve paid for it to date all ourselves,” Stief told Crain’s in a Two Way Inn side room during the commercials’ filming. “No third-party equity holders. We’ve done it in a very measured way. Partnering with Traffic Jam, showing there’s a market, inching into Southeast Michigan and from there across the state.” Now Altes Original Detroit Lager is brewed commercially from Brew Detroit in Corktown.

Detroit National Brewing Co., founded by three metro Detroit natives, is selling Altes beer. The lager was born in Detroit more than a century ago and is being re-released by the new startup.

See ALTES on Page 20

DEVELOPMENT

Bankruptcy creditor drops suit seeking more time BY KIRK PINHO

A conceptual rendering of a planned mixed-use development on the east Detroit riverfront across 8.9 acres. | GENSLER DETROIT

A subsidiary of a Detroit bankruptcy creditor has backed down from a lawsuit it filed in federal court earlier this month asking for more time on an east Detroit riverfront development. Pike Pointe Holdings LLC, a subsidiary of Syncora Guarantee Inc., sued the city Nov. 13 to get an additional two years, until Dec. 10, 2021, to take title to a piece of property totaling 2.11 acres so that it could couple that site with another 6.79 acres it received development rights to in the 2013-14 bankruptcy case for a large mixed-use project.

Pike Pointe instead plans to take title to the 2.11 acres by the current Dec. 10 deadline after the bankruptcy court denied a motion for an expedited hearing on the matter, meaning that months of litigation would likely ensue beyond the deadline. The deadline to take title to the 6.79 acres is Dec. 10, 2021. The 2.11 acres is at 2290 E. Jefferson Ave., 2310 E. Jefferson Ave. and 301 Chene St., and the 6.79 acres is at 2200 Franklin St., 2263 E. Atwater St. and 281 Chene St. Under its agreement with the city forged during the bankruptcy case, it has 15 months after obtaining the title to the 2.11 acres to start con-

After relying largely on government funding for decades, two of the three congressionally created Area Agencies on Aging serving Southeast Michigan are stepping up their fundraising games. And the third is considering it. The moves come amid a growing population of seniors in the region and state, rising demand for senior services and lack of dedicated funding for things seniors need but can’t always afford, like eyeglasses, hearing aids, handrails for showers, stair lifts and transportation. “We don’t have the financial capacity to serve ev- Karson eryone on the (waiting) lists ... (and) we know we have a growing population of seniors,” said Michael Karson, president and CEO of the Southfield-based Area Agency on Aging 1-B, which serves Oakland, Macomb, Washtenaw, Livingston, Monroe and St. Clair counties. All three of the local AAA agencies have raised money for years to support the Meals on Wheels program for homebound seniors and the disabled on major holidays when the government doesn’t support it. But their fundraising has been limited to that, until now. “We felt this was the right time to invest in a fundraising program,” Karson said. The money AAA 1-B raises will provide unrestricted dollars to support unfunded needs, shorten waiting lists and help the agency build its reserves to ensure long-term sustainability. The agency is starting out small, with a $150,000 fundraising goal to feed the general fund. But Karson said it will look to increase its annual fundraising to $1 million within five years by increasing awareness of its services and engaging more corporate supporters.

Rising demand

struction or Detroit can take the property back. At this point, that’s an unrealistic time frame to start a project, Pike Pointe said earlier this month. “Pike Pointe is not interested in another drawn-out fight with the city in court,” the company said in a statement Tuesday afternoon. “Its goal from the start has been to work collaboratively with the city on a revitalization project that would have transformed these crumbling surface parking lots near Chene and East Jefferson into new residential and retail space.

Created by Congress in 1974 through the Older Americans Act, the national network of nonprofit AAA agencies provides service referrals and home- and community-based services to maximize the independence and dignity of older adults. There are over 600 AAAs nationally — 16 in Michigan serving the entire state. They provide a long list of services including: elder rights information, referrals, home-delivered meals and social interaction through the Meals on Wheels program, caregiver resources, chore services, community wellness and nursing home levels of care for people who need it, in their homes. Some are based on financial need; others are not.

See CREDITOR on Page 20

See AGENCIES on Page 18 DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 3

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Morouns buy Bel Air shopping center, known for movie theater The Moroun family has purchased the Bel Air Centre on Detroit’s northeast side. The family’s Wa r re n - b a s e d Crown EnterprisKirk es Inc. real estate PINHO company finalized the sale last month, according to Wayne County land records. The purchase price was not disclosed. The shopping center is about 450,000 square feet on more than 40 acres. The precise plans for the property are not known. Michael Samhat, president of Crown Enterprises, confirmed the purchase and said the site’s future does not include retail. He would only say it would be “repurposed.” My translation of that: Its buildings will be demolished, although when is not known. Samhat said some of the retailers are looking to break their existing leases and others are staying open, but he declined to specify which ones. Johny Thomas, general manager for the Bel Air Luxury Cinema, said Tuesday afternoon that the theater still has 15 years left on its lease and it doesn’t plan on going anywhere anytime soon. In a city that doesn’t have many sizable blocks of contiguous vacant land for new industrial and warehouse space, the site presents an opportunity for new development in that sector along a pair of major traffic arteries, Eight Mile Road and Van Dyke Avenue. Mayor Mike Duggan said in September that the city has to make more 30-acre contiguous parcels available for modern, single-story factories, as my colleague Chad Livengood wrote at the time. As far as movie theaters, the city has just the Bel Air on the east side, Cinema Detroit on Third Avenue in Midtown and the Redford Theatre on the northwest side. Although there have been announcements of two new Detroit theaters around downtown — an Emagine Entertainment Inc. theater and an Alamo Drafthouse in Midtown — neither have started construction and it’s not known when they will. The shopping complex’s main tenants are Forman Mills, a pair of Romeo & Juliet furniture stores and the 10-screen movie theater, as well as

The Moroun family has purchased the Bel Air Centre on Eight Mile Road east of Van Dyke Avenue. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

“WE DIDN’T BUY IT BASED ON RETAIL PERFORMANCE.” — Michael Samhat, president of Crown Enterprises

some smaller retailers, including a bounce house business and Taste Buds medical marijuana store. The mall is less than 50 percent occupied overall, Samhat said, and rents are in the single digits per square foot. “We didn’t buy it based on retail performance,” Samhat said, adding that Crown has about 1.5 million square feet of space under development for FCA US LLC in Warren and Detroit. (Fun fact: The property sits immediately north of FCA’s Conner Center, which was announced in March last year as the replacement for the assembly plant there that produced the Dodge Viper until August 2017.) The Bel Air was built in the mid1980s and spans five buildings. It had been owned by an entity called Bel Air Shopping LLC, which has a New Orleans mailing address for the law firm Fishman Haygood LLP. A message was sent to an attorney listed on the LLC’s incorporation documents Monday. The sale price was $3.99 million in November 2015. It went to auction in April 2015, according to reports in the Detroit Free Press and Detroit News at the time, but the auction results are not known. The minimum bid was $1.1 million.

The News reported that at the time it had been owned by Namdar Realty Group LLC out of Great Neck, N.Y. The Morouns have faced their share of criticism and ire over the years for a bevy of reasons, ranging from upkeep of the Michigan Central Station that they used to own in the Corktown neighborhood and other properties they have, to battles with the Canadian and Michigan governments over a new bridge over the Detroit River. Matthew Moroun, son of Manuel “Matty” Moroun, has sought to soften the image his father has sown in the minds of many in Detroit and Southeast Michigan more broadly.

Former Hope Hospital site goes out to RFP The city of Detroit has issued a request for proposals for a 0.75-acre property at Virginia Park and Third Street for a mixed-use development that includes residential space on the site of the former Hope Hospital, which was torn down in 2014 after closing in 2010. In addition to the site at 801 Virginia Park, the developer would also have the option on a 0.2-acre property at 808 Virginia Park, according to marketing materials by the Detroit-based brokerage firm Summit Commercial LLC. The asking price is $360,000. Responses to the RFP are due by Jan. 26. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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For the first time in Oakland County’s history, voters of both political parties could be faced with truly competitive primary elections for the county executive position next year. A pair of candidates — one Democrat, one Republican — will battle in November 2020 to guide the future of 1.25 million people north of Eight Mile Road as a divisive presidential race promises ripple effects on voters down-ballot from Lyon Township to Addison Township, from Hazel Park to Holly Township. David Coulter, the appointed Democratic CEO of the state’s wealthiest county, plans to seek a full four-year term after taking over the remaining 16 months made vacant when longtime Republican county executive L. Brooks Patterson died Aug. 3 after a battle with pancreatic cancer. That will pit the Ferndale Democrat, with all the trappings of incumbency (although it’s not denoted on the ballot by law), against Treasurer Andy Meisner, of Huntington Woods, in that party’s primary. One potential Democratic foe, Board of Commissioners Chairman David Woodward of Royal Oak, has been neutralized, endorsing Coulter during his announcement in Ferndale on Oct 31. Then on the Republican side, potential candidates include former state Sen. Mike Kowall of White Lake Township, former Congressman and county board Chairman Mike Bishop of Rochester and Rochester Hills Mayor Bryan Barnett, although none have announced campaigns or formed political committees for the race. “If it’s Coulter and Meisner, that makes for an interesting time at the county building there with the primary playing out every day in the staff meeting,” said David Dulio, a professor of political science and the director for the Center for Civic Engagement at Oakland University. “I still think it’s going to be competitive. Andy is a formidable candidate and knows how to run countywide, which Dave Coulter hasn’t done. That might be something that gives Meisner an advantage; whether that overcomes the incumbency for Dave Coulter, that remains to be seen. ... Flip over to the Republican side and we’ll see who gets in and that’s going to be interesting. You have some folks who could be really good candidates.” Patterson’s political clout and the county’s Republican political leanings for decades resulted in purely sacrificial Democratic lambs being led to the slaughter. In 2004, the party didn’t bother to run a candidate at all, even as the Kerry/Edwards presidential ticket edged out Bush/Cheney in the county by less than 3,000 votes. In 2012, three days after the Aug. 7 primary in which Patterson took 90 percent of the Republican vote against a doomed GOP challenger, he was nearly killed in an Auburn

Coulter

Meisner

Hills car crash. He did virtually no campaigning that year and still defeated the Democrat by 14 points as the Obama/Biden ticket took 53 percent of the vote to Romney/Ryan’s 45 percent. “The peak goal for a Democrat running against Brooks was making it expensive for him to win, but there was not a really great sense that they would win,” said Vaughn Derderian, chairman of the Oakland County Democratic Party. “It was always an uphill struggle.” But Democratic political winds started to clearly pick up in 2008 — amid anger over the economic collapse and Iraq War, and heightened turnout for the historic candidacy of Barack Obama — when Meisner and Prosecutor Jessica Cooper captured their positions (future Congresswoman Brenda Lawrence challenged Patterson but was handily defeated by 16 points). Then there was Lisa Brown, the former state representative from West Bloomfield Township who came into the clerk/register of deeds office and Jim Nash, a Farmington Hills Democrat, who won the water resources commissioner post. Meisner said in an interview he isn’t backing down. “I respect Dave, but I also can’t help

“I BELIEVE, AND MOST PEOPLE BELIEVE, THAT OAKLAND COUNTY IS NOW TRENDING DEMOCRAT, IF IT’S NOT DEMOCRAT ALREADY.” — Bill Bullard Jr., former Republican chairman of the county board and a former state senator and county clerk/register of deeds

but wonder if it wouldn’t be better for the county if he just focus on the job he was given and allow us to get past this whole chapter that led to his appointment with Mr. Patterson passing away.” Coulter endorsed Meisner on June 20, about a month and a half before Patterson died and two months before he was appointed to the executive position on Aug. 16. “I think Dave got it right when he endorsed me,” Meisner said, adding that Coulter visited his office last month to tell him that he would announce his candidacy for a full term in 2020. (Perhaps telling of the tenor of things to come, Meisner’s uncle, Mort, a public relations executive, fired off an email before Coulter’s announcement referring to Coulter as a “loser for state Senate” in 2010 and “a favorite of politicians.”)

Coulter was a surprise pick during the appointment process; he did not apply to be county executive when the county board was accepting applications following Patterson’s death. However, he said, he wants to continue the work he’s been doing for the last two-plus months. “I believe the universe sometimes puts you in places you’re supposed to be that you might not have been expecting,” Coulter said at a media event this fall. “As many of you know, I was not expecting to be appointed county executive this August. In just a few short months, I have seen the bright possibilities we can create for our county.” Coulter moved up in the spotlight last month when he, along with Wayne County Executive Warren Evans and Detroit Mayor Mike Duggan, announced the so-called “coalition of the willing” plan to get a mass transit millage on the November 2020 ballot in Oakland, Washtenaw and Wayne counties while bypassing opposition in Macomb County. Meisner, at this point, is by far the best funded candidate officially in the race, having announced his candidacy in March and forming his political committee in January. He reported $214,746 raised and $63,006 spent, which leaves his war chest with $420,898 on hand. Coulter had previously announced a bid for the state House of Representatives and his campaign committee for that race reported just $14,520 cash on hand at the end of the last reporting period. One concern some Democrats have is expending campaign resources during a bruising primary battle and not having them available for a contested general election. “On the one hand, yeah, I’m worried about fighting amongst ourselves and then getting to the general and exhausting resources, but I also think this is a necessary discussion to have, to talk about what we think we should be doing and what we think we should be the next eight to 10 years,” Derderian said. Bill Bullard Jr., the former Republican chairman of the county board and a former state senator and county clerk/register of deeds, said whatever Republican emerges from a primary contest to take on the Democrat will face a difficult electoral climate. “I believe, and most people believe, that Oakland County is now trending Democrat, if it’s not Democrat already,” said Bullard, who is now a lobbyist in Lansing with Strategic Communication Solutions. “When Mitt Romney, a native of Oakland County, ran he only got 45 percent of the vote in Oakland County. Donald Trump only got 43 percent. I believe people still look at the qualifications of the individual candidate but it puts the Republican at a distinct disadvantage.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

REAL ESTATE

The Pearl, a 90,000-square-foot development in downtown Birmingham, is expected to be complete in March. | MARUSICH ARCHITECTURE

$20 million luxury development in Birmingham targets March completion The Pearl to include multifamily units, 2 ground floor commercial spaces BY KURT NAGL

A $20 million luxury development being erected in downtown Birmingham is expected to be complete in March with a posh eyelash shop and up to $11,300-per-month apartments. The Pearl, a 90,000-square-foot mixed-use building at Old Woodward Avenue and Oak Street, is being developed by Frank Simon, principal of FLS Properties, based in West Bloomfield. The four-floor building will consist of 26 high-end multifamily units with two ground floor commercial spaces totaling about 4,500 square feet. About half that space has been signed to Lash Lounge, which will be operated by Kati Prater, wife of Detroit Lions kicker Matt Prater. It is a franchise location of the Texas-based company that has nearly 100 shops, including three in Southeast Michigan.

THE LUXURY RENTAL UNITS START AT $4,800 PER MONTH FOR ONEBEDROOM UNITS AND GO UP TO $11,300 FOR A THREE-BEDROOM. The other 2,700-square-foot storefront will likely be filled by a national retailer, but a lease has not been signed, said Emil Cherkasov, principal of Bloomfield Hills-based Forward Commercial Group, which is leasing the building. The luxury rental units start at $4,800 per month for one-bedroom units and go up to $11,300 for a three-bedroom. Unit sizes range from 1,011 square feet to 2,783 square feet. They feature 10-foot tall ceilings, private terraces, underground park-

ing, full-time concierge, soundproof insulation and keyless entry, according to a news release. Emil’s wife Rachelle Cherkasov is handling residential leasing. Cherkasov said there is a waiting list and leasing will begin in January for March occupancy. The Pearl adds to a growing number of new luxury developments in the affluent Oakland County city. Crain’s reported last November that more than a half-dozen projects totaling more than $250 million were being planned there to feed demand for high-end condos and premier office space. The general contractor on The Pearl project is Ohio-based The Douglas Co. The architect is Bloomfield Township-based Marusich Architecture. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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Apartment units at The Pearl luxury development in downtown Birmingham will start at $4,800 per month. | MARUSICH ARCHITECTURE

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COMMENTARY

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Make it a goal to practice the 4Rs with technology

COMMENTARY

Dearth of local news coverage leaves a void Michael

LEE

Managing Editor I’ll hear from local residents and leaders after offering up all kinds of other angles we could explore. They are clearly hungry for the coverage that used to be routinely provided by local papers. Now instead, those communities often get “news” served up by local Facebook groups, which tend to be hives of rumor, inaccuracy and speculation. It’s not healthy. Nonprofit news models have had some success, such as the Center for Michigan’s Bridge Magazine, supported by philanthropy. And smaller operations like the Oakland County Times have aimed to provide on-the-ground reporting. But they can’t measure up to the ecosystem that you could see in old Crain’s lists of the largest weekly newspaper chains from 1990, when the 15 largest weekly newspaper companies distributed around 1.5 million papers a week. It’s hard to see a business model that supports this kind of intensely local coverage, which is crucial to functioning cities, that doesn’t involve readers paying for news through digital subscriptions or in some other direct way. Original reporting, the kind that involves phone calls, meeting attendance, Freedom of Information requests and old-fashioned shoe-leather work, costs money. I can testify that even the smallest communities are hungry for that kind of reporting. Somebody is going to eventually find a way to fill that demand and make it pay.

A recent economic speaking engagement led by Patagonia’s Vincent Stanley sparked thoughts about how the iconic brand’s “Don’t Buy This Jacket” advertising campaign applies to companies in today’s technological society. Jason Kehr is In November 2011, Papresident of tagonia took out a fullValley City page ad in the New York Electronic Times on the Friday after Recycling, a Thanksgiving — othercertified B Corp wise known as Black Friand licensed day. The ad stated, “Don’t large-quantity Buy This Jacket,” with a universal waste picture of a gray Patagohandler headquartered nia R2 Jacket, one of the in metro Grand company’s best sellers. It Rapids. also included what it took to make the jacket, including 135 liters of water, enough to meet the daily needs of 45 people. While the jacket is made with 60 percent recycled polyester, it “comes with an environmental cost higher than its price,” the ad stated. The goal of Patagonia’s “buy less” advertising strategy was to encourage people to think about how their purchases impact the environment, objectively assess their immediate need for products and pledge to reduce, repair, reuse and recycle whenever possible. Companies that practice the 4Rs — reduce, repair, reuse and recycle — have a tremendous opportunity to decrease their environmental footprint, while at the same time, increase their profits. This doesn’t just apply to manufacturers of wearable goods, but also to companies of all sizes in various markets. While technology is extremely useful and often necessary for daily business efficiency, companies often purchase more electronic products and services than they need. A couple of ways to help mitigate this is to extend refresh cycles on devices or limit the amount of devices employees may use onsite. Companies that adhere to these two practices alone can help reduce the amount of precious metals used to produce new electronics each year.

Michael Lee is 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.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 8 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

Ultimately, the best thing you can do for the environment is reduce the amount of electronics purchases. If that’s too overwhelming for your company, tech repairs are the next best thing to support the reduction process. In most cases, companies will scrap electronics that malfunction and purchase new equipment rather than exploring the repair route. Yet, repairing malfunctioned electronics is often cost effective and can be done in a timely manner. When companies have exhausted all repair options, they can evaluate the equipment’s reusable value. Today’s society is host to a robust used electronics market with an extensive array of equipment based on make, model, generation, specs, etc. When repurposed equipment is brought back into a working environment, not only does it extend its useful life, but it avoids the pitfalls of the final option: recycling. ULTIMATELY, THE The final R — recycling — gets the BEST THING YOU most attention of CAN DO FOR THE the 4Rs, and is a viable option when ENVIRONMENT IS an electronic de- REDUCE THE vice has truly reached its useful AMOUNT OF end-of-life stage. ELECTRONICS Breaking down equipment to its PURCHASES. commodity level is certainly a better and more sustainable option than having it go to the landfill. But keep in mind, recycling tech devices should be the last resort as reduction, repair and reuse are all better options for the environment. Just like Patagonia’s “Don’t Buy This Jacket” advertising campaign, companies large and small can evoke positive change in the environment by committing to the 4Rs with their technology usage. Additionally, companies will have all the computing power they need and a stronger bottom line when implementing a technology strategy of buying less new equipment, repairing current equipment and utilizing the used equipment market. As community members, we implore you to practice the 4Rs to make this world a more sustainable place to live. Will you take the 4Rs challenge?

BLOOMBERG

It’s been a month of storm clouds for the business of local news. A massive report last month from PEN America called “Losing the News: the Decimation of Local Journalism and the Search for Solutions” received national attention for its dire warnings about the decline of local newspapers and what that decline means for democracy in America. A complex web of factors has contributed to this decline — everyone knows about the rise of the internet, the mistake of giving away I CAN TESTIFY the news for free — but factors have THAT EVEN THE other been key. The loss of SMALLEST classified ads to marketplaces like eBay COMMUNITIES and Craigslist, and the ARE HUNGRY increase in private equity buyers of newspaFOR LOCAL per chains who have hollowed out newsNEWS. rooms as a cost savings measure, often when the papers themselves were already profitable. The purchase of Detroit Free Press owner Gannett Co. Inc. by Gatehouse Media owner New Media Investment Group, which closed last month, is sure to be fueling fears of further cuts to local coverage. Gatehouse has a reputation for shrinking newsrooms, though so far there has been no sign of mass layoffs or any other moves for the Detroit paper. Countless weeklies that focused on just one or a few communities have folded or combined with others (including the family-owned Romeo Observer, which years ago paid me $15 per story to write about track meets and soccer matches). Those that remain have stretched reporters over multiple cities and left many towns without anyone keeping watch on their elected officials and day-to-day governance. Publications (like Crain’s) that cover a specialized niche have fared better than the general-interest newspaper business. But by their nature, they can’t provide the level of truly local day-to-day journalism that the traditional newspaper business used to thrive on. I see this whenever Crain’s does dip into a controversial local issue. We might write a single story on a major issue that’s impacting, for example, a major real estate development, and

BY JASON KEHR

Sound off: Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.

OTHER VOICES

Here are some jobs that tariffs helped create in America BY ZAK PASHAK

When a new president is elected, I would understand the impulse to do what Donald Trump has tried to do to his predecessor’s legacy. I implore our Zak Pashak is owner of Detroit future officials to consider the Bikes. adage that even a broken clock is right twice a day. The man did manage, implausibly and outrageously, to follow his instincts into the White House. Those instincts — or his advisers, or maybe even his xenophobia — have pushed the United States into a necessary trade confrontation with a country that we have poured money into over the last 30 years to the benefit largely of the Walton family, Chinese industrialists (and workers) and the Chinese government — at the expense of our own middle class. We must not continue to cede our manufacturing base to China under the delusion that a global free market exists. I moved to the United States in 2011 and founded Detroit Bikes, the country’s largest bicycle frame manufacturing facility. The company has recently taken on large assembly and sourcing orders for a national retailer and hiring has started on up to 50 new positions in the 48227 ZIP code, with the potential for many more to follow. The 301 tariffs have played a significant role in winning us these orders. If managed correctly, tariffs could lead many other purchasing departments of many other types of products to rethink their supply chain and how American hands can start playing a bigger role in it. Strategic tariff management has the potential to create hundreds of thousands of new American jobs. As it stands, the knock on the 301 tariffs is that they are exclusively punitive to China, rather than constructive in the United States. Large American purchasers (Walmart, etc) can avoid the tariffs by sourcing, and in turn driving the construction of new factories and the jobs they house, from some other country — say, Vietnam or Cambodia. In this scenario, the 301 tariffs exist only to either tax Americans, or to continue our national transfer of wealth to replacement countries. They function as a consumption tax that disproportionately impacts people with less money to begin with. But these tariffs have also opened up some opportunities, and could open even more. In my industry, most bikes are assembled, boxed and shipped from China, and only opened once they reach their final retail destination. In higher-end bikes the most expensive component, the drivetrain, is usually made in Taiwan or Japan. If those components are shipped to China and assembled onto a bike, they then become subject to the 30 percent 301 tariff coming into the U.S. Suddenly it makes a lot of sense to pay an American to

assemble the globally sourced posed to a broader product array, parts that make a bicycle, rather better quality products and a local than having it all assembled in and economy that kept consumer dollars in the hands of local people. shipped from China. Twenty-five years ago, there IF MANAGED CORRECTLY, TARIFFS COULD were thousands of American bi- LEAD MANY OTHER PURCHASING cycle production jobs. Entire DEPARTMENTS OF MANY OTHER TYPES OF c o m m u n i t i e s PRODUCTS TO RETHINK THEIR SUPPLY were sustained by domestic bi- CHAIN AND HOW AMERICAN HANDS CAN cycle manufac- START PLAYING A BIGGER ROLE IN IT. turing and asSomewhere along the way, we sembly facilities and the good, steady work required to run them. passively allowed China and a American consumers were ex- handful of American oligarchs to

strategically undo the manufacturing framework of our country. While the American government sat back, European regulators demonstrated that China subsidized its steel industry and reacted by applying tariffs to protect European steel makers. It wasn’t just steel — the European Union has been consistent and diligent in countering Chinese market manipulation. As it relates to my own industry, there are currently many thousands of bicycle industry jobs that remain in Europe. We can, and should, follow this same strategy here in America.

Detroit Bikes is based in Detroit. | DETROIT BIKES

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BIGGEST DEALS | 2019 Did your company make an acquisition or divestiture in 2019? Were you a law firm or financial adviser that supported a deal? Crain’s Detroit Business is seeking details on Michigan’s largest merger and acquisition deals. The M&A deals must have a deal value over $10 million and have been announced or closed in the 2019 calendar year and either the target, acquiring or selling company must be located in Michigan. Crain’s annual Biggest Deals list will run online and in the print edition on February 24, 2020.

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BEST-MANAGED NONPROFITS ABOUT THIS REPORT High turnover in the nonprofit sector is spurring organizations to be more intentional in their succession planning and leadership development efforts. Finalists in Crain’s Best-Managed Nonprofit Contest this year were recognized by an independent panel of judges for initiatives spanning organizationwide efforts to cultivate a culture that attracts and retains employees while preparing them for shifts in leadership to ensure the mission continues to nextgeneration leadership development through specific programs. Crain’s will honor this year’s winner early next year at its annual Newsmaker of the Year luncheon. Winner  Living Arts PAGE 10

Finalists  Chaldean Community Foundation PAGE 11  Downtown Boxing Gym PAGE 12  The Henry Ford PAGE 13

Judges  Gary Dembs, president and CEO, Nonprofit Personnel Network  Kelley Kuhn, vice president, Michigan Nonprofit Association  Bill Liebold, president, The Liebold Group LLC, a nonprofit and higher education consultancy, and former president, Michigan Colleges Alliance  Gerald Lindman, assistant professor, nonprofit leadership concentration, Michigan State University  Richard Martin, principal, Caleb LLC, a philanthropy consultancy The nonprofit practice group at Plante Moran PLLC, led by partner John Bebes, did a financial analysis of the applicants. 10 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

A HOLISTIC VIEW WINNER

Living Arts is proactive on succession planning Children and parents participate in a Living Arts intro to dance class at the Ford Resource and Engagement Center in Detroit.

BY SHERRI WELCH

When it comes to succession planning, Living Arts is taking a holistic view to developing a strong bench. Its efforts extend beyond grooming individual successors for leadership roles and cross-training to ensure seamless transitions. It’s focused on ensuring financial transparency so staffers better understand where revenue comes from, how it’s spent and how they and their departments play into that. It’s also included staff in strategic planning sessions and created an inclusive culture that empowers every employee. “This is about being proactive ... creating culture, paying attention to people ... creating relationships (and) the intentionality, especially for a small organization,” Executive Director Alissa Novoselick said. The moves have helped Living Arts retain 92 percent of its 54 employees over the past three years.

“AS THE ECONOMY CHANGES, WE NEED TO DO EVERYTHING POSSIBLE TO BE AN ORGANIZATION WHERE PEOPLE SEE THEMSELVES GROWING AND THRIVING.” — Alissa Novoselick

Erika Villarreal Buce, director of programs, and Executive Director Alissa Novoselick.

At the same time, Living Arts has focused on building awareness of its mission with peer organizations. And that’s helped create a pipeline of interested candidates it can look to when it does need to fill roles. “As the economy changes, we need to do everything possible to be an organization where people see themselves growing and thriving,” Novoselick said. “By strengthening our culture .. our mission ... our relationships with peers in southwest Detroit ... in the education (and arts) space, the organization has mechanisms for succession planning (built in),” she said. Living Arts’ organizationwide view of succession planning, something other nonprofits both small and large can replicate, has earned it the title of Crain’s 2019 Best-Managed Nonprofit. Youth arts education programs led by professional artists or “teaching artists” in early learning environments, K-12 classrooms and sites outside of school in Southwest Detroit are the bedrock of Living Arts’ programs. It also works with arts educators to infuse art in the curriculum and pro-

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FINALIST

Chaldean Community Foundation welcomes next-generation leaders Identifies current employees with leadership potential

PHOTOGRAPHS BY SYLVIA JARRUS FOR CRAIN’S DETROIT BUSINESS

BY SHERRI WELCH

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vides professional development for educators. It’s serving 3,000 children, families and educators annually, through efforts including work in 10 Detroit Public School Community District schools and partnerships with other nonprofits like Boys and Girls Club of Southeastern Michigan, delivering programs at its new site. It operates on a $1.1 million budget for fiscal 2020 with 54 employees. It diversified its revenue — mostly grants three years ago. Today, about a third of its budget stems from income earned from fees for out of school programs, individual and corporate giving. Recently, Living Arts launched a 20th anniversary fund campaign to raise $100,000 by the end of the calendar year. So far, it’s raised $85,000 toward the board-designated fund which will support strategic opportunities. Novoselick took the helm of southwest Detroit nonprofit Living Arts in 2017 after the former executive director left to practice her art full time.

Such shifts can open the door to large-scale staff turnover which can stall growth and disrupt program delivery in an organization of any size, but especially smaller nonprofits. Living Arts sought to mitigate that risk, first by ensuring employees were getting competitive pay and benefits and improving those if they weren’t. “One of the key metrics in keeping people is paying them fairly and what they deserve,” Novoselick said. It also refined human resources policies and procedures to accommodate the diverse needs of staff, putting in place flexible work schedules, generous paid time off and policies to accommodate worklife balance and family and personal commitments. Living Arts also put a new focus on human resources, initiating 360-degree reviews to provide every employee with a more holistic view of their performance from not only supervisors but also peers and those served. See LIVING on Page 12

Over the past five years, the number of people served by the Chaldean Community Foundation has grown from a few thousand each year to nearly 35,000. Much of the demand was spurred by the surge in Iraqi and Syrian refugees during the last administration. But the number of people coming to the foundation hasn’t trickled off despite the shift in federal policies that has kept refugees from those countries from seeking asylum in the U.S. in recent years. Demand for the foundation’s services continues to grow, President Martin Manna said, as behavioral health issues surface for many who faced trauma in their native land. Others need help interpreting important documents, learning to speak English, and connecting with health care, housing and jobs. “We grew so quickly we were always just reacting and never really had a long-term plan,” Manna said. In recent years, the foundation created defined program areas: behavioral health, career services, immigration, community outreach, development and capital mission. It’s providing services on a $5.8 million budget, while also raising $8 million to fund a 30,000-square-foot expansion of its Sterling Heights center, a 135-unit mixed-use housing complex in the community nearby and the Michael J. George Chaldean Loan fund, which pro-

“WE GREW SO QUICKLY WE WERE ALWAYS JUST REACTING AND NEVER REALLY HAD A LONG-TERM PLAN.” — Martin Manna, president, Chaldean Community Foundation

vides small automobile loans to clients in need. To oversee its growing program areas, the foundation has recruited high-level, next-generation talent and leaders, including nearly a dozen with advanced degrees and five attorneys to lead those areas. Among them is Paul Jonna, former chairman of the foundation, who is now COO. Some newly recruited employees

joined the team as program managers immediately; others have worked their way toward management, Manna said. The foundation has put in place succession-planning policies for its board members and is welcoming next-generation leaders to its ranks. It’s now actively identifying current employees with leadership potential and providing professional development. Over the past three years, it’s promoted seven or more employees into senior positions including development director, program managers and human resources director. To develop leadership potential and independent thought and decision-making, it’s opened strategic planning, problem-solving, development and communications conversations to all team members so they can be an integral part of developing the foundation’s path forward. Manna said the foundation has stepped up its appearances at community colleges and other local venues and events to broaden awareness of its services — not only for Chaldean Americans but anyone in need. Its team reflects that, with many Chaldean Americans on staff but others, too, overseeing areas like human resources. “People say youth bring energy, (and) senior staff bring wisdom,” Manna said. “If we can fuse the two, we’ll have a great organization.”

Lead case manager Jason Dowda works inside the Chaldean Community Center. | SYLVIA JARRUS FOR CRAIN’S DETROIT BUSINESS

DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 11

FOCUS | BEST-MANAGED NONPROFITS

LIVING

FIN

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From Page 10

And it created opportunities for employees to take on more responsibility and move up within the organization, along with professional development opportunities. To ensure an inclusive workplace, Living Arts has focused on diversifying its board and staff. Its board now includes five people of color, making up 41 percent of its 12-member board. Half of its employees are people of color, up from a quarter three years ago. “What succession planing looks like for an organization like ours, which has grown an exceptional amount in past five to seven years and just broke the $1 million revenue mark really looks like ... strengthening and empowering everyone in the organization, from teaching artists to board members,” said Living Arts Chairman Matthew Nahan, a community coordinator at Henry Ford Health System. Ensuring everyone at Living Arts knows where the organization gets its money, where that money is spent and how their area and role fits into that was also key, Novoselick said. With smaller nonprofits, the executive director is often “the protector of the money,” Novoselick said. If they depart, an organization’s finances can be turned upside down. To avoid that potential, Living Arts provides financial literacy training for its entire management team, and it’s put financial transparency in place. “If someone was to leave, there would be no surprises about the strengths of the organization, how allocations are happening, the budget at every level and the plan for growing,” Novoselick said. New leadership working with existing staff when Novoselick came in was impressive, said Kelley Kuhn, vice president of the Michigan Nonprofit Association.

BY S

Students and mentors race each other at Downtown Boxing Gym in Detroit. | SYLVIA JARRUS FOR CRAIN’S DETROIT BUSINESS

FINALIST

Downtown Boxing Gym is developing kids it serves Nonprofit launches apprenticeship to cultivate young leaders from its program ranks

External relationships

BY SHERRI WELCH

At the same time, Living Arts is building external relationships to raise awareness of its mission and culture and build a pipeline of interest for positions that open up. It is tapping into the talents and input of its youth and parents in making programmatic decisions, leading events and filling positions on its administrative team, where possible. The nonprofit attends more peer events and co-founded a group to regularly convene arts and arts administrators of color to have solidarity and discussions, Novoselick said. She is also convening a group of nonprofit executive directors, inside and outside the arts, to discuss issues, opportunities and best practices. Those efforts are helping Living Arts build relationships with professionals in the sector and already spurred the hire of an in-school, arts program manager from among the the teaching artists network. Everything Novoselick and her team have put in place has spread knowledge of “where we’ve been, where we are and where we need to go,” across the organization, Nahan said. “If any board member, leader or teaching artist leaves, the understanding of what the organization means, why it exists and the importance of that to the young people and families that we serve won’t be lost.”

Grassroots nonprofits with dynamic founders can struggle to ensure their missions live on beyond the leader. That’s something the Downtown Boxing Gym Youth Program began mulling over a few years back, before it had even hit the 10-year mark. The tutoring, athletics, mentorship, socio-emotional skill building, college- and career-readiness and other supports it provides to students in its program have helped 100 percent of the program’s 277 participants graduate from high school since 2007. How could DBG ensure the approach founder Khali Sweeney had put in place through personal connections with youth carry on beyond current leadership? The answer was under the group’s nose the whole time. DBG is developing kids it serves as future leaders of the nonprofit. The kids in the program have been part of building the culture, said Executive Director Jessica Hauser. You can teach anybody the business side of things, but the less tangible piece of leadership can’t be taught, she said. “It almost has to be co-created.” With a two-year, $500,000 grant from the Ralph C. Wilson Jr. Foundation, DBG last year launched an

Sherri Welch: 313 (446-1694) Twitter: @SherriWelch 12 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

“WE (ALSO) GET REQUESTS FROM ALL OVER THE WORLD TO REPLICATE. UNDERSTANDING ... THE MAGIC SAUCE ALLOWS US TO THINK THROUGH (IF) IT’S REALISTIC TO REPLICATE AND WHAT THAT COULD LOOK LIKE.” — Jessica Hauser, executive director, Downtown Boxing Gym

apprenticeship program to cultivate Sweeney’s successor by teaching young leaders to emulate Sweeney’s style as a leader, mentor, life coach, athletic trainer and, often, a surrogate family member. Kadeem Anderson, a 2015 DBG graduate who started at the gym at age

12, is the first to shadow Sweeney. “Khali wants him to be even better than he is,” Hauser said. “That means he needs to get into the weeds on the business side, (too).” Anderson attended Oakland University, where he completed some pre-med classes but left after his

sophomore year, deciding that profession wasn’t for him, Hauser said. He’s now registered to start classes at Wayne State University during the winter session, with a focus on social work. Sweeney isn’t expected to step back from the nonprofit any time soon, but to continue to have a high touch with students as the program grows, it will need more mentors who think like him, Hauser said. “We (also) get requests from all over the world to replicate. Understanding ... the magic sauce allows us to think through (if ) it’s realistic to replicate and what that could look like.” DBG, which is operating on a $2.5 million budget for fiscal 2020, is building the program into its budget to ensure it will continue beyond the pilot. Outside of the pilot, a culture of developing youth in the program into leadership roles is emerging. Kenedi Cain, 15, a sophomore at Cass Tech High School and DBG attendee for four years, is now serving as a part-time assistant in the nonprofit’s STEAM lab, helping to develop lesson plans and looking for ideas to conduct weekly experiments that connect students to science. She’s learning communication and organizational skills and critical thinking, among other things. At the same time, she’s serving as a mentor to her peers, Hauser said.

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FINALIST

The Henry Ford looks to its own collection for lessons in leadership Nonprofit develops coaching program with past, present innovations BY SHERRI WELCH

Succession planning has been embedded in The Henry Ford’s operations for decades. That’s what led CEO Patricia Mooradian, her predecessor and four of the Dearborn institution’s current vice presidents to their positions. And that’s how it cultivated leaders like COO and Vice President Brent Ott, who started out busing tables as a summer job at The Henry Ford while in college 19 years ago. At the same time, the museum has kept employee turnover low. Last year it saw just 10 percent turnover in its 354 full-time employees and 1,500 part-time and seasonal employees. But one in five of its employees have been with the institution for over 20 years, and half of its senior management team are expected to retire within the next 10 years. To ensure it’s ready for that coming succession, the nonprofit operator of The Henry Ford museum and Greenfield Village is focusing even more sharply on developing the next generation of leaders. “We don’t want to be caught off guard. We want our team to be ready,” Mooradian said. The institution began to work with outside coaches, but it became apparent that “off-the-shelf” programs weren’t in keeping with The Henry Ford’s culture, she said. So the nonprofit developed its own, incorporating the traits and habits of past and present innovators who are central to its academic curriculum and its collection into a leadership development program.

“WE WANT TO DEVELOP THE NEXT GENERATION OF LEADERS (WHO) ARE USING THE HABITS AND TRAITS OF INNOVATION AS PART OF THEIR SKILL SET.” — Patricia Mooradian, CEO, The Henry Ford

Those include, for example, learning from failure, staying curious, taking risks and collaborating. “In order for us to really … walk the walk, we needed to incorporate that into our own training,” Mooradian said. The Henry Ford sent two in-house trainers to become certified in leadership development so they could customize the program for all levels of management. The program includes immersion in both academic and real-world applications of leadership theory, models and tools. Launched early this year, the yearlong program includes five sessions. So far, The Henry Ford has rolled it out to six cohorts comprised of a total of 167 managers. It plans to launch another phase of the leadership training next year and ongoing, continuing sessions each year for management. “We want to develop the next generation of leaders (who) are using the habits and traits of innovation as part of their skill set,” Mooradian said. To strengthen its ability to identify potential leaders in the organization, The Henry Ford has also put in place a leadership development review process. The review focuses on succession planning and how the institution can professionally develop staff with upper management potential. Feedback from managers and staff about both of the new leadership development programs has been extremely positive, Mooradian said. “They love that a nonprofit is investing in them and their skills and talent.”

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Kids make paper airplanes inside the flight exhibit at the Henry Ford Museum in Dearborn. | SYLVIA JARRUS FOR CRAIN’S DETROIT BUSINESS

*As reported in Barron’s March 8, 2019. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices, and other factors. **As reported in Forbes September 14, 2019. The rankings, developed by Shook Research, are based on in-person and telephone due diligence meetings and a ranking algorithm for advisors who have a minimum of seven years of experience. Other factors include client retention, industry experience, compliance records, firm nominations, assets under management, revenue generated for their firms, and other factors. See zhangfinancial.com for full ranking criteria. DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 13

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A lone bottle of Crown Royal Regal Apple whiskey sits on a shelf at a CVS Pharmacy store in St. Clair Shores. Crown Royal is among the name-brand liquors that have been in short supply at the retail level because of Republic National Distribution Co.’s delivery problems in Michigan. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

FOOD AND BEVERAGE

Republic National faces fines, lost revenue over liquor delivery woes Penalties are result of months of distribution problems BY CHAD LIVENGOOD

Attorney General Dana Nessel’s office wants to impose steep financial penalties on Michigan’s largest liquor distribution company for rampant delays and problems with delivering wine and spirits after consolidating shipping warehouses. NWS Michigan LLC, which does business as Republican National Distributing Co., was hit with an 88-count complaint from Nessel’s office detailing dozens of violations for failure to deliver liquor and spirits to individual restaurants, retail stores and bars in August, September and October. The company faces fines totaling $26,000 — $300 per count — and a reduction of 50 cents per case of liquor it delivers to some 13,000 retail customers. The fines will likely be dwarfed by the reduced fee-for-service, depending on whether an administrative hearing officer imposes the financial penalties and for how long. Republic National delivered about 6.6 million cases in the 2019 fiscal year and 6.08 million cases in 2018, according to the Michigan Liquor Control Commission. If the company’s $8.25 per case payment from the state were docked 50 cents per case for a year, the company would lose more than $3 million in revenue. Under Michigan’s three-tier liquor control system, Republic National and two other companies that are the state’s only authorized distribution agents get paid $8.25 per case of liquor they deliver to licensed retailers. Liquor suppliers and importers pay the companies an additional $1.35 per case. The other distributors are Highland Park-based General Wine & Liquor Co. Inc. and Kalamazoo-based Imperial Beverage Co. Republic National is the largest of the three distributors, delivering 68 14 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

“WE ARE CONTINUING TO DRIVE OUR TEAM TO RESTORE DELIVERY SERVICE TO THE HIGH LEVELS THAT WE HAVE HISTORICALLY PROVIDED MICHIGAN.” — Joe Gigliotti, a regional president for Republic National Distributing

percent of the 8.8 million cases of liquor the state sold to retailers in the 2018 fiscal year. The financial penalties against Republic National are a result of months of distribution and delivery problems the company has faced since it moved to consolidate two distribution warehouses in Grand Rapids and Brownstown Township under one roof in Livonia — a new $80 million, highly automated warehouse near I-275 and I-96. Republic National executives have blamed computer glitches and struggles among its employees to learn a new system for custom-packing cases of liquor orders for bars, party stores and restaurants. The company said it is reviewing the Attorney General’s complaint. “We are continuing to drive our team to restore delivery service to the high levels that we have historically provided Michigan,” Joe Gigliotti, a regional president for Republic National Distributing Co., said Tuesday in a statement. “No additional fines or requirements from the commission are needed for us to acknowledge the importance of service improvements or to incent us to work harder.” Eighty-five of the 88 counts in the complaint stem from failure to satisfy minimum requirements of delivery of liquor to individual licensed retailers. They include Imperial Liquor in Rose-

ville, the 300 Bowl bowling alley in Waterford, The Lakes Bar & Grille in Commerce Township and Red Lobster Hospitality LLC in Novi. The complaint cites Republic National for failing to maintain adequate operations and failure to maintain telephone answering equipment that have “kept callers on hold for multiple hours, disconnected calls after a lengthy hold, failed to answer multiple calls, and failed to return multiple messages.” Republic National has hired a third-party call center to answer a flood of phone calls from liquor retailers “just to make sure they get a human being and are not waiting ... on the phone,” Gigliotti said Friday. Nessel’s proposed administrative sanctions against Republic National call for the company to be placed on probation and required to pay for an audit of its operations, “including, but not limited to, its receipt and storage of spirits from suppliers, accountability and security for commission funds, and storage of commission inventory.” The sanctions include the 50-centsper-case reduced fee for Republic National until the audit “is completed and all corrective action taken, to the commission’s satisfaction,” according to the attorney general’s complaint. The administrative legal proceeding against Republic National comes on the heels of a Friday meeting of the Michigan Liquor Control Commission, where Gigliotti and other company executives updated commissioners on their progress in restoring normal operations. But a liquor control commission staff member told commissioners that delivery and accounting issues related to Republic National’s weeks of delays have gotten “worse,” even as the company has sought to fix problems stemming from a glitches at the new distribution center in Livonia.

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ARCHITECTURE

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

ACCOUNTING

ARCHITECTURE

TAX Planning Group

AXT Company

CTION CONSTRU Jane Pool hasIte volo Salma Starlgn hasIte officte mpossitatint volo officte BUILD volut BEST volut fugiaec tibus, mpossitatint Group Planning TAX sumqui temposa fugiaec tibus,hasIte sumqui Starlgn Salma ndianti temposa ndianti hasIte volo Poolonserrumende Jane volo officte tint cus, se etmpossita doles doles onserrumende se et officte mpossitatint volut quaeceres quia doles doles cus, tibus, fugiaec erro volut fugiaec tibus, sumqui volorehendam quaeceres erro quia temposa aut moloratem sumqui ndianti temposa ende cus net aperibus dicta nem volorehendam aut moloratem onserrum ndianti onserrumende se et cus, cus net aperibus dicta nem dolesendantiaesed s erro et dolesnditis seligenda doles doles cus, quaecere quos doluptur sitatur ligenda nditis endantiaesed s erro quia quaecere quia volorehendam aut eproviduste riatumm quos doluptur sitatur aut molorate damvolende volorehen m cus net aperibus molorate dicta nem verum expel ipicatenis eproviduste volende riatum net aperibus cus nem ligenda nditis dicta sed doluptatiunt volupta quam, verum expel ipicatenis endantiae nditis ligenda sed quos doluptur endantiae ommolup tatur? Quiaeperi auda doluptatiunt volupta quam, sitatur doluptur quos eproviduste volende sitatur pa cus inste repudionem quamus et ommolup tatur? Quiaeperi auda volende riatum eprovidu verum expel ipicatenis riatum aut velluptam videlic ieniet pa cus in repudionem quamus et expel ipicatenis verum unt volupta quam, doluptati quam, hariam vero cus, audit aut velluptam videlic ieniet unt volupta doluptati tatur? Quiaeperi auda ommolup i auda optatquatem expla doluptatur hariam vero cus, audit Quiaeper tatur? quamus et em ommolup repudion in pa cus autatqui ut facepro optatquatem em quamus et repudion ieniet cus in dolori pa aut velluptam videlic expla aut velluptam videlic ieniet hariam vero cus, audit audit r cus, hariam vero optatquatem expla doluptatu r optatquatem expla doluptatu autatqui dolori ut facepro ARCHITECTURE ACCOUNTING autatqui dolori ut facepro

ACCOUNTING

AXTCO.

Davis Design

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

CONSTRUCTION

BEST BUILD

INSURANCE

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

INSURANCE

LEGAL Russel Agency

Paula Thompsom N LLP JOHNSO hasIte volo officte mpossitatint volut Smith hasIte John fugiaec tibus, officte volo volut sumqui tint temposa mpossita ndiantitibus, sumqui fugiaec onserrumende ndiantise et doles doles temposa et quia cus, quaeceres ende seerro onserrum s erro quaecere volorehendam moloratem doles cus,aut doles autnem dam cus net aperibus dicta volorehen quia net aperibus ligenda nditis m cusendantiaesed molorate nditis quos nem doluptur sitatur ligenda dicta doluptur quos riatum eproviduste sedvolende endantiae ste volende verum eprovidu expel ipicatenis sitatur expel ipicatenis doluptatiunt quam, verumvolupta riatum quam,auda ommolup tatur? Quiaeperi volupta doluptatiunt i auda pa cus in repudionem quamus et tatur? Quiaeper ommolup quamus et emieniet aut velluptam videlic repudion in cus pa hariam vero cus, auditieniet videlic aut velluptam audit optatquatem expla doluptatur hariam vero cus, doluptatur autatqui dolori ut facepro tem expla optatqua facepro ut dolori autatqui

LEGAL

JOHNSON LLP John Smith hasIte volo officte mpossitatint volut fugiaec tibus, sumqui temposa ndianti onserrumende se et doles doles cus, quaeceres erro quia volorehendam aut moloratem cus net aperibus dicta nem ligenda nditis endantiaesed quos doluptur sitatur eproviduste volende riatum verum expel ipicatenis doluptatiunt volupta quam, ommolup tatur? Quiaeperi auda pa cus in repudionem quamus et aut velluptam videlic ieniet hariam vero cus, audit optatquatem expla doluptatur autatqui dolori ut facepro

LAW

LEGAL

Davis Inc.

SMITH GROUP

Moris Law LEGAL

George Group

INSURAN Paul JonesCEhasIte volo officte mpossitatint volut SMITH GROUP fugiaec tibus, hasIte Don James sumqui temposa volo officte ndianti mpossitatint volut onserrumende se et doles doles tibus,erro quia fugiaec cus, quaeceres temposa sumqui volorehendam aut moloratem ende se et onserrum cusndianti net aperibus dicta nem cus, quaeceres erro dolesendantiaesed doles nditis ligenda dam aut volorehen quia quos doluptur sitatur aperibus cus netriatum moloratem eproviduste volende ligenda nditis nemipicatenis dictaexpel verum doluptur sed quos endantiaevolupta doluptatiunt quam, ste volende sitatur eprovidu ommolup tatur? Quiaeperi auda ipicatenis expel verum riatum pa cus in repudionem quamus et quam, volupta aut doluptati velluptamunt videlic ieniet Quiaeperi auda tatur? ommolup hariam vero cus, audit em quamus et pa cus in repudion optatquatem expla doluptatur ieniet videlic aut velluptam autatqui dolori ut facepro hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro

Shela Time hasIte Peter Yan hasIte volo George volo officteGroup officte mpossitatint mpossitatint volut fugiaec tibus, hasIte volo Peter Yan volut fugiaec sumqui sumqui temposa tint mpossita offictetibus, temposa ndiantitibus, ndianti onserrumende volut fugiaec onserrumende se et se et doles doles cus, sumqui temposa doles doles cus, quaeceres erro quaeceres erro quia ende onserrum ndianti quia volorehendam aut moloratem cus, et doles dolesaut sevolorehendam moloratem netquia aperibus cus net aperibus dicta nem s erro quaecerecus m dicta nem ligenda nditis ligenda nditis endantiaesed volorehendam aut molorate nem endantiaesed quos doluptur quos doluptur sitatur dicta aperibus net cus sitatur eproviduste volende sed eproviduste volende riatum ligenda nditis endantiae riatum verum expel ipicatenis verum expel ipicatenis quos doluptur sitatur doluptatiunt ste volupta quam, doluptatiunt volupta quam, volende riatum eprovidu ommolup tatur? Quiaeperi auda ommolup tatur? Quiaeperi auda ipicatenis expel verum pa cus in repudionem quamus et pa cus in repudionem quamus et doluptatiunt volupta quam, i auda aut velluptam videlic ieniet aut velluptam videlic ieniet ommolup tatur? Quiaeper et hariam in repudionem quamus hariam vero cus, audit pa cusMORIS vero cus, optatquatem expla doluptatur ieniet videlic aut velluptam LAW audit autatqui dolori ut facepro hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro

CONSTRUCTION

Don James hasIte volo officte Moris Law mpossitatint volut Time hasIte fugiaec Shela tibus, sumqui temposa volo officte tint volut se et ndianti onserrumende mpossita tibus, doles doles cus, sumqui quaeceres erro fugiaec ndianti aut quia volorehendam temposa et ende moloratem netseaperibus onserrumcus quaeceres erro cus,nditis dicta nem ligenda doles doles aut dam endantiaesed quos doluptur quia volorehen aperibus m cus net sitatur eproviduste volende molorate nditis ligenda riatum verum ipicatenis nem expel dicta doluptur quos sed doluptatiunt volupta quam, endantiae ste volende ommolup Quiaeperi auda eprovidu sitatur tatur? ipicatenis pa cus in repudionem et verum expelquamus riatum quam, volupta aut velluptam videlic ieniet doluptatiunt i auda Quiaeper tatur? hariam vero cus, audit ommolup em quamus et optatquatem expla doluptatur pa cus in repudion videlic ieniet autatqui dolori ut facepro aut velluptam hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro

INSURANCE

LEGAL

Ground Up

Marble Agency

CallaLEGAL LLP

Singletree LLP

LAW

LEGAL

Carol Strong hasIte CE JennINSURAN Stone hasIte Tina Bond hasIte Bella Jones hasIte Michael Banks hasIte voloCONSTRU officte CTION Singletree LLP volo officte volo officte volo officte volo officte ACCOUNTING Calla LLP mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut Marble Agency Michael Banks hasIte fugiaec tibus, Up fugiaec tibus, sumqui fugiaec tibus, fugiaec tibus, sumqui fugiaec tibus, sumqui Ground Jones hasIte Bella volo officte Jon & Jon Co. Bond hasIte sumqui temposa Tinandianti temposa sumqui temposa temposa ndiantitint volut temposa ndianti officte volo hasIte mpossita Stone Jenn ndianti onserrumende se et onserrumende se et ndiantimpossitatint volut onserrumende se et sumqui onserrumende se et volo officte Carol Strong hasIte fugiaec tibus, officte volo volut tint doles doles cus, quaeceres erro doles doles cus, quaeceres erro onserrumende se et doles doles doles doles cus, quaeceres erro doles doles cus, quaeceres erro mpossita sumqui tibus, fugiaec volo officte temposa ndianti mpossitatint volut quia volorehendam aut quia volorehendam cus, quaeceres erro quia quia volorehendam autse et quia volorehendam aut fugiaec tibus, aut ndianti temposa ende mpossitatint volut sumqui tibus, onserrum fugiaec moloratem cus net aperibus moloratem custemposa net aperibus volorehendam moloratem moloratem cus net cus, aperibus sumqui se et ende quaeceres erromoloratem cus net aperibus onserrumaut fugiaec tibus, doles ndianti doles temposa erro dicta nem ligenda nditis dicta nem ligenda nditis cus netdoles aperibus dicta dicta nem ligenda nditis dicta nem ligenda nditis quaeceres ndianti cus,nem doles dam aut sumqui temposa ende se et quia volorehen onserrum se et doles dolesligenda nditis endantiaesed ende aut et endantiaesed quos doluptur endantiaesed quos doluptur endantiaesed quos doluptur se onserrum dam ende net aperibus endantiaesed quos doluptur quia volorehen quaeceres erro ndianti onserrum moloratem cus doles cus, s erro quia quaecere s erro sitaturdoles eproviduste volendeaut sitatur cus, eproviduste volende quos doluptur sitatur volendenditis sitatur eproviduste volende net aperibus sitatur eprovidusteligenda cus m molorate doles doles cus, quaecere dam dicta nem volorehen aut moloratem eproviduste volende dam riatumquia verum expel ipicatenis nditis riatum volorehen verum expel ipicatenis riatum riatum verum expel ipicatenis dicta nem ligenda quos doluptur riatum verum expel ipicatenis quia volorehendam aut net aperibus m cusquam, endantiaesedquam, dicta nem molorate aperibus doluptatiunt volupta doluptatiunt volupta quam, verum expel ipicatenis doluptatiunt volupta quam, cus net sed quos doluptur doluptatiunt volupta endantiae moloratem cus net aperibus eproviduste volende ligenda nditis sed doluptatiunt sitatur nem Quiaeperi dictatatur? endantiae nditis ommolup auda volende ommolup tatur? Quiaeperi auda volupta quam, ommolup tatur? Quiaeperi auda ommolup tatur? Quiaeperi auda ste ligenda nditis sitatur eprovidu doluptur dicta nem ligenda verum expel ipicatenis sed quos doluptur sitatur ipicatenis pa cus inriatum pa cus endantiae in repudionem quamus et pa cus in repudionem quamus et ommolup tatur? Quiaeperi auda repudionemvolupta quamusquam, et pa cus in repudionem quamus et quos expel verum riatum volende unt endantiaesed quos doluptur ste doluptati sitatur eprovidu ste volende quam, aut velluptam videlic ieniet aut velluptam videlic ieniet riatum pa cus indoluptati repudionem quamus et aut velluptam videlic ieniet aut velluptam videlic ieniet eprovidu unt volupta tatur? Quiaeperi auda sitatur eproviduste volende expel ipicatenis ommolup verum ipicatenis expel hariamriatum vero cus, audit hariam vero cus, audit aut velluptam videlic ieniet hariam vero cus, audit hariam vero cus, audit Quiaeperi auda et verum tatur? ommolup riatum verum expel ipicatenis in repudionem quamus volupta quam, unt doluptatur pa cus et doluptati volupta quam, hariam vero cus,inaudit unt quamus optatquatem expla optatquatem expla doluptatur optatquatem expla doluptatur em doluptati quam, pa cus repudion videlic ieniet optatquatem expla doluptatur Quiaeperi auda doluptatiunt volupta velluptam tatur? Quiaeperi auda autatquiommolup dolori ut tatur? facepro ieniet autatqui aut autatqui dolori ut facepro optatquatem expla doluptatur dolori ut facepro audit autatqui dolori ut facepro i auda ommolup videlic Quiaeper et velluptam tatur? aut quamus cus, em ommolup et hariam vero quamusautatqui pa cus in repudion dolori ut facepro quamus et pa cus in repudionem cus, audit vero doluptatur hariam expla ieniet tem pa cus in repudionem videlic optatqua ieniet velluptam aut r aut velluptam videlic optatquatem expla doluptatu aut velluptam videlic ieniet autatqui dolori ut facepro vero cus, audit audit hariam cus, vero facepro ut hariam r autatqui dolori hariam vero cus, audit r optatquatem expla doluptatu r optatquatem expla doluptatu optatquatem expla doluptatu autatqui dolori ut facepro autatqui dolori ut facepro autatqui dolori ut facepro

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PEOPLE ON THE MOVE

CRAIN'S LIST: MICHIG MICHIGAN AN B BANK ANKS S Ranked by 2019 Michigan deposits inside market Company name Address Phone; website

Top executive(s)

Michigan deposits inside market ($000,000) June 2019/2018

Number of Michigan offices inside market 2019

Deposits outside market ($000,000) 2019

Number of offices outside market 2019

J.P. Morgan Chase & Co.

John Carter managing director, region manager

$44,613.6

220

$1,266,605.4

Comerica Bank

Michael Ritchie Michigan market president

28,994.2

192

27,324.8

Bank of America

Matthew Elliott Michigan market president

22,875.2

1,330,811.6

4,238

TCF Financial Corp.

Craig Dahl president and CEO

18,175.2

248 2

17,029.3 2

305 2

PNC Bank

Ric DeVore president for Detroit and Southeast Michigan

17,106.7

176

252,302.6

2,222

Huntington National Bank

Sandra Pierce senior executive VP, private client group and regional banking director and chair of Michigan

16,859.8

288

66,751.6

621

801 W. Big Beaver Road, Suite 500, Troy 48084-4724 248-244-3541; www.huntington.com

Fifth Third Bank Eastern Michigan

David Girodat president and CEO, Eastern Michigan

16,757.1

201

113,165.2

1,023

Flagstar Bancorp Inc.

Alessandro DiNello president and CEO

13,026.1

114

1,791.1

Citizens Bank

Richard Hampson Michigan market president

5,769.7

119,476.6

Independent Bank Corp.

William Kessel president, CEO and director

2,978.9

0.0

Mercantile Bank Corp.

Robert Kaminski Jr. president, CEO and director

2,627.2

0.0

KeyBank N.A.

Ted Willett president, Michigan

2,089.9

111,825.7

Macatawa Bank Corp.

Ronald Haan president and CEO

1,667.9

0.0

Arbor Bancorp Inc. (Bank of Ann Arbor)

Timothy Marshall president and CEO

1,458.2

0.0

Old National Bank

Alex Strati Michigan region CEO

1,412.7

12,998.9

First National Bancshares Inc. (First National Bank of America)

Ken Foote CEO

1,364.9

0.0

CIBC Bank

Victor Dodig president and CEO Michael Capatides senior executive VP and group head, U.S. region, president and CEO, CIBC Bank USA

1,324.5

21,073.9

Wells Fargo & Co.

David Szabo regional president

1,291.5

1,289,843.5

Isabella Bank Corp.

Jae Evans president, CEO and director

1,283.8

0.0

Level One Bancorp Inc.

Patrick Fehring chairman, president and CEO

1,243.8

0.0

H. Douglas Chaffin president and CEO

1,171.7

0.0

Northpointe Bancshares Inc.

Charles Williams president and CEO

1,092.4

0.0

Mackinac Financial Corp. (mBank)

Paul Tobias chairman and CEO

915.2

200.9

Fentura Financial Inc. (The State Bank)

Ronald Justice president and CEO

796.4

0.0

Horizon Bank

Craig Dwight CEO and chairman

788.3

3,182.4

8 9

16 17 18

21 22

611 Woodward Ave., Detroit 48226 313-256-8500; www.jpmorganchase.com 411 W. Lafayette, Detroit 48226 248-371-5000; www.comerica.com 2600 W. Big Beaver Road, Troy 48084 800-643-9600; www.bankofamerica.com 1

333 West Fort Street Suite 1800, Detroit 48226 800-867-9757 755 W. Big Beaver Road, Troy 48084 800-243-7274; www.pnc.com

One Woodward, Detroit 48226 313-230-9001; www.53.com

5151 Corporate Drive, Troy 48098 248-312-2000; www.flagstar.com 27777 Franklin Road, Southfield 48034 248-226-7998; www.charterone.com 4200 East Beltline Avenue NE, Grand Rapids 49525 616-527-5820; www.independentbank.com 310 Leonard St. NW, Grand Rapids 49504 616-406-3000; www.mercbank.com 100 S. Main, P.O. Box 8612, Ann Arbor 48107 800-539-2968; www.keybank.com 10753 Macatawa Drive, Holland 49424 616-820-1444; www.macatawabank.com 125 S. Fifth Ave., Ann Arbor 48104 734-662-1600; www.bankofannarbor.com 2723 S. State St., Ann Arbor 48104 734-887-2600; www.oldnational.com

241 E. Saginaw, East Lansing 48823 800-968-3626; www.fnba.com

34901 Woodward Ave., Ste. 200, Birmingham 48009 248-566-4700; us.cibc.com/en/home.html

101 W. Washington St., Marquette 49855 906-228-1203; www.wellsfargo.com 401 N. Main, Mt. Pleasant 48858 989-772-9471; www.isabellabank.com 32991 Hamilton Court, Farmington Hills 48334 248-737-0300; www.levelonebank.com

MBT Financial Corp. (Monroe Bank & Trust)

102 East Front St., Monroe 48161 734-241-3431; www.mbandt.com

3333 Deposit Drive NE, Grand Rapids 49546 616-940-9400; www.northpointe.com 130 S. Cedar St., Manistique 49854 888-343-8147; www.bankmbank.com 175 N. Leroy, Fenton 48430 810-750-8725; www.fentura.com

200 E. Big Beaver Road, Troy 48083 248-781-2584; www.horizonbank.com

$43,832.4

30,157.2

19,264.2

3,193.9

17,288.6

15,767.0

16,530.1

10,297.0

5,719.3

2,820.5

2,540.5

1,480.8

1,586.9

1,314.8

1,367.2

1,045.7

1,310.9

2,444.0

1,278.2

1,083.2

1,149.1

734.2

881.5

702.0

624.9

4,804

243

1,017

1,103

174

5,565

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This list ranks banks and bank holding companies with a presence in Michigan. Figures are from the FDIC's deposit market reports, which are based on the branch/office deposits for all FDIC-insured institutions as of June 30. It is not a complete listing but the most comprehensive available. Companies are listed with the address and top executive of their main metro Detroit office. Actual figures may vary. NA = not available 1 Chemical Bank became TCF Bank after the completion of a "merger of equals" on Aug. 1. 2 Combined numbers for Chemical Bank and TCF Bank reported by FDIC as of June. 3 Completed its merger with First Merchants Corp. of Muncie, Ind., on Sept. 1. SOURCE: FDIC

16 | CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS | DECEMBER 2, 2019

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The University of Notre Dame in South Bend, Ind. | CRAIN’S CHICAGO BUSINESS

Pulte foundation donates $111M to Notre Dame Gift will support anti-poverty programs BY SHERRI WELCH

The Pulte Family Charitable Foundation has made a $111 million gift to the University of Notre Dame, the alma mater of several in the family, to support development of anti-poverty programs. The gift represents a part of the assets transferred to the foundation from the estate of the late PulteGroup Inc. founder William Pulte, who died in March 2018. The home-building company was long based in Bloomfield Hills before moving its headquarters to Atlanta in 2013. The gift will fund efforts aimed at breaking the cycle of poverty, along with financial aid and scholarships for low-income students. Among other programs, it will support the Pulte Institute for Global Development, which is developing programs to improve the well-being of the world’s poorest and most vulnerable populations, and the William J. Pulte Directorship of the institute. The gift will also fund a donor-advised fund and endowments named for William J. Pulte and the family in support of the Keough School of Global Affairs’ next-generation global leadership development programs and the Wilson Sheehan Lab for Economic Opportunities, which is working to scale programs that move people out of poverty. The Pulte family will work with the university in South Bend, Ind., on the distribution of the gift to determine the most effective and efficient ways to curb and eliminate poverty, said Mark Winter, president of Bingham Farms public relations firm Identity, speaking on behalf of the family. After his retirement, William Pulte focused on serving others “and wanted to do what he could to help address the world’s biggest problems, especially world peace and poverty,” his widow Karen Pulte, a member of the family foundation’s board and Notre Dame’s Keough School of Global Affairs advisory council, said in a release.

“Bill wanted more impact on a larger scale,” she said. “That’s why the combination of the Pulte Family Charitable Foundation and Notre Dame makes so William Pulte much sense. Together, we will leverage our resources to finally put an end to global poverty once and for all.” “What we do and the decisions we make now will make all the difference in our being a dynamic and relevant entity — taking on current and future philanthropic challenges and addressing humanitarian issues — versus an old-school foundation that functions under the most conservative principles and practices,” Nancy Pulte Rickard, the couple’s daughter who serves as chairman and president of the family foundation, said in a release. The Pulte Family Charitable Foundation’s alliance with Notre Dame will help the foundation accomplish its “long game, both nationally and globally,” she said. “In addition to sharing our core beliefs rooted in our Catholic faith, the university has a global reach with access to some of the world’s brightest minds, expertise, resources and all-around know-how for playing on different fields and winning when it comes to improving life systems for humanity.” The Boca Raton, Fla.-based foundation’s gift to the University of Notre Dame follows a $1 million gift from the foundation to Ferris State University in Big Rapids in October to fund scholarships and an incubator as part of the university’s construction program, Winter said. The foundation expects to continue to operate and provide financial resources to other charities going forward, Winter said.

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DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 17

CALENDAR

REDEVELOPMENT

` TUESDAY, DEC. 3 100 Women Power Connect — 2019. 6-9 p.m. Sashe LLC. Includes boot camps “Who Knows You?” and “How to Sell Yourself in 15 Minutes or Less,” facilitated by career expert and professional coach Jocelyn Giangrande. Also includes: executive mentor panel “Keeping It Real” discussion with leaders sharing journeys, lessons learned and what it takes to make it in careers and business, shopping bazaar supporting women entrepreneurs/vendors and networking reception to help build professional connections. Washtenaw Community College, Ann Arbor. $39. Contact: Jocelyn Giangrande, email: jgiangrande@sashewomen. com; phone: (248) 789-0333.

` THURSDAY, DEC. 5 Cannabis Summit & Simulcast. 7:30-11:30 a.m. Michigan Association of Certified Public Accountants. Leaders in Michigan’s marijuana industry will discuss risk management, professional liability concerns and the latest in regulation and business valuation procedures. Speakers include: Ronald Seigneur, managing partner, Seigneur Gustafson LLP, Lakewood, Colo.; Marc Lichtman, partner, UHY LLP, Farmington Hills; Kareyna Miller, founder and president, LC Solutions Michigan PLLC, Flint; Christopher Rosmarin, principal, Rehmann, Grand Rapids; Jennifer Piggott, manager, Adult-Use Licensing, Marijuana Regulatory Agency, state of Michigan and James Baiers, chief legal officer, Trion Solutions, Troy. MSU Management Education Center, Troy. $145 members; $220 nonmembers. Contact: Kamal Webster, email: kwebster@micpa.org; phone: (248) 2673700. 2019-2020 State of the Region. 10 a.m.-1:15 p.m. Dec. 5. Detroit Regional Chamber. The sixth annual State of the Region will reveal new data on Southeast Michigan’s economic health and how the region compares to peer regions. The report analyzes economic indicators related to business growth, talent,

innovation and international commerce. Ford Field, Detroit. $75 members; $150 nonmembers. Contact: Katy Palahang, phone: (313) 596-0384.

` UPCOMING EVENTS Outlook 2020. 6-9 p.m. Dec. 9. Startup Nation and Venture Catalysts. Program will highlight Michigan’s business ecosystem and tech trends for 2020. Platform, Birmingham. $35. Contact: Gary Cohn, email: gary@startupnation. com Positive Links Speaker Series: Authenticity on One’s Own Terms. 4-5 p.m. Dec. 12. Center for Positive Organizations. Speaker Patricia Faison Hewlin, associate dean of Undergraduate Programs and associate professor in the Desautels Faculty of Management at McGill University, will discuss how people can be authentic on their own terms by identifying thresholds of authenticity as well as personal values that can be integrated into the workplace to: increase work engagement, foster positive relationships and enhance overall personal well-being. Ross School of Business, Ann Arbor. Free. Contact: Center for Positive Organizations, email: cpo-events@umich.edu; phone: (734) 764-0544. 2020 Michigan Economic Outlook. 11:30 a.m.-1:30 p.m. Jan. 7. Detroit Economic Club. Grant Thornton chief economist Diane Swonk and Jeff Donofrio, director of Michigan’s Labor and Economic Opportunity Department, discuss the 2020 Michigan Economic Outlook. MotorCity Casino Hotel. $45 members, $55 guests of members. Website: econclub.org To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

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PEOPLE ON THE MOVE 18 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

Retail, apartments, condos planned to replace Wyandotte post office BY ANNALISE FRANK

A $12 million project planned in Wyandotte would remake a former post office and parking lot into a five-story residential and retail building. The state last week approved a plan for the development that would allow it to capture state and local taxes for nearly $4.5 million in demolition, environmental remediation and infrastructure improvements, according to a Michigan Economic Development Corp. memo. The construction on nearly an acre at 166 Oak St. and 135 Chestnut St. would erect a 92,000-square-foot building with nearly 29,000 square feet of retail, as well as 16 apartments and 33 condos. It would also have 30 parking spaces under the building and over part of the first floor, according to the memo, as well as 6,300 square feet of public space. The post office has been closed

AGENCIES

From Page 3

In 2018, nearly a quarter, or 2.4 million, of Michigan’s nearly 10 million residents were age 60 and older, Data Driven Detroit’s Executive Director Erica Raleigh said, citing data from the U.S. Census Bureau. That’s up from 1.9 million, or 19.5 percent of the state’s 9.88 million residents, in 2010. Area Agency on Aging 1-B, which serves the areas with the largest population of seniors in the state, assists about 120,000 people each year. It has an additional 1,200-1,400 people on a waiting list for its programs and adds about 80 more to the list each month because it doesn’t have the funding to help them, Karson said. Some are in nursing homes and want to move back into the community. Others are discharged from hospitals and can no longer live independently, he said. “Our goal is to keep them in their homes. Most people do better in their homes; they are very comfortable there.” Enabling seniors to age in place at home also helps keep costs lower for them and the health care system, Karson said. To formalize AAA 1-B’s fundraising operations, he has created a new grant manager position that has helped attract grants including $250,000 from the Ralph C. Wilson Jr. Foundation to fund outreach in Washtenaw County. Last fall, Karson also hired a director of philanthropy to formalize fundraising through a new development department. DTE Energy Foundation has provided annual support of the holiday Meals on Wheels program for years. The agency is looking to build on that. It will host its first-ever fundraising gala on Dec. 5 at Petruzzellos Banquet and Conference Center in Troy. Sponsors include: Excellacare, Humana, Imperial Senior Suites, Personal Accounting Services and PNC Bank. AAA 1-B is hoping the event will help it reach its $150,000 annual goal to help fund unmet needs such as transportation for seniors and to begin paring back the waiting list for its programs. This year’s fundraising goal is just above the $132,000 the agency raised

A development project in Wyandotte plans to transform a former U.S. Post Office and parking lot into a five-story mixed-use development with integrated parking.

since 2014, according to the state. It was declared functionally obsolete in May. Wyandotte’s Brownfield Redevelopment Authority requested approval of the local and school tax-capture plan. The city’s Downtown Development Authority is also granting the project $180,000. It is getting other tax abatements totaling approximately $910,000. The developer has maximized se-

nior financing and is contributing approximately 15 percent equity into the project in cash and land/building acquisition. The project from Wyandotte-based A&J Realty Ventures LLC would create around 60 permanent jobs with an average wage of $16.67 an hour, the memo said.

in fiscal 2019 ended Sept. 30 and $73,000 the year before, Karson said. AAA 1-B reported just under $55 million in total revenue for fiscal 2018, up from $50.8 million the year before. It ended fiscal 2018 with an excess of more than $769,000 and net assets/ fund balances of $6.2 million. It’s operating on a budget of just over $60 million for fiscal 2020. The bulk of its revenue comes from federal and state grants and the remaining $12 million in fee-based revenue from contracts with local health systems and the VA Ann Arbor Healthcare System to provide discharge services for seniors, Karson said. The agency has increased its reserves by $1.2 million over the past two years by identifying internal efficiencies and outsourcing private-pay aid, housekeeping, snow removal and law services. The agency also closed two locations, leaving it with locations in Southfield and Clinton Township. Its reserves today are about $4.5 million. Karson said the goal is to get them to $10 million-$15 million. The agency will employ several strategies, including fundraising, said Jenny Jarvis, chief communications and strategy officer, in an email. Among other moves, it will seek additional operating efficiencies in program delivery, cut unprofitable programs, “aggressively” collect on receivables and focus on developing profitable partnerships, she said. The reserves are meant to provide a buffer in cases of government shutdowns to ensure services continue, Karson said. They also could provide a source of loaned capital to the nonprofit for future opportunities like getting out of leases and into its own building. Like its larger peer, the Detroit Area Agency on Aging, which serves Detroit, Hamtramck, Harper Woods, Highland Park and the five Grosse Pointes, is also stepping up its fundraising. It plans to launch a $250,000 drive in January, fund development manager DiAnna Solomon said. “The emphasis on fundraising is a growing consideration for DAAA because of a reduction in state and federal funding due to slower population growth in our region,” she said. “Yet, the needs of our constituents have not decreased.”

Last year, the Detroit agency served 97,441 people. It’s operating on a $77.9 million budget through federal, state and local contracts, Solomon said. Given population declines in its area, the agency’s federal funding is expected to be reduced by $500,000 per year through 2022, Solomon said. It began raising money from its staff back in 1988 to support the holiday Meals on Wheels program, and that has been the agency’s only fundraising focus ever since, Solomon said. In fiscal 2019 ended Sept. 30, it raised $250,000 for the meals program. “It’s imperative that we work harder and smarter to deliver more comprehensive services that are impactful and actually help fill the gaps,” Solomon said. “Fundraising is one of the avenues to doing that.” The Senior Alliance, or Area Agency on Aging 1-C, raises money year-round to fund the holiday Meals on Wheels program for seniors in 34 communities of southern and western Wayne County. The largest supporters of the program include DTE Energy Foundation, Ford Motor Company Fund and Greektown Casino. The agency, which serves over 50,000 people each year on an annual budget of about $30 million, has set a goal to raise $100,000 for the program this year, said CFO and Deputy CEO Kishori Gandhi. It reported $32.4 million in total revenue, a $1 million operating excess and just under $10 million in net assets/ fund balances for fiscal 2018. To build on the corporate sponsorships from DTE Energy Foundation, BJ’s Wholesale and Beaumont Health, it’s advertising on WWJ AM 950 and has posted videos online. Like the other agencies, it’s seeing unmet needs among seniors in the community. It’s considered broader fundraising, but hasn’t yet attempted to raise money outside of that needed to fund the holiday meals for seniors. Fundraising for the elderly is a tough sell, CEO David Wilson said. When it comes to seniors who are living on very limited income, “it’s harder for people to accept that and make a donation ... year round.”

Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Compuware CEO Chris O’Malley stands in a room once packed with mainframes. The signs represent back office functions that have since moved to the cloud.

COMPUWARE

From Page 1

Although he wouldn’t discuss the privately held company’s revenue or how many employees it has inside the former Compuware Building (now called One Campus Martius), O’Malley said today’s incarnation of Compuware is on its way to a third straight year of growth. “We’ve created a degree of profitability that’s shocking for a company of our size — and we’re growing at the same time,” O’Malley said in an interview for the Crain’s “Detroit Rising” podcast. “Certainly our shareholders are happy. We’re achieving things that Thoma Bravo, our principal investor, thought impossible five years ago. But we’re also doing it in a situation where we’re growing, which means we’re creating more opportunities for the employees here and we’re also answering the call for our customers.”

From ’terminal’ to growth O’Malley arrived at Compuware in mid-2014 amid a tumultuous period for the company Karmanos co-founded in 1973 and moved from the suburbs to downtown in 2003, creating the anchor of what’s now a vibrant central business district and park at Campus Martius. Compuware’s executives had fended off a December 2012 hostile takeover at-

tempt by New York City-based Elliott Management Corp. that dragged on for a year. In late 2014, Compuware sold the 1-million-square foot landmark building for $142 million to Quicken Loans founder Dan Gilbert and the Cotton family — founders of Meridian Health — after Compuware was sold to Thoma Bravo. O’Malley came to Detroit from the startup scene in Chicago. “I learned how to take $1 and turn it into $100 when you’re burning cash and you’re trying to make some idea to come true in the market,” he said. O’Malley has sought to position the 46-year-old software company as a “new-age startup” after multiple divisions of the old Compuware were sold or spun off into different businesses, including the Southfield-based cloud software company Covisint Corp. (Nasdaq: COVS). At the time of the 2014 sale, the remnants of a Compuware that once employed 4,000 in downtown Detroit were split into two: the mainframe business retaining the Compuware name and Dynatrace, a Waltham, Mass.-based cloud management company also owned by Thoma Bravo. “When I came in, I saw Compuware not as a company in state of decline that some people thought (of ) as terminal,” O’Malley said from his office overlooking Campus Martius park. “I saw a company that had a beautiful history, that had done a lot

the “waterfall” model for mainframe COMPUWARE HAS software development to the agile MIGRATED FROM THE and DevOps methods. With innovation within those methods, O’Malley “WATERFALL” MODEL FOR said, there are new prospects for MAINFRAME SOFTWARE growing the business, O’Malley said. “That’s the opportunity for us,” he DEVELOPMENT TO THE said. “We can grow at double digits AGILE AND DEVOPS for probably a decade within that opportunity.” METHODS. WITH INNOVATION WITHIN Focused on customers THOSE METHODS, In deciding which functions of O’MALLEY SAID, THERE ARE Compuware’s business stayed inhouse on mainframes and which funcNEW PROSPECTS FOR tions got sent to the cloud, O’Malley GROWING THE BUSINESS. applied this standard: “Everything we would give us a competitive “THAT’S THE OPPORTUNITY believed advantage in serving our customers, we did that work on the mainframe.” FOR US. WE CAN GROW AT Everything else has been gradually DOUBLE DIGITS FOR shed. “Customers don’t care what generPROBABLY A DECADE al ledger we use. They could care WITHIN THAT less,” O’Malley said. “They care about the products we support.” OPPORTUNITY.” What hasn’t been outsourced at — Compuware CEO Chris O’Malley

of great things — in more recent history, it had troubles.” Even as major businesses put their consumer-facing services on cloud-supported apps, the primary IT functions of many large companies are still essentially run on mainframe technology even as software development methods have evolved. Compuware has migrated from

Compuware are the people. Through the turmoil of spinoffs, divesting of certain lines of business and fending off a hostile shareholder’s takeover attempt, Compuware still retained employees who have spent 30 to 40 years at the firm, O’Malley said. It’s a rarity in the information-technology business — especially one whose landlord, Quicken Loans founder Dan Gilbert, has a seemingly

unending need for IT talent. “We have a very, very low employee turnover (rate) here and a very high employee engagement (rate),” O’Malley said. O’Malley attributes the company’s success in retaining employees in the culture they’ve maintained that runs counter to other IT companies. Employees aren’t allowed to work from home. The policy is designed to counter the trend of outsourcing business functions overseas, O’Malley said. “Everybody wants to work from home — and all of us would prefer that,” O’Malley said. “But when you’re mindful of the fact that we only work at the pleasure and service of our customers and when you’re trying to invent new things to serve those customers, proximity matters. Communication matters. Thinking about ideas and brainstorming matters. Trial and error matters. “All of these things drive you to the necessity of working together,” he added. Keeping the nimble Compuware team intact, on one floor, has been a “huge part” of the company’s climb back to profitability and growth, O’Malley said. “Had we deviated from any of those tenets from the outset, I think we probably would have been more like we were six years ago than we are today,” he said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 19

ALTES

From Page 3

But the team is also testing a darker lager, Altes Sportsman, at Traffic Jam. To distribute to nearly 1,500 bar and retail locations in the Lower Peninsula, Detroit National Brewing works with four distributors. On Nov. 13, the company shipped its first Altes cases up to the Upper Peninsula to start selling there through a fifth, Johnson Distributing Co. Altes is available anywhere from Slows Bar BQ in Corktown to the Mt. Holly Ski Area and small suburban markets, according to its website. Stief said he estimates an average of 1,500-2,000 cases (24 cans each) are sold per month, though the figure fluctuates. At the start, Altes was sometimes out of stock and couldn’t keep up with demand, but Stief said those days are behind it. He declined to disclose sales figures or the prices Altes charges wholesale. But for retail, sixpacks range from $7.99 on sale to $10.99 and 12-packs $13.99-$16.99. Bar prices range widely — PJ’s Lager House in Corktown sells cans for $3, for example.

Marketing the resurrection Doner worked with Altes in April when it got its first big round of attention, on Detroit Tigers’ Opening Day. A keg of Altes sold out in about an hour at Nemo’s Bar and Grill in Corktown, Stief said. Then Stief and his co-owners officially “resurrected” Altes April 20 with an Easter egg-style beer hunt at another Detroit bar, the Old Miami. Doner was behind the stunt and paired online-only ads that featured local actor Jimmy Doom in a bunny suit. Doom returns as the bartender in Doner’s latest spots for Altes. The ads center on Santa, lounging with several rounds of Altes after a long night of gift delivery. The first ad references the reindeer Comet pooping, while another features a cheeky call with Mrs. Claus. A third starts with St. Nick leaving the bar’s restroom before proclaiming to the bartender, “Less talky. More drinky.” “Part of (the ad strategy) is just staying true to that Detroit grit and that Detroit sort of sass. Like, this was originally that blue-collar sort of hard-working person’s beer,” said Karen Cathel, executive creative director for Doner. “Which is why we think this works so well with Santa. There’s nobody that’s a harder-working man than Santa. “At the end of the day, what does he want to do? He wants to belly up to a good old bar and have a good old beer and just chill. ... It’s a sassy, slightly tipsy Santa.” While Altes paid “hard costs” for the ads such as casting, equipment and props, the startup beer company isn’t paying for Doner’s time. Except in beer. “We’ve agreed to do some work for them occasionally, almost as if it was a pro-bono account,” Cathel said. “They pay us in beer. Agency parties, events, they are happy to supply the beer. ...

CREDITOR

From Page 3

“Pike Pointe is still hopeful that it will be able to partner with the right developer to improve the property for the benefit of the east riverfront community as best as possible under these circumstances.” Its motion earlier this month said the subsidiary envisioned a develop-

From left, Detroit National Brewing Co. co-owners Pat Kruse, Eric Stief and Carl Erickson pose with cans of Altes Original Detroit Lager, a beer that originated in Detroit more than a century ago. The three relaunched the Altes brand and are producing it at Brew Detroit in Corktown. | DETROIT NATIONAL BREWING CO.

Detroit Free Press writer William Schmidt wrote on May 13, 1973 about a Detroit-centric Altes beer jingle penned by Doner ad man Morrie Weiss. | DETROIT FREE PRESS ARCHIVES

And they allow us to work on a category that we don’t have.” She declined to disclose the cost of the one-day commercial shoot, but said it was kept minimal. Altes doesn’t have a big budget for media, so the Christmastime ads aren’t for TV. They will be posted to Facebook and YouTube, Cathel said. But she said she is confident Altes’ Detroit following will light a fire under the spots, spreading them to areas of the state where Altes isn’t as common a name. Doner got involved when Cathel told the brewers she wanted to help relaunch the brand, after her husband

saw a picture of an early-stage Altes bottle posted on social media. “Who doesn’t want to work on a nice Detroit comeback story?” Cathel said. It wasn’t until they began talking that she learned Doner and Altes’ intersecting history.

Altes started out as Tivoli Brewing Co. in 1897, but renamed itself in 1949 after its most popular beer brand, according to “Detroit Beer: A History of Brewing in the Motor City” by Stephen Johnson.

Detroit-born Doner won a contract with Altes Brewery in 1953, according to Ad Age. When Baltimore-based National Brewing Co. bought Altes in 1955, it wanted Doner to become National’s agency, and the added business led Doner to establish an office in Baltimore in 1960. Doner made a commercial jingle for Altes that became a hit and was “practically ... adopted as Detroit’s official city song,” the Detroit Free Press wrote in 1973, according to archives. Lines include “This is my town, Detroit is where it’s at for me,” according to the Free Press.

ment with a 3,500-car automated parking system, 300 apartments, 100 furnished condominiums, a 256room hotel, 60,000 to 100,000 square feet of office space and 60,000 square feet of retail space. A message seeking comment was sent to John Roach, director of media relations for Mayor Mike Duggan. Earlier this month, the city said in a court filing: “Pike Pointe’s delay and neglect is

inexcusable. Having had five years to engage a developer and timely move forward with a development plan, Pike Pointe has done little more than attempt to ‘flip’ the property for a quick cash out. Pike Pointe has ignored its development obligations and shown absolutely no grounds for an extension.” The subsidiary says part of the delay is attributable to changing development conditions, including a new East

Riverfront Framework Plan, the community benefits agreement ordinance and changes in Detroit leadership in planning and development. Pike Pointe also asked that the bankruptcy court require the city to nix an agreement that allows the operator of the Aretha Franklin Amphitheatre — The Right Productions — to use those properties for parking because it believes it “limits the value” of the properties.

20 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

‘Where it’s at’

That same year, the Free Press cited Altes’ jingle when maligning National Brewing for announcing it would close the 77-year-old brewery that housed Altes and shift production to Baltimore. The headline: “Where It’s At is Not Detroit, Altes Decides.” “So much for their cheery jingle’s ‘Greektown by night’ and ‘Eastern Market shopping sprees,’” the paper wrote. Like Cathel, the Two Way Inn reunited with Altes via social media. Manager Danielle Pantalleresco posted a photo of an old Altes beer sign she found in the bar’s basement on Facebook, and a commenter tagged the new brand. Now she sells five cases of Altes a month and expects that to “skyrocket” after the holiday ads are released. The Altes videos are the first thing ever officially filmed at the Two Way, Pantalleresco said. “We’re really selective ... We’re a classic Detroit bar, and Altes is a classic Detroit beer. It was a no-brainer for us,” she said. “Altes is one of those beers where there’s a story that comes along with it, like, ‘I remember my grandpa used to drink it at Christmas’ and ‘My dad drank it.’ It’s a generational beer.” Annalise Frank: (313) 446-0416 Twitter: @annalise_frank The subsidiary is not dropping that part of its lawsuit. “The city has advised Pike Pointe that it can and will cancel that contractual arrangement prior to conveying title to Pike Pointe,” the lawsuit withdrawal reads. “Pike Pointe will withdraw the remainder of the motion if and when this issue is resolved.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

MARIJUANA

From Page 1

It’s a tale that’s played out in every state that has legalized cannabis. California regulated its adult-use market in 2017. This year, illegal marijuana sales are expected to be triple, nearly $9 billion, of legal sales in the The Golden State, according to data from the United Cannabis Business Association. In California, just 89 of California’s 482 cities were allowing recreational dispensaries as of Dec. 25 last year, according to the Los Angeles Times. More than 1,200 of Michigan’s 1,773 cities, townships and other municipalities have opted out of letting adult-use recreational marijuana businesses operate in their borders. As of last Monday, only three recreational marijuana dispensaries in Michigan had been approved by the MRA to sell adult-use product on Dec. 1. The MRA expected roughly a dozen stores to be operational by Sunday. “What happens when you have inadequate access is less competition, higher prices and less product variety,” said Andrew Livingston, director of economics and research at Denver-based marijuana law firm Vicente Sederberg LLP. “All of this leaves the consumer asking, ‘Why am I going to purchase from this

A question of safety

Where’s the product?

The safety of the illegal black market has become a widespread concern in recent months, as largely black-market vaping products — a vape heats marijuana liquid concentrates into a vapor with its psychoactive chemicals, which is viewed as a healthier alternative to smoking marijuana flower — has been linked to a growing lung illness outbreak. The U.S. Centers for Disease Control and Prevention has confirmed 42 deaths and and over 2,100 cases of vaping-related illnesses across 49 states, the District of Columbia and two U.S. territories. The Michigan Department of Health and Human Services has identified 55 cases of lung illness from vaping, including one that required a double lung transplant at Henry Ford Hospital. The patients with the illness have ranged from 15 to 65 years old, the state said in a press release. Vitamin E acetate is the believed culprit in the outbreak. The oily chemical has sometimes been added to marijuana vaping liquids to thicken and dilute them. It’s commonly used in skin creams and other supplements, but the CDC believes its introduction into the lungs of vape users is interfering with the users’ breathing function.

Exacerbating the problem for dispensaries is the slow ramp-up of production. There’s already a shortage of available product for medical marijuana dispensaries, and with sales that were set to begin Sunday, legal supply is likely not to meet demand. Adult-use marijuana sales originally were not expected to begin before spring 2020, but in September, the MRA pushed up the date. To help meet demand, MRA allowed marijuana businesses holding existing medical marijuana licenses and approved or pursuing adult-use licenses to transfer up to 50 percent of medical marijuana inventory to the recreational market. Carter said no matter how the supply is sliced, it won’t meet either medical or adult-use demand. “The industry is facing an artificial shortage of products created by an unnecessary acceleration of the (adult-use recreation) market by (regulators) long before the underlying supply structure is ready,” Carter said in an email. “This is now exacerbated by the vape ban. There is the strong likelihood that provisioning centers across the state may soon close their doors or at the least operate with limited staff and hours as their shelves become empty.” Brisbo recognizes the economics, but is more concerned with the long-term survival of the legal regulated market than the immediate hardships during the rollout.

“...WHERE THERE’S DEMAND, IT WILL BE MET ONE WAY OR ANOTHER. I THINK PART OF OUR APPROACH IS TRYING TO PROVIDE ACCESS TO THE REGULATED MARKET BECAUSE, ULTIMATELY, IF CONSUMERS ARE GOING TO CONSUME MARIJUANA PRODUCTS, WE WANT THEM TO CONSUME SAFE MARIJUANA PRODUCTS.” — Andrew Brisbo, executive director of MRA

new storefront 45 minutes away, wait in line and pay 35 percent above market price? Is this somehow better than the (illegal) dealer that visits my home?” Livingston said often communities opt out because it’s simply easier than drafting their own regulations and policies. “States lay out the framework, but it’s up to local governments to deal with the local zoning, the hours of operations and other rules,” Livingston said. “Sometimes the local governments just don’t want to do with all this, not because of the obvious cultural issues with cannabis, but because there’s just a lot to deal with. Saying no requires one simple statement versus making hard decisions.” Inaccessibility is something the MRA is painfully aware of from its experience with medical marijuana legalization, which voters approved in 2008 but wasn’t fully operational for nearly a decade. As of Nov. 12, 40 of Michigan’s 83 counties had no municipalities that allowed for a single medical marijuana dispensary. “That’s going to create some pretty wide swaths of inaccessibility for marijuana products ... and where there’s demand, it will be met one way or another,” said Andrew Brisbo, executive director of MRA. “I think part of our approach is trying to provide access to the regulated market because, ultimately, if consumers are going to consume marijuana products, we want them to consume safe marijuana products.”

In response, the MRA temporarily halted marijuana vape sales until a portion of the products are tested for the synthetic chemical, despite no evidence the legal market widely uses vitamin E acetate. The agency is requiring dispensaries and manufacturers to test a sample of each batch of existing marijuana vape cartridges, about 1.5 percent of all existing product, confirmed David Harns, communications manager for the MRA. For Detroit’s Utopia Gardens, marijuana vapes represented 30 percent of its sales. The medical marijuana dispensary on East Lafayette Street is awaiting the MRA to approve its adult-use recreational license and for the city of Detroit to approve operations, which it’s expected to do by March. Stuart Carter, owner of Utopia Gardens, said the temporary ban is effectively pushing marijuana consumers back to the black market. “There are 44 states with some form of marijuana laws; none of these states have done this,” Carter told Crain’s in an email. “Independent studies have shown that the additives are in the black market (vape) cartridges. The black market uses banned fillers in their cartridges such as vitamin E acetate and coconut oil and glycerin. They distribute untested and unsafe products to the unsuspecting public. The black market flourishes in Michigan. There are no restraints. This is where the state should look in to trying to protect the public.”

Legal weed: The basics Small start: Recreational marijuana sales were set to begin Sunday, but only three dispensaries will be open to consumers — all in Ann Arbor. Greenstone Provisions on South Ashley Street, Arbors Wellness on East Liberty and Exclusive Provisioning Centers on Varsity Drive were expected to be open on Dec. 1 with at least some product available to users without a medical marijuana patient card. The rest of the industry: The Michigan Regulatory Agency approved adult-use recreational licenses for five non-store front marijuana businesses. Exclusive received two of those licenses for its processing and grow operation in Ann Arbor. The others include: Arbor Kitchen LLC, a processor in Ann Arbor; Kalkaska-based Real Life Solutions, a cannabis-focused event organizer; and Precision Safety Innovation Laboratories LLC in Ann Arbor. More licenses are expected to be granted this week. The supply: When the state surprised the industry by moving the date from January 2020 to Dec. 1, it made adjustments to allow retailers meet demand. Retailers are allowed to transfer 50 percent of the product that’s been held in inventory for at least 30 days from medical marijuana to adult-use recreational marijuana. The future: The supply chain is not fully developed as it takes several months to grow, process and distribute marijuana products. Medical marijuana supply has been constrained for months and with licensed growers and processors able to shift only half of their medical supply over to recreational, the shortage is only expected to continue.

“INDEPENDENT STUDIES HAVE SHOWN THAT THE ADDITIVES ARE IN THE BLACK MARKET (VAPE) CARTRIDGES. THE BLACK MARKET USES BANNED FILLERS IN THEIR CARTRIDGES SUCH AS VITAMIN E ACETATE AND COCONUT OIL AND GLYCERIN. THEY DISTRIBUTE UNTESTED AND UNSAFE PRODUCTS TO THE UNSUSPECTING PUBLIC. THE BLACK MARKET FLOURISHES IN MICHIGAN.” — Stuart Carter, owner of Utopia Gardens

“Demand is a hard thing to measure in this industry, because the demand that existed in this state was obviously not on the books. No one was really willing to tell you they were a marijuana consumer,” Brisbo said. “Inevitably, some businesses aren’t going to succeed. But I think we want to create a stable market environment; that is critical. We only have so many tools at our disposal to ensure that happens. ... The black market is going to exist regardless, but I think part of the transition toward the regulated market is providing access in a way that it would be provided through the black market so that consumers can make a good choice, a safe choice.” Livingston, however, argues that access is really only a problem because of marijuana’s cultural connotations. “Cannabis has been a cultural phenomenon for decades, but its acceptance has moved much faster for the populace than elected representatives. Not many of us were alive in the 1930s when state governments were creating new licensing and laws for re-legalization for alcohol, but I imagine that went smoother because the individuals creating those laws were themselves alcohol consumers. When it came to making the decision to have a liquor store in their community, they thought about their own access. They didn’t want to have to drive to get their whiskey. Those implementing the cannabis laws today aren’t likely those who will frequent those storefronts.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

DECEMBER 2, 2019 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

Dennis Archer Jr. at the intersection of old, new Detroit

crainsdetroit.com

IGNITION MEDIA GROUP: Dennis Archer Jr. is a relationship-building Detroit businessman with a penchant for entertaining. The CEO of Ignition Media Group and founder and president of Archer Corporate Services has a University of Michigan law degree, but now leads an integrated marketing agency. The son of former Detroit Mayor Dennis Archer, he frequents his downtown restaurant, Central Kitchen + Bar, and is a developer and investor in the long-planned East Jefferson Avenue Meijer store. Archer, 50, spoke to Crain’s from his downtown office about the restaurant scene; boosting entrepreneurs; and Intersection, a year-old monthly party he and Sen. Marshall Bullock host to promote neighborhood entrepreneurship and civic engagement. | BY ANNALISE FRANK ` CRAIN’S DETROIT BUSINESS: OK, let’s talk about Intersection. You started this up, it sounds like, as a way to highlight businesses in the neighborhoods and community organizers. What is its significance? DENNIS ARCHER JR.: Well, number one, I’m a beneficiary through Central Kitchen, my restaurant downtown, of the resurgence of downtown and the increased occupancy, both office and residential. Plus it’s cool to come downtown. You’ve got downtown getting a lot of attention from both the media and people who enjoy hospitality. However, there are entrepreneurs who have had places in the city way before it was cool to come downtown now. Some 20-, 30-, 40-year-old establishments. And so, Intersection is our way of taking our audience to those neighborhoods and exposing them to hospitality outlets outside of the greater downtown area and exposing them to the entrepreneurs who operate those establishments and at the same time, we (give an) award (to) someone, usually civically, who’s doing something charitable in that neighborhood, someone who is doing something entrepreneurial in that neighborhood. They may not be recognized by the press. So we just try to put the shine on people in the places outside of downtown. ` You mentioned Central Kitchen — I read somewhere your love of neighborhood bars helped start up Ignition. Yeah, I mean, even when you look at Central, Central was influenced by (Luxe Bar & Grill) in downtown Birmingham. I live in Detroit, and I found myself sitting at the bar at Luxe once or twice a week. There are a lot of regulars, the staff knows everybody’s name. We needed this downtown.

So when we opened Central (in 2015), there was Wright & Co., and then Townhouse right around the same time we opened Central. Now there’s three. Fast forward four years later, there’s a hundred. I’m hoping that same sort of excitement will happen with entrepreneurs in the neighborhoods … If I’m an investor that wants to jump on the Detroit bandwagon, perhaps a little late, you can probably still get a deal in the neighborhoods and they’re tremendously underserved. Hospitality, service, retail. Even if you go into the more affluent areas of Detroit. ` So if you’re doing a project in the neighborhoods, do you pitch it as serving residents around there, or as more of a destination? Both? I mean, everyone knows I like to entertain. And so, it’s, you know, a gift I think I have and I actually enjoy it. So, if I could entertain and bring my clients and my friends and my colleagues to somewhere (for Intersection) where they normally would not go and expose them to something — because what I hope happens is, whether you’re going to Baker’s Keyboard Lounge, or Friends bar, or Northern Lights, or Cutter’s in Eastern Market, and you don’t normally go there, you’ve never been there, you’ll go. Drinks are great. Music is great. People are cool. Vibe is awesome. And you go back. You know, ‘What are you doing Saturday night? We should go down to Cutter’s, Dennis had an event there, they’ve got an amazing bacon cheeseburger.’ Hopefully that happens all around the city, as we move around. ` What do you think about the idea of a restaurant bubble around downtown? Look, it’s arguably the most difficult business to be in. So unless you’re

getting into it and operating it like a business, there’s a lot of risk for failure, but you don’t hear a lot of that. So do I think that there is a bubble? Yes. How far away from that bubble are we? I’m not smart enough to predict that. But I think if you look, there are a lot of genres missing, particularly downtown. There’s no Indian food. ` I was just going to say that. Yeah. No non-chain Mexican food. There’s not a super-cool pizza joint. So there are a lot of things we don’t even have. There’s also room for more places for people with a more simple palate, as well. I think a lot of places that are open have been opened for the foodie or someone with a more progressive palate. So, yes, I do think there is going to be a bubble. I don’t think we’re approaching it yet.

They’re the best. So, I don’t like the word comeback. A stock, your condo or home value fluctuates. So does a municipality. It’s not a comeback, it’s another chapter. This chapter is better than some. There may have been chapters that were better than this chapter.

Dennis Archer Jr. is CEO at Ignition Media Group

` What do you wish people would stop asking you about Detroit’s comeback? I wish they would stop referring to it as a comeback. Because, you could go around the city ... If you were to ask Mark (Anderson), who owns Friends bar on Eight Mile, he’s never had a decline in his business. Dutch Girl Donuts, they haven’t gone anywhere. People are going to get those doughnuts starting at 6 a.m. five or six days a week, during ups and downs.

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` They’re good doughnuts.

CUSTOMER SERVICE

New microbrewery in St. Clair Shores to open before Christmas

22 | CRAIN’S DETROIT BUSINESS | DECEMBER 2, 2019

The Rocket Mortgage Classic is held at Detroit Golf Club.

` TICKET PRESALE FOR PGA TOURNEY STARTS THIS MONTH TICKETS FOR THE SECOND Rocket Mortgage Classic PGA event in Detroit will be available during a presale this month at a bumped-up price from the inaugural tournament in June. Tickets will be on sale Dec. 9-22 as organizers look to raise some early ticket revenue during the Christmas shopping season. On “Cyber Monday,” which is Dec. 2, fans who pur-

Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care. (313) 446-0325 or jgreene@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 CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374

RUMBLINGS

The 80-seat inside will be outfitted with reclaimed Canadian barnwood and copper. Garage doors will open to an outdoor patio when weather permits. There will be no kitchen. Grub can be brought in from elsewhere or purchased at on-site food trucks, but Copper Hop’s sole focus is the beer. The business has obtained its microbrewers license and other permits. Its exact opening date depends on when the beer is ready, and Balicki said he’s taking a lot of care to get it right. “We’re beer drinkers,” Balicki said. “You can’t serve bad beer. At the end of the day, if you finish a batch of beer and try it and say, ‘This doesn’t taste right,’ you can’t put it on tap and serve it to people.”

REPORTERS

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ANOTHER NEW MICROBREWERY is ready to try its hand in St. Clair Shores, where several brewers have opened in the last few years. Copper Hop Brewing Co. is expected to open on Greater Mack Avenue just south of Nine Mile Road sometime before Christmas, said co-owner Ryan Balicki. He and business partners Jeremy Lewis and Shaun Koltuniak began brewing beer for the location this past weekend and are overseeing the final touches on a $250,000 build-out of the 4,800-square-foot space. They launched a Kickstarter campaign in September and raised $43,500 from thirsty supporters. Once open, the microbrewery will operate a five-barrel system capable of spitting out 75,000 beers yearly.

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

chased tickets for the first event on RocketMortgageClassic.com will have early access to tickets before they are available to the general public, according to a tournament news release. The event will take place May 2531 at the Detroit Golf Club. Tickets for tournament days will run $5 more than last year. Grounds passes cost $50 for Thursday; $55 for Friday; and $60 each for Saturday and Sunday. A “Good Any One Day” pass costs $70. A weekly grounds pass is $180 and good for access Monday-Sunday. For 2020, the tournament was moved from the end of June to accommodate the Tokyo summer Olympics, scheduled for July 24-Aug. 9. Golf was reinstated as an Olympic sport in 2016.

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

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