Crain's Detroit Business, Feb. 10, 2020, issue by Crain's Detroit Business

THE CONVERSATION Saunteel Jenkins, CEO of The Heat and Warmth Fund, grew up with her “heart for service.”

Coronavirus impact looming. PAGE 3

PAGE 22

CRAINSDETROIT.COM I February 10, 2020

ROADS

Will bonding plan pump up construction costs? At last Thursday’s hearing for the unveiling of Gov. Gretchen Whitmer’s 2021 budget plan, the Republican chairman of the Chad House AppropriLIVENGOOD ations Committee put his finger on a blind spot in the Democratic governor’s plan to issue $3.5 billion in road construction bonds. Rep. Shane Hernandez, R-Port Huron, told Whitmer’s budget director, Chris Kolb, that he’s heard concerns in recent years from municipal officials about the inflating cost of repaving and rebuilding city streets and county roads. “How does this budget address those concerns of our locals on smaller projects, on getting competitive bids and their prices inflating?” Hernandez asked Kolb. “And does this $3.5 billion make that issue worse?” Kolb initially danced around the question. “I’m not trying to filibuster,” he said with a smile. But filibustering is exactly what the budget director did, steering clear of the nagging problem exposed by Hernandez’s question. Kolb held up a map of the state detailing how Whitmer’s budget plan boosts funding for schools. The map showed counties shaded in green with school districts that are getting the highest increase in per-pupil funding in 20 years. See LIVENGOOD on Page 20

SMALL BUSINESS

Stitching a future Adel Hamka and his nephew, Mohammad Hamka, select a tie for a shirt at the shop he co-founded with Mohammad’s late father, Abe. Mohammad says, “I want to support my uncle, but I like it. Yes, it’s my responsibility, but it’s also an honor.” | JOHN SOBCZAK/ LORIEN STUDIO FOR CRAIN’S

How a small business is trying to move on without its patriarch BY DUSTIN WALSH

Amid a kaleidoscope of thread spools and wool fabric shards, Mohammad Hamka cries. The sewing machine he sits behind is his father’s. Was his father’s. Mohammad’s father, Abdallah “Abe” Hamka and his uncle, Adel Hamka, opened Oxford Tailor & Clothing on Grand River Avenue in Novi in 1986, four years before Mohammad was born. The brothers hemmed together a loyal customer base from quality work, built from Adel’s adept hands and Abe’s charismatic attention to customers and paperwork.

FOCUS | MICHIGAN BUSINESS: GRAND RAPIDS

 Former Founders

chairman pursues ‘future of farming’ with hydroponic lettuce. PAGE 10

Mohammad Hamka, Abe’s son and an apprentice tailor, reaches for a spool of thread. | JOHN SOBCZAK/LORIEN STUDIO FOR CRAIN’S

death. His own son, Mike, is temporarily performing Abe’s bookkeeping and bill paying duties. Oxford, like so many small businesses, had no succession plan, no guiding system for how to navigate a tragedy. So Adel and Mohammad limp along for now, learning new skills and maintaining a business and a legacy. “His hand is everywhere,” Adel, 65, said, gesturing to the wool cutaways and plastic-sheathed suits while wiping a tear from behind his glasses with the other hand. “This shop feels empty. I feel empty ... my life is empty without him.” See TAILOR on Page 21

INSURANCE

Health insurers, employers scramble to prepare for no-fault reform BY CHAD LIVENGOOD

NEWSPAPER

Now the 29-year-old Mohammad, a brand new apprentice in the trade, is confronting a reality where each needle he threads and buttonhole stitch he manipulates brings sorrow. Abe, 55, died on Oct. 24 while swimming in the Red Sea along the coast of Egypt on vacation. The avid runner suffered from cardiac arrest due to an undiagnosed heart condition, leaving behind heartbreak and a son and brother to navigate the nuances of the business he quarterbacked. Adel only recently ordered new casual shirts for the store, some three months after his brother’s

Some major health insurance companies are warning state regulators they won’t be able to immediately comply with a key component of auto insurance reform that lets motorists drop unlimited medical coverage on their no-fault policies. The new law going into effect July 1 stipulates that motorists who want to forgo Personal Injury Protection to lower their overall monthly premiums have to prove to their auto

insurance carrier they have a qualified health insurance plan that covers auto injuries. The PIP opt-out is the centerpiece of the Legislature’s effort to lower the high cost of auto insurance in Michigan through an overhaul of the 1973 law that Gov. Gretchen Whitmer signed into law last May. The provision has some human-resources and benefit managers at major employers in Michigan reviewing their health care coverage in anticipation of a barrage of ques-

tions from employees about whether they can drop PIP coverage to save money on auto insurance premiums. Last month, Whitmer’s Department of Insurance and Financial Services issued a bulletin to state-regulated health insurers directing the companies to “develop a document that indicates whether a person’s coverage is ‘qualified health coverage’ for purposes of nofault insurance.” See INSURANCE on Page 20

NEED TO KNOW

WHICH WILL GO?

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  BUSINESS LEADERS PUSH TO UNSTICK TRANSIT BILL THE NEWS: A coalition of more than 50 Southeast Michigan business leaders is making a renewed appeal to the Legislature to get a bill passed that would create the framework for a regional transit ballot initiative this fall involving Oakland, Washtenaw and Wayne counties. Fifty-two business executives signed a letter sent Wednesday to House Speaker Lee Chatfield and Senate Majority Leader Mike Shirkey calling for passage of House Bill 5229.

watched by the state, to act on PFAS contamination in drinking water supplies. WHY IT MATTERS: The state and two townships in Kent County sued the shoe and boot maker over the contamination. PFAS is one of a group of toxic chemicals known as “forever chemicals” because they break down so slowly over time.

WHY IT MATTERS: Whitmer, who made fixing the roads her primary slogan, made the decision to sell bonds rather than seek a legislative solution after last year’s budget standoff.

 FOUNDERS REOPENS DETROIT TAPROOM THE NEWS: Founders Brewing Co. reopened its Midtown Detroit taproom to the public last Thursday morning. The taproom on Charlotte Street has been closed since late October following a lawsuit, and eventual settlement, by a former employee who alleged racial discrimination.

WHY IT MATTERS: The legislation would change a 2011 law to allow the three counties to place individual property tax hikes for transit on the November ballot that could be pooled for improving mass transportation. Macomb County officials and voters have opposed new transit taxes.

 WOLVERINE PFAS SETTLEMENT FINALIZED THE NEWS: A finalized agreement between Wolverine Worldwide, the state and the townships of Plainfield and Algoma has officially been filed, state Attorney General Dana Nessel announced last Monday. Under the agreement, Wolverine will pay $69.5 million to extend municipal water to 1,000 properties which saw their well water contaminated. The company will also take ongoing responsibility,

highways and bridges over the next five years will lower maintenance costs, which have increasingly consumed the agency’s budget in recent years.

 COST FOR BONDING FOR ROADS: $5.1B TOTAL THE NEWS: Gov. Gretchen Whitmer’s $3.5 billion road-bonding program to jump-start highway reconstruction projects across the state will cost taxpayers $1.6 billion in interest over the life of the 25-year bonds, state officials said. MDOT Director Paul Ajegba said rebuilding $3.5 billion in

WHY IT MATTERS: Fallout from the racism lawsuit has hit the company’s reputation and finances hard. The Detroit taproom has lost out on more than $1.2 million in revenue while closed, according to company estimates, all while its 60 or so employees have continued to receive pay.

 MSU’S MARK DANTONIO ANNOUNCES RETIREMENT THE NEWS: Mark Dantonio leaves Michigan State fans with an abundance of fond memories after bringing the Spartans to heights they

Macy’s plans to close 125 stores  Macy’s Inc. — which locally runs the Stores Formerly Known As Hudson’s — plans to close 125 of its locations over three years. The chain would not disclose a complete list of the locations slated to close. Thirty of them were named a month ago, none of those in Michigan. Seven local Macy’s are still around: at Fairlane Town Center in Dearborn, Briarwood Mall in Ann Arbor, Twelve Oaks Mall in Novi, Lakeside Mall in Sterling Heights, Southland Mall in Taylor, and Oakland Mall and Somerset Collection in Troy. Macy’s shut down locations at Westland and Eastland malls about three years ago. For this round, the chain says it will target stores in weaker shopping malls. It’s also worth noting that the two Troy malls are only about 10 minutes apart. Stay tuned. Macy’s at Eastland Mall closed three years ago. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

hadn’t reached in decades, but he didn’t leave without questions. Dantonio announced his retirement Tuesday, ending a 13-year run in which his teams won three Big Ten titles and he became the school’s winningest coach. The 63-year-old Dantonio cited the nonstop demands of the job. WHY IT MATTERS: Dantonio oversaw

one of MSU’s most successful runs, and went 8-5 against its intrastate rival, the University of Michigan. At the same time, his surprise resignation came the same day as reports that a former MSU staffer alleged in a lawsuit that Dantonio committed NCAA recruiting violations. (Dantonio’s lawyers called the allegations “false, scandalous, and wholly unsupported.”)

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WORKFORCE

ENVIRONMENT

Coronavirus impact a looming question Auto industry prepares for the worst BY DUSTIN WALSH

DOCK COLLAPSE FALLOUT

This photo taken by drone camera on Dec. 18 and provided to Crain’s Detroit Business shows a growing sinkhole adjacent to the area of the Detroit riverfront dock collapse by Historic Fort Wayne.

Detroit finds worrisome seawall conditions along riverfront BY ANNALISE FRANK

City of Detroit inspectors have found concerning seawall and waterfront conditions across the length of Detroit’s riverfront after a dock collapse at a contaminated riverside site where the state sees company cleanup efforts as inadequate. The city has inspected all 152 properties along the Detroit River in the wake of the aggregate spill near Historic Fort Wayne and issued about $195,000 in fines for more than 500 blight violations on five plots of land. The wave of inspections came amid environmen-

tal groups’ calls for action and state concerns over holes in response plans by the site’s owner and the limestone storage and shipping company that operated there. Conditions at the site have been deteriorating in the wake of the Nov. 26 Revere Dock collapse that sent limestone construction aggregate material into the river. The former Revere Copper and Brass Inc. property was listed for decades as contaminated due to past use of uranium and other dangerous chemicals in the 1940s and 1950s for the Manhattan Project that produced the first nuclear weapons. An environmental cleanup in the

late 1990s removed contamination, but some remains, according to the state Department of Environment, Great Lakes and Energy. Authorities discovered after the collapse that the site owner since 2015, Revere Dock LLC, had for months been allowing illegal limestone storage, without a permit. Tenant Detroit Bulk Storage is now moving those materials off the site to come into compliance, according to Jessica Knight, chief enforcement officer for Detroit’s Buildings, Safety Engineering and Environmental Department.

“OUR (BUILDINGS, SAFETY ENGINEERING AND ENVIRONMENTAL DEPARTMENT), THEY ARE OUT NOW ON THE RIVERFRONT WALKING EVERY SINGLE SITE, WRITING TICKETS.” — Mike Duggan, Detroit mayor

Uncertainty looms for Southeast Michigan auto suppliers as the deadly coronavirus outbreak in China continues to halt production. Factories across China have been shut down since Jan. 24, the start of the Lunar New Year, but most have remained closed past the Feb 2 restart date due to the fast-spreading virus that has claimed at least 630 people and infected nearly 32,000 in 25 countries. The Chinese government installed a mandatory quarantine of more than 60 million people in 14 of China’s 23 provinces — factories in these provinces cover 80 percent of the country’s exports. Luckily for U.S. auto suppliers, parts from mainland China were on freighters crossing the Pacific Ocean prior to the Jan. 24 shutdown. But those ships will reach the U.S. West Coast in a matter of days and fears are building that parts shortages are on the horizon, leading to a global auto production slowdown. “As of now, the quarantine hasn’t been that long,” said Peter Nagl, senior analyst in the automotive economics group at Southfield-based research firm IHS Markit. “A slowdown won’t likely occur unless this lingers into March. Right now everyone is more worrying about the impact than feeling it.” As of Feb. 7, the Chinese government said it would allow factories to resume production on Sunday, Feb. 9. But automakers are already taking it upon themselves to idle production longer.

See RIVERFRONT on Page 18

See CORONAVIRUS on Page 17

MERGERS & ACQUISITIONS

Bank of Ann Arbor acquires First National Bank of Howell BY NICK MANES

Bank of Ann Arbor acquired Livingston County-based First National Bank of Howell in a deal that creates a bank with $2.2 billion in total assets, the two financial institutions announced Tuesday morning. The $101.4 million, all-cash acquisition gives Bank of Ann Arbor a foothold in the growing Livingston County market with FNBH’s eight branches, along with its existing branches in Oakland, Wayne and Washtenaw counties. Pending regulatory approvals, the new bank will have more than 300 employees and a total of 17 branch locations. The deal calls for shareholders of FNBH to receive $3.65 per share in cash for each share of FNBH Bancorp common stock outstanding, subject to adjustment in certain limited circum-

“THIS IS SUCH A NATURAL FOR BOTH ORGANIZATIONS, OPERATING IN CONTIGUOUS COUNTIES.” — Tim Marshall, president and CEO of Bank of Ann Arbor

stances, according to a statement announcing the deal. The bank expects the deal to be accretive to earnings per share of more than 10 percent. Ultimately, it was common cultures that fueled the deal, according to Ron Long, president and CEO of FNBH. “If you look at Bank of Ann Arbor, they’ve got lots of accolades as best banks to work for, top workplaces. Culturally, that was very important to us,” he said. “We built our high-performing bank post-recession with a lot of

high-performing people, and we wanted to partner with a bank that also cherishes high-performing people.” Beyond a common culture, geography and the growth of Livingston County, which has gained about 10,000 residents in the last decade, helped fuel the deal, according to bank executives. “This is such a natural for both organizations, operating in contiguous counties,” said Tim Marshall, president and CEO of Bank of Ann Arbor. “Their coverage of Livingston County is just terrific. That whole I-96 corridor is just ripe for the taking and very exciting for us.” The deal to buy FNBH marks Bank of Ann Arbor’s third acquisition since 2010. Most recently, in 2017, the bank completed its acquisition of Bank of Birmingham. See BANK on Page 17

Tim Marshall, president and CEO of Bank of Ann Arbor (left), and Ron Long, president and CEO of First National Bank of Howell, credit their common cultures for their deal. | LEISA THOMPSON

FEBRUARY 10, 2020 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE

The new Hyatt House hotel in Royal Oak next to Beaumont Hospital will feature 128 apartment-style rooms.

Hyatt House hotel planned next to Beaumont Hospital in Royal Oak BY KURT NAGL

A new $23 million Hyatt House extended stay hotel is in the works at the Woodward Corners by Beaumont development next door to Beaumont Hospital in Royal Oak. The five-story hotel — a new concept coming to Michigan — will include 128 apartment-style rooms and is expected to open in 2021, according to a Tuesday news release from Beaumont. Hyatt House Royal Oak will cater to business travelers as well as patients and their families who travel to Beaumont for health care, hospital COO Carolyn Wilson said in the release. “… We’ll welcome business and leisure travelers looking for a hotel that offers an excellent array of other businesses nearby, including a grocer, restaurants and coffee shops,” she said. The 77,824-square-foot hotel will feature units with kitchen suites, free Wi-Fi, indoor and outdoor common areas, complimentary breakfast, a drinks and snacks bar, 24-hour gym

and more than 800 square feet of meeting space. Dogs and cats are welcome, too. Hyatt House is a brand of Chicago-based Hyatt Hospitality Corp. The Royal Oak location is being financed and developed by Colorado-based

“… WE’LL WELCOME BUSINESS AND LEISURE TRAVELERS LOOKING FOR A HOTEL THAT OFFERS AN EXCELLENT ARRAY OF OTHER BUSINESSES NEARBY, INCLUDING A GROCER, RESTAURANTS AND COFFEE SHOPS.” — Carolyn Wilson, Beaumont COO

Pedersen Development Co. It will be managed by Maine-based Olympia Hotel Management. There are 95 Hyatt House locations throughout the U.S., including six in

Chicago. While Michigan doesn’t have any Hyatt hotels of the extended stay variety, there are five Hyatt Place hotels in metro Detroit, including one on Main Street in Royal Oak. Woodward Corners is anchored by Walker-based Meijer Inc.’s first small-format store in metro Detroit, which opened there last week. The 41,000-square-foot Woodward Corner Market is neighbored by Wahlburgers, dance fitness studio AKT and the incoming Brown Iron Brewhouse. Other future tenants include Iron Aspen Dental, Bucharest Grill and golf simulator business X-Golf. The Beaumont Health-led development is being executed by West Bloomfield Township-based construction manager Tower Construction and Ann Arbor-based Hobbs + Black Architects. Livonia-based Schostak Brothers & Co. and Bloomfield Hills-based AF Jonna Development LLC are co-managing the building program. Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

FINANCE

Beringea leads investment into Northern Michigan space company

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Space will be the next frontier for a Southeast Michigan venture capital firm. Farmington Hills-based Beringea LLC announced this week that it led a $5 million investment round into a northern Michigan firm focused on equipment used for analyzing and processing data collected from satellites in space. The capitalization into Traverse City-based Atlas Space Operations Inc. comes as executives say there’s increasing need for investment in the burgeoning industry of space exploration and as more satellites are launched and send data back to Earth. “You talk about weather, military defense, general earth observation, there’s a need for real-time communication,” said Beringea Vice President William Blake. “There’s frankly a need to get this data down to earth. When you see the cost of launch and satellite construction being reduced, ground infrastructure is kind of the next seg-

Blake

McDaniel

ment of the Space 2.0 industry.” Space 2.0, Blake said, refers to the emergence of companies like Elon Musk’s Space X and the increasing commercialization of space exploration and has been touted by space historian Rod Pyle. Terms of Beringea’s investment into Atlas and its co-investors were undisclosed. As Crain’s previously reported, Atlas moved to Traverse City from California after an investment offer was made from Boomerang Capital LLC, a Traverse City venture capital firm. The number of satellites projected to be orbiting earth in the coming years is rapidly expanding. A report last year in

the Massachusetts Institute of Technology’s Technology Review projects that there could be as many as 1,100 satellites by 2025, up from 365 in 2018. Given that projected rise in satellite usage, Blake told Crain’s he anticipates further investment into Atlas, and likely a series B fundraising round in the coming year as the company works toward greater scale. “For us, we’re underwriting investment in the company today and subsequent support going forward, so our expectation is outsized returns,” said Blake, who declined to provide specific figures. “We view them as a leader in the space field and view that there will be significant liquidity options for us going forward.” The latest investment round will allow Atlas to grow its software platform called Freedom and “virtualize and automate the access to [hundreds] of ground nodes on a global scale,” CEO Sean McDaniel said in a statement. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

PEOPLE

Song sounds off on policy issues facing state of Michigan Duo Security co-founder says education system, lack of mass transit inhibit startup community BY NICK MANES

modern U.S. educational systems today.” For Song, Michigan’s troubled eduDug Song may have helped to grow cation funding model hurts the state — and then eventually sell — a tech in multiple ways. For starters, it’s a startup in Southeast Michigan. He has marketing problem that keeps people serious doubts, however, about the reout of the state, or pushes them to gion’s ability to compete in the broadmove away, he said. er, global economy. “And it’s crazy, because other than Song still works full time as the autos — at least in Ann Arbor — [educo-founder and general manager of Duo Security, which began in Ann Arcation] is our main export,” Song told Crain’s. “We grow giant brains, and bor before being acquired in 2018 by then we give them away to the world.” San Jose, Calif.-based Cisco Systems “This is insanity,” Song said of the Inc., of which it is now a business unit. state’s education system while on Duo Security started in Ann Arbor stage at last month’s Detroit Policy and the city remains the cybersecurity Conference, hosted by the Detroit Refirm’s headquarters, but it’s no longer the location where the 900-person gional Chamber. company is expanding. The good news for Song and other Rather, it’s the Sun Belt technology business groups like Business Leaders hub of Austin, Texas, that now stands for Michigan, which have pushed for as Duo Security’s fastest-growing ofbig increases in K-12 funding: If politicians in Lansing can agree, they could fice. see the significant boost they’ve long The challenge with Ann Arbor, Song called for. said, is a dearth of commercial office That’s because Gov. Gretchen Whitspace and a governing mentality that mer last week, in her fiscal year 2021 the entrepreneur views as adverse to budget proposal, recommended what growth. her office touted as “the largest fund“Yes, we could have found more space in Ann Arbor, but Ann Arbor is ing increase for classroom operations not a city built for growth, and right in 20 years.” now it’s dominated by the City CounBut it’s much more than education policy that has Song concerned about cil that doesn’t understand how to do Dug Song on stage at the Detroit Regional Chamber’s annual Detroit Policy Conference | DETROIT REGIONAL CHAMBER Southeast Michigan’s ability to comthat right,” Song told Crain’s in an inTop of mind for the 44-year-old en- of higher taxes to pay for some of pete for top talent. terview late last month. “It’s a prob- other public policy issues facing the Song, like dozens of business lem, and so we decided to move down city of Detroit, the Southeast Michi- trepreneur: the state’s struggling K-12 these items. to Austin just because they are build- gan region and the state as a whole. education system, the region’s lack of He points to Minnesota as a state groups from around the region, is a ing up. They’ve got room, they have a He’s quick to note that his public poli- integrated mass transit and a culture that he believes gets it right when it strong advocate for robust regional startup community to draw from. It’s cy positions are his alone and don’t that he says inhibits a more robust comes to funding education and in- transit. Such service has long been necessarily reflect those of the Silicon startup community in the metro De- frastructure, while still being a friend- proposed, but also generally faced been great.” consistent opposition from several But beyond struggles to grow in Valley software giant that acquired his troit area and the broader state. ly state for big business. Song is on record about his support Ann Arbor, Song sees no shortage of company for $2.35 billion. “And yes, that takes taxes. And you suburban communities and especialknow what? None of those Fortune ly Macomb County, which isn’t taking part in the most 100 [Minnesota] recent push for headquartered “YES, WE COULD HAVE expanded regionbusinesses care,” al transit. Song said. “They FOUND MORE SPACE IN “The infralove it, right, be- ANN ARBOR, BUT ANN structure thing is cause it’s great if you’re trying to ARBOR IS NOT A CITY BUILT a huge piece of this,” Song told hire people with FOR GROWTH, AND RIGHT Crain’s. “Like yes, families. It’s a we need to fix the huge opportuni- NOW IT’S DOMINATED BY damn roads, but ty. I mean, Min- THE CITY COUNCIL THAT just as much … neapolis is an autonomous veamazing city, DOESN’T UNDERSTAND hicles are not goright? We just HOW TO DO THAT RIGHT.” ing to solve all of need to take care this. Like, mass of our physical — Dug Song, co-founder and transit works.” environment and general manager of Duo Security Asked what take care of our impact a strong, regional transit syspeople and we’ll be good.” To be sure, Song certainly sounds tem could have on the area’s growing like a guy close to launching a political startup technology sector, Song said career, but said that’s not in the cards. he believes it would connect the “Hell no,” Song said when asked whole region and would lead to havwhether he might jump into politics, ing an “actual economy,” as opposed adding that he intends to continue to just having a “grouping of comparunning Duo Security for the foresee- nies.” Despite all the challenges Song able future. sees, he also acknowledges that Southeast Michigan, broadly speak‘This is insanity’ ing, still stands as a major source of Song is one of several business potential talent that he and other enleaders and advocates in the state ex- trepreneurs can’t ignore. “I think we need to be doing more pressing dismay at the state’s funding [in Detroit], because we can’t ignore model for K-12 education. A January report from Royal Oak- the fact that while Detroit proper is based education research and advo- 600,000 people, there’s 4 million peocacy organization Education ple in metro Detroit to draw from and Trust-Midwest noted the “crisis” fac- is the largest concentration of engiing the state’s public schools in multi- neers per capita outside of Silicon Valley,” Song told Crain’s. “And so it’s reple areas. | | ASSURANCE TA X ADVISORY “Michigan’s funding system is not ally just untapped for us as a talent only unfair and deeply inequitable; pool, and we can and need to be doit’s also inadequate,” reads the report. ing more.” “Michigan’s system of school funding is, simply put, not designed to keep Contact: nmanes@crain.com; pace with the costs and realities of (313) 446-1626; @nickrmanes

9 5 9 1 600

There’s always another tax code change coming.

We’re on it.

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6 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

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LETTER TO THE EDITOR

The ‘Cockroach People’ respond to Busuito

DANIEL SAAD

TO THE EDITOR:

COMMENTARY

Our conflicts are real; social media ramps them up There are long-simmering conflicts and divisions in Detroit. Sometimes they boil over. But mix social media into those conflicts and you have a uniquely toxic brew that inflames a conflict rather than providing a release valve. The Chaldean American Chamber of Commerce and the black-focused National Business League are trying to calm down a bitter dispute that started with a Facebook post. Which led to more back-and-forth insults and racial slurs that were ugly on both sides, ugly enough that I don’t want to repeat them. Crain’s was pulled into the fray when reporter Sherri Welch wrote stories on the controversy because it involved public officials and a prominent business group. She interviewed the key players on all sides, including a member of Detroit’s charter commission who made one of the inflammatory posts. Sherri’s story didn’t directly quote the racial slurs the commissioner was responding to. By the time of the interview, those comments had been removed from the Facebook thread, but screenshots later emerged. Soon, a meme began circulating on social media with Sherri’s photo, this time accusing Crain’s of ignoring hate on the Chaldean side. Tension between black Detroit residents and Chaldean shopkeepers is decades old. Some black residents say the shopkeepers — owners of grocery stores, gas stations and convenience stores — exploit black neighborhoods and take dollars out without doing enough for the community. They accuse store owners and employees of wrongfully killing black people. Some Chaldean Americans say they often are threatened in their stores, which in many neighborhoods are the only source of groceries. Shop owners, they say, keep guns for protection. Both sides cite prejudice and racism. These are legitimate issues that deserve discussion and solutions. But a social media punching match is more likely to turn into something tragic than lead to positive change.

Michael

LEE

Managing Editor The African-American and Chaldean chambers are right to call for a timeout on increasingly heated social media posts that in one case offered up a map for people to find the Chaldean Chamber offices. Ratcheting up the rhetoric is so easy on social media. And the medium has also provided a platform to spread incorrect and intentionally misleading “news” — as we’ve seen on a national and international scale. Google and Facebook both responded to perceptions of the toxicity of our always-online culture in their Super Bowl ads. Google’s was a tear-jerker focused on memories of a marriage, and Facebook pushed the idea of its groups uniting people rather than dividing them. Out in the “real” world of social media, it can be hard to see signs of that togetherness. The 2020 election is already at full volume and vitriol. And seemingly every week there is a story about some celebrity or public official tweeting something they soon have reason to regret. Foreign governments are infiltrating Facebook groups to rile people up and keep the controversy flowing to destabilize our society. And in situations that are already tense, social media’s immediacy makes it easy to ratchet up the rhetoric to dangerous proportions. Social media lets us marinate in our chosen outrage, 24/7. Click, type, boom, repeat. It’s a reliable hit of adrenaline to which we are addicted. Before you hit “reply,” keep in mind that you may not be responding to a real person. As election season ramps up, it’s probably going to get worse before it gets better. We would all do well to slow down and talk face to face.

Several members of Detroit’s Latino community regularly attend the Wayne State University Board of Governors meetings to observe the board’s actions. We are concerned about the stability of the university as it is under attack by a faction of the board, including one who is “Hispanic.” We have long been involved with Wayne State, as alumni of Chicano Boricua Studies (now called Center for Latin@ Studies — CLAS). We are concerned about the destabilizing of yet another educational institution in Detroit following nearly a decade of state control of Detroit Public Schools, which left our students far behind the rest of the state. Neither of the other two state universities with elected boards have experienced emergency management and subsequent looting of schools. DPS is a direct feeder to Wayne State University. None of the board members who attack Dr. M. Roy Wilson live in Detroit or have been subjected to their district’s disinvestment. None of them have experienced the attacks by Wayne State to precious, successful programs such as CLAS. We are longstanding participants in educational life in Detroit and defend Wayne State from attacks that threaten its stability. Dr. Michael Busuito, in his article in Crain’s, “Other Voices,” Jan. 27, 2020, stated “Unfortunately, Wilson cronies keep resurfacing like cockroaches, to throw gasoline on a fire that I saw dwindling with (board member Shirley) Stancato’s influence.” The group of Latin@s who show up at board meetings were surprised by this comment. It’s been quite a while since we were referred to as cockroaches. Author and activist Oscar Zeta Acosta embraced our status as “Cockroach People” in “The Revolt of the Cockroach People,” reminding us that there are those who do not believe we have the same rights as those in power. That we are expendable, that we are inferior. The comment in Crain’s struck a nerve. But we disagree; we do have a right and responsibility to engage with the university without being called “cronies” or “cockroaches.” Dr. Busuito seems to be saying that we have no right to meddle in the business of the university Board of Governors, as if they are not elected by us — The Cockroach People. We do not believe the false narrative that the board members who are attempting to oust Dr. Wilson are doing so because he is corrupt, because he stole money, or any other reason stated by them. Members of the public came and stated that they demand his resignation because there are so many broken elevators in the buildings on campus. Other issues raised were that there are not enough black and Latino faculty getting hired or getting tenured. These are legitimate claims, but as we have watched the attacks on the president, there seem to be other agendas at play. Dr. Busuito states that the community should be thankful that board members Sandra Hughes O’Brien and Dana Thompson are “demanding accountability when others are willing to follow Wilson blindly.”

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 | FEBRUARY 10, 2020

We are not people who follow anyone blindly. For more than 40 years, we have engaged with Wayne State — generally in the form of protest, but not always — to defend a program that has grown to be successful and produce the leaders we need to raise our community up out of oppression, out of poverty. We have had legendary battles with Wayne State over the racism against our professors, underfunding and benign neglect — to the point where we nearly disappeared. But we prevailed and have grown from a small leadership project to a center, complete with tenured faculty, counselors, a director and assistant director. We have withstood attacks from inside and outside our program. We welcome new presidents as they come and go and see to it that we are DR. BUSUITO known as a deeply rooted community SEEMS TO BE that defends education. That’s why we SAYING THAT WE support Dr. Wilson. HAVE NO RIGHT We are not on anyone’s payroll. We have TO MEDDLE IN no vested interest in THE BUSINESS anything but the stability of the program OF THE and the university in UNIVERSITY which it is housed. We will be present BOARD OF at meetings, as we GOVERNORS, AS have throughout the past decades. Regard- IF THEY ARE NOT less of who the presi- ELECTED BY US dent is, regardless of who sits on the Board — THE of Governors, we will COCKROACH be vigilant to defend our community’s PEOPLE. right to access higher education. When people without historical context come to a place of power, they often think they know best because they share ethnicity with us. But there’s much more to understand about a community than simple appearances. It’s profoundly arrogant to presume one knows better what’s needed. It’s profoundly insulting to call community supporters “cronies” and “cockroaches.” It’s profoundly arrogant to work at one university and attempt to topple another when one was elected to look after its best interest. We believe it will be difficult to attract a credible president after the highly public attacks on Dr. Wilson. We are not afraid of gathering in to defend Wayne State University and Dr. Wilson. He deserves support. Elena Herrada On Behalf of The Cockroach People Detroit

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.

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

Calling all Michigan businesses: It’s on us to bridge skills gap BY KARA GRASSO

College is a distant dream for many people who live in rural Michigan, according to an article published late last year in the Detroit Free Press. The piece Kara Grasso is vice president of states that “Michigan’s poorest strategic counties are eduoperations at cation deserts, DENSO. creating a cycle of a lack of jobs that entrenches poverty.” Residents in those areas face very real logistical challenges to get to the nearest community college or the closest four-year university, discouraging many from pursuing higher education. On top of that, there is a growing perception across America that college itself is a poor investment. At the beginning of 2019, 7 million U.S. jobs were unfilled, according to the U.S. Department of Labor Bureau of Labor Statistics — and American employers continue to consistently cite challenges finding qualified workers. There are many factors that contribute to the widening skills gap — including the cost of college, accessibility and the rapid pace at which technology is evolving. Regardless of the reason, the result is the same — if we cannot help young professionals get the training they need to thrive, businesses will be unable to find the skilled workers they need to succeed. While many are quick to place blame on our education system, employers must also take responsibility. Businesses need and depend on skilled workers — and they must do their part in nurturing and cultivating them. Denso, a leading mobility supplier, with its North American headquarters in Southfield and over 3,000 employees in Battle Creek, is deeply committed to Michigan and its workforce — our success depends on it. Accordingly, we are investing signifi-

cantly in our employees and commu- helps with recruitment and retennity members. For other local com- tion. Last year, Denso invested $1.95 panies looking to bridge the skills million to open the North Technical gap, they too can look for opportuni- Training Center at our Battle Creek facility. Our goal ties to upskill or is to ensure our reskill current BUSINESSES NEED AND technical talent workers and fuhas the skills ture employees. DEPEND ON SKILLED necessary to sucFor example: ` Invest in train- WORKERS — AND THEY ceed in the changing autoing and profes- MUST DO THEIR PART IN motive industry. sional developIt takes dollars ment: A NURTURING AND and training to commitment to CULTIVATING THEM. do so. provide contin` Partner with ued training and development to your employees schools and the community: Open builds skills, drives innovation, and and consistent communication with

local educators can help encourage the development of specific skills needed in your field — from critical thinking and communication to creativity and STEM skills. Regular visits to schools, local organizations or community events to interact with students and other potential employees builds relationships and goodwill, introduces residents to careers they may have not considered, and helps them see how they can play a role in helping you change the world. ` Commit to diversity and inclusion: Having a diverse workforce is vital to the success of any business. Making your company more accessible

through dedicated D&I initiatives means more employees with different ideas, perspectives and solutions, which improves the overall industry, increases knowledge, strengthens teamwork and sets the stage for innovation. Companies around the world — not just in Michigan — are challenged with closing the growing skills gap. By focusing on and investing in opportunities to train and develop our workforce with the skills needed to succeed in fast-changing industries, especially ones where technology plays a key role, we can do better for our businesses and more importantly for our residents.

After 65 marathons and 100,000+ miles, Doug Bajor ran to us. When a morning snow impeded Doug Bajor’s paper route, he did what any other determined grade-schooler would do: he ditched his bike, and delivered the paper by running door to door. That customer-first mindset brought Doug to the attention of Greenleaf Trust, where he recently joined us as a senior wealth management advisor. Doug and Greenleaf Trust were already running in similar circles, so to speak. He had driven by our Birmingham office countless times, and had long admired our reputation for always doing the right thing for clients; a core value close to his own heart. In Doug’s previous role at a large regional bank, he served as vice president and strategy portfolio manager, tasked with the management of investment portfolios for high net worth individuals, endowments and foundations. Even so, he

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CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

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BY T

Former Founders chairman pursues ‘future of farming’ with hydroponic lettuce company

John Green, former executive chairman of Founders Brewing Co. and co-founder of Revolution Farms LLC.

BY TOM HENDERSON

What’s one to do after selling a highly successful brewery to a Spanish company? Grow lettuce. That was the answer for John Green, the former executive chairman of Grand Rapids-based Founders Brewing Co., the largest brewery in Michigan. The Mahou-San Miguel Group, a multinational Spanish beer company, bought a 30 percent stake in Founders in 2014, then last August announced it was upping that to 90 percent. The deal closed in January. Mike Stevens and Dave Engbers, who co-founded Founders in 1997, each retain a 5 percent stake, while Green sold the rest of his stock. Meanwhile, in 2017, Green, who was still with Founders, and two other successful Grand Rapids entrepreneurs, Chip George and Brian Steketee, co-founded Revolution Farms LLC, which hydroponically grows a variety of organic, non-GMO lettuces in a 1-acre greenhouse on farmland in Caledonia, a few miles southeast of Grand Rapids.

10 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

 Former Founders chairman pursues ‘future of farming’ with hydroponic lettuce company. THIS PAGE

 HealthBridge aims to keep employees healthier and lower health care costs. PAGE 11  Startup helps health care systems plan for infrastructure fixes. PAGE 13  Grand Rapids HQ provides support, services for homeless and at-risk youth. PAGE 14  Grand Angels raise third fund of $11.8 million, its largest yet. PAGE 14

“WHAT GOT ME EXCITED ABOUT THIS BUSINESS IS IT’S LOCAL, AND IT’S THE FUTURE OF FARMING.” — John Green, co-founder, Revolution Farms LLC

Green had been chairman and interim CEO at Revolution Farms but became permanent CEO of Revolution Farms last September. He stepped down as Founders’ executive chairman after selling his stock in January. George is the co-founder of Comfort Research Inc., a maker of furniture and pool accessories with expected revenue of $85 million this year (see related story, Page 12). In 2012, Steketee founded Modustri, an internet of things company whose software monitored the performance of heavy machinery. In 2017, he sold the company to Caterpillar Corp. Green is chairman and CEO, and George and Steketee are board members. None had any previous farming experience. They say their main reason was basic: They love lettuce and greens, and so often the greens they bought in clam-shell packages, having spent days getting to Michigan from where they were grown, started going bad before they were half gone. Second,

they thought they could capitalize on the movement toward locally sourced, organic, lower-carbon-footprint food. “What got me excited about this business is it’s local, and it’s the future of farming,” said Green. “Ninety-five percent of the lettuce in stores here comes from California and Arizona. Not only does it cost a lot to get it here, but it takes days to get here,” which means reduced shelf life for the lettuce once it arrives compared to Revolution Farms. The three broke ground on their greenhouse at the end of 2017 and sold their first lettuce to SpartanNash Co. in November 2018. “We’re focusing on Michigan for now, but in the next year or two we’ll target the Midwest, too,” said Green. “We know we are creating value. We’ve been in the red every month, but we have so much opportunity in front of us.” See LETTUCE on Page 14

REVOLUTION FARMS

GREEN REVOLUTION

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COMFORT CULTURE Grand Rapids company makes affordable, green furniture. PAGE 12

HealthBridge aims to keep employees healthier and lower health care costs

Norman A. Yatooma ATTORNEY AT LAW

Company helps employees navigate high-deductible co-pays

REVOLUTION FARMS

BY TOM HENDERSON

Investors and employers are buying into the idea that HealthBridge Inc., a 2017 startup in Grand Rapids, can help reduce health care costs for their employees and keep them from putting off the care they need because of high deductibles. The company was founded by COO Amy Chambers and CEO Greg VandenBosch, two veterans of the health care benefits industry. When HealthBridge signs a company on as a customer, it negotiates lower co-pays with health care providers, pays them promptly, then provides interest-free or low-interest loans to the employees as they pay HealthBridge back. That solves a major problem with the high-deductible employer insurance plans that have come to dominate the market. Often, employees will delay needed care because they can’t afford the deductible. One result is that as employees delay care, they are more likely to miss work. Last year, 45.8 percent of Americans under 65 with employer-sponsored health benefits were enrolled in high-deductible plans, according to the U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics, up more than five percentage points from a year earlier and up from 25.3 percent in 2010. According to a nationwide poll by the Los Angeles Times and the Kaiser Family Foundation released last May, 21 percent of respondents said they had had either an individual plan with a deductible of $3,000 or more or a family plan with a deductible of $5,000 or more. Twenty percent had deductibles of $1,500 to $2,999 for an individual plan or $3,000 to $4,999 for a family plan. Chambers said that other studies show that nearly two-thirds of those with high-deductible plans skipped or delayed medical care or having a prescription filled because of the cost. “Forty percent of those delaying health care make $100,000 or more a year,” she said. Chambers has more than 25 years of experience as an employee benefits attorney. Before launching HealthBridge in 2017, she was general counsel and executive vice president of product development at Grand Rapids-based RespondWell, a telemedicine startup sold to Zimmer Biomet in 2016. Before that she spent 10 years as associate general counsel and vice president of product development for Grand Rapids-based Priority Health, one of Michigan’s largest health-insurance plans. VandenBosch was an early investor and executive vice president of corporate strategy at RespondWell.

Chambers

VandenBosch

He also founded Grand Rapids-based MedDirect Inc., which provided revenue management services to health care organizations. It was sold to Ohio-based MedData Inc. in 2012. HealthBridge raised a series A round of $2.5 million in venture capital in 2017, led by Wakestream Ventures LLC, a Grand Rapids-based investment arm of the DeVos family, and raised a B round of $8.2 million last April, led by ManchesterStory Group LLC, a VC firm in Des Moines, Iowa. It was joined by Magnetar Capital LLC, a $13 billion hedge fund based in Evanston, Ill. In addition to providing equity, Magnetar also provides debt to

“THERE’S A REAL PAIN POINT. EMPLOYERS ARE STRUGGLING WITH HOW TO ENSURE THAT EMPLOYEES SEEK HEALTH CARE WHEN THEY NEED IT WHEN THEY’RE FACING HIGH DEDUCTIBLES.” — Mike DeVries, chief investment officer, Wakestream Ventures

HealthBridge to pay employees’ costs up front. Currently, HealthBridge is raising a round of convertible debt of $10 million that it hopes to close this spring. Wakestream, ManchesterStory and Magnetar have all committed. Chambers said the funds will be used to ramp up sales and expand its client footprint beyond Michigan. She declined to say how many customers HealthBridge currently has or how many employees are covered. “It’s a good management team with mature industry experts,” said Mike DeVries, chief investment officer for Wakestream Ventures. He declined to say how much he has invested. “There’s a real pain point. Employers are struggling with how to ensure that employees seek health care when they need it when they’re facing high deductibles. And HealthBridge is way ahead of the curve in addressing it. They are hands down better than the rest of the marketplace,” said DeVries. “And what I like is they have their own

wealth wrapped up in this. It’s a great sign for an investor that the founders are writing checks, too. And they know what it is like to work a long, hard day.” HealthBridge is not an insurance provider. At a monthly cost that ranges from 50 cents to $3 per employee, companies can provide HealthBridge’s services alongside existing health plans. HealthBridge works with employers and insurance providers to track claims. When a claim comes through, HealthBridge contacts the health care provider and negotiates the cost to the employee. According to Chambers, 20 years ago, 95 percent of payments to providers on employer-sponsored plans came directly from insurers. Today, health care providers get only 60 percent of payments from insurance companies. The other 40 percent is supposed to come from patients. On average, hospitals wait 180 days for payments from patients and typically end up settling for 50 percent. Hospitals across Michigan had combined unpaid medical bills of $419 million in the fiscal year of 2017, the most recent year for which data are available. HealthBridge’s business model calls for negotiating directly with providers to lower the cost to the employee but at a higher rate than the 50 percent the provider can typically expect to recover. HealthBridge then pays the provider immediately and collects over time from employees. The terms are three to six months at zero percent interest, followed by seven percent interest for the remainder of the 24-month repayment period. “Most people want to pay their bills if they have resources to pay them,” said VandenBosch. “Health insurance doesn’t ensure your health. We all suffer when people need care and don’t get it. It’s a ridiculous problem, and we need to solve it.” The company’s first client was North Ottawa Community Health System in Grand Haven, which last year beta tested HealthBridge’s service among its roughly 500 employees. Jireh Metal Products Inc., a metal stamping plant in Grandville that employs 91, is one of HealthBridge’s most recent additions to its roster of customers. “I learned about what HealthBridge was doing and said, ‘I have to be part of this,’” said Mike Davenport, Jireh’s owner, president and CEO. “Deductible costs are just so high. How can you help folks manage through it? We have to make sure people are managing their health care appropriately, because a healthy employee isn’t going to miss work down the road. Being with HealthBridge will absolutely pay a dividend.”

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FOCUS | CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

Get comfortable

Comfort Research of Grand Rapids makes affordable, green furniture BY TOM HENDERSON

got a call one day asking if we did drop shipping. I said, ‘I don’t know, “It’s a too-dumb-to-know-better what’s drop shipping?’” said George. Drop shipping is how many interstory.” That’s how Chip George sums up net companies deliver products: the history of Comfort Research Inc., Someone orders online, and the a fast-growing furniture maker on the manufacturer delivers to the buyer directly, rather than to a retail outlet. north side of Grand Rapids. “No one was buying furniture onThe story begins in 1995 when George and his roommate, Matt line then,” said George — except earJung, needed a chair for the house ly adopters like college students they shared off campus while attend- looking for cheap, cool-looking furing Hope College. They ripped up niture. And so Comfort Research besome couch cushions and made gan selling chairs at studentmarket. what looked like a bean bag chair. It com and collegedepot.com (both was super comfortable, and soon sites are now defunct). “We’d get five orders a day, then 10 friends and family were asking if the orders,” said George. two could make them chairs, too. About the time of the move to Well, they thought, if friends and family like them, maybe strangers Grand Rapids, the father of one of would like the chairs, too. Maybe their friends, who was a manager at a Meijer store in East Lansing, ordered they should start a company. So they did. George says the com- 50 chairs. The first batch sold out in pany will do about $85 million in rev- eight days, and the second batch of enue this year and employs 225. The 50 sold out in 12. A corporate buyer at two founders are co-CEOs, with the company then ordered 1,200 George claiming an additional title of more Fufs and shipped them to Meiambassador awesome, while Jung is jer stores around the state. The company has been selling them in quanthe fabulator. The year after they made their first tity since. Shawn Sinicrope is a group vice chair, they bought a 16-horsepower president at wood chipper to Grand Rapshred foam, first ids-based Meijer operating out of “THEIR ATTENTION TO Inc. who heads the basement of DETAIL AND HOW THEY up the general the building in Holland where SUPPORT THEIR RETAILERS m e r c h a n d i s e business. He says George’s dad had IS FIRST RATE. THEY’RE that while the his dentist office, product line he and then they ONE OF THE BETTER carries from moved to a barn COMPANIES I WORK WITH Comfort Rein Allegan. search varies by And they be- BY FAR.” the season, at gan touring col- — Shawn Sinicrope, group any given time leges around the vice president, Meijer he’s selling 15-20 Midwest during of its products. welcome weeks “Their attention to detail and how at the beginning of semesters, selling chairs to students at Michigan State, they support their retailers is first the University of Michigan, Calvin rate. They’re one of the better compaCollege, Purdue and Northwestern nies I work with by far,” he said. for their dorms or apartments. Some- “They’re very innovative. They know times the colleges set aside space for where their market is today and vendors pitching arriving students; where it will be in the future, whether other times George and Jung would it’s new fabrics or new products, and set up in front of college bookstores, not a lot of suppliers can say that.” In 2011, the company moved its offering 10 percent of sales to the manufacturing and headquarters stores’ owners. They called their chairs Poof chairs staff into a 140,000-square-foot brick for the sound they made when some- building, the former home of Peninone sat in them. “They were $85 if you sular Plating. They added a factory in wanted a liner for the chair, $65 if you Lewisburg, Tenn., in 2014 and one in didn’t. We had visions of grandeur,” Tremonton, Utah, in 2017. “The two factories get us closer to said George. They bought their fabric from big customers. Our furniture is inexoverruns being sold for $1 a yard pensive but bulky. It costs a lot to from Herman Miller and Haworth ship,” said George. “Now, 99 percent Inc. and bales of scrap foam left over of America is within two days’ shipfrom carpet padding from a supplier ping.” Comfort Research is also a suppliin Muskegon for $100 a bale. Business started to boom, but er to Costco, Walmart and Sam’s soon they got a cease-and-desist let- Club, among others. The company ter from a company making foam has more than 90 SKUs, and online footballs that had been branded as shoppers can buy directly from ComPoof balls, and so they started calling fort Research at its retail site, buybigthe chairs Fuf chairs, and still do to- joe.com, which was named for a faday, though the product line has ex- vorite member of the sales team. Bean bag chairs still top the site, panded dramatically. In 1998 they moved from the barn available with your choice of polystyto a 2,500-square-foot facility in rene beads or foam as filler, ranging Grand Rapids, moving frequently from $39.99 to $231.99. Kids’ bean over the years as the business grew. bag chairs range from $35-$87. A The move to Grand Rapids and the wide range of pool and beach floats company’s growth coincided with its are available, as well, from $31.99 to early embrace of internet sales. “We $349.99. 12 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

A Fuf chair available from Comfort Research. | COMFORT RESEARCH

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Startup helps health care systems fix infrastructure Facility Health raises $1.3M seed round BY TOM HENDERSON

Facility Health Inc., a Belmont-based health care startup just north of Grand Rapids, closed at the end of January on a seed round of funding of $1.3 million. The company makes software to help large health care systems more efficiently monitor and repair infrastructure components such as heating and cooling systems and operating room equipment. The round was led by Wakestream Ventures LLC, an investment arm of the DeVos family based in Grand Rapids. The last participant to join the round was the Grand Rapids-based Grand Angels, which closed on an investment of $350,000 at the end of January. That included money from the angel group’s newest and largest investment fund, as well as individual members of the Grand Angels and members of other angel groups affiliated with the Grand Angels through the Michigan Capital Network. (See related story, Page 14.) Members in the angel network in-

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Fernando

The line of pool and beach gear was acquired in 2014 when the company bought T2 Marketplace, a manufacturer near Charlotte, N.C. George said the company is looking into two more acquisitions, now, though nothing is imminent. Tim Parker is president of the Grand Angels investor group in Grand Rapids. His group hasn’t invested in Comfort Research, but he is well aware of the company and is an admirer. “It’s a wildly successful consumer-products company, with an amazing culture and enthusiasm. The guys who run it are fun and relaxed, and people like to work there. And they are very active in the community,” he said. The company donates products to charities around the country to use in fundraisers. And it prides itself on being green. All food scraps from employees eating in the building are composted. The company claims to be landfill free and is working toward being zero-waste certified. Foam for the Fuf chairs is made from 100 percent scrap materials from other manufacturers, 100 percent of internally generated production waste is recycled, and 97 percent of office waste is recycled. George and Jung are big on corporate culture and employee rewards. Each quarter, one employee wins the

Chip George (left) and Matt Jung (right), co-founders and co-CEOs of Comfort Research, pictured with employee Ciji Thomas, winner of the company’s quarterly “Awesome Award.” | COMFORT RESEARCH

FAB award, for Finding A Better Way. It’s given to an employee who has come up with a better way to do something; quarterly winners get $2,500 and the best idea of those four gets another award of $10,000 at the end of the year. The DIRT award, for DoIng The Right Thing, is given quarterly, too, along with a $500 check, to someone nominated by a coworker for doing something considered the right thing. There is also a quarterly trophy called the Awesome Award given to an employee by his or her fellow employees for doing something extra special, either at work or in the community. That one comes with an extra week’s vacation. “The culture they have there is great. Whenever I go there, you can see the enthusiasm, from the guy stapling cardboard boxes all the way to the CEOs,” said Sinicrope. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

%1/+0) 61 &1906190 .#05+0)

Nelson

clude the Woodward Angels in Detroit, the Flint Angels and the Ka-Zoo Angels in Kalamazoo. Also joining the round was Invest Detroit Ventures, the investment arm of Detroit-based Invest Detroit, and the Ann Arbor-based Michigan Angel Fund. Facility Health was formally launched in 2016 but took a go-slow approach as it developed its software and algorithms and found a few customers to prove out its business proposition. Buoyed by an exuberant response from early customers, the company quickly added more customers and reached out to the investment community to accelerate its growth. Facility Health was co-founded by a pair of serial entrepreneurs in Grand Rapids, Christian Fernando and Hans Nelson, who each also have successful consulting companies. Fernando, Facility Health’s CEO, is CEO of Fernando Consulting Inc., which helps early stage tech companies find funding and fine tune their business models, and Nelson is CEO of Belmont-based Synergy Consulting Engineers Inc. Fernando is the CEO and Nelson is the chief strategy and engineering officer. See FACILITY on Page 15

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FOCUS | CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

The power of care

LETTUCE

From Page 10

Grand Rapids HQ provides support, services for homeless and at-risk youth BY TOM HENDERSON

Grand Rapids HQ is a drop-in center for homeless and at-risk youth that opened its doors at the end of 2014. It doesn’t have beds, but staff there can help the homeless aged 14-24 get beds at other support facilities around town, including 3:11 Youth Housing, one of its partners in a new, three-year initiative called the Comprehensive Health Initiative. When HQ opened, there was just one facility with two beds for homeless youth. Today, thanks in part to HQ’s fundraising and partnerships, there are a total of 50 beds at various facilities around town, including the Bridge of Arbor Circle and Covenant House. HQ offers a range of other services, including GED training, teaching job skills, helping with document recovery for those in need of Social Security cards or birth certificates, providing nurse practitioners and dentists, free use of washing machines and dryers, a bank of computers with email and internet access, a big flat-screen cable TV, hot meals, lockers where things can be safely stored 24/7, a small library, showers and complimentary toiletries such as toothbrushes, toothpaste, shampoo and prophylactics. The nurse practitioners treat minor injuries or illnesses, administer flu shots and other vaccines and do pregnancy testing and testing for HIV and sexually transmitted diseases, all at no cost. HQ was launched with a donation of more than $1 million from a somewhat unlikely benefactor — Mars Hill Bible Church in nearby Grandville, which bills itself as a non-denominational evangelical megachurch. It seats up to 3,500 for Sunday services and averages about 2,500. HQ is fully independent of the church and not one of its ministries. HQ requires those who attend to register and become members, at no cost, but there are no other requirements. Those dropping in don’t have to be Christian, there is no proselytizing on the premises, they don’t have to promise to get off alcohol or drugs if they have substance abuse problems — they just need to be polite when they are there. The LGBTQ community is welcome. “The church realized it had been part of the problem with LGBTQ youth, many of whom get kicked out of the house when they come out to their parents,” said Shandra Steininger, the co-founder and executive director. “A drop-in center needs to be low-barrier to be effective. We wanted to be as welcoming as we could. The mission was to create a safe and welcoming space. Forty to 50 percent of homeless adults were homeless as kids, and our hope is to help break that cycle of homelessness.” “The cool story is that a large, local, evangelical church provided the seed funding ... what’s even more amazing is that they didn’t insist that HQ be run as a ministry or even as a faith organization,” said Carl Erickson, who has been the nonpaid chairman of HQ for three and a half years. Erickson is a member of the Grand Angels investor group and the founder of Atomic Object, a highly successful

Carl Erickson, chairman, and Shandra Steininger, founder and executive director, of Grand Rapids HQ, a drop-in center and service provider for homeless and at-risk youth 14-24 | GRAND RAPIDS HQ

web and app developer in Grand Rapids that has another office in Ann Arbor. Mars Hill’s donation allowed HQ to buy its building on State Street, just east of downtown Grand Rapids, in June 2014. “In effect, that was an endowment for us in that we don’t have to pay rent,” he said. Steininger knows just how important a helping hand, some kind words, and a safe place to go can be. She was once an at-risk young person herself, living in poverty in a small town in rural Indiana, a victim of physical and sexual abuse at the hands of her

“I HAD A ROUGH CHILDHOOD, BUT A PERSON CAME INTO MY LIFE AT A CRITICAL TIME AND CHANGED MY VIEW OF THE WORLD. I KNOW THE IMPACT A PERSON CAN HAVE ON YOUR LIFE.” — Shandra Steininger, CEO, of Grand Rapids HQ

stepfather, and with few aspirations. “The expectations in my world were that maybe, eventually you could move out of the trailer park and into renting a house,” she said. “I had a rough childhood, but a person came into my life at a critical time and changed my view of the world. I know the impact a person can have on your life.” That person was named Audrey, a grown woman Steininger met when she was 16. “I started babysitting for her, and we became friends. She would call me up and say she was thinking about me. It was nothing big or glamorous, it was just someone who cared about me and saw something in me. She was a mentor and a

14 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

mother figure. She had a very positive influence that energized me to think beyond the limited dreams of my small town.” Audrey convinced her to break out of her family cycle, to become the first person in her family ever to go to college, and she helped Steininger move to Grand Rapids when she started at Calvin College. Audrey died in a car accident during Steininger’s sophomore year in college, a tragedy that motivated her to prove that Audrey was right in seeing something in her. After graduating from Calvin College, Steininger got her master’s in social work from Michigan State University and moved back to Grand Rapids. HQ has grown to a staff of 15 and has an annual budget of $500,000. In the last three months of 2019, HQ served 214 different members, 410 for the year and more than 1,300 since it opened its doors. Those 410 members paid more than 8,000 visits to the center in 2019. Last fall, HQ and its partners began the three-year Comprehensive Health Initiative, focusing on health care access for at-risk and homeless youth, healing therapies and wellness programs. Other partners besides 3:11 Youth Housing in providing services to youth and young adults were Health Net of West Michigan, a nonprofit helping provide access to health care; Wisdom Center Counseling LLC; and the Grand Valley State University College of Nursing. Steininger said the program raised $400,000 to launch from a variety of local sources, including Mars Hill Bible Church, Herman Miller Cares, the Steelcase Foundation, the Frey Foundation and the Michigan Health Endowment Fund. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

Green said their business is green not just in the color of the lettuce but in the impact on the environment. Though hydroponic farming involves growing in water, the process uses 90 percent less water than traditional farming. It also uses much less land than traditional farming, reduces the need for fertilizer and, most importantly, eliminates the high cost and carbon footprint of trucking lettuce across country to Michigan. The founders are in the enviable position of not needing equity capital to grow, each having enough personal resources so there isn’t any immediate pressure on getting cash-flow positive in the short term. “This is a long-term play,” said Steketee. “My kids are 12, 9 and 7, and I hope they all work here some day.” The company employs 24 and will be hiring 20 more next summer. “I love the founders. They are a western Michigan dream team,” said Tim Streit, partner and founder in the Grand Rapids firm of Grand Ventures. He is not an investor. Green is an adviser to Grand Ventures. They sell all they can grow, and this spring the company will break ground on a two-acre greenhouse expansion that should be growing lettuce sometime during the summer. The plan is to add three more acres in the summer of 2021 and eventually have 12 acres under glass, growing lettuces, herbs and microgreens year-round.

“Once we go beyond three acres, we might go out for outside capital,” said Green. Green said they grow about 8,000 pounds a week and should eventually get to 10,000 pounds per acre. They have already landed several major customers, including Gordon Food Service and, most recently, Meijer Inc. Brands under the SpartanNash banner include Spartan stores, Family Fare stores and Tom’s Food Centers. “Gordon Food Service is a family-owned organization that started out in 1987 with ag and butter delivery, so local and small has always been in our DNA,” said Sean Walsh, the company’s North American director of fruits, vegetables and dairy. “There was a time when local was

Grand Angels raise fund of $11.8M, its largest yet BY TOM HENDERSON

Early stage entrepreneurs in western Michigan have more equity capital to tap into to fund their companies. The Grand Angels of Grand Rapids have finished raising their third fund, of $11.8 million. Their previous funds were $2 million and $6.8 million. Members of the Grand Angels can also invest in deals individually alongside the fund. Members of the Michigan Capital Network, which includes the Woodward Angels in Detroit, the Flint Angels and the Ka-Zoo Parker Angels in Kalamazoo, can also co-invest in deals with the fund. The Grand Angels provides back-office and due-diligence support to members of the other angel groups in the network. According to Tim Parker, the president of the Grand Angels, the group hopes to announce soon that angels in another city in the state have joined the Michigan Angel Network. Paul D’Amato, director of the Grand Angels Fund III, said the fund has already started making investments from the third fund, including a follow-on investment of $650,000 in Micro-LAM Inc., a portfolio company in Kalamazoo that makes laser-based tools to improve machining for ceramics, silicon and metal; and being part of a $350,000 investment that closed at the end of Janu-

ary in Belmont-based Facility Health Inc., a company that sells predictive software to health care organizations that monitors components of their infrastructure. (See related story, Page 13.) Parker said the Grand Angels have invested $30 million in 55 companies over the years and have had 23 exits through sales or initial public offerings. But there is more for portfolio companies than the money. Early stage portfolio companies need to run lean and mean. Having a wide base of investor support from angel investors statewide means companies can tap into expertise from a broad base of successful business people. “A larger membership base for the Michigan Capital Network means more talent for portfolio companies to draw on,” said Parker. Three years ago, the Grand Angels had 45 members for its portfolio companies to turn to. Now, through the angel network, Parker said there are 105 angels around the state who can offer their expertise. In October, Grand Rapids-based Grand Ventures LLC closed its first fund out at $28 million, tying the record for the largest fund ever raised in the Midwest that specifically targets startup companies, according to data compiled by Pitchbook. MATH Venture Partners of Chicago also raised a $28 million startup, or seed, fund for startups in 2015. Tim Streit co-founded the firm in 2017 and is its general partner. Grand Ventures has invested in 10 companies and has already had two profitable exits.

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FOCUS | CRAIN’S MICHIGAN BUSINESS: GRAND RAPIDS

FACILITY

From Page 13

Revolution Farms LLC hydroponically grows a variety of organic, non-GMO lettuces | REVOLUTION FARMS

more of an economic benefit, from a freight perspective,” Walsh said. “Now, local has become extremely important to our customers. Restaurant owners and consumers want to make sure they are supporting local businesses. They want to know where their food comes from. The story of the food and who grew it is much more important to us. And, then, you also have shelf-life improvements. You get advantages in shelf life and in frequency of delivery. You can get delivery every day instead of every two or three days.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

Fernando is the former vice president and chief product officer at Grand Rapids-based Blue Medora Inc., a fast-growing IT firm that has been one of the most successful raisers of venture capital in western Michigan in recent years. He and Nelson bootstrapped the company for the first four years. “We kept putting all the money we made back into the company. For four years, we didn’t get paid.” He said they met in 2015 and hit it off. Nelson had some customers in health care and recognized a problem they had in capital planning. “We knew there was a better way to do it. I told Hans, ‘I can write that software in my sleep. Let’s see if we can turn this into a business.’” They landed two customers right away, one a Florida company that had already been a customer of Nelson’s engineering consulting firm and the other a large Michigan health care company. Fernando said he isn’t allowed to name them. Fernando said his company has 15 large health care facilities as customers, with a total of 50 million square feet and 75,000 separate infrastructure assets with a total replacement cost of $4 billion that his software monitors. He said customers’ locations range from Michigan to Florida to North Carolina to the West Coast. Hospitals are large and complex places with a wide variety of infra-

“FORTY-FIVE PERCENT OF INFRASTRUCTURE ASSETS ARE PAST THEIR USEFUL LIFE SPANS. TO REPLACE ALL OF THAT 45 PERCENT WOULD COST THE AVERAGE HOSPITAL $30 MILLION, AND THERE’S NO MONEY FOR THAT.” — Christian Fernando, CEO, Facility Health

each asset. If a system that heats and cools bathrooms is past its typical life span but still working, no need to worry. But if the HVAC system for operating rooms goes down, there’s an immediate and huge hit to patient safety and revenue. His company gets data from customers on when various infrastruc-

ture components were installed or had maintenance done and its software algorithms do something he calls strategic-risk monitoring to help CFOs prioritize their annual maintenance budgets. Fernando said the company will use the seed funding to further develop its software and add seven to 10 employees by the end of the year for marketing, sales and back-office support. It currently employs nine and has one intern. The company will continue to focus on large health care facilities because it is such a large market, but has begun targeting other markets as well, Fernando said. He added that Facility Health recently signed a contract with a large international real-estate management firm that he wouldn’t disclose to monitor infrastructure at some of its properties. Another large market is monitoring infrastructure at food processing facilities, of which there are some 30,000 nationally. “We know we can disrupt these verticals with what we have,” said Fernando. Skip Simms, the managing member of the Michigan Angel Fund, which invested $325,000, said he was impressed by the backgrounds of Facility Health’s co-founders and how their software addresses a big problem in a huge market. “They’ve been around the block. They’ve done a number of startups, they know the pitfalls, the ups and downs, and they can address an enormous global market. In our due diligence, we

called customers who loved the product. It’s been a problem deciding where to spend their money on infrastructure until Facility Health. This is going to be a game-changer for health care CFOs.” “The team has a good balance of software and industry experience in the sector,” said Patti Glaza, managing director of Invest Detroit Ventures, which as a matter of policy does not disclose the size of individual investments. “What we found in our diligence calls was an untapped demand for what they do. Hospitals are very complex campuses with many areas that need repairs and need a better capital plan. Where must you invest to prevent catastrophic issues? Facility Health’s software works, and hospital CFOs really need it.” Of considerable importance to investors was the growth of revenue. “My goal in November was to double revenue this year to $5 million,” said Fernando. “But we landed some big customers and, now, we might even hit that in the second quarter.” “They’re growing very fast and it’s going to be a cool Grand Rapids company,” said Paul D’Amato, director of the new, $11.8 million Grand Angels Fund III, who has joined the company’s board of directors. “They’ve built amazing software, and the savings they can deliver to a customer is significant.” Contact: thenderson@crain.com (231) 499-0191; @TomHenderson2

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structure components, but their profit margins are thin and their CFOs tightly constrained as to what they can spend on proactive maintenance each year, Fernando said. “Forty-five percent of infrastructure assets are past their useful life spans,” he said. “To replace all of that 45 percent would cost the average hospital $30 million, and there’s no money for that.” He said Facility Health software does the equivalent of triage on infrastructure components, using what he calls a health-index calculation for

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The week. “Thplans is planvia will be dependent on practices revenue growth across government six of Crain tank Communications’ core brands: and fluid management system compliance with relevant Automotive Healthcare, Adinmaker hasModern 13 operations in China, regulations.” News, Crain’s Business Publications, Age, Pensions & Investments, Polymer Group. leveraging cludingBy one in Wuhan.your focused However, if the Chinese government Coronavirus already is expected decides to extend quarantine overas a modern, ROI mindset and the your experience multi-channel marketerto make a dent in production andtheir harm the weekend, you’ll decidethose howplans bestcould to change engage audience members during sales, resources. Matt Tsien, Position presidentcould of General again. customer journeys, and how best to allocate be Fiatin Chrysler said based Detroit,Automobiles Chicago, orNV New York Motors City. China, told investors last week. “In terms of the impact on sales, a European plant could be forced to Visit for more information there will be I believe a near-term imshutcrain.com/careers/ down at the end of February or in and earlyavailable March ifpositions. it can’t get parts from pact on the overall industry,” he said. “Fundamentally, dealerships have China. Northville-based automotive ther- been closed for the Lunar New Year. In mal-management system supplier some regions, they’re slowly ramping Business Sales up. InAssociate many other regions, they Gentherm plansDevelopment to reopen its four fa- back cilities in China on Monday, the com- still remain closed. So we expect that The Polymer Group is looking for a Business Development/Sales there will be an impact on volume in panyGlobal told Crain’s in a statement. the near term. Generally “At this who time,will withbethe extensiontoofwork Associate expected with inactive accounts speaking and newas theobjective crisis passes there be some the ChinesetoSpring Festival by Chinese prospects pre-sell the brand with the to set up will a meeting pent-up demand. So there offi cials, it will take us additional time with the Regional Manager. They will work with the sales team to will helpbe some bounce on theThe other to fully assess the impact of the coronaestablish relations to ensure a smoothprobably transition of the account. virus to Gentherm,” the company said side of it. But in terms of predicting Business Development Associate will need to be able to effectively in an emailed statement. “When our what the overall impact of it would be research uncover new opportunities both income, endemic andit’snonto our equity I think a little employeesand return to work on February endemic clients. 10 ... we will have enhanced disinfec- bit too early to sort of make that call. tion, ventilation and screening mea- We obviously do the very best we can to get our operations started up when sures for employee health and safety.” VisitAuburn crain.com/careers/ for more information they could be started up and to manHills-based BorgWarner Inc.,available which operates plants in Beijing, age our costs and expenses, to maxiand positions. Dailan, Ningbo, Taicang, Jingzhou mize our outcome.” If the virus continues is not conCity, Tianjin and Wuhan — the epicenter of the outbreak — and a technical tained and continues to ravage busicenter in Shanghai, won’t commit to a nesses’ ability to operate, the outcomes become bleak. specific reopening date. Southfi eld-based IHSReceivable Markit pre“TheCommunications local government isregulations Crain currently seeking an Accounts dicts the Chinese auto market could are still fl uid as to reopen dates regionSpecialist. This position will report to the Accounts Receivable Manager be idled intolocation. March, which would ally, will and we following and be are located in the our guidedowntown Detroit The ideal knock about 1.7 million units off prolines they are setting forward, ” Michelle have candidate will be highly motivated, an upbeat attitude and must Collins, director of public relations and duction schedules and cost the indusbe a team player. try billions. marketing, said in an email. Nagl said continued outbreaks like Plymouth-based Adient plc also Visit for more information this coronavirus could amplify the inplanscrain.com/careers/ to reopen on Monday. CEO and available positions. Doug DelGrosso told investors on Jan. dustry’s current efforts to move pro31 that the company is assessing im- duction from China to other low-cost nations in Asia. pact. “We’ve seen 18 months of trade “In addition, we formed a global response team to ensure a coordinated tensions between the U.S. and China,” contingency plan is in place, proactive- Nagl said. “Automakers and suppliers your success already diversifying out of China. ly monitoring any impact related to are Share reasoncustom some are lingering customers, suppliers and joint venture The onlywith China E-prints may have econorelationships,” DelGrosso told inves- are because Reprints, or expertise tors. “Prior to any estimate on specific mies of scale and more!on a part.” From Page 3

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Bank of Ann Arbor’s downtown Ann Arbor location. | BANK OF ANN ARBOR

BANK

From Page 3 The executives said they’re hopeful this deal will be approved by federal regulators by June or July. Bank of Ann Arbor was advised on the deal by the Chicago-based investment banking firm Performance Trust Capital Partners LLC and the law firm Bodman PLC. First National was advised by the Grosse Pointe-based in-

vestment banking firm Donnelly Penman & Partners Inc. and Grand Rapids-based law firm Varnum LLP. M&A activity by community banks has been on the rise in Michigan, as Crain’s has previously reported, and the executives said they see their deal as part of that trend. “This trend is not only a Michigan trend of smaller, community banks combining to form stronger organizations, but it’s also a national trend,” Long said.

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FEBRUARY 10, 2020 | CRAIN’S DETROIT BUSINESS | 17

MICHIGAN DEPARTMENT OF ENVIRONMENT, GREAT LAKES AND ENERGY

Michigan Department of Environment, Great Lakes and Energy staff inspected a pond Jan. 28 at a site on the Detroit River where construction aggregate spilled following a dock collapse Nov. 26.

RIVERFRONT

Riverfront property violations

From Page 3

“Both the city and Revere Dock have asked Detroit Bulk Storage to remove the aggregate currently stockpiled on site,” the law firm representing Revere Dock, Detroit-based Butzel Long, said in an emailed statement. “They are removing material daily and reporting on progress to the city and Revere Dock.” A Detroit Bulk Storage representative reached by phone said the company declined to comment. Revere Dock and Detroit Bulk Storage owed more than $83,000 in fines as of Thursday. The city also responded by filing a lawsuit in late January against the companies. “The first thought is alarm that it took over a week for residents and the city to find out what happened,” said Justin Onwenu, environmental justice organizer for the Sierra Club in Michigan. “There’s alarm over the fact that they were operating without a permit, on a site with contamination ... the city is definitely going to have to answer for that.” The city needs more aggressive inspections, Detroit Mayor Mike Duggan said Jan. 29 while answering media questions after a talk at the Detroit Policy Conference. “Our (Buildings, Safety Engineering and Environmental Department), they are out now on the riverfront walking every single site, writing tickets,” he said. “We had a couple things happening. One is, the people (at the Revere Dock site) didn’t have the permit. But the other thing is, with the rising water levels coming from climate change ... it’s eroding the shorelines across the state.” Lakeshore erosion in Michigan from high water levels prompted lawmakers in December to urge Gov. Gretchen Whitmer to declare a state of emergency. For Detroit, the issue is heightened because, according to EGLE, “much of the Detroit River shoreline is contaminated from historic fill materials and legacy industrial operations.”

‘Shore them up’ “We’re going to have to shore a lot of them up,” Duggan said of property along the city’s waterfront. “... (The Re-

The city of Detroit has issued more than 500 blight tickets after inspecting all 152 properties along Detroit’s riverfront in the wake of the Nov. 26 Revere Dock collapse. It rendered more than $195,000 in fines as of Thursday. The properties are: ` 5851 W. Jefferson Ave.: $83,180 in fines to site owner Revere Dock LLC and operator Detroit Bulk Storage ` 4461 W. Jefferson Ave.: $81,200 in fines to site owner Detroit Marine Terminals Inc., as well as the Detroit/Wayne County Port Authority and Ambassador Port Co. ` 5601-5701 W. Jefferson Ave.: $28,000 in fines to another slice of the former Revere Copper and Brass site that is home to Waterfront Petroleum Terminal Co. and owned by Waterfront Terminal Holdings II LLC ` 100 Meadowbrook St.: $1,350 in fines to the property of Kean’s Marina, owned by Industrial Consolidators Inc. ` 100 Marquette Dr.: $1,405 in fines to the Roostertail event space, owned by Tom Schoenith SOURCES: DETROIT BUILDINGS, SAFETY, ENGINEERING AND ENVIRONMENTAL DEPARTMENT AND DETROIT PARCEL RECORDS.

vere Dock) case should not have happened, but we’re making darn sure it doesn’t happen again.” Three or four BSEED property maintenance division inspectors traversed the length of the river in December and January, according to Knight. Knight said the building department does not normally inspect seawalls for stability, but decided to do so annually after the Revere Dock collapse, consulting with the U.S. Army Corps of Engineers on methodology. It also said it will inspect the Detroit River-adjacent properties and buildings annually instead of the usual every two years. Previously, no governmental entity was responsible for ongoing mainte-

18 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

nance and inspection of seawalls and other waterfront structures in Detroit, according to Don Reinke, chief of compliance and enforcement for the corps’ Detroit District. As of Thursday, BSEED had issued more than 500 tickets to five properties for property maintenance violations on coastal lots including unlawful storage of items outside commercial buildings, failure to maintain the premises, lack of certificate of compliance, unlawful occupancy of buildings and unsafe conditions. The seawall problems are being handled separately from property rules because the former was out of BSEED’s purview until now, according to Knight. The city sent warning letters, dubbed “correction orders.” Problem spots included overflow of water onto land, collapse or failure of the seawall and aggregate pushing up to the seawall causing it to be unsound, she said. The properties had until Feb. 3 to respond to the letters with independent engineering assessments of the stability of their seawalls. As of Thursday, Knight said, the city received six of these reports out of 152. Warning letters to be sent Monday will give property owners a seven-day extension. After that, the city would start fining them. If that doesn’t work, litigation could be a next step, as with Revere Dock. Nick Leonard, executive director of the Great Lakes Environmental Law Center, called the extent of seawall concerns “a bit surprising.” “I knew a lot of the docks and seawalls were from very old facilities … but I didn’t realize until we really started to look into this problem how grave it was and how multifaceted it was,” he said. He said the Detroit-based nonprofit has seen local governments step in to fill holes in inspections as concerns over shoreline integrity mount around the Great Lakes.

State response EGLE is assessing water samples taken Jan. 28 from inside and outside an original 5-foot silt curtain Revere Dock installed around the collapse site to contain the materials, EGLE spokesman Nick Assendelft said. Revere Dock’s next deadline was

Friday to submit an updated shortterm response plan. Assendelft said Friday afternoon that the agency expected to receive those additional details soon. The state called a first version filed with the state Jan. 10 “inadequate.” Another, filed Jan. 24, didn’t do enough to halt erosion into the river; didn’t adequately assess a growing, 12-foot-deep sinkhole; and included a plan for geotechnical measuring on the site that was “not appropriate,” EGLE said in a statement on its website. Revere and Detroit Bulk Storage must submit a progress report by Feb. 29 and a long-term restoration plan by March 30. It missed a Dec. 26 deadline to submit a response plan, but met the next two deadlines. “Once a final version of the remediation plan is in place, we will continue to step in to make sure it’s implemented according to the agreed-upon parameters,” Assendelft said in an email. The spill hasn’t harmed drinking water quality, the state has said, based on its testing and that of the Great Lakes Water Authority. U.S. Environmental Protection Agency officials did find uranium, lead and several chemicals during testing at the site in late December. One, a soil sample of lead, surpassed EPA’s threshold for removal management, according to EGLE. The state also noted its previous testing there “showed no radiation above background levels.” “Concerns around drinking water have been addressed,” Onwenu of the Sierra Club said. “But I do think that’s a really low bar, and I don’t think we should be OK with contamination in the river because we got lucky that the (drinking water) intake is upstream or downstream of the site.” In a statement emailed to Crain’s, Revere Dock, a subsidiary of Grand Rapids-based Erickson’s Inc. refuted the existence of a sinkhole as identified by EGLE. Revere Dock said it would begin construction of a new seawall next month and is still finalizing timeline and design. It also maintained it is committed to fixing the site, bringing it into compliance with city regulations and “working cooperatively” with regulatory agencies. “The engineers at (Revere consultants) G2 Consulting Group and PM

Environmental have been working with EGLE, U.S. EPA and the U.S. Army Corps of Engineers to develop and install temporary measures to secure the site ...” the statement said.

‘Tight safeguards’ Environmental advocates have raised concerns about authorities’ slow response to the Nov. 26 incident, which was first reported by the Windsor Star on Dec. 5, and whether Revere Dock can or will pay for an adequate cleanup. Onwenu of the Sierra Club said the city needs to be “more proactive.” He, the Michigan Environmental Justice Coalition, the Southwest Detroit Community Benefits Coalition and others met with Duggan, his chief of staff Alexis Wiley and other administration officials in mid-January. They called on the city to ramp up its response and amend laws to protect residents from similar incidents by requiring regular shoreline structure inspections, maintaining a public list of contaminated land along rivers and improving emergency response systems that failed to timely identify the spill. According to an administration response provided to Crain’s, the mayor’s administration vowed to respond with publicly accessible information, reviews of government processes and collaboration. “It’s clear that this issue has gotten their attention, their concern, but (it’s about) making sure that concern is translated into support for larger action,” Onwenu said. In a statement after the collapse, U.S. Rep. Rashida Tlaib, D-Detroit, called it “ yet another example of the need to have tight safeguards for industry.” “Our residents don’t deserve to continue to be dumped on by corporate polluters with no accountability,” she said. Assendelft told Crain’s that EGLE is “essentially holding Revere Dock’s feet to the fire” to assure they meet their due care obligations and protect public health. “We’ll try to get it done in the most timely manner we can,” he said. Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

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INSURANCE

From Page 1

“It’s not something we’re thrilled about,” said Dominick Pallone, executive director of the Michigan Association of Health Plans, which represents a dozen health insurance companies doing business in the state. “It’s very difficult for us to change our systems on time. And it’s hard for us to automate this process.” The involvement of health insurance companies to assist motorists in dropping unlimited medical benefits under their auto insurance plan is complicated by the July 1 implementation of the law not corresponding with annual changes in employer-sponsored health care plans, which typically take effect at the beginning of the year. Blue Cross Blue Shield of Michigan, the state’s largest health insurer, is evaluating “customer service processes and letters” to be prepared to supply customers with information about whether their health coverage will allow them to drop PIP coverage after July 1, said Andy Hetzel, vice president of corporate communications at Blue Cross, which is not a member of MAHP. “Blue Cross intends to comply with the directive, but we are working through the details of what compliance means for us and our customers,” Hetzel said. “Blue Cross is working diligently to prepare for the new auto insurance law and we will provide more information to our customers when we finalize decisions and have new processes in place.” Health plans have to figure out the logistics of declaring myriad different individual and group health insurance plans compliant with the auto insurance law’s definition of a “qualified health plan,” which differs with legal definitions for the same term under the Affordable Care Act, Pallone said. “Our QHP is not the same determination that’s in the auto insurance code,” Pallone said. “It’s a slight deviation on the plan.” Pallone said the state should develop a clearinghouse to determine which health plans comply with the auto insurance law’s definition of qualified health coverage. The lack of a system for auto insurers to cross-check coverage leaves motorists vulnerable to not having enough medical coverage in the event of a catastrophic auto injury, Pallone said.

LIVENGOOD

From Page 1

“Green in this case is good, even for a U of M fan like myself,” said Kolb, a former state legislator from Ann Arbor. Kolb then sort of got around to Hernandez’s question by noting that an influx of federal stimulus dollars in 2009 for road construction did not cause the price of pavement and labor to inflate. “As we put more money in, there will be some costs,” Kolb conceded. “But they will level out as this becomes the norm. When we have guaranteed funding for transportation, the industry will move here and they’ll create jobs and they’ll be here for the long term.” Kolb never really answered the crux of Hernandez’s question about how Whitmer’s plan to speed up billions of dollars in highway reconstruction projects over the next five years won’t

“WE WILL DO WHATEVER WE CAN TO GET THE WORD OUT ABOUT WHAT THAT FORM COULD LOOK LIKE AND WHAT PEOPLE SHOULD EXPECT OR ASK FOR FROM THE EMPLOYER OR HEALTH CARE (INSURER).” — Anita Fox, director of the Michigan Department of Insurance and Financial Services

Anita Fox, director of the Michigan Department of Insurance and Financial Services, has directed health insurance companies to create a document to give customers stating that their health plan covers auto injuries, allowing them to opt out of medical coverage under their auto insurance policy. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

“You’re going to create some new cracks for people to fall through,” Pallone said. Another potential hiccup is the state insurance department does not directly regulate self-funded ERISA plans, which are subject to federal oversight. “I have limited authority over them,” DIFS Director Anita Fox said last week. Fox said her agency is reaching out to major employers in Michigan that self-fund ERISA health plans and suggesting they create a similar form for employees indicating their plans do not exclude or limit coverage for auto injuries. “We will do whatever we can to get

the word out about what that form could look like and what people should expect or ask for from the employer or health care (insurer),” Fox said. The benefits afforded for auto accident injuries under most health insurance plans are not the same as PIP benefits in a no-fault plan — and this has some human resource managers in Michigan businesses scrambling to educate their workforces. For example, most employer-sponsored health care plans don’t cover lost wages, round-the-clock in-home attendant care for severely injured motorists or modifications to a home or personal vehicle, like auto

make the already-rising cost of local street projects higher as road builders chase the bigger jobs first. And saying that there wasn’t inflation in road construction costs during the Great Recession when the unemployment rate was through the roof and road builders desperate for work were trying to stave off bankruptcies is comparing apples and oranges with this robust economy and current labor shortage. The inflating cost of road construction has alarmed lawmakers, adding to their resistance to pumping more money into the system (despite repeated assurances from road construction companies that they can handle the additional work). Between 2013 and 2018, the cost of reconstructing a lane mile of highway skyrocketed by 93 percent from $1.78 million to $3.45 million, according to the Michigan Department of Transportation. Local government leaders have reported, anecdotally, similar spikes in

bids for repaving streets and county roads — the ones we all drive on first before we get to an interstate highway, U.S. or M road owned by the state. Inflating road construction costs has diminished the per-mile buying power of the Legislature’s $1.2 billion road-funding plan from 2015, which under Whitmer’s 2021 fiscal year plan finally gets fully funded. The budget director’s dodge on the inflating cost of local roads reflects a new strategy that Whitmer has adopted in her quest to address crumbling roads: Fix what she has control of and force the Legislature figure out what the do about the other 92 percent of roads owned by counties, cities and villages. “I never said it was an ultimate solution,” Whitmer told reporters Thursday. “I said, ‘This is financing, it’s a wise thing to do and I can do it unilaterally.’ So I’m going to take action.” Whitmer also has signaled she’s using the bonding program to get construction projects going while she fo-

20 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

no-fault PIP plans do. “We want people to be sure that if they fully opt out what benefits they’ll be leaving behind,” said Liz Pochini, manager of benefits for DTE Energy. “What does that statement of appropriate coverage look like? We are trying to determine the best way to get that in somebody’s hands.” DTE Energy’s various self-funded and fully insured plans through Blue Cross Blue Shield of Michigan, Health Alliance Plan and Priority Health cover medical treatment for auto injuries for some 10,000 employees and 20,000 retirees, Pochini said. “As the employer, we want to get in front of this so we can communicate

SYLVIA JARRUS FOR CRAIN’S

“I NEVER SAID IT WAS AN ULTIMATE SOLUTION. I SAID, ‘THIS IS FINANCING, IT’S A WISE THING TO DO AND I CAN DO IT UNILATERALLY.’ SO I’M GOING TO TAKE ACTION.” — Governor Gretchen Whitmer

to our employees and retirees about what this really means so they can make the decision as to what’s best for their families,” said Michael Cooper, DTE’s director of compensation, benefits and wellness. Under the new law, motorists will be able to choose different levels of PIP coverage: $500,000, $250,000 or unlimited. There’s also a provision allowing individuals on Medicaid to buy $50,000 of PIP coverage if individuals in their home have a qualified private insurance plan covering auto injuries. Each of those levels comes with a mandatory average rate reduction: 45 percent cut for $50,000 of PIP coverage; 35 percent off for $250,000; 20 percent for $500,000; and 10 percent less for the unlimited PIP plans. The new law allows for motorists maintaining the $250,000, $500,000 or unlimited PIP plans to coordinate benefits with their health insurance so the health care carrier is the primary payer. Auto insurance carriers give motorists discounts for coordinating benefits. General Motors Co., which has 45,000 employees statewide, does not plan to change its self-funded ERISA plan, which already covers auto injuries, said GM spokesman Dan Flores. “However, GM has a subrogation provider that will actively pursue reimbursement as a result of an injury caused by another party’s wrongdoing,” Flores said. Aaron Emerson, senior vice president of communications for Quicken Loans, said the Detroit-based online mortgage company is working with its ERISA plan administrator, Blue Cross Blue Shield, to add auto injuries to its plan and let employees drop PIP coverage. Quicken Loans did not previously allow coordination of benefits. Quicken Loans and its chairman, Dan Gilbert, were a driving force in lobbying for passage of the legislation getting rid of Michigan’s mandatory unlimited medical coverage for auto insurance. “As we approach this highly anticipated date, we will provide proactive, comprehensive communications to ensure our Michigan-based team members understand the new options to save on their auto policies, while also addressing any additional questions they may have,” Emerson said. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood cuses on other issues on her agenda. “Until the Legislature is ready to throw an alternative on the table, I’ve got to do the best I can by prioritizing the resources that we have and focusing on the education and skills of our people, the climate, our drinking water and ensuring people have greater access to health care,” she said. “That’s where we set the priorities.” The ball is back in the Legislature’s court in this seemingly never-ending battle in Lansing over taking care of a transportation infrastructure built when Michigan was still one of the more prosperous and growing states in the union. Though don’t look for Hernandez to necessarily carry the ball on new long-term revenue to fix local roads. He’s running for Congress in the 10th District of the Thumb counties and part of Macomb County. It is, after all, an election year. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

TAILOR

From Page 1

things have changed. Now it’s up to (Mohammad). If he gives me retirement, I’ll leave.”

Conflict to cuff links

Planning ahead a challenge

Adel immigrated to the U.S. from Lebanon in 1976 at the onset of a 15year civil war after their brother Ghassan was killed in a hospital bombing. Another of his brothers, Haidar, or “Hank,” had immigrated a few years earlier and ended up in Detroit after working for luxury suit maker Hickey-Freeman Co. in New York. Abe and their parents followed in 1978, leaving behind the family shoe store in Beirut at the epicenter of the war. Abe and Adel were cobblers. “That’s how I know this machine,” Adel said tapping the commercial-grade sewing machine in front of him. All three brothers — Abe, Adel and Hank — used those skills to get tailoring jobs at the now-defunct Van Horn’s Menswear in Taylor. Hank eventually left for a factory job at General Motors Co. Less than a decade later, they founded Oxford Tailor, hoping to carve out a family business like they once had in Lebanon. The trio collectively covered shifts at Oxford before and after shifts at Van Horn’s. In the beginning, they’d cut the heat in an effort to save money and afford more merchandise, Adel said. “We had a space heater right there,” said Adel, pointing to the space between his and Abe’s — now Mohammad’s — work stations. Abe’s relationship with customers kept them coming back time and again, Adel said. “(Abe) was always a good talker,” Adel said. “He was so good with the customer. Always with a smile on his face. He was such a good listener. People just loved him as soon as they walked into the store.” The company grew enough to sustain careers and the brothers left Van Horn’s in the late 1980s. Since, Oxford has flourished under one guiding principle, Adel said. “Serve the customer, be honest and be consistent,” Adel said. “Selling nice merchandise also helps.” Abe extended that service ethic to his other community in Dearborn. Mohammad recalled the time and dedication his father gave to the Islamic Center of America. Abe’s steady hand was as skilled in gold leaf as blind stitch. Following the 2005 construction of the largest mosque in North America, Abe worked with an artist to place goldleaf Arabic prayers around the qubba, or dome, in the building’s center. Abe and Adel found a groove in recent years, Mohammad said. Adel built a house in Lebanon and visits old family and friends a few times a year. Abe dedicated his time to traveling the world with his wife, Hala, visiting more than 20 countries in the past five or so years, Egypt being his last. “Growing up in Lebanon, Egypt was viewed as the most luxurious place to travel,” Mohammad said. “It was always his dream to go to Egypt.” Abe left for Egypt on Oct. 17. He spent time in Cairo and saw the Egyptian pyramids before heading to a resort on the Red Sea in the city of Sharm El-Sheikh. On Oct. 25, only hours after Abe’s death, Mohammad once again filled his father’s shoes and traveled to the resort to be with his mother.

Heidi Bolger, founding principal of the consulting division of accounting firm Rehmann, said small businesses like Oxford rarely have a succession plan that works because the economics are too small. “It’s a lifestyle business of sorts,” Bolger said. “Most of these business support a family but don’t have the luxury of hiring an apprentice. There’s not a lot of hard assets. They can’t just sell all the bulldozers. It’s a service business. These businesses provide a certain standard of living and the only way out is another family member stepping up to sustain it.” Mohammad said he feels responsible for Oxford and for his uncle, but it’s not forced upon him. “I want to support my uncle, but I like it. I’m interested in this,” Mohammad said. “Yes, it’s my responsibility, but it’s also an honor. I have a lot to learn, but there’s something great about making people feel comfortable (in their clothes).” Finding a family member in the tailoring industry is also critical, because there aren’t young apprentices streaming in to fill out an application. “Americans my age are not interested in this,” Mohammad said. The number of tailors, dressmakers and custom sewers plummeted 30 percent to 21,150 between 2005 and 2018, according to U.S. Bureau of Labor Statistics data. The median hourly wage in 2018 was $14.90. This is because Americans are buying fewer suits. Workplaces have become far more casual in recent years. A combined 79 percent of workers surveyed by Randstad U.S. in August 2019 said their current employers’ dress code policy is either business casual, casual or there’s no dress code at all. Casual attire has become such a staple in American workplaces that 33 percent of respondents said they would quit their job if forced to follow a conservative dress code. U.S. revenue for men’s suits declined to $1.9 billion in 2018 from $2.2 billion in 2013, according to the research firm Euromonitor. Women’s suits saw a greater decline to $402 million from $795 million during the same time frame. Only 8.6 million suits were bought, thus needing altering, in 2018, according to the report. But Mohammad is resolute about Oxford’s success, building upon the shoulders of his father. “I have bigger plans, maybe opening more shops someday,” Mohammad said. “I don’t see this place going anywhere.” Mohammad steps away to help a customer. The mid-30s professional was dropping off buttons and looking to chat with Abe. “I get phone calls and everyone is still looking for Abe,” Adel said. “He ordered merchandise for people, and they never got a call back. I spend a lot of time talking about him, what happened to him. Everyone feels it. Just like family.” Other customers saunter in, some teary-eyed with suits to be altered, some with nothing, to offer condolences to Mohammad and Adel. A large 24-inch by 36-inch photo of Abe rests behind the counter, still smiling at each and every customer.

Abdallah “Abe” Hamka, co-owner of Oxford Tailor & Clothing, died in October on vacation in Egypt. | OXFORD TAILOR & CLOTHING

The how-tos of small business succession planning Oxford Tailor & Clothing’s succession plan got derailed by the untimely death of one of its owners, but it remains critical for all business owners to prepare for the unexpected as well as timely exits. Daniel Minkus, partner in charge of the Birmingham office for law firm Clark Hill PLC and expert in estate and succession planning, walks us through the basic steps small business owners should take to make sure their business and families are protected. ` Talk about it now; you’re going to die, but your business doesn’t have to: “Small business owners used to never talk about it. They just assumed their kids would come into the business. I promise what worked in the ’60s and ’70s does not work today. Talk to your partners. Talk about death and disability. It’s a kind thing to do for your family and partners.” ` Always be looking for a successor. “You are doing yourself a favor if you find someone early and train the next owner. Then you can work on a plan to slowly turn over control and, hopefully, get paid for working less and toward retirement.” ` Look to your competitors. “Whether or not your competitors may be interested in acquiring your business or making you part of their organization can ensure your business carries on when you’re gone. And provides some financial security.” ` Life insurance is your friend. “Some businesses choose to load up on life insurance, either Keyman (owned by the company) or a Buy-Sell Agreement (insurance provides a buyout option), so if they can’t carry out a succession plan there’s a pot of money to keep the business afloat.”

Adel Hamka works on a piece of clothing at Oxford Tailor & Clothing in Novi. “I get phone calls and everyone is still looking for Abe,” he said. | JOHN SOBCZAK | LORIEN STUDIO FOR CRAIN’S

Every son quotes his father Abe didn’t raise his son, or his two daughters, to work in the tailoring industry. Mohammad, instead, ran the family’s BP gas station at Ann Arbor Trail and Warren Road in Dearborn Heights. But with his father’s death came new responsibilities. “I ran the station and my father did the books, but now that’s my respon-

sibility,” Mohammad said. “Now I have to make it happen in two or three hours in the morning then get my day started (at Oxford). Thankfully, I am able to do so because of his work ethic. He was a good mentor and a good father.” For Adel, his brother’s death means retirement and his return to a more stable Lebanon is on hold — and more hours at the shop. “(Abe) knew I wasn’t going to run this place forever,” Adel said. “But

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

FEBRUARY 10, 2020 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

‘Heart for service,’ traumatic loss guided Saunteel Jenkins’ path THE HEAT AND WARMTH FUND: Growing up on Detroit’s west side gave CEO Saunteel Jenkins a “heart for service.” But she almost turned away from social work after her younger brother was killed at age 14 for his Duke University jacket. Her mother’s words urged her on, and Jenkins, 49, went on to earn bachelor’s and master’s degrees in social work from Wayne State University. She’s worn many hats, holding roles at Detroit homeless shelter Mariners Inn, serving on the Detroit City Council and marching in Detroit’s Thanksgiving parade as a member of the Distinguished Clown Corps with her husband, Carl Bentley. | BY SHERRI WELCH ` You always knew you wanted to get into social work? Yes, but after my brother was killed in 1991, I went to my mom and told her I was quitting college. My brother Jovan was the sweetest, kindest kid. They had just left a basketball game at the church, him and his friends. They shot him. Nine millimeter straight through his heart. My brother was just on the ground. I can still see him. That was absolutely, without a doubt, the worst experience of my entire life. I told my mother if people would take my brother’s life for something like a jacket or for anything, I just didn’t think I had it in me to help. My mother told me that I couldn’t forget how blessed my brother was. He had been loved and hugged every day. He didn’t have everything that he wanted, but he had everything that he needed. And that there were children in this world who weren’t that lucky. The kids who killed my brother, she said, if they had been hugged and loved every day, your brother would be here. You have to finish school for those kids, otherwise kids like your brother will never be safe. ` Losing your brother led you to launch a youth violence prevention task force when you were on City Council and a family foundation to fund programs that showed kids new views on life. During my campaign, youth violence was one of the main things I focused on and all of the things connected to it: education, recreation and afterschool programming for kids, and the fact that for every $1 we spend on afterschool programs, we spend $8 on juvenile justice. The numbers alone say we need to spend more on afterschool programs. ` You quit City Council shortly after you were re-elected in 2014 when

the spot at THAW opened up. What led you to do that? I didn’t go into it to become a lifetime politician. I felt I had something to offer at that time. I had a heart for service, an understanding of policy, a holistic perspective of how policy works, how city council works. And I knew the community. I majored in social work, but I learned from (former City Council President) Maryann Mahaffey, who told me that social workers put Band-Aids on wounds caused by poor public policy. That perspective I thought was needed at the time. ` So what led you to THAW? I lived in a house with no lights and no gas. My dad was a mailman. My mom was a stay-at-home mother on and off. I know what it feels like to sleep in a room with a kerosene heater, all gathered together, trying to stay warm, or walking down the street, embarrassed because your house is dark, hoping the other kids don’t really understand why. My parents, in their minds, were keeping us safe and warm. There are parents out there who are doing things out of love without an understanding necessarily that they also come with risks. I’m passionate about helping people, period. But the mission of THAW hits home for me. ` Hasn’t THAW has begun focusing on policy shifts over the past year or two? Part of THAW’s focus is becoming a key player in policy that impacts utilities and housing because the two are connected. It’s utility assistance funding and also the conversation around blight and housing. It should be a conversation connected to utilities. People leave their homes because they can’t pay an $800 gas bill. The state emergency relief program

requires a co-pay from families receiving utility assistance or with less than $500 in the bank. Those kinds of policies, I guess, in writing make sense, but in reality, it was making it so much harder for families. We’re telling people you have to pay your rent, get to and from work and feed your kids. But they should use all the money they have before they come to us for assistance. Those kinds of policies totally go against the stated goal of helping people become self-sufficient. We’re talking with policy makers so that they understand how this actually impacts families.

especially in older industrial cities like Detroit, Philadelphia, Chicago where there is dated infrastructure. ` You are a longtime member of the Parade Co.’s Distinguished Clown Corps, aren’t you? I am! This will be my 10th year. I am excited about getting gold on one side of my costume to mark the accomplishment. I never thought I’d be so excited about being a clown! It’s a lot of work. But it’s fun to be out there and see all the families and the kids who are excited to see the clowns.

` Have you seen any policy wins? Last year, the state agreed to allow enrollment in programs like THAW to serve in lieu of these required co-payments so families would not have to come up with co-pays to get assistance with their utility bill. And now the state will allow you to have as much as $500 in the bank and still qualify for assistance.

Saunteel Jenkins is CEO of The Heat and Warmth Fund.

` What are you focused on now? Water. There is nothing at the state or federal level for water assistance. That’s one of the things we’re working on with legislators in Michigan. On the federal level there are some efforts as well. I am the chair of the National Energy and Utility Affordability Coalition. We’re looking at water because the cost of water is rising,

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22 | CRAIN’S DETROIT BUSINESS | FEBRUARY 10, 2020

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` IT’S HARD TO BOOT UP A FOOTBALL TEAM LAWRENCE TECHNOLOGICAL UNIVERSITY hired its first football coach, and now it’s let go its first football coach. The nonprofit private college relaunched its football program last year after 70 years as part of a business strategy to remold itself into

more of a traditional residential college rather than a commuter school. Defensive coordinator Avante Mitchell, 40, was promotMitchell ed to head coach, replacing Jeff Duvendeck, who parted ways with the program after going 1-9 last year in the Southfield-based university’s first full football season in 70 years. Along with the reboot of its program, the university has invested $2 million into its stadium, which features seating for 2,300 and a new 88,000-square-foot synthetic grass field and lighting.

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