Crain's Detroit Business, May 11, 2020 issue by Crain's Detroit Business

Michigan Business: Ag team targets commercializing morel mushrooms. PAGE 12

THE CONVERSATION Agricultural economist Trey Malone studies what’s at stake for Michigan’s food economy under COVID-19. PAGE 22

CRAINSDETROIT.COM I MAY 11, 2020

COPING WITH COVID-19

BURNING THROUGH SAVINGS

Michigan was recession-ready — but not for this

In March, Michigan had $4.6 billion in reserves in its unemployment trust fund, making it the most-funded social safety net for workers among Great Lakes states and the nation’s 10 most populous states. Only Oregon ($5 billion) and Washington state ($4.78 billion) had more cash in their unemployment trust funds and those states have much more generous weekly benefits of $648 and $790, respectively. Michigan’s maximum weekly benefit is $362.

State unemployment insurance trust fund value More than $5B

$3B to $4B

$1B to $2B

$4B to $5B

$2B to $3B

Less than $1B

Washington Montana

Vermont

North Dakota

Oregon

Maine

Minnesota

New Hampshire

South Dakota

Idaho

Wisconsin

Wyoming

Michigan

Utah

Illinois

Indiana

Kansas

Missouri

West Virginia

New Mexico

Delaware Maryland Virginia

Kentucky North Carolina

Tennessee

Oklahoma Arizona

New Jersey

Ohio

Colorado

California

Rhode Island Connecticut

Pennsylvania

Iowa

Nebraska

Nevada

Massachusetts

New York

Up North tourism feels squeeze of slowdown

Lockdowns will start to hurt this month BY TOM HENDERSON

Even in the bigger northern Michigan cities, it can sometimes seem as if the coronavirus pandemic is a distant worry. Still, Gov. Gretchen Whitmer’s announcement that she was dividing the state into eight regions, based on the impact of COVID-19

More tourism, pages 20-21

South Carolina

Arkansas Mississippi Alabama Texas

Georgia

Louisiana Florida

Alaska

Hawaii

Map Data from ©HERE/MAPS4NEWS CRAIN’S DETROIT BUSINESS GRAPHIC

How Michigan compares...

$4.6B unemployment cushion won’t last long

... to the top 10 largest states

Fund, one of healthiest in country, would run dry by August

California (1) Texas (2) Florida (3)

$450 $521 $275

New York (4) Pennsylvania (5) Illinois (6) Ohio (7) Georgia (8) North Carolina (9) Michigan (10)

$504 $572 $484 $480 $365 $350 $362

BY CHAD LIVENGOOD

In the decade since the Great Recession, Michigan employers built up one of the healthiest unemployment insurance funds in the country. But even $4.6 billion might not be enough to withstand the onslaught of coronavirus shutdown-induced job-

less claims from quickly bleeding the fund dry. Michigan’s unemployment trust fund, which took nine years to build up, could be drained in a matter of six months if nearly 1 million jobless workers draw benefits for an average of 19.4 weeks, according to a new analysis from the W.E. Upjohn Institute for Employment Research.

NEWSPAPER

INSIDE ` State looks to push work share programs, which are juiced by extra federal money. Page 18

Michigan entered the coronavirus pandemic’s economic upheaval with a better-funded unemployment insurance trust fund than any of the nation’s 10 most populous states and far ahead of its Great Lakes peers. A Crain’s analysis shows that Michigan’s $4.6 billion unemployment fund had more cash on hand at the outset of the public health crisis than Ohio, Indiana and Illinois combined — and twice as much savings as New York state before the pandemic shut down America’s largest city. See UNEMPLOYMENT on Page 18

State (population rank)

Maximum Trust fund weekly value as of benefit 1/1/20

$3,260,789,629 $1,934,397,487 $4,071,519,600 $2,651,482,639 $3,435,423,679 $1,946,242,074 $1,264,072,100 $2,559,981,541 $4,003,197,955 $4,661,100,963

... and to other Great Lakes states Great Lakes states

Maximum Trust fund weekly value as of benefit 1/1/20

Michigan Wisconsin Illinois

$362 $370 $484

Minnesota Ohio Indiana

$740 $480 $390

SOURCE: U.S. DEPARTMENT OF LABOR

$4,661,100,963 $1,971,405,287 $1,946,242,074 $1,705,263,924 $1,264,072,100 $895,342,153 CRAIN’S GRAPHIC

` Mackinac Island battens down the hatches for a rough ride ` Northern Michigan winery owners depend on online sales, national distribution channels

around the state, was greeted with relief by those in the northern Lower Peninsula and the Upper Peninsula. There are no lines to get into the Costco in Traverse City, where there are pallets of toilet paper lining one wall. Except for hand sanitizers and disinfectant products, the shelves at Meijer stores are well stocked, with babyback ribs, hams, steaks, trout and salmon in large supply, and little evidence yet of a rumored breakdown in the supply chain for meat. So far, the timing of stay-at-home restrictions has been forgiving for northern Michigan. Ski resorts were winding down their season in March and didn’t take much of a hit. Whitmer’s decision in late April to allow golf courses to open came just about the time tourist courses at Treetops in Gaylord, Boyne Highlands in Harbor Springs and Crystal Mountain in Thompsonville were scheduled to open, anyway. See TOURISM on Page 20

NEED TO KNOW

CORONAVIRUS

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` SURGE OF JOBLESS CLAIMS EASES THE NEWS: Jobless claims in Michigan dropped again last week as the economic shock of COVID-19 is settling. Still, the state received new unemployment claims from 68,952 the week ending May 2 as the business shutdowns caused by the coronavirus outbreak deepened the worst U.S. economic catastrophe in decades. WHY IT MATTERS: Since March 15, more than 1.33 million in Michigan have filed for unemployment benefits. That’s more than a quarter of the total labor force in Michigan. It remains to be seen how the ramp-up of construction and manufacturing will affect those numbers.

` UM HEALTH SYSTEM MAKES BIG COST CUTS

health care: a massive loss of revenue caused by cancellations of elective surgeries and other procedures because of concerns about the coronavirus.

seph Richardson Jr. told Crain’s. “And strategically, it’s a very good growth market — one of the top 10 fastest growing population states in the country.”

` ANGEL INVESTING KEEPS GROWING IN MICHIGAN

` AUTO CLUB GROUP ADDS ANOTHER STATE

THE NEWS: Michigan Medicine announced furloughs of 1,400 employees, a hiring freeze, projected financial losses up to $230 million in fiscal year 2020 ending June 30 and will soon begin a restructuring plan to deal with the impact of the coronavirus pandemic that is still sweeping the world. It also is delaying work on a new hospital planned for Ann Arbor.

THE NEWS: The Dearborn-based Auto Club Group remains in merger and acquisition mode. Michigan’s AAA insurance and travel club announced Wednesday a merger with AAA Colorado, the most western state of its territory in 14 states, two U.S. territories and the Canadian province of Quebec. Auto Club Group’s acquisition will add Denver-based AAA Colorado’s 400 employees to a nationwide workforce of 10,200 and grow its customer base to more than 14.1 million members, Richardson said.

WHY IT MATTERS: The University of Michigan’s health system is dealing with the same problems as all of

WHY IT MATTERS: “We’re calling it the gateway to the west for Auto Club Group,” Auto Club Group CEO Jo-

THE NEWS: Even as COVID-19 continues to wreak havoc on the general economy, there’s more evidence of a solid foundation for Michigan’s entrepreneurial economy. The Ann Arbor-based Michigan Angel Community on Wednesday released its 2019 annual research report, which found continued growth last year in the world of high-net-worth individuals looking to put capital into startups in the state’s burgeoning high-tech sector.

Field hospitals wind down, but will remain ` A major COVID-19 field hospital at TCF Center in downtown Detroit discharged its last patient last week and is “pausing” operations, as the pace of new cases and hospitalizations in Michigan for the disease has slowed. The 970-bed TCF Regional Care Center was emptied as of Wednesday afternoon, according to a statement from the state. Detroit Mayor Mike Duggan referenced its closure for the time being during a daily news briefing Thursday afternoon. But the facility will keep its beds, to be ready for any potential second spike in cases. The field hospital expected to start April 10 with 25 patients and ramp up to several hundred, depending on need. As of April 17, it still had just 21 patients, according to Duggan, and was down to one patient last Wednesday. The mayor has called TCF Center the “single biggest report card” the city has for how well its response to coronavirus is working, as well as state-level social distancing and stay-at-home orders.

WHY IT MATTERS: The 2019 report determined that there 1,322 individuals who invested money into Michigan companies last year. That’s nearly double the number found in the organization’s 2017 report.

` DELPHI, BORGWARNER RESOLVE M&A DISPUTE THE NEWS: BorgWarner Inc. and Delphi Technologies plc resolved a dispute that threatened to end the companies’ previously announced merger, shaving about $500 million in value off the price of the all-stock deal, taking it to about $1 billion.

TCF Regional Care Center in Detroit. | LARRY PEPLIN FOR CRAIN’S

WHY IT MATTERS: Troy-based Delphi Technologies announced March 30 it would draw down all of its available credit, about $500 million, to build a war chest to stabi-

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lize its balance sheet during the COVID-19 crisis. A day later, BorgWarner sent a letter to Delphi’s board alleging that it breached the terms of its deal.

HEALTH CARE

COVID-19

‘Unprecedented’ race

COVID-19 hits Wayne County mental health system hard Crisis threatens viability of agencies BY JAY GREENE

Pfizer’s Kalamazoo facility is being used to design and build a manufacturing line to produce a vaccine for COVID-19.

Pfizer’s Michigan team works to produce COVID-19 vaccine by fall BY CHAD LIVENGOOD

Pfizer Inc. has sequestered a team of nearly 75 scientists and engineers at its Kalamazoo facility to design and build a manufacturing line to produce a vaccine for COVID-19 as soon as the fourth quarter — a huge investment to make a product that has yet to be proven to work. In the midst of the coronavirus pandemic, the team of Pfizer employees and contractors is working seven days a week to modify existing production lines and facilities at its 1,300-acre manufacturing campus in Kalamazoo to produce a vaccine, a company executive told Crain’s.

“This is unprecedented for us,” said Chaz Calitri, vice president of operations for injectables and Pfizer’s interim site lead in Kalamazoo. “The project is called Lightspeed — it’s called that for a reason.” The Pfizer (NYSE: PFE) team in Kalamazoo team intends to begin early engineering runs in the third quarter to test its equipment for formulating, filling and packaging a COVID-19 potential vaccine in what could be tens of millions of units eventually produced in Kalamazoo, Calitri said. “This is kind of a novel process because there are no mRNA vaccines on the market today,” Calitri said, referring to disease-specific antigens.

Calitri said the manufacturing preparation work is being compressed into a tight timeline while the company’s scientists conduct the first clinical trials in the U.S. in partnership with the German pharmaceutical firm BioNTech SE (Nasdaq: BNTX). “By Q3, we want to be able to prove we can formulate it and fill it and package it in our facility,” Calitri told Crain’s. “And then in Q4 we want to begin actual manufacturing for commercial use.” The aggressive timeline hinges on the success of the trial testing and approval from the U.S. Food & Drug Administration, Calitri said. See PFIZER on Page 18

Chaz Calitri is vice president of operations for injectables and Pfizer’s interim site lead in Kalamazoo.

GIVING GUIDE 2020

Giving back to nonprofits in a time of historic need W

h e n COVID-19 hit Michigan in March, it affected all of us — our personal lives, our work lives, our economy. And for many Mary nonprofit orgaKRAMER nizations, it was a tsunami — canceled fund-raising events and lost revenue, furloughed employees and volunteers who stepped back because of the pandemic. Just as the need for services soared. That’s why I’m excited that Crain’s

WE’RE SUPPORTING 33 NONPROFITS THAT ARE USING A DIGITAL PLATFORM, MIGHTYCAUSE, TO RAISE MONEY FOR THEIR CAUSES. can serve as a catalyst for a new initiative: The May Days of Giving. Beginning May 11 and running through June 3, we’re supporting 33 nonprofits that are using a digital platform, MightyCause, to raise money for their causes. All 33 are also participating in our annual Giv-

ing Guide, produced by our marketing storytelling arm, the Crain Content Studio. We moved publication of that guide to June 8, nearly five months earlier than usual because the need for nonprofits to elevate their missions is now. Which is also why we worked to create an online giving opportunity. You can check out the stories from the 33 nonprofits on their campaign pages at Maydaysofgiving. crainsdetroit.com. You’ll find agencies serving some of our most vulnerable populations — seniors, children, cancer patients — and addressing critical issues like remote learning for children, food

insecurity, mental health and addiction. I hope you find a nonprofit whose mission aligns with your values. Many thanks to Huntington Bank, which is sponsoring this effort and is covering the service fee normally charged by the fundraising platform. We’ll keep readers posted on this effort, with a goal of raising $350,000 – or an average of $10,000 per nonprofit. And we’ll publish the results June 8. Let the giving begin! Mary Kramer is group publisher of Crain's Detroit Business.

With nearly half of the deaths and positive cases of COVID-19, Wayne County, including Detroit, is at the epicenter of the COVID-19 pandemic in Michigan. Out of the spotlight, Wayne County also is facing a growing behavioral health crisis that is threatening the financial viability of more than a dozen community health agen- McRill cies in the state’s largest county and has contributed to the region’s high mortality rates and positive COVID-19 cases, mental health executives tell Crain’s. The crisis is fostering increases in suicides, anxiety and substance abuse, mental health experts say. Meanwhile, the agencies and workers serving the population is being pushed to the brink. “We have some of the sickest (most acute) patients. Wayne County has 25 percent of all the mental health patients in Michigan (25 percent, or 82,000, of the state’s total of 350,000) and has the largest Medicaid population here (28 percent, or 690,000 of 2.5 million),” said Sherry McRill, CEO of Northeast Integrated Health, a Detroit-based mental health provider. “Many already have other symptoms of high blood pressure, diabetes, heart disease, hypertension” and they are highly susceptible to being infected by coronavirus, said McRill. “Those mentally ill don’t take care of themselves. We have a lot of people die in our system. They are positive and don’t know it and spread to others.” Of the more than 4,200 deaths and 45,000 positive COVID-19 cases in Michigan as of last week, 47 percent of deaths and 40 percent of cases are in Wayne County, said the Detroit Wayne Integrated Health Network, the largest of the state’s 10 regional behavioral health organizations. Historically, community mental health agencies have served as the primary health care provider for many adults and children with behavioral problems, including serious emotional disturbance, severe mental illness, developmental disabilities, substance abuse, autism and other children initiatives. “We are the invisible frontline. There is so much need for behavioral health that will become even worse once this crisis is over,” said Cathy Liesman, CEO of Development Center in Livonia. “We’ve had staff and consumers test positive and four consumer deaths, relatives of staff who have passed away. It has had a huge impact and it is only a tip of the iceberg.” See HEALTH on Page 17 MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 3

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5 groups vie to lead Detroitâ&#x20AC;&#x2122;s Corktown housing effort The city of Detroit received five applications from groups trying to be selected to lead a potentially $30 million grant effort related to an ambitious new housing Kirk plan in Corktown. PINHO The city is trying to snag a U.S. Department of Housing and Urban Development Choice Neighborhoods program grant to build hundreds of new affordable and market-rate housing units on sites in the neighborhood west of downtown. According to the city, those looking to participate in the effort were: `Gorman & Co. (lead); Detroit-based Southwest Solutions `New Haven, Conn.-based Glendower Group (lead); White Plains, N.Y.based Censere Consulting LLC; Paramount Consulting; Carter; Atlanta-based WrightNow Solutions; and Atlanta-based Ypiretis Asset Management `Bingham Farms-based Slavik Enterprises LLC (lead); Bingham Farmsbased RAD Conversion Specialists LLC; Buffalo, N.Y.-based Norstar Development USA LLC; and Oakland Housing. `North Hollywood, Calif.-based Clifford Beers Housing (lead); Detroit-based Ethos Development Partners; Los Angeles-based Lorcan Oâ&#x20AC;&#x2122;Herlihy Architects; and Farmington-based KMG Prestige Inc. A representative for Ethos Development said this group was not among the finalists. `Boston-based The Community Builders Inc. (lead); and Detroit-based Hamilton Anderson Associates. Crainâ&#x20AC;&#x2122;s reached out to the city for additional information on the applicants. The project envisioned involves turning a large swath of publicly and privately owned land into new mixed-income market-rate and afford-

Affordable housing is also envisioned for Bagley west of Rosa Parks near Michigan Central Station. | LARRY PEPLIN FOR CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

able housing totaling about 500 units. If it happens, it would take place over five years across a smattering of properties: `Of those, 87 new units would serve as replacement units for Clement Kern Gardens, an existing affordable housing development on a 7.1-acre site at 1661 Bagley St. owned by Detroit-based American Community Developers. `More mixed-income housing is envisioned on a site referred to as the â&#x20AC;&#x153;left fieldâ&#x20AC;? of the former Tiger Stadium property. The site is at the Fisher Service Drive and Cochrane Street. `Single-family and multifamily units on about 19 acres. `Affordable housing is also envisioned for Bagley west of Rosa Parks near Michigan Central Station. The city said it will pursue the project even if it isnâ&#x20AC;&#x2122;t awarded the HUD grant.

No-tel A developer that had been planning

to tear down a vacant building at 2141 E. Jefferson Ave. just outside downtown Detroit to build another new hotel is abandoning that plan for now due to high construction costs, said Scott Bowers, a representative of the project. According to city documents submitted to the Board of Zoning Appeals, it would have been eight stories with 228 rooms and a few hundred parking spaces. â&#x20AC;&#x153;Unfortunately the development of that particular site proved to be too costly for our client,â&#x20AC;? Bowers said in a Tuesday afternoon email. The client is Bloomfield Hills-based Shina Financial LLC, which is registered to Sam Shina. Shina is one of five brothers who have lived in Detroit for nearly four decades after emigrating from Iraq, Crainâ&#x20AC;&#x2122;s reported in 2015. The brothers own a chain of grocery stores in the city. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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HEALTH CARE

Dental practices, routine treatments on hold during COVID-19 Dentists say coronavirus crisis brings devastating financial, professional impact to offices BY JAY GREENE

The impact on dentists and their patients from the COVID-19 pandemic is expected to be far-reaching and unpredictable, most likely leading to poorer oral health for some patients because of delays in treatment and financial disruptions for dentists that could last months after the crisis subsides, say several dental leaders in Michigan. Very little in funding assistance has reached dental practices in the weeks since Michigan recorded its first positive case on March 10. Federal funds are starting to flow through the Small Business Administration, but much more will be needed once Gov. Gretchen Whitmer modifies the executive order (2020-17) that closed down dental offices except for emergencies. Crain’s interviewed a number of dentists for this story, most of whom agreed to go on the record. Some outside of Southeast Michigan said they want to reopen their practices now. Others, mostly those in metro Detroit,

believe it won’t be safe for their staff and patients until late May or June at the earliest when sufficient numbers of COVID-19 tests for infections and serology tests for antibodies are expected to be available. But all dentists said the financial and professional impact to their offices and practices has been devastating. Even with the federal loan and grant programs, several dentists told Crain’s if their practices don’t reopen by June, some could face bankruptcy, loss of their practices or setbacks that could last for years. The American Dental Association has estimated that the impact on dental offices so far could result in about 2 percent of dentists filing bankruptcy. However, if dentists can’t go back to seeing patients by June, those filing bankruptcy could increase to 11 percent, and by the end of August as many as 50 percent of dentists could be facing some form of bankruptcy, business or personal. Meanwhile, the vast majority of dentists have laid off or furloughed employees, many of whom have Assistant Heather Snippe takes a preappointment temperature and patient COVID questionnaire in the parking lot of Smiley Family Dentistry in Grand Rapids. | MICHIGAN DENTAL ASSOCIATION JOURNAL

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worked at their offices for years. To pay utility, mortgage and other bills, some dentists have taken out low-interest loans through the SBA COVID-19 Economic Injury Disaster Loan (EIDL) program that offers loans at 3.75 percent and provides a grant of $1,000 per employee to a maximum of $10,000 that does not require repayment. The SBA’s Paycheck Protection Program, which initially ran out of money before Congress recharged it, offers loans at 1 percent. A portion of the loan is forgivable based on qualifying expenses. The American Dental Association said nationally 77 percent of dentists have applied for the EIDL and 74 percent have applied for the PPP, but many are still waiting for approval.

Dentist stories

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6 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

Margaret Gingrich, president of the Michigan Dental Association, is a general practice dentist in Big Rapids, where she heads up Gingrich Dental PC with six employees, all of whom have been furloughed. “The impact to dentistry has been significant, all over the state,” said Gingrich, who just received some SBA funding assistance for her practice. “Since we’ve been shut down I have had to move more than 1,000 patient visits back. I’ve had to lay off six workers because I saw my expenses going out and nothing coming in. We have loans and rents (to pay),” said Gingrich. Beyond disruption to their practices, patients requiring regular oral health maintenance or procedures such as cavity filling or root canals could soon be facing more severe problems like teeth extractions, implants and advanced periodontal disease. Gingrich said she also has seen an increase in dental emergency cases. “There are lots of toothaches. When we shut down on March 20 I saw emergencies a half day a week. Now it is up to two days. One day I started six root canals because (patients) had

Gingrich

Dawley

earlier delayed the work before the shutdown. I go in and take care of patients on my own. I don’t want to risk staff members,” she said. Gingrich also heads up the association’s COVID-19 back to work task force. It completed a report last week that will help guide dentists with reopening after Whitmer lifts her shutdown order. “We sent out a questionnaire to dentists and of 1,300 responses, the most ever, 90 percent of dentists are down to 5 percent of practice volume,” Gingrich said. “The No. 1 concern is (having sufficient numbers of) personal protective equipment and testing, when can we get back to work” and enough cash to restart practices until insurance billing kicks in. Gingrich said the dental association has been lobbying for Whitmer to lift the order and allow dentists to begin seeing more patients. The task force’s recommendations advise following the back-to-work guidelines outlined by the American Dental Association along with some additional steps, including pre-appointment patient screening; in-office registration including hand sanitizing and temperature checks; and staff protection strategies including consideration of a respiratory protection program. “It is clear from the literature that masks are only one strategy of a comprehensive program to mitigate transmission of airborne diseases such as COVID-19. This strategy must also include eye protection, gowns, behavioral measures to support proper doffing and donning, and general infection control measures,” the MDA return to work toolkit says.

Joanne Dawley has been practicing dentistry for 44 years in Southfield. She describes her general dentistry practice as multigenerational family, as some of her original patients are now grandparents, like herself, who have brought their children and now their grandchildren to her practice. “I do what I do because I love what I do. I really like the interaction with my patients. I miss my patients. I have a lot of stories about them: weddings, the births, the graduations. I know an awful lot about all the patients and that’s a big part of my practice,” said Dawley, who was president of the Michigan Dental Association in 2008. “What I care about right behind patients and making sure they are cared for properly is that my staff is cared for properly,” she said. “All are significantly younger than me. A paycheck is very important to them.” Dawley employs five workers, two hygienists, a receptionist who also is a registered dental assistant and a parttime contract worker with an assistant who does root canals “Their last day of work was March 20. The next day the governor issued the executive order that closed us up and I was able to give them one more paycheck,” Dawley said. “I helped them file for unemployment for those temporary benefits because I do fully expect to take all of them back.” For now, Dawley is taking emergency calls for severe problems such as tooth extractions and patients who need antibiotics. “The other day, we were able to accommodate a patient by not seeing them. We were able to leave certain products at the office. They’d come by and pick them up without having to see us,” Dawley said. Steve Meraw, a periodontist at Professional Periodontics & Implant Services with offices in Warren, Saint Clair Shores, Grosse Pointe Woods and Ann Arbor, treats mostly older patients for gum disease and works with general dentists to do dental implants and crowns. See DENTISTS on Page 7

COVID-19 HEROES

Treating the collective trauma of COVID-19

Therapy company sees widespread PTSD cases from frontline workers to fearful children BY JAY GREENE

Jennifer Blough talks with people every week who are facing crisis situations, whether it is a frontline health care worker trying to make sense out of daily deaths and suffering, a young child who is at home and fearful of going outside or someone who has lost their job and feels their identity is gone as well. Blough, owner of Deepwater Counseling PPLC in Ypsilanti Township, is a licensed professional counselor. Her therapy company, like many businesses that are based on in-person contact, has moved to the telehealth space because of the COVID-19 pandemic that has cost over 4,200 lives in Michigan and economic pain across all sectors. “There are pros and cons to telehealth therapy,” Blough said. “But I have to tell you, just personally this past week I had some clients with some real breakthrough sessions, so telehealth can be very effective, very powerful.” Blough said some people don’t feel comfortable talking in front of a computer screen, either because they don’t have privacy at their home or because they just like the “energy” of a face-toface visit. Some struggle with technology or don’t have a computer or internet services. During the first two weeks of the shut-down, health insurance didn’t cover mental health telehealth visits, only medical. But she said lately more

DENTISTS

From Page 6

He practices with two other dentists and has a staff of about 26 clinical and office employees. “I have been practicing 21 years and this is the first time I had Meraw to lay people off. It is disheartening. All staff is furloughed. The financial impact is huge. My office is closed down,” said Meraw, who will take over as president of the MDA on May 17. Meraw sees patients only on an emergency basis and manages most patients over the phone. At Doolin Haddad Advanced Dentistry in Rochester, dentists Kurt Doolin and Jeff Haddad said they don’t believe they will be able to perform dental cleanings until June at the earliest. “As with many health facilities and businesses, we see a ramping up to full-service dentistry gradually evolving over the summer,” Doolin said. “When it comes to social distancing, we will be very mindful of that; however, because we have an individualized practice model, it’s unusual for us to have more than two or three people in our waiting room at one time, although it is large enough to accommodate safe physical distancing.”

What does returning to work look like? Along with ear, nose and throat physicians, dentists must work much

“WHAT WE’RE GOING THROUGH RIGHT NOW, IT’S AN EXAMPLE OF WHAT WE CALL A COLLECTIVE TRAUMA. THIS REFERS TO THE PSYCHOLOGICAL FACT OR REACTION BY A GROUP OF PEOPLE AND, IN THIS CASE, OUR ENTIRE SOCIETY TO A TRAUMATIC EVENT.” — Jennifer Blough, owner of Deepwater Counseling PPLC

closer to patients and their airways where coronavirus could be present than other professions. In other words, the recommended 6 feet of social distancing is impossible. “When we go back to work, we can wear N95 respirator masks, face shields, gloves and full gowns, but our patients can’t wear masks when we are working inside people’s mouths,” said one specialty dentist, who asked for anonymity. The dental specialist said he and other dentists are concerned that some dentists and political leaders are pushing to reopen practices without sufficient testing and personal protective equipment. Coronavirus testing is at such low levels in some communities that treating patients requires additional PPE and understanding whether a patient is positive for COVID-19. “If we have a positive patient in our chair, how do we safely treat them, and then the next person without being infected? We need to do much more cleaning and sterilization of our offices during the day and after we close,” the dentist said. “Do we spend $30,000 on a negative pressure room for COVID-19 positive patients?” Another major question is what will be the testing rules for patients and staff. “I need a good test with an extremely low false negative rate,” said the specialist. “It needs to be rapidly done. I don’t want to rely on a piece of paper saying it was done, and how do we know if it was accurate? I am concerned about my patients, my staff and potential liability.” Gingrich acknowledged that many dentists are asking these questions. She also said there is a healthy de-

payers are covering it and, as a consequence, more people are scheduling online appointments. “We are also seeing people who may have actually struggled to come into the office due to schedules or transportation issues. This is actually more convenient for them,” Blough said. “We’ve all had to adjust.” Each of her nine counselors and two interns have 10-20 virtual therapy sessions each week. Blough specializes in compassion fatigue, caregiver stress and frontline health care workers. “We’re seeing an increase in behavioral problems, particularly with depression, substance abuse and addiction,” she said. “There are a lot of family and relationship conflicts as well.” Even before the deadly spread of COVID-19, the U.S. has been facing a suicide epidemic, an opioid addiction and death crisis and an overall lack of funding and attention to mental health and substance abuse issues. “I really fear what we’re seeing right now may just be the tip of the iceberg when it comes to the mental health consequences of this pandemic,” she said. “What we’re going through right now, it’s an example of what we call a collective trauma. This refers to the psychological fact or reaction by a group of people and, in this case, our entire society to a traumatic event.” Across Michigan, Blough said her counselors are seeing a widespread post-traumatic stress response. “What I am really concerned (with)

bate within dentistry, with some wanting to reopen practices faster than others. Doolin said his practice plans to exceed recommendations along with continuing virtual online dentistry consultations. Planned measures include an office-wide air filtration system that kills airborne viruses and temperature screening for employees and patients. Gingrich said preventive measures to minimize coronavirus infections will be widespread across dentistry. “We are going to pay more attention to personal protective equipment than ever before. We have always wiped down rooms, but we may have patients rinse their mouths (with hydrogen peroxide) before treatment,” Gingrich said. “When we return to work there will be one standard of care.” But that standard to practicing dentistry also depends on whether a vaccine, COVID-19 tests and serology antibody tests are readily available. Once she is given the green light, Dawley said it will take several days to reopen her practice because staff and patient education will be required to practice safely. “Our environment has completely changed. We will need to schedule people farther apart than we normally do,” she said. “Before, we had three providers in our office and three sets of patients. We won’t be able to do that again. Some people will be waiting longer for an appointment. Not because I don’t want to see them, just because we need to protect ourselves and our patients.” Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

is that as we go on, you’re gonna start to see a rise in actual PTSD in addition to other mental illnesses such as clinical depression and anxiety disorders,” she said. She gave two examples of clients she has worked with recently. “There is a 10-year-old child, a girl. She is terrified to leave the house. She has asthma and is terrified about getting (COVID-19),” Blough said. “She won’t take the dog out for a walk her with parents or go for a car ride.” Blough said she is worried people in shut-in situations might develop agoraphobia, the fear of leaving the house. “We are working with her on anxiety reduction techniques, some deep breathing to relax muscles, and doing cognitive behavioral therapy,” Blough said. “We want to allow her to validate her fears, but we want to show her how realistic being exposed to (the) virus is really. It is slow work.” A second client is a frontline health care worker, whom Blough said she began talking with in the first few weeks of the COVID-19 crisis. “I love working with first responders. They have a lot of trauma in what they have seen and they also are exposed to secondary traumas, other people’s traumas,” she said. The health care worker initially contacted Blough because of one specific incident that caused PTSD. “A coworker died. She was struggling with survivor’s guilt and was having nightmares, some agoraphobia, a lot of anxiety

about leaving the house. She wondered why this person died and not her.” Blough said she has tried to contact the health care worker, who hasn’t had a session in a few weeks, to see how she is faring. “A lot of first responders have scheduling issues. They don’t have time. We get concerned when people stop counseling. We try and reach out. Even those who want to take a pause in counseling, we just check in to see if they are all right.” Blough said her staff has also faced the trauma of COVID-19. One staff member has lost several people to the virus “We as counselors also struggle sometimes,” she said. Starting next week, Blough said Deepwater Counseling is offering two free online support groups. One, for first responders and health care workers, will be held Tuesdays at 6:30 p.m. The second, which will be open to the public, will be held Thursdays at 3 p.m. Both sessions will be led by clinical director Jennifer Burger and assisted by intern Janeka Washington. Sign up either on Deepwater’s website or call Jennifer Burger (734) 203-0183, extension 706, or email her at jennifer@ deepwatermichigan.com. “My concern about health care workers is that they are not reaching out for support. They are so exhausted,” Blough said. “If they can find an hour each week, to feel safe, it could help.”

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COMMENTARY

OTHER VOICES

The nursing home patient I’ve been visiting for the past two years ended our most recent phone conversation with a heartbreaking coda: “Don’t forget about me.” As if I could. Like many others in Michigan right now, I’m worried about someone who’s isolated in long-term care. And I’m even more concerned that voices like hers, and the ongoing threat to their lives, are being written off amid the clamor to open up the state. My friend and I connected through a Hospice of Michigan pet visitation program. Bedbound 24/7 and mostly blind, she loves my little dog, but she craves human contact even more. Her spirit, affability and grandma jokes make her a staff favorite. Ask her how she is feeling: “With my fingers.” What’s she been up to? “Raising hell.” And so on. Dedicated caregivers and phone calls from family help during this time. But I worry about her emotional health, even as she remains — for now — COVID-free. The risk to nursing home residents is still very real. Deaths in long-term care facilities are estimated to account for more than a quarter of COVID-19 fatalities nationwide; in Detroit, Mayor Mike Duggan has called DEATHS IN nursing homes the LONG-TERM “center” of the corona CARE FACILITIES battle. But Michigan has taken far too long ARE ESTIMATED to coordinate and reits nursing home TO ACCOUNT FOR port data. MORE THAN A More than five weeks into Gov. QUARTER OF Gretchen Whitmer’s COVID-19 stay-at-home order, the state’s Health and FATALITIES Human Services department finally beNATIONWIDE. gan reporting positive COVID-19 cases in nursing facilities on April 24. But the numbers have been inconsistent, lacking context and in some cases plain wrong. Some early data was uploaded incorrectly, giving the alarming impression that some facilities were being overrun by the virus. After Crain’s Senior Editor Chad Livengood raised the issue with the state, officials manually rechecked and corrected the numbers. One Ann Arbor facility went from 97 cases to 1. “Providing accurate data is very important … and we have established a process that will help ensure data posted to the website going forward will accurately reflect the data,” MDHHS spokeswoman Lynn Sutfin said. Statewide, 3,091 cases have been reported from 459 nursing homes, according to Thursday figures. Not all facilities have responded to state reporting requirements, however, and it’s unknown how many residents recovered or died. The figures also do not include other long-term living facilities where seniors need less intensive medical care. Perhaps most critical, testing capacity for the state figures is not taken into account — a higher case count at some facilities may simply mean better testing.

GETTY IMAGES/ISTOCKPHOTO

Amid push to reopen, remember those still at risk Kelley

ROOT

Executive Editor Alison Hirschel, an attorney with the Michigan Elder Justice Initiative, told Crain’s last week that the numbers the state has released so far can’t be considered accurate until more testing is done. That’s important because “we have to target our scarce resources where they’re needed most,” she said. Detroit’s testing and reporting has been better, as it should be, given the virus’ brutal toll in the city. Health officials there launched an effort to test nearly 2,000 residents at 26 nursing homes in recent weeks. Of those, 26 percent tested positive, and 248 have died, figures released Monday show. The city said this week it plans to re-test 13 of those nursing homes. It also has expanded testing to adult foster care centers, group homes and other long-term care facilities that are not considered skilled-care. That’s a step forward; the state says it plans to follow suit once it establishes reporting protocol. The reporting and patchwork accountability makes it frustrating for people with loved ones in nursing care to get answers. One friend, for example, found out about a major COVID outbreak at her mother’s nursing home through news reports — not the facility itself. Thankfully, her mother remains healthy. Meanwhile, new threats are emerging daily. On Wednesday, WXYZ reported a Sterling Heights senior care facility saw a spike in coronavirus cases among its residents after it took in COVID-positive patients discharged from area hospitals. As more victims recover from the virus, many of them elderly or frail, they will need places to go — putting these facilities at further risk. The state health department on its website notes that “the presence of COVID-19 at a facility is no way an indicator of a facility that isn’t following proper procedures. Several facilities are supporting local hospitals by accepting confirmed COVID-19 positive residents and going forward will be noted as such.” These issues deserve attention even as we move to open up the state’s economy and resume our busy lives. My nursing home friend has seen a lot in her 79 years, and she’s remained remarkably upbeat despite her circumstances. She’s looking forward to turning 80 in September. We owe her the chance to get there.

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.

Water access must be part of our COVID recovery BY RADHIKA FOX AND ELIZABETH CISAR

Wash your hands, save lives — it’s a central message during the COVID-19 crisis. But what if you don’t have basic running water? Incredibly, too many Americans don’t. In Michigan, the pandemic has shed light on long-running water probRadhika Fox is lems across the state. CEO of the US We’ve seen heroic efWater Alliance. forts to get drinking water reconnected and to improve transparency about water shutoffs. Panic buying of bottled water has created additional hardships for thousands of Michigan residents with PFAS chemicals and other pollutants in their water. And high lake levels continue to hammer drinking Elizabeth Cisar water intakes and sewage is a senior treatment plants, making environment it even harder for coastal program officer communities to meet sanat The Joyce itation needs. Foundation in Our recovery from Chicago. COVID-19 must include real investment in fixing problems behind these water access failures. Nonprofits, frontline utility workers, and local government leaders across Michigan and the Great Lakes are working to make water clean and accessible to all. As the nation shifts to recovery, we need to help them, and these four principles should guide our thinking: Ensure water is reliable and affordable. In 2016, a national survey of 73 water utilities found that 500,000 customers had been shut off for nonpayment. The authors estimate that shutoffs for nonpayment affect 15 million people in the United States every year. The problem is well-known in Detroit but growing across the nation. As a recent statewide analysis of water affordability in Ohio demonstrated, it is a challenge in rural, suburban and urban communities across the United States. A solution will require commitment and investment from local, state and federal governments. Local governments and water providers must adopt rate structures designed to ensure affordability for basic service, regardless of income. Other utilities come with assistance programs, such as the Low-Income Home Energy

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 | MAY 11, 2020

Assistance Program. There is no equivalent for water, and there should be. Close the access gap. Many of the more than 2 million Americans who lack indoor plumbing or wastewater services live in remote areas, or come from high-risk groups like the elderly, disabled, homebound and homeless. The federal government should use existing disaster response protocols to close this access gap and prioritize communities where local capacity is limited. It should partner with state and local municipalities for both immediate and longterm solutions. We must also invest in new technologies, like atmospheric water generation, community-driven partnerships between water utilities and community leadership in advancing solutions. The new Flint Community Water Lab is a great example. Strengthen water utilities of all sizes. Across the U.S., more than 70,000 utilities deliver tap water and treat our sewage, and water professionals are key actors in our public health infrastructure. But because most utility revenue comes from water sales, utilities have been hit hard by the closure of restaurants, arenas and other businesses. Federal recovery dollars for water utilities are critical. Fuel economic recovery by investing in water systems. The IN MICHIGAN, pipes and other sys- THE PANDEMIC tems delivering our clean water are aging, HAS SHED LIGHT but we are not investON LONGing enough in infrastructure to keep wa- RUNNING WATER ter systems in good PROBLEMS IN repair. In 2017, the American Society of ALL PARTS OF Civil Engineers estimated that the U.S. THE STATE. needs to spend $15 billion more per year over the next 10 years to meet projected capital needs. In Michigan and other Great Lakes states, rising lake levels have only increased the need for water system improvements. Such investment would be one clearly smart way to jumpstart our post-COVID-19 economic recovery. A pre-crisis study shows this kind of investment would create more than 1.5 million jobs. The pandemic has shown that overall public health requires us to meet the basic water needs of every person in the U.S. These principles — so basic, yet so overlooked — can help chart the route to getting us there. Michigan can lead the way.

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

OTHER VOICES

COVID-19 pandemic is forcing ‘change’ upon us BY TOM WATKINS

Change has arrived. It is up to us to produce progress. COVID-19 has changed the world. The reality we once had is now gone. What we make our Tom Watkins is world is up to all of the former state us to define going mental health forward. director and Cash may not state be king in a post superintendent COVID-19 world. of schools. Contactless payment systems rather than paper and coin money should become the new normal. The U.S. is playing catchup with many other regions of world when it comes to making contactless payments. A deadly virus has accelerated our behaviors as a society. While it is believed that the chance of being infected by cash is still low, there remains a psychological fear of touching money that has passed through multiple people’s hands before it finds its way to you. People rightfully fear using the old “greenbacks” out of concern that paper and coin currency, touched by unknown people, could be a petri dish for spreading the flu or coronavirus. America, the innovation capital of the world and the world’s biggest economy, is moving at a snail’s pace for going cashless and we need to catch up. COVID-19 may be just the stimulus we need to move forward.

LETTER TO THE EDITOR

In China, you do not see people — far surpasses what we see in Amerisigning receipts, inserting credit or ca. The WeChat app, the brainchild of debit cards, entering PIN numbers Tencent, a giant Chinese tech compaon keypads. Contactless payment is ny, is often referred to as a social media ubiquitous. At a time when AMERICA, THE INNOVATION CAPITAL OF it seems that anything involving THE WORLD AND THE WORLD’S BIGGEST China is viewed with skepticism ECONOMY, IS MOVING AT A SNAIL’S PACE and trepidation, FOR GOING CASHLESS AND WE NEED TO America needs to catch up with Chi- CATCH UP. na in living in a currency-free, technology-driven app, equivalent to Facebook or WhatsApp. But this grossly undersells world. Today the use of technology by aver- the power of WeChat with its more age Chinese citizens — young and old than 1 billion active users.

WeChat is both a lifestyle and social ecosystem with seemingly endless applications. Beyond the typical social media functions of messaging and Twitter-style feeds, it is also used for financial transactions of almost any type. It has virtually replaced cash in most commerce exchanges. I have even seen beggars in China with a QR code hanging around their necks so that who wish to make a donation can send it via WeChat. It is the new business card: Business associates and strangers alike share their contact info electronically. To say it went from being unheard of to becoming a nearly universally used, overnight sensation is an under-

statement. It is truly ubiquitous to the point where vendors look puzzled when you attempt to use RMB (Chinese currency): In fact, there are places that do not accept cash, only electronic payment. China is not standing still. Transactions have been moved from cash to electronic mobile and even to a new way to pay in China. No card, no phone, just look at the camera and pay by facial recognition. The future has arrived in China. Change can produce progress. COVID-19 should do more than make us sick or kill us. It might provide just that catalyst needed to improve society and move humanity forward.

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LIFELINE CRAIN’S PODCAST TO NAVIGATE THE COVID CRISIS

Quicken Loans sets an example TO THE EDITOR: While COVID-19 has taken its toll on the economy, small businesses and the American working class — some corporations have taken it upon themselves to be part of the solution. Crain’s recently highlighted a $1.2 million donation from the Quicken Loans Community Fund — the philanthropic arm of mortgage lender Quicken Loans, Bedrock and affiliated companies — and the Gilbert Family Foundation to support vulnerable residents and small businesses impacted by the coronavirus pandemic. A portion of the donation will support the United Way for Southeastern Michigan COVID-19 Community Response Fund. It will also support small businesses and existing grant partners to help maintain operations in the coming weeks. This welcomed contribution is a step in the right direction for Michigan’s economy and for the well-being of those impacted. While leadership from our elected officials is crucial, the government cannot navigate these uncharted waters alone. Quicken Loans’ investment shows how private dollars can help mitigate the impact of the pandemic. Quicken’s investment sets the example for other companies to step forward and support the hardworking people of Michigan. Palmer Schoening, chairman, Family Business Coalition Washington, D.C.

Hosted by award winning investigative journalist Christine Haughney Dare-Bryan, Crain’s new podcast focuses on helping small businesses navigate the COVID-19 crisis and rebuild for the future.

EVERY THURSDAY, Small Business Lifeline highlights a specific topic to assist the small businesses community with timely expert advice and updates. Each episode features in-depth interviews with top policy makers and business owners to give listeners concrete answers to the questions that are keeping them up at night when it comes to surviving a pandemic.

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MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 9

CRAIN’S MICHIGAN BUSINESS

Making the green after a rough start

BRIAN WALTERS

Coronavirus threatens to hollow out Michigan’s $4.2 billion golf industry, but course owners see hope Treetops Resort is home to high-ranked golf courses such as the Fazio that aren’t seeing the usual flood of golfers this time of year due to the statewide business shutdown.

BY KURT NAGL

Golf courses in Southeast Michigan saw record numbers of players early this month when beautiful weather met pent-up demand during the coronavirus pandemic. But the state’s $4.2 billion-a-year industry, which employs 60,000 workers, could be sliced in half at the pace it’s on now, experts say. Restrictions on travel, large gatherings and golf carts are slamming most owners of the 750 courses across the state, which generally make more income from amenities than the game itself. At the same time, golf has perhaps never been a more popular topic in Michigan. It was at the center of local and national debate when Gov. Gretchen Whitmer decided to allow it late last month. The ensuing plea to allow cart use sparked more controversy.

10 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

Michigan golf: By the numbers  750 golf course facilities  $4.2 billion typical annual economic impact  60,000 people typically employed in the industry  500,000 regular players  Home to five of America’s greatest public courses, as ranked by Golf Digest  Home to top-rated par 3 course in America — Threetops at Treetops Resort SOURCES: NATIONAL GOLF FOUNDATION AND GOLF DIGEST

While the financial crisis will inevitably shrink the industry in Michigan — home to the fourth most courses in the country, despite waves of closures in the past decade — the unexpected surge of interest in a game often viewed as stuffy and elitist could help bring it new life. “Golf is one of the safest activities you can participate in, and so because of that, we might actually see a spike for golf this summer,” said Chris Whitten, executive director of the Golf Association of Michigan. Whitten said there has been a sizable increase in sign-ups for GAM’s Youth on Course program, which allows kids to play more than 100 courses around the region for no more than $5. Around 4,000 participated last year. More than 4,500 are expected to take part this year.

U se

Tom Schwark, owner of Sycamore Hills Golf Club in Macomb County, said his 27 holes have seen more play from younger generations, especially with limited entertainment options during the statewide shutdown. “I’ve been pleasantly surprised how many golfers are willing to walk on the golf course right now,” he said. “We’re not getting cart fees, but on the other hand, we are getting a lot of play.” Detroit’s three municipal courses have logged more than 4,300 rounds since reopening April 25 — a wildly high number considering last year the courses were mostly closed for flooding at this time, said Karen Peek, director of golf operations for the courses. See GOLF on Page 11

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FOCUS | CRAIN’S MICHIGAN BUSINESS

GOLF

From Page 10

“To some degree, we expected that because of the isolation that’s been going on for what seems like a lifetime,” she said. “There have been times when the golf course looked like a June day in 2019.” Customers have included the usual mix of Detroit regulars and players from the suburbs, Peek said, but there have been a lot more younger people than usual. That’s a good sign for an industry that has long struggled to attract the coveted business of millennials. That the pandemic could potentially boost the popularity of McKinley the sport is a silver lining some can see better than others.

Resort courses hit harder Nearly 60 percent of Michigan’s golf courses have reopened since getting the go-ahead April 24, according to a recent estimate by the National Golf Foundation. Most of them have been in metro Detroit, one of the hardest-hit regions in the country in terms of total coronavirus cases and deaths. For courses up north, which has seen relatively minimal impact from the virus, the financial blow has been worse. Treetops Resort in Gaylord was forced to move or cancel 2,400 bookings through May 15, the end of Whitmer’s current stay home order, said Kevin McKinley, director of golf and ski for the resort. Seeing empty books during peak reservation season worries him. “Two things are going to kill us and other resort courses,” he said. “One is if we can’t use golf carts. That pretty much obsoletes three out of the five of our golf courses … The other thing that’ll kill destination resorts here is if travel is limited or restricted.” Worst-case scenario, McKinley said he’ll go from planning a record number of rounds played this season at 96,000 to 97,000 to being hard pressed to make 20,000 rounds. “That would be catastrophic,” he said. “We would probably make 25 to 30 percent of budgeted revenue.” The resort, which typically employs around 300 people by now, has only about 30 on payroll, mostly maintenance crew keeping courses up to snuff. McKinley said the budget to maintain its five courses and resort landscaping works out to around $400,000 just for April and May. Only one of its courses is open, for walking only, with a list of safety measures that have become common for courses across the state: online payment only, foam inserts in holes to prevent contact with the cup, spaced out tee times, sanitizer aplenty and closure of bathrooms, drinking fountains and ball washers. Boyne Resorts, near Boyne Falls, opened one if its 10 courses for walking only, Bernie Friedrich, senior vice president of golf operations, said in an email. Only two of them can be played without a cart. Coming off a streak of several years making record revenue, the resort prepared three budgets ranging from a 20 percent reduction with a June start to virtually no revenue if the resort is closed all season. “We have 400 members and thou-

Golfers at Bruce Hills Golf Course in Macomb County find creative ways to lug around golf clubs during the ban on golf carts. | KURT NAGL/CRAIN’S DETROIT BUSINESS

sands of tee times on the books, we need to get carts in play soon,” he said in the email. “Even then with single riders in carts, it will be an interesting year.” One bright spot for the resorts is that the pandemic had virtually no impact on ski season. Its damage on golf will become more apparent when the governor provides updates on her stay home order. Alongside golf carts, next on the wish list for resorts is lifting restrictions on unnecessary travel, which have prevented them from selling their main product of package golf with accommodations. Another chunk of revenue for nearly all courses is tied to food and beverage. They have lost nearly all those sales until at least May 28 due to the extended ban on bars and dine-in service. Even if restrictions are lifted, resorts could be hampered by lingering health and financial concerns that put a golf outing out of the question.

costing about the same. Business has been good for the cart dealer, which has seen an increase in demand for parts and services from individual golf cart owners since the shutdown began. The company never closed because golf carts are considered an essential service — depending on their use. Ciavoni said he supplied five golf carts to the TCF Center to help doctors, nurses and patients get around the makeshift hospital set up to handle an overflow of coronavirus patients. It also has a contract with McLaren Macomb hospital. It remains uncertain when golf carts will return to courses. Some neighboring states, including Wisconsin, have lifted the ban on cart rentals.

The Michigan Golf Alliance said Whitmer has received its request. The governor’s spokeswoman Tiffany Brown said there was no update on the policy.

Other lost business Course owners also have worries beyond golf carts. “(Courses) are forecasting already a 50 percent loss from outing revenue, wedding revenue, large-group gathering revenue,” Paisley said. Back at Sycamore Hills, Schwark estimates revenue losses to be around $200,000 so far, mostly due to canceled sports banquets. A large chunk of his business comes from weddings, which likely won’t be happening there anytime soon.

Schwark said he received a federal Paycheck Protection Program loan that was “well into six figures” to help him meet a weekly payroll at the golf course that he said exceeds $20,000. Cancellation of parties and banquets means lost jobs for the club’s typical 40-50 seasonal workers. Some courses were quick to defy the “no cart” rule or employ policies that allowed them for physically handicapped players. Moose Ridge Golf Course in South Lyon allowed riders in carts with a plastic divider, while courses such as Bruce Hills in Bruce Township allowed beverage attendants to operate carts. Others including Rattle Run in China Township allowed them for golfers who said they couldn’t walk the full round. Some have operated with a strict adherence to their interpretation of the executive orders. There are no carts, including for food and beverage, at Shepherd’s Hollow, Pine Trace and Cherry Creek golf clubs, said Mike Bylen, managing partner of the courses. “We were forced to close down when we would normally be opening up, in a springtime where we were experiencing better weather than we had in the past several years,” Bylen said. “So you can imagine, we lost revenue.” He said that although the restrictions are bad for business, slowing down a bit could be good for the sport. “I think more people are rekindling their love for the game because there’s not a lot to do right now,” he said. Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

Golf cart debate Golf carts might not be essential to sustaining human life, but course owners argue they are an essential revenue stream. When the Michigan Golf Alliance asked Whitmer late last month to allow carts on the course, the request was criticized by some as being petty amid a global pandemic. Golf advocates said that not allowing them puts undue strain on courses already taking a financial hit. On average, cart fees account for around 30 percent of the overall cost to play golf, Whitten said. More importantly, not allowing them takes away the bread and butter for most courses: senior play and league play. “Everyone understands it’s not back to business as normal, but we’re asking for the golf carts because they are a key component of the industry,” said Jada Paisley, executive director of the Michigan Golf Course Association. Golf carts are also one of the most significant expenses for course owners. An average course typically runs a fleet of 60 carts, which would cost around $300,000 to purchase, said Vinnie Ciavoni, manager at Motor City Karts, a golf cart dealer in Mount Clemens. Courses typically sell their carts every five years for half the original value and buy new ones to be cost efficient, Ciavoni said. Many courses also rent the carts, which ends up MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 11

CRAIN’S MICHIGAN BUSINESS

Farming a finicky fungi

MSU researchers hope lucrative morel mushroom crops will grow farmers’ incomes BY TOM HENDERSON

Researchers at Michigan State University hope to add another crop to the rotation to boost income for Michigan farmers, who have been hit by, among other things, falling prices for asparagus and a tart-cherry market flooded with imports from Turkey. The crop they hope to commercialize? That iconic target of hobbyist foragers who flood Michigan’s woods each May — morel mushrooms. The delicacies could be a lucrative crop. They were fetching $80 a pound at the Fresh Farms Market in Grosse Pointe last year and are routinely offered for sale at $40-$50 a pound at farm markets in northern Michigan, where much of the foraging is done, although morels are found all over the state in the spring. MSU researchers, led by principal investigators Gregory Bonito and Trey Malone, were awarded a grant of $199,993 from the U.S. Department of Agriculture last fall for a project titled “Cultivating a morel mushroom industry in the North Central United States.” They and their partner on the project, MSU professor Scott Swinton, hope to eventually duplicate Bonito for Michigan farmers what Chinese farmers have done. Many kinds of mushrooms have been grown for years and are routinely available in grocery stores, including portabello, shiitake and oyster mushrooms. But morels have been notoriously hard to cultivate. Growers in China have been the exception. They started trying to figure out how to cultivate morels on farms in 2014 and have turned morels into an export business. “There’s been a lot of research in China, which has been pretty successful cultivating morels,” said Bonito, who has visited Chinese farms to see their operations and get some tips. China now cultivates about 500,000 hectares of morels, about 1.25 million acres, generally growing them between such row crops as oranges, strawberries, grapes and a variety of grains. “They really started making big breakthroughs, and imported Chinese morels have flooded the U.S. market the last couple of years.” One Michigan grower, Mycopia Mushrooms of Scottville, has about 80 employees and cultivates a wide variety of mushrooms for sale to retailers around the U.S. It has successfully grown small numbers of morels indoors on what it says is a trial basis. Growing the finicky fungi outdoors is a different story. Swinton, who has been awarded the title of University Distinguished Professor, is a professor of agricultural and environmental economics. He said the project grew out of a conversation the three had at a Labor Day picnic in East Lansing in 2018. “Greg is a mushroom specialist and we got to talking about mushrooms and morels and could you cultivate them? Greg said, ‘They grow them in China, we should be able to do 12 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

Michigan State University agriculture professor Scott Swinton plants mycelium last fall for a project designed to see if it is feasible to commercially grow morel mushrooms. | TREY MALONE/MICHIGAN STATE UNIVERSITY

“CAN WE GROW MORELS COMMERCIALLY? THE MARKET DEMAND IS THERE, BUT IT’S A NICHE MARKET, AND RIGHT NOW WE DON’T KNOW HOW BIG IT IS. IT IS NOT CLEAR IF IT MAKES SENSE ECONOMICALLY.” — Trey Malone, assistant professor and extension economist, MSU department of agriculture

Michigan State University Assistant Professor Trey Malone, who is working on the morels project, also supports research and outreach with the craft beverage industries in Michigan. | MICHIGAN STATE UNIVERSITY

it here.’ What we want to accomplish first is figure out how to cultivate them outside in Michigan. If you can do it, what are the costs, and what price would growers have to get in return?” Swinton’s role in the project is focus-

ing on economics and budgeting. Malone will oversee assessing consumer demand. “Growers are looking for a secondary revenue stream,” said Malone, an assistant professor and extension economist in MSU’s department of agriculture. “Apples are doing OK, but tart cherries are off, blueberries are off ... If you are selling at a farmers’ market and you are having a tough time selling what you have and the morel guys are selling out, well ... “Can we grow morels commercially? The market demand is there, but it’s a niche market, and right now we don’t know how big it is. It is not clear if it makes sense economically. What is the minimal viable market? What are people willing to pay? The academic literature on morels is pretty thin. More people have published papers on Bigfoot than on morels.” Bonito, who describes himself as a mushroom guy, is an assistant professor in MSU’s agriculture department, with a focus on mushrooms, plant-fungal interactions and truffle ecology. He will oversee cultivation and assessing the complicated chemistry of what crops tolerate morels growing nearby and vice versa. They hope to cultivate grey and black morels. The 60-some species of morels are split into three categories of grey, black and yellow, with yellow the hardest to cultivate. “I’ve been a backyard hobby mushroom grower for years,” he said. In 2015 he spearheaded the state’s new certification program for approving which foragers, based on their expertise, were legally allowed to sell mushrooms. In the spring of 2018, Bonito transplanted mycelium, the underground root network from which mushrooms sprout, in what are called high tunnels, at MSU. “We got a few mushrooms last May,” he said. After getting the grant, the project was expanded last fall to also include growing morels at a nearby farm. It’s been a cold spring, with snow in the Lansing area in mid-April, which delayed the morel flush a bit, but Bonito expects to see morels any day. “We’re not trying to overpromise. There are a lot of experiments and trials that we need to do to get there, and it may take a few years, but I think we can do it,” said Bonito, of farmers in Michigan and the Midwest growing morels as a cash crop. He said there are two eventual paths, one called rotation farming and the other called co-cropping. In rotation farming, morels would be planted in October or November and harvested in April and May. Then a wide variety of plants could be planted where the morels had come up. Bonito said the seasonal crop rotation of morel and plants should improve the soil carbon and fertility for plants, without any negative impact on either crop. Co-cropping would be trickier. Morels would grow between rows of other crops as they also grow. The needs of crops vary in terms of chemical additives to the soil or soil acidity, and those needs can come into conflict with the needs of morels. Bonito said the plan is to expand cultivation to two more Lansing-area locations this fall. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

REAL ESTATE

Mall at Partridge Creek owner in default on $725 million mortgage BY KIRK PINHO

The owner of The Mall at Partridge Creek in Clinton Township is in default on its mortgage. The November default on a balloon payment on a $725 million debt that is also secured by three other malls in Florida, Virginia and North Carolina makes it the latest metro Detroit shopping center to enter into choppy waters with its lender. Emails sent to a representative of Miami Beach, Fla.-based owner Starwood Capital Partners Inc. have not been responded to since April 23. The company also owns Fairlane Town Center in Dearborn, which similarly is behind on its separate $135.7 million mortgage that has been sent to special servicing, according to New York City-based Trepp LLC, a company that tracks commercial mortgage-backed securities data. Trepp says the Partridge Creek loan was sent into special servicing with Wells Fargo on Nov. 8 and a loan restructuring proposal was sent, but work-out discussions have been back-burnered as the bank attempts “to understand the magnitude of the COVID-19” pandemic.

AT PARTRIDGE CREEK, THE TWO LARGEST TENANTS — NORDSTROM (140,000 SQUARE FEET) AND CARSON’S (116,250 SQUARE FEET) — HAVE BAILED, WITH SPIRIT HALLOWEEN TAKING THE CARSON’S SPACE NOW, ACCORDING TO TREPP LLC. It also says the four properties were appraised at the end of March with a value of $366.7 million, a little more than half of the original loan balance. The balance is now $681.6 million. Starwood reached an agreement in November 2017 to extend the maturity date by two years, according to Trepp data. At Partridge Creek, the two largest tenants — Nordstrom (140,000 square feet) and Carson’s (116,250 square feet) — have bailed, with Spirit Halloween taking the Carson’s space now, according to Trepp. Revenue was $17.7 million last year, down 13.2 percent from $20.4 million in 2018, according to Trepp. NOI has fallen 20.7 percent from $11.1 million to $8.8 million. Revenue at the four malls combined has plunged the past several years. In 2015, they pulled in about $115.2 million, but by last year, that had fallen to $95.8 million. Net cash flow has likewise fallen from $62.7 million to $48.3 million, according to Trepp. Occupancy overall has fallen from 97 to 81 percent.

Partridge Creek, which opened in 2007, has 626,000 square feet. Starwood purchased it in 2014 along with Fairlane and five other malls as part of a $1.4 billion deal with Bloomfield Hills-based Taubman Centers Inc. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

The owner of The Mall at Partridge Creek in Clinton Township is in default on a $725 million loan that had a balloon payment due in November, according to New York City-based Trepp LLC. | LARRY PEPLIN/CRAIN’S DETROIT BUSINESS

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MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 13

CRAIN'S LIST: SE MICHIG MICHIGAN AN P PUBLICL UBLICLY Y HELD C COMP OMPANIE ANIES S Ranked by 2019 revenue Company; fiscal year end Address Phone; website

Top executive(s)

Ford Motor Co. (12/2019)

James Hackett president, CEO & director

General Motors Co. (12/2019)

Revenue ($000,000) 2019

Revenue ($000,000) 2018

Percent change

Net income ($000,000) 2019/ 2018

Exchange/ Stock price Ticker 52-week Symbol high/low Type of industry

$155,900.0

$160,338.0

-2.8%

$47.0 $3,677.0

NYSE F

$10.56 $3.96

Automobile manufacturer

Mary Barra chairman & CEO

137,237.0

147,049.0

-6.7

6,732.0 8,014.0

NYSE GM

41.90 14.33

Automobile manufacturer

Penske Automotive Group Inc. (12/2019)

Roger Penske, Sr. chairman & CEO

23,179.4

22,785.1

1.7

435.8 471.0

NYSE PAG

53.81 19.99

Automotive retail

Lear Corp. (12/2019) 21557 Telegraph Road, Southfield 48033 248-447-1500; www.lear.com

Raymond Scott, Jr. president, CEO & director

19,810.3

21,148.5

-6.3

753.6 1,149.8

NYSE LEA

159.14 63.20

Automotive supplier

Adient plc (9/2019) 49200 Halyard Drive, Plymouth 48170 734-254-5000; www.adient.com

Douglas Del Grosso president, CEO & director

16,526.0

17,439.0

-5.2

491.0 1,685.0

NYSE ADNT

29.28 5.90

Automotive seating supplier

Aptiv PLC (12/2019) 5725 Innovation Drive, Troy 48098 248-813-2000; www.aptiv.com

Kevin Clark president & CEO

14,357.0

14,435.0

-0.5

990.0 1,067.0

NYSE APTV

99.04 29.22

Automotive supplier

DTE Energy Co. (12/2019) 1 Energy Plaza, Detroit 48226 313-235-4000; newlook.dteenergy.com

Gerardo Norcia president, CEO & director

12,669.0

14,212.0

-10.9

1,169.0 1,120.0

NYSE DTE

135.67 71.21

Energy company

Ally Financial Inc. (12/2019) Ally Detroit Center, Floor 10, 500 Woodward Ave., Detroit 48226 866-710-4623; www.ally.com

Jeffrey Brown CEO & director

11,618.0

10,466.0

11.0

1,715.0 1,263.0

NYSE ALLY

35.42 10.22

Digital financial services company

BorgWarner Inc. (12/2019)

Frederic Lissalde president & CEO

10,168.0

10,530.0

-3.4

746.0 931.0

NYSE BWA

46.60 17.00

Manufactures components and systems for propulsion systems for combustion engine, hybrid and electric vehicles

Masco Corp. (12/2019)

Keith Allman CEO, president & director

6,707.0

6,654.0

0.8

935.0 734.0

NYSE MAS

50.06 27.04

Manufactures products for the home improvement and new home construction markets

American Axle & Manufacturing Holdings Inc. (12/2019)

David Dauch chairman & CEO

6,530.9

7,270.4

-10.2

484.5 57.5

NYSE AXL

16.44 2.50

Automotive supplier

Kelly Services Inc. (12/2019)

Peter Quigley president, CEO & director

5,355.6

5,513.9

-2.9

112.4 22.9

NasdaqGS KELY.A

28.91 10.13

Staffing, employment, workforce solutions

Meritor Inc. (9/2019) 2135 West Maple Road , Troy 48084 248-435-1000; www.meritor.com

Jeffrey Craig president, CEO & director

4,388.0

4,178.0

5.0

291.0 117.0

NYSE MTOR

27.18 10.91

Supplier of axle, brake and suspension solutions to original equipment manufacturers and the aftermarket for the transportation and industrial sectors

Delphi Technologies PLC (12/2019) 5725 Delphi Drive, Troy 48098 248-813-2000; www.delphi.com

Richard Dauch CEO

4,361.0

4,858.0

-10.2

17.0 358.0

NYSE DLPH

26.82 5.39

A propulsions systems technology provider

TI Fluid Systems plc (12/2019)

Bill Kozyra president and CEO

3,828.0

3,976.2

-3.7

158.9 157.8

LSE TIFS

3.51 1.47

Tier-one supplier of automotive fluid systems technology

Domino's Pizza Inc. (12/2019)

Richard Allison, Jr. president, CEO & director

3,618.8

3,432.9

5.4

400.7 362.0

NYSE DPZ

381.86 220.90

Restaurant franchisor

Cooper-Standard Holdings Inc. (12/2019)

Jeffrey Edwards chairman & CEO

3,108.4

3,624.0

-14.2

67.5 103.6

NYSE CPS

59.22 6.64

Fluid-handling systems, noiseand vibration-control products, body-sealing systems

Visteon Corp. (12/2019)

Sachin Lawande president, CEO & director

2,945.0

2,984.0

-1.3

70.0 164.0

NasdaqGS VC

105.99 38.69

Global automotive supplier

TCF Financial Corp. (Dec-19)

Craig Dahl CEO, president & director

2,052.8

1,613.7

27.2

295.5 304.4

NasdaqGS TCF

47.46 16.96

Financial institution

Universal Logistics Holdings Inc. (12/2019) 12755 E. Nine Mile Road, Warren 48089 586-920-0100; www.universallogistics.com

Tim Phillips CEO, president & director

1,512.0

1,461.7

3.4

37.6 52.2

NasdaqGS ULH

27.49 11.02

Transportation and logistics

Credit Acceptance Corp. (12/2019)

Brett Roberts CEO & director

1,489.0

1,285.8

15.8

656.1 574.0

NasdaqGS CACC

509.99 199.00

Financial institution

Flagstar Bancorp Inc. (12/2019)

Alessandro DiNello president, CEO & director

1,404.0

1,122.0

25.1

218.0 187.0

NYSE FBC

40.00 16.76

Financial institution

Superior Industries International Inc. (12/2019)

Majdi Abulaban CEO & president

1,372.5

1,501.8

-8.6

96.5 26.0

NYSE SUP

6.30 0.90

Auto parts and equipment

Sun Communities Inc. (12/2019) 27777 Franklin Road, Suite 200, Southfield 48034 248-208-2500; www.suncommunities.com

Gary Shiffman chairman & CEO

1,264.0

1,126.8

12.2

161.6 107.2

NYSE SUI

173.98 95.34

Real estate operations

Gentherm Inc. (12/2019)

Phillip Eyler president, CEO & director

971.7

1,048.5

-7.3

37.5 41.9

NasdaqGS THRM

49.95 27.24

Developer and marketer of innovative thermal management technologies for heating and cooling and temperature control applications

9 10 11 12 13

1 American Road, Dearborn 48126 313-322-3000; www.ford.com

300 Renaissance Center , Detroit 48265 313-667-1500; www.gm.com 2555 Telegraph Road, Bloomfield Hills 48302 248-648-2500; www.penskeautomotive.com

3850 Hamlin Road, Auburn Hills 48326 248-754-9200; www.borgwarner.com

17450 College Parkway , Livonia 48152 313-274-7400; masco.com

One Dauch Drive, Detroit 48211 313-758-2000; www.aam.com

999 West Big Beaver Road, Troy 48084 248-362-4444; www.kellyservices.com

2020 Taylor Road, Auburn Hills 48326 248-296-8000; tifluidsystems.com 30 Frank Lloyd Wright Drive, Ann Arbor 48105 734-930-3030; www.dominos.com/index.intl.html

39550 Orchard Hill Place Drive , Novi 48375 248-596-5900; www.cooperstandard.com

One Village Center Drive, Van Buren 48111 800-847-8366; www.visteon.com

333 West Fort St., Suite 1800, Detroit 48226 866-258-1807; ir.tcfbank.com

25505 W. 12 Mile Road, Southfield 48034 248-353-2700; www.creditacceptance.com

5151 Corporate Drive , Troy 48098 248-312-2000; www.flagstar.com

26600 Telegraph Road, Suite 400, Southfield 48033 248-352-7300; www.supind.com

21680 Haggerty Road, Suite 101, Northville 48167 248-504-0500; www.gentherm.com

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This list of publicly held companies is a compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties that have stock traded on a public exchange. For companies not on a calendar fiscal year, revenue and net income figures are for the most recently completed fiscal year. 52-week highs and lows are for period ending April 9, 2020. SOURCES: S&P Global Market Intelligence, (Marketintelligence.spglobal.com) and SEC filings.

14 | CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS | MAY 11, 2020

CRAIN'S LIST: SE MICHIG MICHIGAN AN P PUBLICL UBLICLY Y HELD C COMP OMPANIE ANIES S Ranked by 2019 revenue Company; fiscal year end Address Phone; website

Top executive(s)

Revenue ($000,000) 2019

Revenue ($000,000) 2018

Percent change

Net income ($000,000) 2019/ 2018

Exchange/ Ticker Symbol

Stock price 52-week high/low

Type of industry

Stoneridge Inc. (12/2019)

Jonathan DeGaynor CEO, president & director

$834.3

$866.2

-3.7%

$60.3 $53.8

NYSE SRI

$34.46 $13.87

Auto parts and equipment

TriMas Corp. (12/2019) 38505 Woodward Ave., Suite 200, Bloomfield Hills 48304 248-631-5450; www.trimascorp.com

Thomas Amato president, CEO & director

723.5

705.0

2.6

98.6 83.3

NasdaqGS TRS

33.45 19.99

Industrial machinery

Horizon Global Corp. (12/2018)

Terrence Gohl CEO

690.5

714.0

-3.3

80.8 204.0

NYSE HZN

5.79 1.20

Auto parts and equipment

Taubman Centers Inc. (12/2019) 200 E. Long Lake Road, Suite 300, Bloomfield Hills 48304 248-258-6800; www.taubman.com

Robert Taubman chairman, CEO & president

661.1

640.9

3.1

227.1 81.1

NYSE TCO

54.49 26.24

Retail real estate investment trust

Alta Equipment Group Inc. (12/2019)

Ryan Greenawalt CEO & chairman

557.4

413.0

35.0

35.4 1.5

NYSE ALTG

10.80 3.59

Heavy construction equipment, material handling equipment, industrial equipment, cranes

Altair Engineering Inc. (12/2019)

James Scapa founder, chairman & CEO

458.9

396.4

15.8

1820 East Big Beaver Road , Troy 48083 248-614-2400; www.altair.com

7.5 15.5

NasdaqGS ALTR

43.28 23.04

Global software and technology, engineering simulation, advanced computing, enterprise analytics and product development

Agree Realty Corp. (12/2019) 70 East Long Lake Road , Bloomfield Hills 48304 248-737-4190; www.agreerealty.com

Joel Agree president, CEO & director

187.5

137.1

36.7

80.1 58.2

NYSE ADC

80.51 45.23

Real estate investment trust

Sterling Bancorp Inc. (12/2019)

Thomas Lopp chairman, president & CEO

186.8

183.8

1.6

57.0 63.5

NasdaqCM SBT

10.55 2.53

Banking

Unique Fabricating Inc. (12/2019) 800 Standard Parkway , Auburn Hills 48326 248-853-2333; www.uniquefab.com

Byrd Cain, III president & CEO

152.5

174.9

-12.8

9.1 3.7

NYSE MKT LLC (AMEX) UFAB

4.80 1.44

Auto parts and equipment

Esperion Therapeutics Inc. (12/2019) 3891 Ranchero Drive, Suite 150, Ann Arbor 48108 734-887-3903; www.esperion.com

Timothy Mayleben president, CEO & director

148.4

0.0

97.2 201.8

NasdaqGM ESPR

76.98 24.82

Biotechnology

Saga Communications Inc. (12/2019)

Edward Christian president, CEO & chairman

123.1

124.8

-1.4

13.3 13.7

NasdaqGM SGA

34.88 21.00

Broadcasting and cable television

Conifer Holdings Inc. (12/2019)

James Petcoff chairman & CEO

96.0

98.9

-2.9

7.8 9.2

NasdaqGM CNFR

4.94 2.00

Property and casualty insurance

Level One Bancorp Inc. (12/2019)

Patrick Fehring, Jr. chairman, president & CEO

84.7

70.9

19.4

16.1 14.4

NasdaqGS LEVL

26.69 13.45

Regional bank

InfuSystem Holdings Inc. (12/2019)

Richard DiIorio president, CEO & director

81.1

67.1

20.8

1.4 1.1

NYSE MKT LLC (AMEX) INFU

11.89 4.00

Health care services

Perceptron, Inc. (Jun-19) 47827 Halyard Drive, Plymouth 48170 734-414-6100; www.perceptron.com

Jay Freeland chairman of the board, interim president & CEO

76.8

84.7

-9.3

6.8 4.0

NasdaqGM PRCP

8.14 2.34

Noncontact measurement and inspection products and processimprovement services

Rockwell Medical Inc. (12/2019)

Stuart Paul president, CEO & director

61.3

63.4

-3.3

34.1 32.1

NasdaqGM RMTI

5.80 1.31

Bio-pharmaceutical/medical manufacturer and supplier

University Bancorp Inc. (12/2018)

Stephen Ranzini president, CEO & director

55.7

53.9

3.3

2.2 5.1

Pink Sheets LLC (OTCPK) UNIB

8.64 5.75

Banking

Oxford Bank Corp. (12/2019)

David Lamb president, CEO & director

25.1

22.0

13.9

5.3 4.0

Pink Sheets LLC (OTCPK) OXBC

25.90 16.35

Financial institution

OptimizeRx Corp. (12/2019)

William Febbo CEO & director

24.6

21.2

16.0

3.1 0.2

NasdaqCM OPRX

17.24 6.50

Health care technology

FNBH Bancorp Inc. (First National Bank in Howell) (12/2019)

Ronald Long president, CEO & director

23.3

17.9

30.0

5.8 3.2

Pink Sheets LLC (OTCPK) FNHM

3.60 2.00

Financial instititution

Huron Valley Bancorp Inc. (12/2018)

Jack Shubitowski president, CEO & director

7.1

6.4

11.0

1.6 1.1

Pink Sheets LLC (OTCPK) HVLM

19.13 14.25

Regional bank

Nano Magic Inc. (12/2018) 750 Denison Court , Bloomfield Hills 48302 844-736-6266; www.pentechnology.com

Scott Rickert cofounder, chairman & CEO

4.3

7.9

-45.0

0.1 0.7

Pink Sheets LLC (OTCPK) NMGX

3.24 0.42

Specialty chemicals

CGE Energy Inc. (9/2019) 7627 Park Place, Brighton 48116 248-446-1344; www.cgeenergy.com

Bryan Zaplitny CEO, president & director

3.8

7.0

-46.5

1.3 3.5

Pink Sheets LLC (OTCPK) CGEI

0.79 0.13

Renewable electricity

Bonal International Inc. (3/2019) 1300 N. Campbell Road, Royal Oak 48067 248-582-0900; www.bonal.com

Thomas Hebel chairman, president & CEO

1.6

2.3

-30.1

0.1 0.3

Pink Sheets LLC (OTCPK) BONL

2.15 1.28

Electronic equipment and instruments

Kraig Biocraft Laboratories, Inc. (12/2019) 2723 South State Street Suite 150 , Ann Arbor 48104 734 619 8066; www.kraiglabs.com

Kim Thompson founder, chairman, ceo, president, cfo & corporate secretary

0.0

0.4

-100.0

2.9 1.2

Pink Sheets LLC (OTCPK) KBLB

0.51 0.06

Commodity chemicals

26 27 28 29 30

36 37 38 39 40 41 42 43 44 45 46

39675 MacKenzie Drive, Suite 400, Novi 48377 248-489-9300; www.stoneridge.com

47912 Halyard Drive Suite 100, Plymouth 48170 734-656-3000; www.horizonglobal.com

13211 Merriman Road, Livonia 48150 248-449-6700; www.altaequipment.com

1 Towne Square, Suite 1900, Southfield 48076 248-355-2400; www.sterlingbank.com

73 Kercheval Ave., Suite 201, Grosse Pointe Farms 48236 313-886-7070; sagacom.com 550 W. Merrill St., Suite 200, Birmingham 48009 248-559-0840; www.cnfrh.com

32991 Hamilton Court , Farmington Hills 48334 248-737-0300; www.levelonebank.com 31700 Research Park Drive, Madison Heights 48071 248-291-1210; www.infusystem.com

30142 Wixom Road, Wixom 48393 248-960-9009; www.rockwellmed.com

2015 Washtenaw Ave., Ann Arbor 48104 734-741-5858; www.universitybank.com 60 S. Washington St., Oxford 48371 248-628-2533; www.oxfordbank.com 400 Water St., Suite 200, Rochester 48307 248-651-6568; www.optimizerx.com

101 E. Grand River, PO Box 800, Howell 48843 517-546-3150; www.fnbh.com 130 South Milford Road, Milford 48381 248-684-9626; www.hvsb.com

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CRAIN'S LIST: GREA GREATER TER MICHIG MICHIGAN AN P PUBLICL UBLICLY Y HELD C COMP OMPANIE ANIES S Ranked by 2019 revenue Company name; fiscal year end Address Phone; website

Top Executive(s)

Revenue ($000,000) 2019

Revenue ($000,000) 2018

Percent change

Net income ($000,000) 2019/ 2018

Exchange/ Ticker Symbol

Stock price 52-week high/low

Type of Industry

Dow Inc. (12/2019) 2211 H.H. Dow Way, Midland 48674 989-636-1000; www.dow.com

James Fitterling CEO & chairman

Whirlpool Corp. (12/2019) 2000 N. M-63, Benton Harbor 49022 269-923-5000; www.whirlpoolcorp.com

Marc Bitzer chairman, president & CEO

20,419.0

21,037.0

-2.9

1,184.0 183.0

NYSE WHR

163.64 64.00

Home appliance company

Stryker Corp. (12/2019)

Kevin Lobo chairman & CEO

14,884.0

13,601.0

9.4

2,083.0 3,553.0

NYSE SYK

226.30 124.54

Medical technology company

Kellogg Co. (12/2019) One Kellogg Square, Battle Creek 49016 269-961-2000; www.kelloggcompany.com

Steven Cahillane chairman, CEO & president

13,578.0

13,547.0

0.2

960.0 1,336.0

NYSE K

71.05 51.34

Food processor

SpartanNash Co. (12/2019) 850 76th St., S.W., PO Box 8700, Grand Rapids 49518 616-878-2000; www.spartannash.com

Dennis Eidson chairman, interim president & CEO

8,536.1

8,064.6

5.8

5.7 33.6

NasdaqGS SPTN

17.35 8.82

Food distribution, military distribution and grocery retail

CMS Energy Corp. (12/2019)

Patricia Poppe president, CEO & director

6,845.0

6,873.0

-0.4

680.0 657.0

NYSE CMS

69.17 46.03

Energy company

Perrigo Co. plc (12/2019) 515 Eastern Ave., Allegan 49010 269-673-8451; www.perrigo.com

Murray Kessler CEO, president & director

4,837.4

4,731.7

2.2

146.1 131.0

NYSE PRGO

63.86 40.01

Pharmaceuticals

Products Inc.) (12/2019) 2801 E. Beltline NE, Grand Rapids 49525 800-598-9663; www.ufpi.com

UFP Industries Inc. (formerly Universal Forest

Matthew Missad CEO & director

4,416.0

4,489.2

-1.6

179.7 148.6

NasdaqGS UFPI

29.17 58.10

Manufacturing

Steelcase Inc. (2/2020) 901 44th St. SE, Grand Rapids 49508 616-247-2710; www.steelcase.com

James Keane president, CEO & director

3,723.7

3,443.2

8.1

199.7 126.0

NYSE SCS

23.02 7.02

Office furniture

Herman Miller Inc. (6/2019)

Andrea Owen president, CEO & director

2,567.2

2,381.2

7.8

160.5 128.1

NasdaqGS MLHR

49.87 14.39

Commercial office, health care, education, and residential furniture

Wolverine World Wide Inc. (12/2019)

Blake Krueger chairman, president & CEO

2,273.7

2,239.2

1.5

128.5 200.1

NYSE WWW

37.58 12.19

Military and uniform footwear

Gentex Corp. (12/2019) 600 N. Centennial St., Zeeland 49464 616-772-1800; www.gentex.com

Steven Downing president, CEO & director

1,858.9

1,834.1

1.4

424.7 437.9

NasdaqGS GNTX

31.27 19.48

Auto-dimming mirrors and aircraft windows, fire protection products

La-Z-Boy Inc. (4/2019)

Kurt Darrow chairman, president & CEO

1,745.4

1,583.9

10.2

68.6 80.9

NYSE LZB

37.48 15.61

Home furnishings manufacturer, wholesaler and retailer

Spartan Motors Inc. (12/2019)

Daryl Adams president, CEO & director

756.5

570.5

32.6

12.6 15.0

NasdaqGS SPAR

20.70 8.45

Specialty vehicle manufacturer

Meritage Hospitality Group Inc. (12/2019)

Robert Schermer, Jr. CEO & director

467.5

435.3

7.4

12.9 13.0

Pink Sheets LLC (OTCPK) MHGU

20.49 9.00

Restaurant

Neogen Corp. (5/2019)

John Adent president, CEO & director

414.2

397.9

4.1

60.2 63.1

NasdaqGS NEOG

79.83 48.91

Develops and markets products dedicated to food and animal safety

Independent Bank Corp. (12/2019)

William Kessel president, CEO & director

196.7

175.6

12.0

46.4 39.8

NasdaqGS IBCP

23.93 9.19

Commercial bank

Mercantile Bank Corp. (12/2019) 310 Leonard St. NW, Grand Rapids 49504 616-406-3000; www.mercbank.com

Robert Kaminski, Jr. president, CEO & director

185.3

161.0

15.1

49.5 42.0

NasdaqGS MBWM

37.32 18.64

Regional bank

Macatawa Bank Corp. (12/2019)

Ronald Haan president, CEO & director

95.7

86.5

10.6

32.0 26.4

NasdaqGS MCBC

11.42 6.01

Regional bank

Isabella Bank Corp. (12/2019) 401 N. Main, Mt. Pleasant 48858 989-772-9471; www.isabellabank.com

Jae Evans president, CEO & director

75.3

74.8

0.7

13.0 14.0

Pink Sheets LLC (OTCPK) ISBA

24.80 16.00

Regional bank

Mackinac Financial Corp. (mBank) (12/2019)

Paul Tobias chairman & CEO

70.3

59.6

17.9

13.9 8.4

NasdaqCM MFNC

17.75 6.52

Regional bank

Fentura Financial Inc. (12/2019) 175 North Leroy St. , Fenton 48430 810-629-2263; www.fentura.com

Ronald Justice president, CEO & director

51.7

44.6

15.9

11.6 10.1

Pink Sheets LLC (OTCPK) FETM

26.00 12.55

Regional bank

ChoiceOne Financial Services Inc. (12/2019)

Kelly Potes CEO & director

41.6

31.4

32.4

7.2 7.3

NasdaqCM COFS

34.00 16.86

Regional bank

Southern Michigan Bancorp Inc. (12/2019) 51 W. Pearl St., PO Box 309, Coldwater 49036 517-279-5500; www.smbt.com

John Castle chairman & CEO

40.2

36.2

11.0

8.6 8.1

Pink Sheets LLC (OTCPK) SOMC

39.80 25.00

Regional bank

CNB Community Bancorp Inc. (12/2019)

John Waldron CEO & director

39.7

34.9

13.9

9.2 8.5

OTCPK CNBB

44.00 28.00

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

2825 Airview Blvd., Kalamazoo 49002 269-385-2600; www.stryker.com

One Energy Plaza , Jackson 49201 517-788-0550; www.cmsenergy.com

855 E. Main Ave., PO Box 302, Zeeland 49464 616-654-3000; www.hermanmiller.com

9341 Courtland Drive NE , Rockford 49351 616-866-5500; www.wolverineworldwide.com

One La-Z-Boy Drive, Monroe 48162 734-242-1444; www.lazboy.com 1541 Reynolds Road, Charlotte 48813 517-543-6400; www.spartanmotors.com

45 Ottawa Ave. SW, Suite 600, Grand Rapids 49503 616-776-2600; www.meritagehospitality.com

620 Lesher Place, Lansing 48912 517-372-9200; www.neogen.com

4200 East Beltline , Grand Rapids 49525 616-527-5820; www.independentbank.com

10753 Macatawa Drive, Holland 49424 616-820-1444; www.macatawabank.com

130 S. Cedar St., Manistique 49854 888-343-8147; www.bankmbank.com

109 E. Division, Sparta 49345 616-887-7366; www.choiceone.com

1 S. Howell St., Hillsdale 49242 517-439-4300; www.countynationalbank.com

$42,951.0

$49,604.0

-13.4%

$1,359.0 $4,641.0

NYSE DOW

$59.05 $21.95

Materials science

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

This list of publicly held companies is an approximate compilation of the largest companies headquartered in Michigan outside of Wayne, Oakland, Macomb, Washtenaw and Livingston counties that have stock traded on a public exchange. 52-week highs and lows are for period ending April 9, 2020. Information was provided by the companies or from public documents. NA = not available. SOURCES: S&P Global Market Intelligence, (Marketintelligence.spglobal.com) and SEC filings.

16 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

HEALTH

From Page 3

Agencies strained Many behavioral health agencies partner with physician groups and federally qualified health centers for medical and dental care to provide comprehensive services and improve outcomes, said McRill, who also is cochair of the Michigan Behavioral Health and Wellness Collaborative, a membership advocacy group formed in 2014 that includes 17 agencies in Wayne County. But mental health and state government officials have recognized that the method by which Medicaid funds providers and agencies is inefficient and needs overhauling. Everyone agrees more funds are needed to serve a growing behavioral health population. Over the past five years efforts have been made to restructure how the state funds its bifurcated $2.6 billion behavioral health system and its $9 billion physical health system with the goal of reducing service duplication and improving outcomes. So far, a solution hasn’t been found that providers, business and government leaders can agree upon. Willie Brooks, CEO of Detroit Wayne Integrated Health Network, said he has asked for at least $50 million more in financial support from the state Department of Health and Human Services to deal with the crisis. “This is a two-year scenario. COVID-19 will have another (surge this fall). We are preparing for it. The facts out there show there will be a strain (on agencies). Online alcohol sales are up 500 percent, anxiety is rising, inpatient care has been lowered tremendously, but domestic violence is skyrocketing,” Brooks said. “All the signs are there for an onslaught of more (mental health and substance abuse) cases. We know life will not be the same. Personal protective equipment will be a part of our lives for a long time.” Liesman said the Development Center’s case workers and providers are dealing with a lot of client stress, anxiety, post-traumatic stress disorder and trauma. “It is overwhelming. We have 4,000 active clients and are in contact with 3,500. There are 500 we can’t reach. We have been going out to look for them” to continue treatment, said Liesman, who also is co-chair of the behavioral

Sheehan

Liesman

health and wellness collaborative. In a survey this month, the collaborative found among its agencies: 38 COVID-19 client deaths, 202 positive COVID-19 clients, one agency staffer death and 39 positive staff cases. Revenue lost per month averaged about $250,000 per agency for nine reporting April 6, 2020 agencies, and furloughs totaled 199, averaging 20 employees per agency of the reporting 10 agencies. McRill and Liesman said most agencies are down 25 percent to 40 percent in case visits and revenue. They say agencies and staff are stressed and nearly at the breaking point. “Most clinics have shut down some programs and services, laid off a lot of staff,” McRill said. “There is no back-towork plan for mental health workers. February 2020 When this17, is over, our workers and clients are facing more trauma, more depression, more child abuse. There will December 2, 2019 be a greater need for services.” From a financial standpoint, Liesman said the Development Center and other agencies need emergency funding increases and a long-term increase. “If this continues for 18 months, I don’t know if we will be in existence without assistance,” Liesman said. “We have had Band-Aids for eight weeks. We expect (COVID-19) to come back in waves until we get a vaccine.” McRill said the payments agencies receive are too low to cover care, especially as costs have risen amid the crisis. She said agencies are paying thousands of dollars for personal protective equipment, laptops for mental health telemedicine and additional hazard pay for workers, all of which currently aren’t reimbursed. “We had 25 layoffs in the beginning. We had to close our congregate program, skills program, cut back on transportation staff and support,” said Liesman, who added she is looking at laying off another 30 to 40 clinicians if funding doesn’t arrive soon. Brooks said DWIHN, which provides the bulk of the funding for the Wayne County agencies, has been running a deficit because its costs have skyrocketed, including $21 million in

additional autism-related expenses. Despite receiving a 2 percent boost from the state Legislature for Medicaid behavioral health and a 6 percent Brooks hike for autism this fiscal year, which began Oct. 1, 2019, most of the 10 regional public entities, including Detroit Wayne, are losing money because case loads and demand for mental health services have increased. In 2019, a report shows the 10 regional public entities that fund hundreds of mental health agencies in Michigan lost $95.7 million in 2018. This is in addition to losing $133 million in fiscal 2017, according to the Community Mental Health Association of Michigan. The association’s CEO, Bob Sheehan, said he expects mental health and substance abuse issues to increase over the next several years because of the COVID-19 crisis and that more state funding is required. Carol Zuniga, executive director with Hegira Health Inc. in Livonia, said COVID-19 has led to a 20 percent reduction in revenue and its residential services were reduced 65 percent because of social distancing to 24 patients from a typical 41 patient daily census. “We provide crisis services and our detox residential services have been cut tremendously because we had no PPE. Like everyone, we were unprepared to provide everybody with PPE,” Zuniga said. “We had a staff member and two patients die in the initial month. We have it under control now, but our revenue has been decimated.”

In March, Zuniga said 20 employees were furloughed and another 25 parttime workers were cut back to zero hours. After receiving funds from the Payroll Protection Program, she said Hegira is back to full staffing, although she said about 50 employees are out sick.

Shift to telemedicine

COVID-19 patients, mental health agencies, along with many physician offices and other providers, switched from face-to-face appointments to online telehealth services. Shortly afterward, on March 23, when Gov. Gretchen Whitmer issued her first stay home order, the state began to allow Medicaid to pay for telehealth appointments and DWIHN created billing codes for telehealth, Brooks said. “Relaxation of telehealth rules was huge. Overnight we made that transition. We still do 10 percent to 15 percent face to face, but telehealth is here to stay,” Liesman said. Some face-to-face meetings are necessary, primarily to administer medications or deliver such supplies as food or diapers, Liesman said. “We had to convert very quickly to telemedicine,” McRill said. “We have a much higher rate of engagement from children’s services. Moms love having it. They don’t have to go on the bus. Adults still like coming in. We never knew this before we started doing telehealth so much.” Liesman said few providers were trained in telehealth. “It is an artificial way of interacting. You have to be creative, especially for children. You can’t just be sitting there,” she said. While telehealth is useful for those who can connect, the visits are typically shorter than in-office appointments, which means agencies are billing much less for their typical visits. “With children, appointments are less than 45 minutes, but we do it more often. Sixty to seventy percent of people want to come in person,” Liesman said.

In mid-March, when Michigan first started seeing increased numbers of

Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

PPE shortages Most agencies have been forced to purchase their own PPE and the amount they have received from the state has been insufficient. Last week, Northeast received its first PPE shipment — but only 200 face masks, McRill said. “We have spent thousands of dollars CRAIN ’S DETROIT BUSINESS on cloth masks and gloves. We have some clinic sites still open because we have some chronically ill patients who need monthly injections of psychotrophic medication and those needing their blood drawn,” McRill said. “We have to keep those services open for adults.” Sheehan said state officials and the association are aware of the financial, staffing and PPE shortages of agencies operating in Wayne County and other RAIN’S DETROIT BUSINESS parts ofCMichigan. Last week, Sheehan said more PPE CRAIN ’S DETROIT USINESS was being distributed to B mental health agencies from the state and other sources. “In partnership with the National Council for Behavioral Health, 66 community mental health agencies ordered over 87,000 surgical masks. These masks are slated to arrive within the next few days,” Sheehan said.

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CRAIN’S READERS

COPING WITH COVID-19

The fund’s solvency level is both a result of a decade of steady economic growth and austerity measures that critics say went too far in curtailing the social safety net of workers who lose their jobs through no fault of their own. Democratic Gov. Gretchen Whitmer’s forced mass closures of businesses in March to stop the spread of COVID-19 triggered an unprecedented onslaught of unemployment claims that are depleting the trust fund by at least $245 million a week, according to state data provided to Crain’s. “We feel (the trust fund) is in good financial shape, but obviously the longer this goes and the more claims that come in, the more concerning it gets,” Whitmer said Thursday. At the outset of the crisis, Whitmer used her emergency powers to extend unemployment benefits from 20 weeks to 26, reversing one of the controversial austerity measures her Republican predecessor put in place nine years ago. Whitmer did not increase the maximum weekly benefit, which hasn’t been raised in 18 years. The Upjohn Institute, a Kalamazoo-based think tank, projects that sustained high unemployment caused by government-ordered business shutdowns and a slow recovery over three quarters could run up a $9.2 billion bill for unemployment benefits by next March. Some of that drain on the fund would be replenished by the roughly $1.2 billion Michigan employers pay into the fund annually, resulting in a new unemployment debt of $3.4 billion, said Christopher Leary, senior economist at the Upjohn Institute for Employment Research. “You’re going to have to start planning to borrow in the middle of July,” Leary said. The Upjohn Institute’s analysis assumes the state’s average weekly unemployment benefit of $325. The $9.2 billion one-year estimate for state unemployment benefits doesn’t account for a potential second wave of jobless claims if there’s a new coronavirus outbreak this fall that triggers another round of shutdowns, Leary said. As recent history shows, borrow-

PFIZER

From Page 3

“The goal is to scale that as fast as possible,” he said. “And again, that will depend upon the outcome of the clinical trials as well.” The stakes for Pfizer and other pharmaceutical companies to develop and bring a COVID-19 vaccine are high, given the more than 270,000 global deaths from the virus and the Depression-level unemployment the pandemic has created in the U.S. “We can’t resume normal life until we have a vaccine,” Michigan Gov. Gretchen Whitmer said last week. Those high stakes are not lost on Pfizer’s top executive in southwest Michigan. “It’s very exciting for us,” Calitri said. “I mean, as an engineer, I can tell you these are the kind of dream projects you want to be on.” The team in Kalamazoo is “dedicated to this, working around the clock so that we can get this vaccine 18 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

“WE CAN’T RESUME NORMAL LIFE UNTIL WE HAVE A VACCINE.” — Michigan Gov. Gretchen Whitmer

Burning through the reserves

Austerity ‘worked’

The Upjohn Institute for Employment Research estimates Michigan will exhaust its $4.6 billion unemployment trust fund by August. Here are the Upjohn Institute’s estimated weekly and cumulative regular unemployment insurance payments, from weeks ending March 14, 2020 through March 13, 2021.

Michigan’s state trust fund for unemployment insurance is funded solely by employers through a tax on the first $9,000 of earnings for each employee. Tax rates range from 2.7 percent to 10.3 percent, depending on an employer’s history of layoffs over the previous three years. For example, seasonal construction businesses that lay off workers in the winter typically pay an unemployment tax of about 8 percent, Anderson said. In recent years, the fund has benefited from a growing economy and limits on benefits. Illinois, Indiana and Ohio combined had unemployment funds totaling $4.1 billion. Minnesota and Wisconsin’s trust funds combined were $1 billion less than Michigan, a Crain’s analysis shows. “In nine years’ time, we went from being in one of the worst positions in

400

Weekly UI cost

Cumulative UI cost

10,000

$394M

350

$9,222M

300 250

8,000 6,000

200 4,000

150 100

2,000

50 0

3/14 4/11

5/9

6/6

7/4

8/1

8/29 9/26 10/24 11/21 12/19 1/16 2/13 3/13

Cumulative cost (millions of dollars)

From Page 1

ing from the federal government to pay unemployment benefits during an economic recession can create a long-term financial burden for employers, who have to pay more on their unemployment insurance to make up the difference. In December, just three months before the coronavirus pandemic hit Michigan, the state paid off its unemployment debt, piled up during the Great Recession, by retiring $3.2 billion in bonds that were issued in 2011 to spread out the cost for employers. Michigan businesses were relieved of a $65 to $217 per employee special assessment to pay off the debt from the 2008-2009 national recession. Michigan entered the Great Recession with just $40 million in the trust fund, enough to pay one week’s worth of unemployment compensation for 110,000 jobless workers. “We learned the hard way during the Great Recession that you can blow through billions of dollars in a short period of time,” said Wendy Block, vice president for business advocacy and member engagement for the Michigan Chamber of Commerce. “You can see pretty quickly that $4.6 billion will get you far, but it won’t get you very far.” Before the pandemic, Michigan had a 3.6 percent unemployment rate in the month of February, a 20year low for a labor force of 4.9 million workers. Between March 15 and May 2, 1.33 million workers in Michigan filed unemployment claims, an onslaught of workers seeking aid that has overwhelmed the state agency. However, not all of those claims will draw on the $4.6 billion state trust fund. The federal CARES Act extended unemployment eligibility to self-employed and gig economy workers and established a new $600 per week pandemic benefit for all workers. Congress also extended unemployment for workers who have exhausted their benefits by an additional 13 weeks. Between March 15 and April 24, the Unemployment Insurance Agency paid out $1.66 billion in benefits, but $1.14 billion was federal funds, according to the state agency. “We’ve got a million claimants right now ... but not all of them are going to be funded by the state,” Anderson said.

Weekly UI cost (millions of dollars)

UNEMPLOYMENT

SOURCE: UPJOHN INSTITUTE FOR EMPLOYMENT RESEARCH; U.S. DEPARTMENT OF LABOR DATA Note: Upjohn Institute for Employment Research’s analysis assumes an average unemployment duration of 19.4 weeks with workers claiming an average $325 each week in benefits

quickly into manufacturing,” Calitri added. Pfizer’s first U.S. clinical trials are being conducted at New York University’s Grossman School of Medicine and the University of Maryland School of Medicine. Additional clinical trial tests on patients through the BNT162 vaccine program are planned to begin soon at the University of Rochester Medical Center/Rochester Regional Health in New York and the Cincinnati Children’s Hospital Medical Center, according to a Pfizer news release. Pfizer announced last week that its facilities in Kalamazoo, Andover, Mass., and Chesterfield, Mo., would eventually manufacture the COVID-19 vaccine. Pfizer’s Kalamazoo facility employees 3,000 and produces an array of sterile injectables, liquid and semi-solids medicines such as antibiotics, antifungals and steroids, as well as oncology and anemia treatments. Because the pharmaceutical

industry is classified an essential business, Pfizer’s workforce in Southwest Michigan has not experienced any interruptions of work. About 40 percent of the 3,000 employees in Kalamazoo are working remotely from home; the rest are reporting to work at the campus each day, Calitri said. Like other businesses, Pfizer has changed workplace procedures to try to prevent any employee from being exposed to COVID-19 on the job. Pfizer employees have to pass a health screening to enter the 1,300acre complex and then are more spread out and limiting their movements around the facility, Calitri said. “There’s been a significant amount of change,” he said. “... We’ve been very fortunate that we haven’t had to stop or slow down any of our manufacturing spaces.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

Pfizer employees must pass a health screening to enter the 1,300-acre complex and then spread out.

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COPING WITH COVID-19

A pedestrian walks by The Framing Gallery, closed due to the COVID-19 pandemic, in Grosse Pointe. The U.S. unemployment rate hit 14.7% in April. | PAUL SANCYA/AP

the nation to one of the best positions in the nation,” Block said. Michigan didn’t get there by accident. In 2011, then-Gov. Rick Snyder and the Republican-controlled Legislature made Michigan one of the first states in the nation to reduce the length of time a worker could claim unemployment from 26 weeks to 20. Eight other states followed suit, with Florida and North Carolina cutting their weeks to 12. Given the health of Michigan’s trust fund, it shows “those reforms worked,” Block said. After declaring a state of emergency that gives her the power to temporarily change laws, Whitmer restored Michigan’s unemployment to 26

weeks through executive order. But what makes the coronavirus Democratic lawmakers and the economic downturn different is the Michigan League for Public Policy are mechanism the state normally uses now pushing for making the governor’s to recoup trust-fund losses from temporary extension permanent. claims has been suspended. “It never should have been reWhitmer’s mandatory shutdown duced,” said Gilda Jacobs, CEO of the orders exempted businesses from Michigan League for Public Policy. being assessed an “experience” ratMichigan’s $362 maximum benefit ing tied to their UI tax for their emalso is the lowest of any Great Lakes ployees’ unemployment claims bestate and has been locked in by law cause March and April’s mass layoffs since 2002. With a national average of were caused by the governor’s ac$468 per week, Michigan’s weekly un- tions, not a normal loss of business employment benefit is the ninth-low- during an economic recession. est in the country, federal data show. “So many of these (current) layoffs “$362 just doesn’t cut it anymore,” are the result of government efforts to said state Rep. Terry Sabo, a Muskeg- protect public health, which kind of on Democrat who has a bill to in- amounts to a subsidy from healthy crease the weekly benemployers to financialefit to $542. “It’s “THE LEGISLATURE ly distressed employoutdated, it needs to be ers,” said Evan Anderupdated — just with CHANGES THINGS son, the chief strategist the cost-of-living in- WHEN THE of the Unemployment creases that we’ve had Insurance Agency. “It’s ECONOMY IS GOOD cost mutualization, not over the years.” Jacobs’ group pro- AND NOBODY IS cost capping.” posed a weekly unemHolding businesses ployment benefit of LOOKING DOWN harmless of higher un$593 or 58 percent of THE ROAD TO employment taxes average weekly wages, a now could make it benchmark used until WHEN THE harder to rebuild the the early 1990s. trust fund’s reserves ECONOMY MAY “The Legislature for the next economic changes things when the NOT BE SO GOOD.” calamity, Leary said. economy is good and — Gilda Jacobs, CEO of Another factor is nobody is looking down the Michigan League Michigan’s unemploythe road to when the for Public Policy ment tax is capped at economy may not be so the first $9,000 of ingood,” said Jacobs, a former Democratic come. Michigan’s taxable wage base lawmaker from Huntington Woods. mirrors Ohio ($9,000) and is close to Jacobs said the extended jobless Indiana ($9,500), but is far below benefits that Congress made avail- Wisconsin’s $14,000 taxable base, able for the first time to self-em- which is the national median, a ployed and contract employees Crain’s analysis shows. should be added to the state program “Michigan’s taxable wage base is going forward. discrimination against low-wage “They were never a part of the job workers. It’s too low,” Leary said. market the way they are,” Jacobs said. “The low tax base hinders our ability “We need to build in unemployment to recover reserves after the crisis.” protections for that part of the econoIt’s also unknown whether the U.S. my, which is growing.” Department of Labor will ultimately allow states to not assess a higher tax rate on businesses that were forced to A low taxable base lay off workers in mass, Block said. “The system is supposed to be exWhitmer is gradually reopening the economy, which should make perience rated and now we’re saying, unemployment claims decline in the ‘Oh, now it all should be socialized,’” coming weeks. Construction sectors Block said. “I think you have to rerestarted last week. Manufacturers turn to charging at some point — fedcan restart production Monday, eral law requires it.” while the Detroit Three automakers will be limited to 25 percent capacity Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood in assembly plants on May 18.

Laid-off workers can collect unemployment and return part time

An unemployed worker checks looks at the State of Michigan unemployment site, Wednesday, April 29, 2020, in Detroit. | CARLOS OSORIO/AP

Some workers collecting $962 weekly benefit could earn more with work-share program BY CHAD LIVENGOOD

Michigan labor officials think they have a potential solution for employers struggling to get workers to forgo the federal government’s generous unemployment check to stay home during the coronavirus pandemic. The Department of Labor and Economic Opportunity is ramping up promotion of its work share program, which allows businesses to recall laid-off employees at reduced hours of between 10 percent and 60 percent. Employees enrolled in the work share program get a portion of the state’s maximum $362 weekly unemployment compensation, ranging from $36 for a 10 percent reduction in hours to $217 for a 60 percent reduction in hours. Under the CARES Act, the federal government is relieving state unemployment trust funds of paying for work share as a mechanism to entice employers to gradually resume operations as their business demands bounce back, said Jeff Donofrio, director of the state labor department. Workers who go back to work part time through the work share program also can continue collecting the federal government’s $600-a-week pandemic unemployment benefit through the end of July, Donofrio said. “That’s the difference maker here in this program as we look at re-engaging the economy,” Donofrio told Crain’s. “We heard from a lot of employers that there are very generous benefits right now for unemployment and how are we going to make the case to an employee to come back if we don’t have 100 percent of our hours, wages and businesses?” Donofrio provided one example of a worker who earns $52,000 a year or $1,000 per week. If they returned to work at 65 percent of their regular hours and compensation, that worker could earn $1,376 per week in the workshare program: $650 from their employer, $126 in regular state unemployment benefits and the $600

weekly pandemic benefit. That comes out to $414 more per week than staying on regular unemployment and $376 above their normal weekly earnings. “So in many cases, they can make as much or more than they would make at 100 percent of wages and hours to come back to work under the work share program,” Donofrio said. As Gov. Gretchen Whitmer reopens the state economy in phases, her labor department is trying to get more employers to utilize the work share program to ease the 1.33 million Michigan workers who filed for unemployment benefits back into the workforce. As of May 2, Michigan’s partial unemployment program had 478 employers with 9,381 employees spread across 1,161 different work share plans — a nearly 25-fold increase in workers and employers using the plan since early February, a month before the coronavirus outbreak hit the state. “Because of the $600 weekly pandemic aid that’s involved now, it become a much more attractive program,” Donofrio said. Since the federal government is covering the cost, the work share program also is one way to slow the drain of Michigan’s unemployment trust fund. Christopher Leary, senior economist at the Upjohn Institute for Employment Research, said the work-sharing program could be strategically used by employers to maintain social distancing at work and gradually increase productivity by staggering work schedules. “Maybe you bring back 100 percent of your workforce, but you work them 50 percent of their time and you let them get 50 percent of their benefits through UI,” Leary said. “That’s a really good strategy for the state and for business and as far as (unemployment insurance) financing to go back to that full employment.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 19

COPING WITH COVID-19

Mackinac battens down the hatches for a rough ride BY TOM HENDERSON

Shepler’s Mackinac Island Ferry Inc. is a microcosm of how coronavirus has hit the northern Michigan tourism industry. The iconic northern Michigan business had a great 2019 transporting freight and customers to and from Mackinac Island and was expecting an even better 2020. To meet demand, company President Chris Shepler, the third generation of the family to run the business, commissioned a new ferry from the Moran Iron Works in Onaway. The vessel, named the William Richard for his father, is 85 feet long, holds up to 210 passengers and is powered by a jet-drive system that replaces the old drive-shaft and propeller system. Powerful jets of water propel the ship at up to 40 miles an hour. Moran, which in 2015 built a 285-passenger vessel called the Miss Margie for Shepler, had finished its metal fabrication. But the installing of seats and painting by Shepler employees came to a halt in March. On May 4, the company resumed work on the vessel. Shepler has been running freight to the island and hauling away garbage as an essential service. Passenger service is up in the air. Coast Guard regulations monitor ferry service on the Great Lakes and Shepler has yet to get any guidance on what social-distancing rules, if any, will be put in place. Shepler said he is on Mackinac Island’s health task force and was recently on a conference call with the governor’s office. When he asked about any passenger restrictions, he was told someone would have to get back to him. Normally, the island more or less opens up by May 1, with the seasonal opening of the Grand Hotel and Fort Mackinac, but their openings have been pushed back to at least May 22. “We plan to have normal ferry service then, but I really have no idea. I wake up every morning thinking I’m going in one direction, and a little later, I’m going down a different rabbit hole,” Shepler said. Shepler also runs a marina in Mackinac City and spent $10,000 on protective equipment for his 25 employees there.

TOURISM

From Page 1

May, though, is when the economic impact began to hit the north hard. The party buses that pour into wineries are shut down, as are the tasting rooms themselves. The Grand Hotel and Fort Mackinac on Mackinac Island have delayed opening by three weeks — at least. The economic boom that had been happening in Cheboygan the last three years or so is at a halt. The National Park Service has delayed the opening of the Pictured Rocks National Lakeshore until at least June 15. Not counting Mackinac Island, the national lakeshore is the biggest economic driver of the summer tourist season in the UP, with tourists packing the boats that go out from Munising to the miles of col20 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

Chris Shepler, president of Shepler’s Mackinac Island Ferry Inc., plans to resume passenger ferry service to the island on May 22. | SHEPLER’S

Despite having not heard yet from the Coast Guard about whether his seven ferries will be able to operate at full capacity or at some smaller percentage, he said the ferry service will require everyone to wear masks. The upper deck is open air, which will provide natural ventilation for passengers. The lower deck, which is normally enclosed with windows, will have its windows open. “Last year, we had 200 employees at the height of summer. I don’t know what we’ll have this year. I’ve already heard from some of my veteran employees saying they are quitting. They don’t want to come back to this enviroment. I’m getting calls saying, ‘Hey, I bought a 3-acre lot in the middle of Texas and I’m not coming back.’ When we open, we’ll see what we have. I suspect we’ll be down 50 percent to start. It’ll be a rough summer, but we’ll get through it.” The late start for the Grand Hotel can hardly be the start its new owners were hoping for. Last September, the Musser family, which had owned the 397-room, Victorian-style hotel since the 1930s, announced they had sold the property for an undisclosed amount to Denver-based KSL Capital Partners, a private-equity firm specializing in travel and lesisure companies. The hotel was built in 1887 and is famous for its 660-foot front porch, reportedly the longest in the world, with its sweeping views of town and Lake Huron. The hotel is being managed by Atlanta-based Pivot Hotels & Resorts, a

luxury division of Davidson Hotels & Resorts LLC, which declined comment for this story. “Right now, we’re asking fans of the island to stay away and let us get ready for the season in a safe way,” said Tim Hygh, executive director of the Mackinac Island Tourism Bureau. “It will take a while to open businesses and train staffs, which are seasonal. We’re positive we can do it safely because of all the work our members and association are doing. How do you properly clean hotels and restaurants now? There are new expectations our travelers will have. “We’re doing the best we can with the information we are getting. We put a health task force together, and we want the island opening to be just right, not a day early and not a day late.” Updates on island openings will be at mackinacisland.org. Like other tourist officials around the state, Hygh thinks there will be one unintended benefit of coronavirus: State residents will be much less likely to fly to out-of-state vacation destinations this summer, meaning they will be looking to vacation in Michigan instead. “We will be able to salvage our season,” he said. He says he expects many people who normally visit the island in spring or early summer will reschedule trips to later in the summer or fall, mimicking what the Detroit Regional Chamber did with its big annual conference that had been scheduled for May 2629 and is now on for Aug. 10-13.

“There will be a huge pent-up demand to travel,” said Dan Sippel, executive director of the Grand Rapids-based West Michigan Tourist Association, which has some 800 members, stretching along the west coast of the state from the Indiana border into the Upper Peninsula. “People will travel by car long before they will travel by plane. They’re going to be looking for things to do, and they’ll be doing local traveling, instead.”

Mackinac Island is the Upper Peninsula’s No. 1 tourist attraction. No. 2 is the Pictured Rocks National Lakeshore, a little northeast of Munising. The National Park Service has closed all the tourist facilities, including visitor centers, drive-in and backcountry campgrounds and most restrooms, until at least June 15.

ored cliffs and packing the hundreds of kayaks that go out on guided tours all day long. If the closing is extended, it will be devastating. Spring and summer festivals are huge up north, and most of them have been canceled, including the Cherry Festival and film festival in Traverse City, the Asparagus Festival in Empire and the Lilac Festival on Mackinac Island. Motels, hotels, restaurants and bars employ tens of thousands of seasonal workers and attract tourists who spend tens of millions of dollars. How soon will Whitmer relax restrictions on them, and will they be able to survive if they are restricted to, say, 25 percent capacity? Like everything else with COVID-19, stay tuned. Crain’s talked to a broad range of tourist businesses to find out what

they’re doing, how they’re adjusting and what the strangest tourist season ever might look like. Tourism officials in northern Michigan were hoping that whenWhitmer announced an extension of social-distancing restrictions on May 1, she would include some partial reopening of restaurants ahead of the Memorial Day weekend. And they were hoping that the state would announce the opening of state campgrounds in time for one of the biggest weekends on the state calendar. They were disappointed on both fronts. Restrictions on dining in restaurants will remain in place until May 28, and the Department of Natural Resources will reopen rustic campgrounds on June 10, with campgrounds with full facilities opening on June 22. All reservations before

those dates have been canceled. But an easing on golf-course restrictions announced a few days earlier was a major consolation (see story, Page 10), as was the announcement that the future easing of restrictions would vary based on how COVID-19 is affecting various regions of the state. Whitmer divided the state into eight regions. Most of the northern Lower Peninsula is in region six, with the Upper Peninsula in region eight. Since both regions have had far fewer cases and deaths than downstate regions, it is assumed that come the end of May, those two regions will see the most easing of restrictions. Golfers must register and pay either online or over the phone, and they must wear face masks. Food will not be served on courses, with clubhouses, driving ranges and practice putting

greens closed. Touchpoints such as ball washers and trash cans have been eliminated and there will be longer waits between groups teeing off to allow for better social distancing. In a move clarified on Friday after the story on Page 10 went to press, golf carts will now be allowed, which could clear the way for more courses to open. Crystal Mountain Inc., the Thompsonville-based ski and golf resort, opened its Betsie Valley golf course on April 29. Its Mountain Ridge course, aptly named for the steep ups and downs, doesn’t lend itself to playing on foot and remains closed. “We were excited to take that step. We’ve been looking forward to it,” said COO John Melcher. “It gives us a great shot of optimism, and it’s great to think we’re at least starting to get back to normal.”

Mackinac Island’s Grand Hotel is delaying its annual opening but is hopeful that tourists will come back. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

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COPING WITH COVID-19

Wineries are thanking Bacchus for shipping Mail order is helping keep them afloat until tasting rooms can open again BY TOM HENDERSON

The lakeshore, with its beach-access points and scenic views from atop cliffs, is still open for visitors. Pictured Rocks Cruises LLC, a licensed concessionaire of the park service which has been taking tourists on popular boat cruises out of Munising and along the base of the cliffs for more than 50 years, has also put its business on hold until at least June 15. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 The resort has 265 lodging units, ranging from hotel rooms to multiple-room townhouses. They remain closed, as do the two full-service restaurants. The Mountain Market has ready-to-go food available for take out. “We’ve brought some staff back. We’ve had skeleton crews the last five weeks, about 30 people, but we were able to bring back our golf maintenance crews and our grounds and garden people. That’s another 12 people. Normally, we’d have 350 full-time employees this time of year.” Melcher said he expects the next easing of restrictions to allow for some reopening of dining facilities, at least 25 percent of capacity and perhaps more. He said he is working on plans to sharply expand outside seating, which would allow for easier social distancing as well as in-

Northern Michigan winery owners are thankful they have dramatically built up online sales and national distribution channels in recent years, now that the longtime staple of their business — tourists coming in to tasting rooms and leaving with bottles of wine in brown bags or, if they bought enough, in boxes — is temporarily shut down. “The tasting room is a huge part of our livelihood,” said Mike Laing, one of the co-owners of L. Mawby LLC of Suttons Bay, which does business as Mawby Vineyards and Winery. Larry Mawby, the second person to plant grapes in the Leelanau Peninsula, opened the winery in 1978 and has sold off a 76 percent stake in the business to Mike, his brother, Peter, and their dad, Stuart. Today, Mike’s official title is partner and director of Mawbyness. Pete is partner and operations manager and has been in charge of successfully expanding their national distribution channels. Last May, the vineyard was honored as one of 50 companies to watch at the annual Michigan Celebrates Small Business event in Lansing. “We just sent out our largest shipment ever,” said Mike. It was 25 pallets of wine, sent to many of the 2,100 members of the Mawby wine club. An additional 425 members picked up wine in person, generally orders of six bottles or more. In all, they sold about 11,000 bottles. On May 1, Mawby launched a new product, cans of wine infused with various botanicals. May is Michigan wine month, and the winery had a big dinner scheduled that it had to cancel. “Mawby’s has tried to own May, but not this year,” said Mike. The brothers also canceled big media events they had scheduled in Chicago, Grand Rapids and Detroit to promote their wines in general and their new line of wine in cans in particular. The winery offers curbside service and is awaiting what they hope will be a loosening of guidelines May 28 that will allow them to resume some tasting room service. The winery has a large outdoor patio and over the years has held various events on the big expanse crease overall capacity. “We’re optimistic we can get back to some sense of normality this summer. With more staff back, there’s some sense of relief and optimism,” he said. The resort’s annual beer and brat festival has been moved from May to Aug. 22, and some scheduled weddings have been postponed until later in the season. On May 1, Treetops Resort in Gaylord opened its Tradition golf course. Its other four courses remain closed. The Heather golf course at Boyne Highlands in Harbor Springs opened right on schedule on May 2, with the same restrictions in place. The Heather, which opened in 1966 and was designed by Robert Trent Jones Sr., arguably the best golf-course designer in the world at

Rick DeBlasio, general manager of Shady Lane Cellars in Suttons Bay, on customers’ view of mail order in a pandemic: “Get me four more bottles of wine, and get them here as fast as you can.” |SHADY LANE CELLARS

of lawn that leads to the rows of grapes, and the brothers are planning to expand outdoor seating, which will in turn expand total capacity and allow them to serve more customers if a capacity limit, say of 25 percent, is imposed for the region by Gov. Whitmer. Rick DeBlasio is general manager of Shady Lane Cellars in Suttons Bay and president of the Leelanau Peninsula Vintner’s Association. Even before the governor first put restrictions in place, he was proactive with what he saw coming, announcing a shipping fee of just one penny for all online orders. “That cut into our margins, but we’ve had a lot of support from our old customers and got a lot of new customers,” he said. Shady Lane also has a wine club, and members seem to be reacting to stay-at-home guidelines by enjoying his wine even more. “With everything that is going on, people are saying, ‘Get me four more bottles of wine, and get them here as fast as you can.’ “The challenge is, what comes next? What will service be like with restrictions on occupancy? What tasting options will be allowed? I hope there will be come common-sense rules that allow us to move forward.” Shady Lane has always had a really big seating area behind the winery, with patrons able to do wine tasting outside and not have to come into the building. The patio is surrounded by a large grassy the time, was named golf course of the year in 2018 by the Michigan Golf Course Association. Steve Kircher, the president and CEO of Boyne USA Inc., which operates 10 golf courses around northern Michigan, said other courses are too hilly and don’t lend themselves to being played on foot. On Friday, the Department of Labor and Economic Opportunity issued a clarification to the executive order that allows for golf cart use on courses, with a limit of one rider per cart. Kircher said he expected that a green light for golf carts would open up Boyne’s other courses for play. Last year, Boyne USA had revenue of about $400 million and employed 10,500 at its 11 resort properties, 13 golf courses and nine ski areas in Michigan, Montana, Maine, Utah, Washington, New Hampshire and

area, so expanding outdoor seating won’t be a problem. “We have a great, experienced vineyard crew and we’re keeping them busy,” he said. “Wine production is ongoing. You can’t just leave wine in tanks and come back two months later.” DeBlasio said he expects one long-term hit to his business will be the lack of tour buses pulling into the driveway all day long during busy summer months. “I haven’t talked to any of the tour companies, but I can’t believe people will be piling on buses any time soon.” The association, which has 28 wineries as members, has already had to cancel two big events, where people sign up for food pairings at participating wineries and spend a weekend making the rounds. The first was Sips, Chips and Dips in March and the second was Spring, Sip and Savor in May. Black Star Farms sits on 160 acres south of Suttons Bay. It has a 10room inn, a very large tasting room, several outdoor patios, horse paddocks and three miles of trails through the surrounding forest. Sherri Campbell Fenton, the owner, said the winery had its best season ever in 2019 and she was on track for a better 2020 until March. The inn was heavily booked for spring; those reservations evaporated. Black Star does a big wedding business, and the May calendar had been booked solid. Two of those weddings have actually postponed their ceremonies but did reBritish Columbia. The company also owns a chain of retail sporting goods stores in Michigan called Boyne County Sports, with outlets in Traverse City, Novi, Petoskey, Bloomfield Hills, Grand Rapids, Boyne Falls and Harbor Springs. While COVID-19 will have a big impact on his company’s revenue this year, Kircher said all things considered, he considers himself lucky. He shut down ski operations in Michigan in mid-March, losing just three weeks at the tail end of the season. While the resorts were closed during the month of April, that is the slowest month of the year. “The Heather has never opened in April,” he said. Boyne operates with thousands of seasonal workers, and their return has been delayed. Kircher said he is tentatively planning to open the Inn

book for later in the summer. “This is their dream wedding destination. They want it to be at Black Star Farm,” she said. Each year, the winery hosts a popular five-course wine and morel-mushroom-themed food pairing, with the night kicking off with a mushroom expert taking guests on a tour through the woods, looking for morels. This year’s dinner had been scheduled for May 22. Fenton is hoping, the governor’s next guidelines permitting, to hold the dinner in June, which is still morel season in northern Michigan. Fenton said she has beefed up her digital marketing and offers free shipping on orders of six bottles or more. “Shipping has been phenomenal.” She also offers a 20 percent discount on curbside pickups of wine. She is allowing customers who have reservations later this year at the inn to cancel without the usual penalties. “But we’re asking them, ‘Please don’t cancel. You can move to later in the summer or fall or next year.’ People have been very great about that. They have been very willing to change their reservations.” Fenton says she has laid off most of her 100 employees. The start for seasonal workers has been delayed and she has moved some employees who normally work elsewhere into the vineyards. “About 25 percent of our team is working. We’re pretty optimistic. “We feel we have an advantage. We’re two or three or four hours away for a lot of people. They’ll want to get out. And with 160 acres, we have a lot of space. We can move a lot of things outside when restrictions are eased.” Jillian Manning is the media manager for Traverse City Tourism, which has 89 lodging members and 157 affiliate members. “This has been more positive for us than I expected. Traverse City is lucky to be more isolated than Detroit and a lot of the state,” she said. “We have seen the local business community leap at the opportunity to be creative.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 at Bay Harbor over the Memorial Day weekend, with some lodging at other facilities possibly opening as early as May 22, with food and beverage service on a take-out basis only. Like others in the hospitality, restaurant and beverage businesses, Kircher is eagerly awaiting what is expected to be an easing in June of the shutdown orders now in place. “The citizens of Michigan just need to be patient. Normally, we would be ramping up our hotel business nationally right now. Now, the plan is to wait until after Memorial Day. We’ll make it through. We’ll prepare for the worse and hope it will be a lot better than we thought. But it’s going to be historic.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 MAY 11, 2020 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

MSU ag economist: U.S. isn’t going to run out of food soon

crainsdetroit.com

MICHIGAN STATE UNIVERSITY: Agricultural economist Trey Malone is pulling late nights writing grants. He and a group of researchers at MSU are looking to secure U.S. Department of Agriculture money to study the food supply chain and safety under COVID-19 and survey consumers about how comfortable they are eating at restaurants. As an extension economist, Malone’s job is to provide research findings to the state’s agriculture sector. And right now, there are so many questions. With empty grocery store shelves in recent weeks and half the country’s pork production idled from COVID-19 outbreaks at slaughterhouses, a growing fear of food shortages is lurking. Malone is studying the developments and assessing what’s at stake for the state’s food economy. He also co-hosts a weekly livestream on agricultural issues facing | BY DUSTIN WALSH the state. ` Crain’s Detroit Business: Tyson warned of meat shortages again last week and more slaughterhouse closures. How worried should the average consumer be about food availability? Very clearly, people can go make a nutritious breakfast. They still have access to the ingredients. Maybe they are just going to have a limited choice set for a time. They might have to switch from ham to chicken. Or the chicken breast might have bones in it. We’ve become so excited at our options at the grocery store. In 1992, there were 8,000 options at the store. Today, it’s about 45,000 options. We’ve demonstrated how much we care to have these unique choices. But right now, the system is going to have to focus on food safety instead of those choices. But the U.S. food system isn’t running out of animal proteins any time soon. Just because there might be shortages in specific cuts doesn’t translate to a massive food shortage more generally. The system isn’t “breaking,” it’s flexing. JBS (which operates a beef processing plant in Plainwell) has already started developing a stronger international supply chain, and poultry production is still strong. I would be more concerned if protectionism (limiting agricultural exports) takes root, but at least in the U.S., we haven’t gone that direction yet. ` So empty store freezers don’t mean there’s a systemic problem? I’ve been frustrated to see how many articles have claimed that this pandemic is a sign that our food system is “broken.” The frustrating irony is that those writers have also been able to maintain a healthy diet for months while we are in the midst of the greatest supply chain disruption of our lifetime. When even “Saturday Night Live” is pointing out how many

items are left on grocery store shelves, you have to wonder what the deal is with the fear-mongering. ` We’ve seen a lot of reporting, including ours, on why these issues are happening. What are we missing? We’re missing the back end of the closures. Just because a plant stops producing for a period of time doesn’t mean the plant has been destroyed. For example, the JBS Greeley, Colo., plant received a lot of attention when it closed down a few weeks ago. It came back on line last week prior to the (President Donald Trump’s executive order for meatpacking plants to reopen), but the reopening garnered much less media attention. COVID19 testing capacity is still a major constraint, but processors across the country are implementing additional protective measures for their workers — which is also not getting enough coverage. ` Readers often ask why Michigan’s seasonal deer processors can’t pick up the slack. Is that a feasible option? While seasonal deer processing is an exciting proposition, I’m afraid the folks considering this option are missing the scale of the problem. Converting deer processors would be like using an umbrella during a monsoon. For example, U.S. pork processing capacity is somewhere around 500,000 hogs per day. The processing capacity slowdown is somewhere around 200,000 hogs a day. No deer processor I’m aware of could put a dent in that number. ` The food supply chain is seeing stress it’s never seen before. Will it need to permanently change? Should it change? This is the $1 million question. I think it will change toward more automation

and reducing labor needs, though this has been the trend for more than a century. I would love to say that small, local systems will be able to pick up the slack in the system, but I’m afraid that is unlikely to happen. ` If the shortages, or perceived shortages, are driving many to garden and local products, is it local foods’ moment? This is definitely a local foods moment. People are reassessing where their food comes from, and it is encouraging all of us to learn more about how to grow our own produce. I think we’re all going to learn how hard it is to be self-sufficient, which will hopefully translate to a deeper appreciation for what agricultural producers do across the country. We’re definitely seeing it in local food sales, such as community supported agricultural systems, which offer consumers the opportunity to buy into small, local farms and receive straight-from-thefarm fresh produce.

producers in 1999 to fewer than 1,200 in January 2020. The way forward for small producers is probably more on the value-added side, along with a substantial amount of off-farm income (family members working in jobs not on the farm). Trey Malone, agricultural economist, MSU

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Peacock Room struts its wares in Facebook live event

22 | CRAIN’S DETROIT BUSINESS | MAY 11, 2020

Rachel Lutz, owner of the Peacock Room in Detroit, showed off the shop’s wares on a Facebook live stream last Thursday night to more than 200 viewers.

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` What is the long-term impact going to be from this crisis on ag businesses? Unfortunately, I think we are going to see an additional hollowing out of the middle. The big farms are more likely to be able to withstand this short-term pain and strain on midsized farms has already been brutal over the past few years. Dairy farms are probably the biggest example of this trend; we have dropped from around 3,500

curbside pickup over the weekend, or for those ordering $100 or more in merchandise and located within 30 miles, porch delivery. The audience clamored for more when Lutz injected her wellknown humor as she walked around her store in the Park Shelton building, highlighting the treasures she’s brought back to Detroit from around the U.S. and other countries for more than an hour. Viewers couldn’t comment fast enough to claim “Repressed feelings” notebooks with an elastic band to keep all of your repressed emotions inside, art deco tins of lip

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Clamoring to shop for Mother’s Day items (or just to shop), more than 200 viewers joined a two-hour, live Facebook stream hosted by Rachel Lutz, owner of the Peacock Room in Detroit, last Thursday night to show off the shop’s wares. Like many other retail businesses, the Peacock Room has been closed since March when the stayat-home orders began in response to COVID-19. Lutz invited viewers to claim their numbered item in the live stream comments and send a private message so staff could collect payment information and arrange

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balm, one-of-a-kind handbags and beaded purses, bird cage candles, puzzles featuring 1920s Vogue magazine covers, a women’s “smoking jacket,” dresses and other items. As Lutz modeled a full-length, sheer black cape studded with aurora borealis crystals and rhinestones, she noted that people could wear it to Kroger and if people try to approach, swoop it like a cape, saying, “No! Six feet back!” “This is actually for your own safety,” Lutz said. “I’m sure you could pay for this out of your medical savings account.”

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