Crain's Detroit Business, May 18, 2020, issue

Page 1

Women in Leadership: Mayor of Pontiac Deirdre Waterman

The Conversation: Ken Coleman finds inspiration in challenging times. PAGE 18

PAGE 12 CRAINSDETROIT.COM I MAY 18, 2020

COPING WITH COVID-19

Lear CEO Scott talks rebooting ‘It’s not a one-sizefits-all strategy’ BY DUSTIN WALSH

I stepped out of the rain into a black tent where a masked man thrust a pair of grill tongs in my direction. Pinched at the end was a fresh basic surgical-grade mask. A thumbs up signaled to the next masked man that I had not knowingly been in contact with a person infected with COVID-19, nor was I experiencing any symp- Dustin toms. My temperature was taken and I was per- WALSH mitted to enter the facility. I returned to work Thursday. Not Crain’s office in Detroit, but Lear Corp.’s just-in-time seating plant on Flint’s historic Buick City site.

When auto supplier Lear Corp. penned and then published its “Safe Work Playbook” on April 6, the idea of returning to work in Michigan seemed a distant reality. The state’s daily COVID-19 numbers remained on the Scott rise, recording more than 1,500 new cases and 110 deaths. The curve was not going to flatten for another three weeks. The company has suffered casualties. At least 13 people died from an outbreak at its plant in Juarez, Mexico. Others have fallen ill across plants in the U.S. prior to Lear shutting down operations last month. But Lear had reopened plants in China, including four locations in the epicenter of Wuhan, two weeks earlier in late March and would reopen plants in South Korea, Italy, Spain and Germany throughout April. Lear released an updated version of its playbook on April 27. The 80-page document is the culmination of what it learned and how it implemented health protocols and created a framework to reopen plants and do so with employee safety at the forefront. Those protocols include strenuous cleaning regimens, temperature checks, plexiglass guards in high-traffic areas and more. The company is even testing new technologies, such as thermal cameras that can monitor employees’ temperatures on the shop floor in real time.

See WALSH on Page 16

See SCOTT on Page 17

GOING THE DISTANCE ON RETURNING TO WORK Employees Teresa Frelix, left, and Douglas Dantzler listen at a safety procedure training at Lear Corp. in Flint, which restarts production Monday. | SARAHBETH MANEY/MLIVE.COM/THE FLINT JOURNAL VIA AP

Answers to burning restart questions BY DUSTIN WALSH

With manufacturers ramping up and the potential for office workers and some broader definition of retail allowed in coming weeks, the prospect of employees passing through doors into work is daunting. The new paradigm under pandemic means much more work and much more expense for employers. And most companies have questions about the logistics of keeping employees safe. Those questions

are basic yet critical to the goal of balancing work and, well, living. We consulted experts to answer some of the trickier questions below and provide guidance on the “new normal.” If you have other questions, email Dustin Walsh at dwalsh@crain.com, and we’ll answer them in coming weeks.  Should I clean my facility before workers return even if an employee never tested positive? See QUESTIONS on Page 16

NEWSPAPER

VOL. 36, NO. 20 l COPYRIGHT 2020 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

Putting faith in protocols: Lear’s playbook in real life

FOCUS | REAL ESTATE  City Living Detroit’s owner Austin Black II talks about home buying and how stay-at-home order could end popularity of open floor plans. PAGE 9


NEED TO KNOW

BUDDING AMID LOCKDOWN

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` DMC’S MALLETT JOINS CITY AS DEPUTY MAYOR

` STATE PROJECTS ‘STAGGERING’ LOSS IN TAX REVENUE THE NEWS: Michigan will confront multibillion-dollar declines in tax revenue combined with record-high enrollment in government health insurance programs — a double whammy from the coronavirus pandemic that may lead to major service cuts. Legislative experts and top officials in Gov. Gretchen Whitmer’s administration agreed to revised budget estimates Friday after hearing economic forecasts. The steep downward revision from revenue estimates issued just four months ago — nearly $6.3 billion combined this fiscal year and next — was unprecedented. WHY IT MATTERS: Revenues in the school aid and general funds, the state’s two main accounts, are projected this fiscal year to fall nearly $3 billion, 12 percent, from last year’s levels. “These numbers are staggering,” said Mary Ann Cleary, director of the nonpartisan House Fiscal Agency.

THE NEWS: The city of Detroit has named Detroit Medical Center executive and former Michigan Supreme Court Chief Justice Conrad Mallett Jr. as deputy mayor. Mayor Mike Duggan made the announcement Friday. Mallett, 66, is chief administrative officer at DMC with deep roots in Detroit politics. WHY IT MATTERS: Mallett joins Duggan, with whom he worked at DMC when Duggan headed it up earlier this decade and oversaw its sale and conversion to a for-profit company.

` JUDGE DISMISSES CHARGES AGAINST EX-MSU PRESIDENT THE NEWS: A judge dismissed criminal charges Wednesday against former Michigan State University President Lou Anna Simon, who was accused of lying to investigators in 2018 as they tried to learn what she knew years earlier about sexual assault complaints involving Larry Nassar. Simon last year was ordered to trial in Eaton County. But Circuit Judge John Maurer tossed the case, saying a lower court judge had abused her discretion in finding enough evidence to keep the case going. WHY IT MATTERS: Simon resigned as Michigan State president in January 2018, hours after Nassar was sen-

tenced to prison following days of wrenching testimony from his victims. The attorney general’s office said it would take Maurer’s decision to the Michigan Court of Appeals and try to get the charges reinstated.

` DTE TO CUT POLLUTION, PAY $1.8M PENALTY THE NEWS: DTE Energy Co. will reduce air pollution from five coal-fired power plants in Southeast Michigan under a proposed settlement of a 10-year-old lawsuit filed by the federal government, officials said Thursday. The U.S. Environmental Protection Agency said the agreement also requires the company to pay a $1.8 million civil penalty and fund a $5.5 million project to replace older school or city buses with newer, cleaner models. WHY IT MATTERS: The agency’s 2010 lawsuit accused DTE of violating the Clean Air Act in the area with emissions of sulfur dioxide and nitrogen oxide. The pollutants can harm human health and contribute to acid rain, smog and haze.

` MAC CUTS POSTSEASONS FOR SEVERAL SPORTS THE NEWS: The Mid-American Conference has cut postseasons for eight sports and slimmed down its basketball schedule. Alterations apply to

New heights for legal weed market ` The state has seen more than $7 million in recreational marijuana sales since the week beginning April 13, the Marijuana Regulatory Agency said Tuesday, a new peak for the newly legal market amid the coronavirus pandemic. The state saw a limited start to recreational marijuana sales as it began issuing licenses on Dec. 1 with total weekly sales starting at about $1.6 million and steadily increasing to a high of $5.77 million between March 16-22. Then sales dipped below $5 million per week until April 13-19, when sales went up to $7.2 million. Since then, weekly sales have remained above $7 million. From May 4-10, the state saw $7.9 million in recreational sales, Gongwer News Service reported. In total since Dec. 1, the state has done $91.59 million in recreational marijuana sales and saw $15.2 million in excise and sales tax revenue.

BLOOMBERG

the 2020-21 schedule — and the following three years — for the 12-member conference, which includes Eastern Michigan, Western Michigan and Central Michigan universities.

WHY IT MATTERS: The moves to stem financial losses from the coronavirus pandemic could foreshadow similar moves by other conferences, including the Big Ten, as college sports face an uncertain future.

FITNESS CENTER & GRAB N’ GO FOOD SERVICE

COMING SOON!

900 TOWER

CENTRALLY LOCATED IN TROY, MICHIGAN

SUITES FROM 2,500 SF UP TO 50,000 SF RECENTLY RENOVATED TWO-STORY LOBBY IMMEDIATE FREEWAY ACCESS SIGNAGE AVAILABLE

248.644.7600 KOJAIAN.COM

2 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020


TECHNOLOGY

WORKFORCE

Businesses get ready for health screenings

“IF CRAFT WORKERS LEFT THE STATE TO WORK OUT OF THE STATE BECAUSE OTHER STATES WERE WORKING AND OURS WASN’T, I BELIEVE IT WOULD BE A TEMPORARY SITUATION.” — Mike Haller, CEO, Walbridge Aldinger Co

New software aims to ease transition BY NICK MANES

Construction is expected to resume at the Midtown West development site following a weekslong shutdown of commercial building due to the COVID-19 pandemic. | KIFAH JAYYOUSI/MONAHAN CO.

COVID AND CONSTRUCTION Loss of skilled trades workers could drive up building costs

BY KIRK PINHO AND CHAD LIVENGOOD

If a Michigan construction industry experiences another exodus of skilled trades workers as some fear, building costs would again increase. The industry is not in consensus about whether the state’s shortterm halt on most commercial building projects in an effort to tamp down the spread of the COVID-19 pandemic caused large amounts of trades workers to seek jobs in other states, much as they did during the yearslong dry spell during the 2000s. But any noticeable and protracted decline in skilled trades labor would cause an increase in construction costs, a key issue that has shuffled some prominent commercial building projects to the side-

lines, caused them to be redesigned or scrapped them altogether. Developers have anecdotally said for over a year that a shortage of available workers has caused construction costs to balloon by as much as 30 percent. Mike Haller, CEO of Detroit-based construction giant Walbridge Aldinger Co., isn’t worried about trades workers going to neighboring states like Ohio, Indiana and Illinois — where restrictions on construction were less severe during the pandemic — and driving up costs because he thinks it would be a very short-term issue. “If craft workers left the state to work out of the state because other states were working and ours wasn’t, I believe it would be a temporary situation,” Haller said. “A craft worker wants to work at home. And if that’s available to them, I

think very readily, they would come back home. I think the bigger issue is relieving the anxieties that people have going back to work, whether your craft worker or any type of industry.” Prior to the pandemic, Michigan had one of the largest skilled-trades gaps in the country, said Todd Sachse, founder and president of Detroit-based builder Sachse Construction. The construction industries in Ohio, Indiana, Colorado, Nebraska and Florida “never shut down,” potentially attracting Michigan carpenters, masons, electricians and other trades workers to seek temporary work in those states, he said. Whether they return to Michigan is a big unknown, he said. “We’re not going to know it until our trade partners go back to work and they pick up the phone and

reach out to Tony and Alice and Tommy and Stacy and Freddie and say, ‘Hey, let’s go back to work,’ and we find out, ‘Oh, sorry, Freddie moved to Florida’ because he didn’t have any work here and won’t be back for another six months or may move down there,” Sachse said. Pat Devlin, secretary-treasurer of the Michigan Building and Construction Trades Building Council, said he has been talking with others in the industry and there isn’t much concern about long-term effects. “People were working five or six days a week and the money was good,” he said. “I’m not sensing a sense of any urgency. We did have people travel to those states that could, but when they can work in their own back yard, they will.”

At the onset of the COVID-19 pandemic, Fuse Technology Group Inc. recognized it would need a solution for monitoring symptoms of employees, many of whom work on software products for essential companies. So the Ferndale-based software developer made its own, and is rolling out that software to its clients and others plotting strategies for returning to work and figuring out how to best mitigate the spread of the coronavirus. As companies express interest in the product, Fuse looks at the regulations of the state and local governments where the business is located and tailors the software to those needs, said Kevin Gravier, director of programming services at Fuse Technology. “It’s a very generic solution for small and medium-size businesses that were planning to launch with paper,” said Gravier, adding that it’s intended to offer “peace of mind” to businesses as they reengage their workforces. Fuse Technology is one of many companies in a rush to create a digital solution as health screenings, in which questions are asked related to symptoms and interactions with sick people, become part of a new normal. Using software aims to answer questions from employers when it comes to collection of workers’ health data and practical matters like who should be responsible for taking temperatures. See SCREENINGS on Page 15

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

EDUCATION

Detroit’s summer youth jobs program faces going online only BY ANNALISE FRANK

Last summer, Detroit tech nonprofit Journi took its Grow Detroit’s Young Talent participants on a field trip to the building in Corktown where StockX verifies collector sneakers. This summer, though, those students will be at home working on laptops. The coronavirus pandemic has wreaked havoc on in-person gatherings, and that includes educa-

tional and training experiences. With applications already streaming in since January, the city of Detroit summer jobs program was forced to make a sharp pivot to digital-only. So were its partners, the nonprofits and companies like Journi that offer six weeks of paid work or training for ages 14-24. Before the coronavirus crisis hit, employers had already committed to taking 5,000 of Grow Detroit’s Young Talent’s average 8,000 job

slots per year, said Marie Hocker, the program’s executive director. “So immediately our team went into action,” Hocker said, to understand which businesses could switch to remote work instead of in-person. She estimates that employers and industry-led training providers could convert just 700 jobs. The Grow Detroit team then went where its participants will go this summer: online. They looked at

how they could simulate real-world work for the rest of the participants, and decided to use two software platforms through Dearborn-based Educational Data Systems Inc. and VirtualJobShadow.com. Hocker said Grow Detroit will still be able to take the approximately 8,000 youth it would have accepted without a worldwide pandemic. See JOBS on Page 15

The health screening app Safely creates a mobile boarding pass of sorts once employees satisfy a health screening. | ANDONIX

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 3


REAL ESTATE INSIDER

• PROMINENT O CLASS C SS A O OFFICE FFICE C SPACE S C • LOCATED IN THE HEART OF DOWNTOWN LANSING • INCREDIBLE VIEW OF THE CAPITOL BUILDING • WITHIN WALKING DISTANCE TO RESTAURANTS, FINANCIAL SERVICES AND MOST GOVERNMENT OFFICES

The Waterford Square apartment complex in Waterford Township.. | COSTAR GROUP INC.

Rent collections at apartment buildings down slightly in May SPECIALIZING IN PRIVATE-PUBLIC PARTNERSHIPS

BOJIGROUP.COM

Leasing services by: 517

351-2200

MartinCommercial.com

Ron and Louie Boji

4 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

Rent collections at apartment buildings were only down 2.8 percent in the first week or so of the month in the Detroit area. That’s according Kirk to RealPage Inc., a PINHO data analysis firm that says collections of full or partial rent payments were at 84.5 percent May 1-6, compared to 87.3 percent for May 1-6 last year. The Richardson, Texas-based company declined to reveal its sample size for the Detroit-Warren-Dearborn area. The National Multifamily Housing Council, headquartered in Washington, D.C., says its 11.4 million-unit survey nationally shows 80.2 percent made a full or partial payment May 1-6, down just 1.5 percent from the same period last year. That’s also up 2.2 percentage points from the 78 percent who had paid all or some of their rent by April 1-6. On the bleaker side of things, data released last week by Apartment List shows that 31 percent nationally didn’t pay their full housing bill, whether rent or mortgage. The survey included about 4,000. Twenty-two percent made no payment and 9 percent made a partial payment. There have been concerns about rent payments as unemployment in Michigan and nationally skyrockets and the COVID-19 pandemic continues to disrupt the economy. “Despite the fact that over 20 million people lost their jobs in April, for the second month in a row, we are seeing evidence that apartment renters who can pay rent are stepping up and doing so,” Doug Bibby, president of the National Multifamily Housing Council, said in a statement. “We expect May to largely mirror April, when the payment rate increased throughout the month as financial assistance worked its way to people’s bank accounts.” Unemployment benefits are increased to $962 per week through late July under provisions built into the federal CARES Act. And last month, the same $2.2 trillion stimulus injected $1,200 or more into bank accounts in an effort to cushion the blow that many are feeling as a result of the pandemic, which has killed nearly 4,600 in Michigan, more than 81,000 nationally and 286,000 worldwide. According to CoStar Group Inc., a Washington, D.C.-based real estate in-

PHOTO AROUND TOWN: The electronic sign atop the Renaissance Center that typically displays “GM” for General Motors Co. went dark for a couple of days. CBRE Inc., which manages the complex, said via a spokesman the signage is “down for maintenance and will be turned back on as soon as our work is done.” | KIRK PINHO/CRAIN’S DETROIT BUSINESS

“DESPITE THE FACT THAT OVER 20 MILLION PEOPLE LOST THEIR JOBS IN APRIL, FOR THE SECOND MONTH IN A ROW, WE ARE SEEING EVIDENCE THAT APARTMENT RENTERS WHO CAN PAY RENT ARE STEPPING UP AND DOING SO.” — Doug Bibby, president of the National Multifamily Housing Council

formation service, metro Detroit’s apartment market, which has an asset valuation of $17.5 billion, has more than 215,000 units with a vacancy rate of about 6.24 percent and an average asking rent of $997 per month and an effective rent of $988. A one-bedroom market rent is $845, while a two-bedroom is $1,079 and a three-bedroom is $1,467, according to CoStar. Evictions in most cases are temporarily banned until May 15 in Michigan under an executive order signed by Gov. Gretchen Whitmer. There is a carve-out for evictions when a tenant poses “a substantial risk to another person or an imminent and severe risk to property.”

More hotel furloughs The Westin Southfield hotel last week furloughed 142 employees. The hotel, which is operated by Alpharetta, Ga.-based Atrium Hospitality, said in its WARN (Worker Adjustment

and Retraining Notification Act) notice to the state that was received May 11: “At this time, it is our hope that the furloughs will only be temporary. However, due to the unprecedented nature of the pandemic, we cannot guarantee that they will not be permanent and cannot guarantee a timeline for recall, if employees will be recalled at all.” The Detroit area and national hotel industry seems to have reached its nadir and has gradually been improving, as evidenced by a trio of key metrics documented by STR, an analysis firm focused on hotels. First, occupancy rates have slowly improved, rising from just 22.3 percent during the worst week for that figure during the pandemic, April 5-11, according to STR, which has its North American headquarters in Tennessee. Most recently the week of April 26 to May 2, it was 29.5 percent. Average daily rates have also crept upward. April 19 to 25, they were $63.56 per night and inched up to $64.59 April 26 to May 2. Another key industry barometer, RevPAR (shorthand for revenue per available room), has increased every week since April 5-11, when it reached its bottom of $14.49. Most recently, April 26 to May 2, it was $19.06. But still, the industry is a shell of what it was just two months ago. Occupancy rates were 62.2 percent the week March 1-7, the week before the first confirmed cases in Michigan were announced. Average daily rates were $99.18 and RevPAR was $61.72. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB


SPONSORED CONTENT

LEADERSHIP DEFINED A Q&A WITH DELTA DENTAL CEO GORAN JURKOVIC

WORKING WITH A ‘NEW SENSE OF URGENCY’ Goran Jurkovic became president and CEO of Delta Dental of Michigan, Ohio, and Indiana in 2019; here, he talks about leading one of the country’s largest dental benefits administrators through the COVID-19 crisis. Talk about when you realized the world as we know it was about to change. What were your first priorities as a CEO? One of my top priorities as CEO of Delta Dental of Michigan, Ohio, and Indiana is the wellbeing of our nearly 1,200 employees. Without them, we can’t meet the needs of the 8.7 million people our benefit plans cover. Their health and safety weighs heavily on me. There were a couple moments, about a month apart, that drove home the threat and the gravity of this crisis. The first was in late February when two of us were preparing to travel internationally for a business meeting. News of the coronavirus spreading overseas was in the headlines, and I was questioning the wisdom of the trip. The benefit of being there for a meeting just didn’t trump the risk of bringing the virus back. We attended virtually, and it was a success. I knew then that if the situation continued to escalate locally, we could keep our people at home and safe and still keep our business going. The second was a surreal moment when I left the building late the night before we closed, not knowing when I would see my team again and realizing that I couldn’t fix this. All I could do was care for our staff, harness their talent and dedication, and calmly guide our company through this unpredictable and unimaginable experience. When we spoke last year you mentioned the importance of communicating with employees. How have you communicated with them throughout this crisis? We recognized immediately that one of the few things we can control in this situation is our message. We knew we had to communicate from the inside out; we knew we had to start on Day One. Our goal was to reach everyone quickly and consistently with facts as we learned them and

C

CRAIN’SCONTENTSTUDIO DETROIT

Delta Dental President and CEO Goran Jurkovic recognized immediately that one of the few things he could help control amid the COVID-19 pandemic was the company’s leadership message; beginning in mid-March he began weekly Monday morning video messages for his team.

decisions as we made them. The gravity of the situation was evident and we acted early. The building was partially closed beginning Monday, March 16, and all but our mailroom and print shops shut down three days later. I began weekly Monday morning video messages. Every message reinforces and provides examples of our commitment to health and safety and celebrates the teamwork, dedication and determination I see from our workforce every day. Our communications also boost company culture, build relationships and encourage self-care. How have you been able to overcome the challenges and seize the opportunities of a WFH employee culture? Because we had a robust work-from-home pilot project in place, we were prepared to equip and send the majority of our workforce home to do their jobs full-time in less than a week with no idea when we would return. We kept about 50 employees on site in our Farmington Hills and Okemos offices mostly to process paper claims and issue paper checks. Necessary staff remained on site throughout the pandemic because dental insurance companies are essential businesses under the stay-at-home orders in all three states.

When the number of COVID-19 cases spiked in the Detroit area we closed our Farmington Hills mailroom for 20 days. Even though we can’t do that work remotely, we couldn’t risk the health and safety of those employees and their families. We haven’t lost anyone to COVID-19. We haven’t missed a beat on our business. But we miss one another and the energy and power of being together. Talk about the importance of providing relief to your customers and to the community during this crisis. Many of our customers are hurting. We quickly granted a 60-day grace period for premium payments. We followed with a one-month premium credit and froze rates for a full year for customers renewing contracts between June 1, 2020 and May 31 of next year. We have kept commitments to nonprofit partners, engaged in virtual volunteering, and supported an N95 mask recycling project with our customers Michigan State University and Sparrow Hospital. The Delta Dental Foundation established a $600,000 COVID-19 Emergency Assistance Fund to support safety net dental clinics serving low-income patients and nonprofits providing emergency food support. We are also looking for ways to help dentists knowing this crisis has significantly affected them.

Whom have you leaned on most for leadership advice throughout the crisis? What have they taught you? When I became CEO last January, I immediately built a diverse executive team to challenge me and to push the company. I also joined the board of Business Leaders for Michigan to strengthen relationships with other large business leaders. Working with other CEOs has driven home that this pandemic is bigger than any of us and, whether competitors or collaborators, we must band together to advocate for the needs of the business community and rebuild our economy. How do you think the COVID-19 crisis will change Delta Dental as a company? This ordeal has driven us to be more flexible and creative. We have learned new ways of problem-solving and new ways of communicating. We had already been innovating and revolutionizing our technical platforms. That work didn’t slow during the crisis; it will accelerate after, as will tele-dentistry and other innovations in oral health care. We have a new sense of urgency about our work.

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 5


COMMENTARY

Employers could play role in ‘smoothing’ jobless claims Chad

LIVENGOOD

get through,” Gray said. “But with the volume, it’s taken a number of weeks longer than that.” Some jobless workers have been waiting since the first week in April, Gray said. Federal law requires a state worker to do a one-on-one review of every single claim, which are sometimes complicated by a jobless worker having multiple jobs and income sources. This is the same agency that failed miserably to automate some of these processes during the Snyder administration and falsely accused more than 43,000 workers of fraud. The crisis at the Unemployment Insurance Agency seems like a ripe opportunity to design an entirely different system that’s more user-friendly and integrated directly with Michigan employers for a more organized approach. Employers who file unemployment claims on behalf of their employees seem to have better experiences than letting their employees fend for themselves. Large employers such as General Motors Co., Ford Motor Co. and even the state of Michigan use this mechanism. The Republican-controlled Legislature’s committee reviewing how Whitmer has managed pandemic response has zeroed in on the unemployment agency. They held a nearly three-hour hearing Wednesday with Gray and Todd Cook, legislative affairs director for the Department of Labor and Economic Opportunity. Cook said expanded use of employer-filed claims “would be really helpful, both in terms of employees and employers.” When an employer sends UIA a filing, the state agency spends less time tracking down the worker’s history and earnings information. “It’s helpful for the employee because it knocks down any issue in terms of data questions ... salary, personal information,” Cook said. “And then it helps the department by smoothing out the process for us.” Mandating all employers file initial claims for the laid-off workers would probably be met with resistance from small businesses because of the added layer of paperwork. But it might have to become part of the cost doing business. This pandemic is not going away tomorrow or next month. Businesses are going to have to adjust to this new reality. Whitmer has cast the unemployment system’s troubles as a problem she inherited from her predecessor, Rick Snyder. While the unemployment system may be a stain on Snyder’s record, pointing fingers doesn’t fix the problem. This is one area where GOP lawmakers and the Democratic governor could work on a solution together.

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.

DANIEL SAAD

On a Friday morning last month, I got a call from a distressed laid-off restaurant manager in mid-Michigan who was in tears about the state’s unemployment system. Lacey Swanson, a single mom from St. Johns, told me how she had gone six weeks without a paycheck and had been struggling to make contact with a bureaucracy that’s been overwhelmed by Gov. Gretchen Whitmer’s shutdown of vast swaths of Michigan’s economy. Swanson had seemingly jumped through every hoop the Unemployment Insurance Agency had told her to. When the online system said she owed the state a $3 balance from a stint on unemployment in 2014, Swanson said she authorized UIA to withdraw $3 from her bank account. And then the agency withdrew four more $3 installments over a period of a week. She was baffled. When I talked to her again on Monday, May 4, Swanson said she received four $3 refund checks in the mail that day from the UIA — but no unemployment check. “I call unemployment all day long, starting at 8 a.m. until 7 p.m., until it hangs up on me after 20 minutes,” Swanson said. After I sent a copy of the checks over to the state labor department, an official told me that Swanson made an error in updating her bank account and her benefits were being “released.” Three days later, Swanson got more than $5,000 in benefits deposited in her bank account for six weeks of being out of work. This was just one person’s wrenching experience with Michigan’s unemployment system. Since March 15, an unprecedented 1.7 million Michigan workers have sought unemployment insurance. Michigan’s unem“THIS CRISIS ployment system was designed for this HAS BEEN USER- not many people claiming TESTING OUR benefits all at once. Its agency was woefully SYSTEM ON unprepared — a conSTEROIDS.” sequence of the Legislature’s cuts to the — Steve Gray, agency. At the beginUIA director ning of March, the UIA had about half of the 1,300 full-time equivalent positions it had in 2013. After nine weeks of coronavirus layoffs, nearly 134,000 people are still waiting in line for their cases to be adjudicated. Some have been waiting since the first week in April. At the end of April, this line was much longer until Whitmer on May 6 signed an executive order allowing the agency to review only a worker’s most recent separation. Previously, the law required the agency to review all job separations in the previous 18 months, often adding weeks to the process. UIA Director Steve Gray said the prior review process allowed the state to deny someone unemployment for quitting a previous job before getting laid off in their new job. “This crisis has been user-testing our system on steroids,” Gray said last week. “It has exposed every possible crack.” State officials can’t say how long it will take to get through the remaining claims, while thousands of new claims come in every week. “It typically would take three weeks for you to

COMMENTARY

Protecting LGBTQ rights is good business BY ALLAN GILMOUR

All of us in Michigan are intently focused on the COVID-19 virus, and rightly so. It’s the worst pandemic in more than 100 years, and the worst upset of our lives and our economy since the end of World War II, some 75 Allan Gilmour is years ago. We are all affected — former president our health, the health of of Wayne State our extended families University and and friends, our work, former CFO of our financial well-being, Ford Motor Co. the future recovery from He is a member this double-threat to our of Fair and health and the economy. Equal We owe special thanks to Michigan’s those on the front lines of honorary activity to protect and leadership serve us. committee. At the same time, a great variety of other work continues. We face important elections this year, for example. One piece of work is Fair and Equal Michigan, launched back in January. It would amend the Elliott-Larsen Civil Rights Act, passed in 1976. At the time, Elliott-Larsen was a model piece of legislation, providing protections to our citizens on a variety of civil rights issues. It continues in effect to today, with success. It omitted, however, protections covering sexual orientation and gender identity. This omission was not controversial 44 years ago, but times have changed. Fair and Equal Michigan would fix this omission. Elliott-Larsen would be amended to cover sexual orientation and gender identity. Why is this important? Today, an employer can fire a lesbian, gay, bisexual, transgender or queer employee without cause, just for being themselves. A landlord can refuse to rent to an LGBTQ person, again just

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. 6 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

for being what he or she is. Most of us in Michigan believe this is unfair. For example, most believe these protections are already included in law; they are not. About 75 percent of citizens favor amending the law, according to a recent poll. How does the Fair and Equal Michigan initiative work? It’s called a citizens’ initiative — proponents must collect about 340,000 signatures by May 27. Then, the Michigan Legislature has 40 days to pass it — no amendments allowed — or, failing passage, to put it on the ballot for the fall election. Who favors this action? Big companies, smaller companies, unions, chambers of commerce, nonprofits, individuals (red and blue). Among the big companies, Fair and Equal Michigan has racked up endorsements from Detroit Three automakers, Apple, Blue Cross Blue Shield, Consumers Energy, Dow, DTE Energy, Flagstar Bank, Google, Herman Miller, Kellogg Company, Kelly Services, Jackson National Life and Rock Holdings. Most of these companies already have internal policies protecting LBGTQ people, but they favor this initiative because it broadens protections statewide — and because they believe it is good business. Michigan is a fight for talent against many other states. Younger people in particular pay attention to personal protections provided by law when they seek employment or just a comfortable and accepting community in which to live. The state continues to lose, or fails to attract, LGBT people who wonder about their future, how they will be included in a state that, otherwise, offers so many opportunities. As Michigan grapples with how to build after this pandemic, fixing out-of-date legislation will make us more attractive to the talented people our state needs. Please join me by signing the petition to add sexual orientation and gender identity to Elliott-Larsen by visiting fairandequalmichigan.com. Thank you as we work to move Michigan ahead.

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


OTHER VOICES

Don’t let COVID-19 ‘fear factor’ delay life-saving treatments BY MAHIR ELDER, M.D.

I work as an interventional cardiologist at several hospitals in one of the nation’s worst “hot spots” for the coronavirus, and I’m sorry to have to report on a hidden aspect of the Mahir Elder, current pandemic M.D., is an that concerns me interventional greatly. cardiologist at I began noticthe Detroit ing several weeks Medical Center ago that some of and a professor the other specialof cardiology at ists in my heart-atthe Michigan tack unit at a maState University jor metro Detroit and the Wayne hospital had State University stopped treating Schools of emergency cardiMedicine. ac patients with state-of-the-art catheterizations and other surgical procedures, and were simply prescribing drugs for them. Instead of inserting narrow tubes, or catheters, into the arteries of patients who’d been stricken with often-fatal myocardial infarctions or pulmonary embolisms and using them to open clogged coronary vessels and remove blood clots (a procedure with a long-established track record for saving lives), these cardiologists were relying on less-effective drug therapies. After making some discreet inquiries, I learned that these physicians were choosing to avoid interacting physically with critically ill heart patients because they feared becoming infected with COVID-19. While I understand the virus anxiety that all too often attacks hospital physicians — many of whom have children at home and elderly parents to look after. I find it difficult to accept the idea that failing to meet the standard of care for patients struggling with potentially fatal ailments is permissible. Make no mistake: Patients struggling with massive heart attacks and severe pulmonary embolisms (large, dangerous blood clots in lung arteries) will die if deprived of treatments that require caregivers to remain near them, often for several hours at a time. At the hospitals where I work in the Detroit area, life-and-death decisions about treatment choices have to be made during almost every shift, and it’s troubling to see how the coronavirus pandemic has created a “fear factor” — an irrational sense of panic that can cause even experienced physicians to forget that their first duty is to provide patients with the very best care. While the great majority of heart specialists still honor the fact that becoming a doctor is a “calling” — a duty-bound vocation in which the physician is required to put the patient’s needs first — there’s no doubt that a some caregivers in today’s pandemic setting are choosing to protect themselves instead of their patients. Unfortunately, these irrational fears of being attacked by the virus aren’t restricted to medical caregivers. According to a recent survey by the national ESO health-data analysis firm, potential heart patients with severe symptoms are increasingly declining to report them. Based on ESO data from 1,300 U.S. health agencies, the number of 911 calls from Americans reporting chest pain has declined by more than 30 percent since January of this year.

That steep decline in calls for assis- rus-fighting gear, in which hospital adtance by emergency heart patients ministrators are keeping a tight rein on seems especially tragic when you con- PPE supplies. What can we do to begin fixing this sider the fact that the risk of contracting the virus in a carefully protectI FIND IT DIFFICULT TO ACCEPT THE IDEA ed heart-care center is actually THAT FAILING TO MEET THE STANDARD OF quite small, given the protective CARE FOR PATIENTS STRUGGLING WITH measures now POTENTIALLY FATAL AILMENTS IS being employed at hospitals every- PERMISSIBLE. where. Another factor that now threatens urgent problem, so that we’ll be better standard-of-care treatment for heart prepared in the years ahead, if another patients is the ongoing personal pro- pandemic takes place? tective equipment rationing of vi- First of all, we should begin talking

openly and respectfully to each other about the fear factor that is now weakening our care for emergency heart patients. We should remind ourselves that the risk of contracting COVID-19 inside a properly protected heart center is much lower than the risk of leaving patients undertreated for heart attacks, blood clots and other cardiovascular ailments. Second, we should create a permanent, centralized registry of vital equipment needed to combat viral pandemics, including ventilators, dialysis machines, testing kits and other virus-fighting tools. This centralized inventory would be distributed to health care facilities around the nation based

on need. Such centralization, via a national registry, will allow redistribution of life-saving technology. Third, we should do a better job of educating patients about the fact that choosing to stay home while struggling with heart-attack symptoms, rather than proceeding immediately to an emergency room, is a potentially dangerous decision. Finally, those of us who work daily in hospital cardiac care units and operating rooms need to renew our vow to put the patient’s needs before our own, while also resisting the temptation to succumb to the irrational fear factor that too often prevents us from doing our best to care for patients.

Check out the latest episode: SMALL BUS NESS

LIFELINE CRAIN’S PODCAST TO NAVIGATE THE COVID CRISIS

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.

LISTEN TO THE PODCAST: crainsdetroit.com/lifeline PRODUCED BY

SPONSORED BY

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 7


TAX TROUBLE COVID-19-fueled economic woes could lead to more property tax foreclosures.

REAL ESTATE

PAGE 10

LEVERAGE BY DESIGN

VIRTUAL REALTY

Zooming in for a home tour in the age of COVID-19 This Springfield Township home was toured virtually via Zoom by a new Florida retiree who wants to move closer to his family.

BY KIRK PINHO

 A virtual home tour in the age of COVID-19. THIS PAGE

On an unseasonably cool morning earlier this month, Karen Jo Micallef, donning disposable gloves and a face mask, walked, at times backward, through a recently renovated Springfield Township home near Bridge Lake holding her laptop computer. On the other end of the Zoom virtual tour was John Frazer, a 62-year-old recently retired Florida tradesworker who operated cranes at nuclear power plants around the country. He is in the market for a home he can call his own for about half the year in Michigan, where most of his family, including his mother, is. Although restrictions on Realtor activity have been relaxed in the last week and a half, virtual home showings are likely to remain a part of daily life for the foreseeable future as people continue to be wary about COVID-19, which has killed more than 4,700 in Michigan and infected more than 49,000 as of Thursday afternoon.

 Austin Black II talks about how stay-at-home order could end popularity of open floor plans.

8 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

PAGE 9

 April home sales tank, but prices rise, as COVID-19 wreaks havoc. PAGE 10

“THOSE THAT AREN’T ON A TIMELINE, THEY’RE NOT IN A RUSH, THEY’RE MORE OPEN TO DOING A VIRTUAL SHOWING.” — Toni Jennings, broker/ owner, Abode Detroit LLC

For Micallef, a real estate marketing and sales agent with Max Broock Realtors, it’s part of the new normal. “I was really nervous at first, to be honest with you,” she said of giving home tours again, virtually or otherwise. “It’s a scary time. It’s something that I think so many of us are just so unsure about. It’s scary stuff. But we are doing all the protective measures, the gloves, the masks, the whole thing.” For weeks, virtual home showings were the only way buyers were allowed to see a property they were interested in purchasing as Gov. Gretchen Whitmer’s executive order prohibited unnecessary travel. It was relaxed effective May 7, although some restrictions remain, such as a cap of four on the number of people allowed in a home, and a ban on open houses.

Frazer is in a unique position in that he had been in the Springfield Township home about a year ago, before renovations. Even without that benefit, he said he would consider purchasing without having physically stepped inside. “I would feel comfortable buying a house maybe just on a Zoom meeting,” Frazer said. Toni Jennings, broker/owner of Detroit-based Abode Detroit LLC, said about 40 percent of her showings are virtual now, even after the lifting of restrictions. Those are generally buyers who have a little more flexibility with their moving schedule, she said. “There is more pressure to go out and physically see the home,” She said. “Those that aren’t on a timeline, they’re not in a rush, they’re more open to doing a virtual showing.” See VIRTUAL on Page 10


FOCUS | REAL ESTATE

Q&A: City Living Detroit’s owner on the state of home buying Austin Black II talks about how stay-at-home order could end popularity of open floor plans BY KIRK PINHO

Austin Black II has seen residential real estate downturns before. In fact, he started his firm, Detroit-based City Living Detroit, in the middle of one in 2010. Since then, he has become a recognized name on the city’s residential real estate scene and served on the Downtown Development Authority board. Black, a graduate of Cornell University, spoke with Crain’s Detroit Business last week about the state of the industry in the age of COVID-19. ` Crain’s Detroit Business: Can you give us a lay of the land on what you’ve been seeing the last couple of months and what trends you’re noticing? Austin Black II: With the stay-at-home order, we were not allowed to show properties. However, we were still able to close sales, so I had several transactions that were under contract prior to the stay-home order close during that period. But it’s very different. I was not allowed to attend the closings. I’ve missed one or two closings in my career, but I’ve missed the last several because we’ve not been allowed to attend. Also the nature of the closings are very different in that either the buyer or seller came to the title company and literally someone came outside the building and signed the documents in their car. In one case, the title company actually came to my client’s home, which is very common under refinancing scenarios but rarely, if ever, happened under buy/ sell scenarios. For my existing listings, fortunately, knowing kind of what was happening with COVID-19, I rushed to get virtual tours of all of my properties that I could, only missing one or two. ` Has there been concern about going into other people’s homes? I noticed some people pulled their properties off the market during this period, more owner-occupied properties, so properties where the seller may have had nowhere else to go, but also because of the safety concern. And we still see some of that even though Realtors can now show properties. Some sellers will not show properties until it’s under contract. So basically, the buyers are doing virtual tours, putting a property under contract and then seeing it during the inspection period, or sellers are requiring preapprovals before showing a property. Those are some of the changes we’re still seeing in terms of COVID-19 because it’s still a threat. The Michigan Association of Realtors has done a great job in guiding us in terms of what we should be doing, in terms of what was under the stay at home order, but also best practices in terms of working with clients on the buying and the selling side. ` What’s it been like the last several days, since it was only since May 7 that home showings were allowed? It’s more of an issue in the size of spaces. In New York City, you can be cramped with two or three people in an 800-square-foot apartment or condo. Because you’re forced to be in your home more, that might change how you think about living in the future. But Detroit is not dense, nor is it close to being dense on that level. So I have not seen, based on conversations I’ve had

with clients, a desire to move away from an urban area because of COVID-19. ` Has there been any trends that you’re noticing in terms of showings or desirable areas? Is every showing going to require a mask and gloves, for example? I think that’s going to be a requirement while this is a threat. That was one of the things that the Michigan Association of Realtors put in our guidelines in terms of what we should expect. All the showings I’ve had I have mentioned to the client that they should have gloves and masks. If they do not have those items, I keep them in my car now, along with hand sanitizer, so that if they don’t have those items I can provide them. Some of the showing instructions I receive mention things like avoid touching things in the home as much as possible. The showing instructions have all said that gloves and masks are required. ` Have virtual showings been going well? A virtual showing versus in-person is completely different, I imagine. Has it caused any tapering in terms of interest in the homes? When I get feedback on my listings, they appreciate virtual showings but it does not replace actually seeing the property. The virtual showing will be a tool to weed out homes. So let’s say a client normally would have seen 15 homes and then narrowed it down. They may rely on virtual tours to narrow down which homes they actually want to see (in person). ` What else is germane to address that we should be on the lookout for relative to trends in single-family in light of this? I think how people see their homes is going to change pretty substantially. We’ve literally been spending more time in our homes than we have ever before, so I think people are going to begin to look at needs and wants, amenities and features very differently than they have in recent years. For example, I could see in some aspects the whole trend of wide-open spaces and open rooms changing. Some people I’ve talked to that work in more office environments, they’re not expecting to go back to the office once the stay-at-home order is lifted. Some of them will be working from their home a lot longer, and that idea of having a wide-open space and no privacy for an office space, for example, they start changing what people want in homes — maybe some open spaces, but also more private spaces throughout.

Austin Black II | STYLISH DETROIT

“WE’VE LITERALLY BEEN SPENDING MORE TIME IN OUR HOMES THAN WE HAVE EVER BEFORE, SO I THINK PEOPLE ARE GOING TO BEGIN TO LOOK AT NEEDS AND WANTS, AMENITIES AND FEATURES VERY DIFFERENTLY THAN THEY HAVE IN RECENT YEARS.” — Austin Black II, owner, City Living Detroit

Some homes are going to have to be modified to accommodate that. Or, for example, people that don’t have finished basements, there may be more of a desire to have a finished basement so you have another separate space within the house to get away from activity in other parts of the house. I could see over the summer there being more construction activity within someone’s home to be able to accommodate different spaces based on who’s going to be in the home on a regular basis. ` Anything else we should be on the lookout for going forward? I think some for some people, their point of reference is 2008. I think what a lot of people don’t realize is the housing market collapsed in 2008 and it was

a recession caused by housing. And in typical recessions, housing doesn’t necessarily get impacted to the degree it did in 2008. I think one thing we are going into today with the situation is we don’t have a lot of excess inventory, so that’s a good sign for housing that it may not have the same impact. I mean, ultimately we don’t fully know the impact that it will have on housing because I think it comes down to what the longer term unemployment rate is going to be. That’s going to impact things more than anything else. A couple things that are different this time around is the expanded unemployment insurance between the federal government and state helping people staying in their homes. And then also Fannie and Freddie, they have deferment and forbearance for their loans that they back, which is a huge number. I think we’re going into this situation better prepared than we (were) before. The other trend that I’ve noticed working with clients is they are not buying homes to be virtually house poor. For example, I saw a lot of dualincome households, they may buy a house based on one person’s income in case someone lost their job. I saw that particularly with buyers under 40 during this period because they were impacted significantly by this last recession. The other thing we’ve noticed is people staying in their homes longer. I expect that to grow. I think the average is around eight or nine years, so I think in terms of deciding to purchase new homes, it’s going to be more longer-term thinking.

INTRODUCING Mi INTEREST ONLY BUSINESS LOANS! As a community-focused business bank, it’s imperative that we support area businesses during this tumultuous time. So for a limited time, ZHōUH RIIHULQJ LQWHUHVW RQO\ ORDQV WR DQ\ EXVLQHVV WKDW TXDOLƓHV The Details Make All The Difference - 12 months interest only

(remaining amortization TBD)

- 5-year term 3ULPH UDWH ZLWK D ŴRRU

Contact Rob Farr at 248.965.9814 or rfarr@mi.bank to see how we can help you.

- 1% origination fee - $500,000 minimum - $5,000,000 maximum All loans required to be secured by collateral acceptable to bank, and are subject to banks approval based on its underwriting guidelines.

Built For Business

www.mi.bank

` Does that trickle down to things like interior designers and stuff like that or is that more just sort of a preference in existing homes? MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 9


FOCUS | REAL ESTATE

COVID-19 expected to cause foreclosure spike Homeowners struggle to pay property taxes amid economic uncertainty BY KIRK PINHO

In Wayne County alone, property tax foreclosures are expected to roughly double as a result of the COVID-19 pandemic. The county, which has been a lightning rod for controversy over property-tax foreclosure auctions, could see up to 7,500 or so foreclosures next year as people already on payment plans for back taxes struggle in an unprecedented economic upheaval, said Treasurer Eric Sabree. Wayne County, the state’s most populous county with its most populous city, is certainly not alone. Other counties, which also conduct auctions, are expecting increases as well. As homeowners are battered with economic uncertainty — more than 1 million in Michigan have filed for unemployment — late property tax bills may be of less pressing concern than, say, putting food on the table or keeping the lights on or the water running. Commercial property is at risk, too, all of which threatens municipal and county coffers heavily reliant on property tax revenue. Through Executive Order 2020-14, Gov. Gretchen Whitmer has banned property tax foreclosures through May 29 or 30 days after the state of emergency comes to an end, whichever comes first. And Sabree and other local treasurers, like Oakland County’s Andy Meisner and Macomb County’s Larry Rocca, have said that they won’t foreclose properties at all this year. “Nobody is gonna lose homes this year” due to tax foreclosure, Sabree said. “But looking ahead to next year” is another story. Municipalities generally send summer tax bills in July, with payment due in September; winter tax bills are generally sent in December, with payment due in February. Unpaid property taxes result in a property going into a forfeiture period

“IT’S SOMETHING THAT I THINK SO MANY OF US ARE JUST SO UNSURE ABOUT. IT’S SCARY STUFF. BUT WE ARE DOING ALL THE PROTECTIVE MEASURES, THE GLOVES, THE MASKS, THE WHOLE THING.” — Karen Jo Micallef, marketing and sales agent, Max Broock Realtors

VIRTUAL

From Page 8

downward as the economy improved, with just 108 last year, down from 181 in 2018. Oakland County peaked at 1,187 foreclosures in 2013 and has been trending downward since, with 369 in 2018, according to the state treasury department. The other concern is pure mortgage foreclosure, said Chris Hackbarth, director of state and federal affairs for the Michigan Municipal League. “The problem is more likely people losing their homes because they can’t afford their mortgage,” he said. “Because this year’s tax bill is based on values as of Dec. 31, 2019, there isn’t going to be a direct impact in the summer or winter tax bill this year. But what do things look like on Dec. 31? That’s the real unknown. What does our unemployment rate look like?”

According to data last month from the National Association of Realtors, in a survey of more than 2,500 Realtors nationally, 58 percent reported doing virtual tours with buyers. Jeanette Schneider, vice president of management services at Re/Max of Southeastern Michigan, said the Michigan Association of Realtors has put forward guidelines for Realtors on home showMicallef ings. Those include face masks, gloves and shoe coverings. In addition, they are recommending that sellers open closet, cabinet and other doors in advance to minimize physical contact. “We are not even a week into this yet,” she said. “As we get more real-life experience doing it, there are bound to be some new protocols and best practices over the next few weeks as we have gone through a number of showings.” The home and condo sales market tanked last month, however, as COVID-19 has led to the arrest of the state’s and national economies.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

Property tax foreclosures could rise with COVID-19 | GETTY IMAGES/ISTOCKPHOTO

during which it can be redeemed, and foreclosure if property taxes aren’t paid for three years. “Yeah, that’s likely,” Meisner said when asked if Oakland County, which had about 250 property tax foreclosures in 2019, expected an increase in 2021. “To the extent that 2020 is a difficult time, it would be in 2023 that the effects of this year’s situation would be felt from a tax foreclosure, that’s the bogey you want to look at for purposes of a tax foreclosure question.” Foreclosed properties typically go to tax-foreclosure auction, a process that has drawn controversy, particularly in Detroit. Counties sell the properties for back taxes owed and pocket the sale price beyond that, one point of controversy. Among the other concerns there are rental homes whose landlords fail to pay taxes even though they are collecting monthly rent checks from tenants, leaving them subject to evic-

tion even if they have never missed a payment. Foreclosures also decimate neighborhoods and auctions of those properties are breeding grounds for real estate speculators. There were 3,960 foreclosures in Wayne County last year, compared to 4,178 in 2018, according to the treasurer’s office, a drop of 5 percent. The majority of those are residences, both owner-occupied and occupied by others. Wayne County had 28,200 foreclosures 2015, according to data from the Michigan Department of Treasury. They have fallen dramatically nearly every year since, with 13,684 in 2016 and 7,268 in 2017. Expect an increase in tax foreclosures in Macomb County as well. “Our anticipation is an uptick in the number of foreclosures going forward,” said Joe Biondo, the county’s chief deputy treasurer. Foreclosures there peaked in 2013, when there were 921. They’ve been trending

Tight home supply sends prices higher even as sales plummet BY KIRK PINHO

Home and condominium sales plunged by the highest rate in more than 15 years last month but prices rocketed up, according to data released last week. Year-over-year sales in the multiple listing service, or MLS, fell by 46 percent from April 2019 to last month across more than 15 counties in the region, Farmington Hills-based Realcomp Ltd. II said in data released Tuesday morning. In Metro Detroit alone — Wayne, Oakland, Macomb and Livingston counties — sales fell 47.8 percent. Yet in the MLS, year-over-year median sale prices rose by 11.7 percent from $171,000 to $191,000, and in the four-county metro area, they rose even more, from $180,000 to $208,000, a bump of 15.6 percent. “It’s like the laws of physics. If you jump off a 10-story building, you’re supposed to die,” said Frank Tarala, chair of the Realcomp board and principal broker for Sterling Heightsbased Sire Real Estate. “This is like violating the laws of economics. How do you drop that much in sales and 10 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

Year-over-year sales in the multiple listing service, or MLS, fell by 46 percent from April 2019 to last month across more than 15 counties in the region. | GETTY IMAGES/ISTOCKPHOTO

yet experience an incredibly healthy increase in value?” The answer to the question seems to come in the form of less inventory, as people pulled their homes off the market and suspended showings as the coronavirus pandemic arrested the housing market. On-market listings continue to fall,

with the MLS reporting 18.2 percent fewer properties on the market compared to last year (20,073 to 16,413 this year) and metro Detroit having 19.5 percent less (12,254 in April 2019 to 9,867 last month). This is typically the start of the spring home-buying season, but the ravages of the COVID-19 pandemic

and subsequent near-halt of the economy has taken its toll on home and condo sales, which fell from 7,519 to 4,060 last month in the MLS and from 4,742 to 2,475 in metro Detroit, according to Realcomp. It comes after a sharp decline of 13.3 percent year-over-year in March for the MLS, and 14.9 percent in metro Detroit. “These numbers in April reflect a month that we were shut down,” Tarala said. “But there was still some activity that was taking place for people who had maybe seen properties before the shutdown and did go through and make offers.” A year-over-year decline in sales like April’s hasn’t been seen in Realcomp dating back to 2003. The largest previous drop in sales was in October 2010, when it fell 24.7 percent, according to a spokesman. Here is a breakdown of how the region performed in April: City of Detroit: Sales dropped 56.2 percent from 390 to 171, with prices increasing 44.4 percent from $45,000 to $65,000, according to Realcomp data. Listings dropped by 11.6 percent, from 2,213 to 1,957.

Wayne County (includes Detroit): A 50.1-percent plunge in sales, from 1,741 in April 2019 to 868 last month. Prices increased by 26 percent to $127,000 to $160,000. Inventory fell by 16.1 percent to 4,164 from 4,963. Wayne County (excludes Detroit): Sales fell 48.4 percent from 1,351 in April 2019 to 697 last month. Median sale prices rose 19.3 percent from $145,000 to $173,00 last month. Inventory fell 19.7 percent to 2,207 listings from 2,750 in April 2019. Oakland County: A mild increase in sale prices (2.4 percent to $261,638 from $255,495) didn’t temper the impact of the drop in sales (44.8 percent from 1,554 to 858 last month) and inventory. The available Oakland County housing stock fell 25.4 percent from 4,317 to 3,222 last month. Macomb County: Sales dropped 50.1 percent to 596 last month, after 1,194 in April 2019. Prices continued to rise, this time 14.5 percent from $165,500 to $189,450. Inventory fell 18.7 percent, falling from 2,323 to 1,888 listings last month. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB


RETAIL

17 Art Van stores to become Loves Furniture under new owners New company to be headquartered in Royal Oak after deal approved in bankruptcy court BY DUSTIN WALSH

A Dallas-based equity firm acquired 27 former Art Van stores out of bankruptcy with plans to reopen as Loves Furniture. The newly formed company, which will operate 17 locations in the state, will be headquartered Royal Oak, the company said in a press release. US Realty Acquisitions LLC, founded by investor Jeff Love, acquired the assets and leases of the Art Van stores out of U.S. Bankruptcy Court in Delaware for $6.9 million, according to court records, and was finalized Tuesday. The deal includes the Michigan locations as well as Art Van and Art Van-owned Levin Furniture and Wolf Furniture locations in Pennsylvania (5), Illinois (2) and one each in Ohio, Virginia and Maryland. The Southeast Michigan stores include Art Van locations in Warren, Royal Oak, Livonia, Waterford, Ann Arbor, Westland, Howell, Shelby Township and Taylor. Loves Furniture is expected to hire more than 1,000 employees, including the rehiring of former Art Van employees, the company said in a press release. US Realty hired Matthew Damiani, former vice president of enterprise operations and customer experience for Art Van, to serve as its CEO.

The newly formed firm will operate 17 locations in the state and be headquartered in Royal Oak. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

“We understand the difficulties facing our communities in the face of the coronavirus pandemic,” Damiani said in a press release. “Our leadership team lives in the same cities and towns we serve. For us, it is a point of pride and hope that we have this opportunity to help put many of our talented neighbors back to work. We want to get up and running quickly.” Loves Furniture said it plans a “soft launch” in the coming weeks as it ramps up hiring toward a grand opening event. Under Gov. Gretchen Whitmer’s

“Stay Home” order most retail stores, including furniture stores, are not permitted to be open. It’s unclear when the governor will allow retail to open under the COVID-19 pandemic, but that could happen as early as two weeks if cases continue to drop. According to Whitmer’s plan, those retail stores would likely only be allowed curbside pickup in the early stages. Under the deal, US Realty now owns about 23 percent of Art Van’s 116 stores, Furniture Today reported. US Realty’s portfolio includes Illi-

nois-based sandwich chain Beefaroo, restaurant supply company Indiana Restaurant Equipment, White Oak Station convenience stores and luxury condos in Dallas. The Warren-based Art Van filed Chapter 11 bankruptcy on March 9, only three years after its late founder, Art Van Elslander, sold the company to a Boston-based private equity firm, Thomas H. Lee Partners LP, in an estimated $550 million deal. After its 2017 acquisition, Thomas H. Lee set an aggressive strategy to open 200 more stores and double

revenue to $2 billion by 2020. But Art Van was saddled with roughly $400 million in debt and no financial cushion to respond to consumers transitioning to online furniture purchases pummeled the company’s balance sheet. Thomas H. Lee was accused of profiteering and mismanagement by former executives, who told Crain’s the private equity firm didn’t bother to learn about the historic business and instead relied on new hires from outside the furniture business. Thomas H. Lee hired Damiani in 2017 from Staples, where he served as the office retail chain’s North American supply chain director. The private equity firm closed all of its Art Van stores following a lastditch Presidents Day sale rush and began selling off assets during bankruptcy, which it changed to Chapter 7 liquidation later in March, but efforts to sell off remaining furniture were stymied by the COVID-19 outbreak. Crain’s reported in late March that Gary Van Elslander, son of founder Art Van Elslander, submitted a bid to buy the Art Van brand name and trademark for less than $1 million. The status of that bid is unclear in the court documents. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

We are a full-service law firm—

Our clients are firm clients. #StronglyHeldBeliefs

www.howardandhoward.com | 248.645.1483 Detroit, MI | Chicago, IL | Las Vegas, NV Los Angeles, CA | Peoria, IL

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 11


FOCUS | WOMEN IN LEADERSHIP

‘I was waiting for someone to step up. Deirdre Waterman, mayor of Pontiac, on leaving Finally, I did.’ her ophthalmology practice to run for office BY RACHELLE DAMICO | SPECIAL TO CRAIN’S DETROIT BUSINESS

Deirdre Waterman never planned to get into politics. She went to school for ophthalmology and operated a successful ophthalmology practice for nearly three decades. Then she heard that the Pontiac Public Library planned to close due to budget cuts. And she decided to do something about it. “I said, ‘That can’t happen,’” Waterman said. “What would that mean for this community in terms of our respect for education and our generation of children who are being educated in this city?” With others, she formed a steering committee that worked to successfully pass a millage in 2006 to ensure the library remained open. Her path to politics continued from there. Waterman was elected to the Pontiac Public Library Board of Trustees in 2009, where she served as chairwoman. From 20122013, Waterman served on the Pontiac Charter Revision Commission, which aimed to revise Pontiac’s governing documents that had been unchanged for nearly 30 years. Waterman was approached several times by community leaders before she considered running for mayor. “Things got worse for the city and I was waiting for somebody to step up,” Waterman said. “Finally, I did.” Waterman was sworn in as the mayor of Pontiac in 2014, becoming the first female mayor in Pontiac’s history. She was re-elected in 2017, making her the first mayor in Pontiac’s history to earn a second term. Waterman has long been civically active and has served on many local boards, including as previous vice chair of the Mosaic Youth Theatre. Her husband, the late Judge William Waterman, was the first African American judge appointed to serve the 50th District Court. Under Waterman’s leadership, the city of Pontiac has achieved fiscal solvency after years of financial distress. At the end of this year, Pontiac predicts $17 million in the general fund surplus budget. Today, businesses such as United Shore Financial Services LLC, a mortgage lender that employs more than 5,000, have moved to Pontiac. Retail giant Amazon plans to open a distribution center this year at the former site of the Pontiac Silverdome, as well as a fulfillment center scheduled to open next year. Last year, officials announced Farmington Hills-based Erae USA, an automotive supplier, will invest $17 million in a new manufacturing center in Pontiac. ` What drew you to ophthalmology? Math and science were strong points (growing up). My father was a physician and that started

12 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

my curiosity in medicine early on. I think the ophthalmology specialty attracted me because it’s very precise and people-oriented. I wanted to have interaction with the public as opposed to doing something that is lab-oriented. You can make such an immediate impact in somebody’s life by improving their sight or vision. I started out with a number of patients who were long-term patients of my dad that needed an eye doctor and came to me for that same level of care. I built my practice in Southfield and later (moved to) Pontiac after I met and married a prominent lawyer in town by the name of William Waterman, who had established a law firm here in Pontiac. There are elements of running a business that carry over (into being the mayor). To run a successful practice, you have to have your operations in order. That includes how you set and balance budgets, manage a staff and do strategic planning. ` Why did you decide to give up your practice and run for mayor? My entry into politics all started with the library. Around 2004, one of the nonprofit groups I was involved with, The Links Inc., decided to help our library here because the city was running out of money. (The Links Inc., is an international nonprofit based in Washington, D.C., that focuses on enriching, sustaining and ensuring the culture and economic survival of African Americans.) I saw that our library was underfunded and undercapitalized and I recommended we raise the money to do a children’s reading room. Many of our children had gone to other cities that had better libraries. We wanted to better the library right here at home. We bought new books and furniture where the children could come and learn. Then, about a year later, the mayor at the time (Leon Jukowski) announced the general fund was in financial difficulty and that the library was one of the things they were going to cut. I remember reading the newspaper with a group of friends and I said, “That can’t happen. What would that mean for the literacy of

Deirdre Waterman

this community? Somebody should do something about this.” My friends looked at me and said, “Well, why don’t you do something about it? We’ll help you.” We formed our own caucus and got a millage passed for the city in 2006. For years, there were a number of community leaders who sought me out for mayor. They were concerned with the politics of Pontiac and wanted some new blood. They knew what I was doing with the library and throughout the community and asked if I’d consider running. I had to think long and hard because politics can be a rough and tumble sport. I had to be very clear that I was going to do this with the aesthetics of a business person. If I was going to give up my practice, my patients, and the things I had worked most of my life to achieve, I had to make sure it was going to be for something that would make a difference. I wanted to change the tone of what was going on in Pontiac and to change the trajectory of where we were

‘IF I WAS GOING TO GIVE UP MY PRACTICE, MY PATIENTS, AND THE THINGS I HAD WORKED MOST OF MY LIFE TO ACHIEVE, I HAD TO MAKE SURE IT WAS GOING TO BE FOR SOMETHING THAT WOULD MAKE A DIFFERENCE. ‘ — Deirdre Waterman, mayor of Pontiac

heading. Now, I’m committed and here I am. I’m proud of the achievements we’ve accomplished. ` Were there any early challenges you had to overcome as mayor? One of the challenges was that there

was a lot of factionalism. Some of our council meetings are known to be kind of robust in terms of their language and their presentation. That was one of the reasons why people encouraged me to run, because I had been involved with nonprofits and I wasn’t part of any faction. When I came in, I wanted to avoid (that type of behavior) because we had enough problems here and I wanted to concentrate on those. My philosophy is to treat everyone with respect. We’re all human-kind here. We aren’t all going to agree about everything. There will be different interests and different ways of doing things, but you have to find some common ground to find out what’s best for the circumstances that you have. I’ve chosen to try to bring people together and to realize that everybody has a voice. We should attack the problem, not each other. I’ve tried to hold on to that. See WATERMAN on Page 13


FOCUS | WOMEN IN LEADERSHIP

WATERMAN

From Page 12

` Attracting businesses has been an important focus for you. How have you worked to accomplish that? One of the things we had to do was change the narrative about Pontiac. It had been seen as crime-ridden. At one time, we were among the top 10 most violent cities in the United States. That was a reputation we had to make sure that we changed. During the first three years of our administration, the Oakland County Sheriff has been brought in (to take over law enforcement in Pontiac) and the crime rates for violent crime decreased by about 40 percent. Now, we’re not even in the top 100 most violent cities anymore, and we’re probably even lower than that. (Oakland County) Sheriff Michael Bouchard is very proud of that. We’ve also stabilized the city financially. We’ve changed the diversity in terms of businesses who have come to town. We were previously known as a one-horse town: General Motors. There was a time when one out of every three working people in Pontiac either worked for GM or for city government. We’re proud of our heritage, but we now have brought in all kinds of new businesses across a spectrum of different industries. The goal of attracting businesses is also to create jobs. United Shore first came to town with about 2,500 people and is now growing to about 5,000 to 6,000 (employees). Williams International (a Pontiac-based company that makes gas turbine engines for the aviation and military industry) brought in half

RACER Trust (Revitalizing Auto Communities Environmental Response) presents Mayor Deirdre Waterman a RACER’s Edge Award in 2019 for Pontiac’s history of revitalizing environmentally distressed areas in the city. | PROVIDED PHOTO

a billion dollars of investment into the city. That’s the largest combined economic development assets the city has had in dozens of years. We now have 38 new building projects happening right now. Amazon is the granddaddy of them. They are building a fulfillment and a distribution center, which is the first time they’ve put both of those (buildings) on one site anywhere in the country. That’s going to bring a minimum of 1,500 jobs. We have a great location that’s well within the reach of a notable workforce. ` COVID-19 has had a massive impact on the people of Michigan. How has it affected Pontiac? In terms of mitigating this, there are some things that we know are still impediments in comparison to other communities. One of those things is just being able to test people. It’s such

an important part of the whole public health control of the disease. We got our first testing station in Pontiac about four weeks ago. (Oakland County opened its first drive-thru COVID-19 testing site April 16 at the county’s main campus in Pontiac.) Before that, only 1 percent of the people in Pontiac had been tested. The local hospitals just didn’t have the test kits available. We’ve had to rise to the occasion to make sure those challenges were met. ` Initially, state and local agencies were not reporting racial data on COVID-19. You’ve been a leading voice in advocating for that data. Why is it important to have? Data is key. It has life and death implications. When we did finally get some data on that, it showed that certain populations were more vulnerable than others. For instance,

initially, young people were told they weren’t vulnerable to this and later we found out that’s not exactly true. People could be very adversely affected by that. We were slow to get the data here. Some of us had to insist that agencies release the demographics of COVID19. That’s important so we can guide treatment and care. That can affect mortality. Pontiac is a community (that is) 51 percent African American. We’ve seen now how African Americans can be disproportionately affected by the mortality rates, sometimes by extreme amounts. Michigan (COVID-19 deaths) are about 40 percent (African Americans). Data should be guiding us. ` What do you hope for the future of Pontiac? Pontiac is in a different place than it was six years ago. We want a place where people’s lives are better. I just want to make a difference in terms of achieving that. Now, we can see the results. I hope we have put some things in place that will continue that trajectory. About five years ago, I was in a church service and I heard a visiting pastor talk about how the ’60s and ’70s were the heydays of Pontiac. I thought to myself, “You mean all our best times are gone, and we have nothing but decline to look at?” Something rankled me when I heard that. We’re on a trajectory now. We can work together and come up with some common goals. Let’s continue to follow the path we are on for progress. Then our heydays aren’t behind us; our heydays may very well be in front of us. That’s the vision I try to instill.

The Waterman File Education: Bachelor of arts in biology and political science from the University of Chicago. Doctor of medicine from Meharry Medical College in Nashville, Tennessee. Waterman completed her residency at the Kresge Eye Institute at Wayne State University, becoming the first African American female ophthalmologist in the state of Michigan. Career ladder: After completing her residency, Waterman worked as an ophthalmologist from 1977-2014, operating her own eye practice, Holloway Eye Care, with offices in both Southfield and Pontiac. Waterman was also a consultant to various health care organizations and served as the president of Pontiac-based Associated Healthcare Providers. She practiced medicine actively until 2014, when she took office as the mayor of Pontiac. Current role: Mayor of the city of Pontiac Fun fact: Growing up, Waterman traveled a lot with her family. She lived in Germany for a year and a half while her father served as a captain in the United States Air Force after the Korean War. “I learned that all cultures are superficially different, but we’re also very much alike,” Waterman said. “People want the same things. They want to have freedom. They want to have opportunity. They want to have a better life for their children. That’s universal wherever you go, whether you live under a dictator or not. We can protect that sense of community and that sense of human respect.”

DATA CENTERS CLOSE TO HOME: Grand Rapids, MI Detroit, MI Oak Brook, IL Indianapolis, IN South Bend, IN Madison, WI

SAFE WITH US Midwest Colocation, Connectivity, and Data Protection US Signal offers 8 Midwest data centers, a trusted network, and secure data protection solutions close to home. With a 22-year track record of success, US Signal is the service provider you can count on now and in the future. ®

To learn more, visit: ussignal.com/crains-det

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 13


NONPROFITS

Advertising Section

PEOPLE ON THE MOVE

To place your listing, visit www.crainsdetroit.com/ people-on-the-move or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com. AUTOMOTIVE

INSURANCE/FINANCIAL SERVICES

Ricardo, Inc.

MassMutual Great Lakes

Christy Good, Vice President of Human Resources, has provided Ricardo, Inc. with more than 15 years of corporate experience encompassing all aspects of HR law. Good drives a high-performance culture through recruitment of premier talent while overseeing strategic initiatives that deliver business value that embraces Ricardo employees and promotes growth. Good has been instrumental in running Ricardo, Inc. business based on a thorough understanding of employment and labor landscape law, legal compliance and current HR processes.

MassMutual Great Lakes welcomes Gina Coleman as Chief Sales Officer. She brings more than 25 years of experience in financial services, business, B2B, B2C sales and management roles. Coleman leads the sales department’s strategy and development initiatives. She is also an advisory board member for the firm’s Collective Financial Group, an all-female financial services firm serving the financial needs of women, while championing career opportunities for women in finance. CRN202204-263863

REAL ESTATE

Advocate Commercial Real Estate Advisors

FINANCIAL SERVICES

International Bancard International Bancard, an industry-leading payment acceptance provider, announces Josh Elsass has joined the executive team as their Chief Sales Officer (CSO). “Josh possesses exceptional talent, drive and leadership experience. He’ll be a fantastic addition to the executive team,” said David Iafrate, CEO and Founder. In his role, Elsass will be responsible for portfolio diversification and revenue growth across International Bancard’s multiple sales channels.

Advocate Commercial Real Estate Advisors is pleased to announce the promotion of Jim Berkemeier to Managing Principal for Southeast Michigan. Jim joined Advocate in 2013 and has been instrumental in growing the firm’s brokerage team and expanding service offerings. In his new role, he will oversee implementation of aggressive growth plans while continuing to serve his office and industrial clients. NEW HIRE? PROMOTION? BOARD APPOINTMENT?

Crain’s People on the Move showcases industry achievers and their companies to the Detroit business community.

NEW GIG?

Contact: Debora Stein at dstein@crain.com

• Plaques • Crystal keepsakes • Frames • Other Promotional Items

14 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

C O N TA C T

PRODUCTS

Preserve your career change for years to come. Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569

Philanthropic, corporate groups launch 3-year effort to support Pontiac Small businesses, nonprofits to provide emergency support BY SHERRI WELCH

A group of philanthropic and corporate groups has created an initiative to support small businesses and nonprofits in Pontiac. The Pontiac Funders Collaborative plans to launch a $200,000 fund to provide businesses with 10 or fewer employees in the city that have been affected by the COVID-19 crisis with emergency support. Set to launch Monday, the Small Business Capital Relief fund will build on $150,000 in emergency grants already made to critical human service agencies in Pontiac, the collaborative said in a news release. And in the coming weeks, the group plans to roll out a program to provide capacity-building grants to nonprofits in the Oakland County city. The Pontiac Funders Collaborative includes Ballmer Group, Community Foundation for Southeast Michigan, Vera and Joseph Dresner Foundation, Flagstar Bank Foundation, General Motors Co., New Economy Initiative, Ralph C. Wilson Jr. Foundation, Tauber Family Foundation and William Davidson Foundation. Freyja Harris, who most recently served as chief administrative officer for the Detroit Employment Solutions Corp., will lead the new initiative as project director. Over the next three years, the effort will focus on workforce development, entrepreneurship, public spaces and support for key institutions. “The Pontiac Funders Collaborative is still early in its efforts but has already begun working in close part-

nership with local government and nonprofit organizations over the last several months to support development of a collective plan intended to help strengthHarris en Pontiac and its institutions and contribute to residents’ ability to thrive,” Lavea Brachman, vice president of programs, Ralph C. Wilson Jr. Foundation, and one of the co-chairs of the new fund, said in the release. “The collaborative’s commitment to support Pontiac’s small businesses and organizations became even more urgent during this crisis, so the relief fund has been designed to provide critical capital for up to 100 businesses throughout the city.” The Community Foundation, which is administering the fund, plans to open the grant application process for the first round of funding on Monday. The first round of applications will close May 26 and grantees will be notified by June 4, with payment immediately following. A second round of applications will be accepted June 8. For more information about Small Business Capital Relief, visit cfsem.org/pontiac-business-relief. The fund will make grants of up to $2,500 made to home-based businesses and up to $5,000 for brickand-mortar businesses. “It is important for us to give back to the communities in which we serve

and our hope is that through this collaborative, we can help Pontiac continue to build upon its legacy as a great place to live and as a vital city to southeast Michigan’s culture and economy,” Sonia Plata, director of the Flagstar Bank Foundation, said in the release. The fund is the latest aimed at supporting small businesses in the region. On Wednesday, a Dearborn partnership announced grants of up to $5,000 for 60 Dearborn businesses with 17 or fewer employees. The Dearborn Small Business Relief Grant program is supporting businesses typically left out of major city, state and federal relief efforts, due to lack of federal funding and eligibility restrictions on micro-businesses, the group said in a release. It’s funded by the New Economy Initiative and coordinated through a group including ACCESS, the city of Dearborn, Dearborn Area Chamber of Commerce, American Arab Chamber of Commerce, Yemeni American Chamber of Commerce, East and West Dearborn Downtown Development Authorities and Warren and Dix/Vernor Business District Improvement Authorities. Those efforts follow the Michigan Women Forward and the Michigan Economic Development Corp.’s announcement Tuesday of a $1.5 million fund geared toward struggling small businesses. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

MERGERS & ACQUISITIONS

B.L.A.C. Detroit sold to entrepreneur who plans to grow magazine BY KURT NAGL

B.L.A.C. Detroit Magazine, a website and print publication focused on the African American community, has been sold to local entrepreneur Billy Strawter Jr. Strawter became the sole owner of the Ferndale-based media company after buying out co-founder Alyssa Martina and a group of shareholders that included Paul Riser Jr., managing director of technology-based entrepreneurship at TechTown Detroit, and Sharon Banks, owner of Bankable Marketing Strategies of Detroit. The sale closed April 22 and was announced May 11. Strawter, who has been an investor in B.L.A.C. for four years, told Crain’s that conversations about an acquisition started eight or nine months ago. “I’ve long been a fan of the publication,” he said. “Just to have the opportunity to continue to tell stories about the region and its people — it’s just an amazing history we have in the area. The opportunity to carry that forward was too big to pass up.” Martina, who owns Metro Parent Inc., launched African American Parent in 1999 with co-founder Alexis

Bourkoulas, who is CEO of Metro Parent. The magazine was renamed B.L.A.C., which stands for Black Life, Arts and Culture. The free publication is distributed monthly with Strawter a circulation of 30,000. “For more than 20 years, B.L.A.C. has been true to its mission of telling the stories of Black Detroiters that often get missed, celebrating our rich culture and sparking dialogue about the issues that impact our community,” Banks said in a news release. “The evolution of B.L.A.C. brings us to a strategic decision that advances the brand with resources that will maximize and propel its growth.” Strawter launched Detroit-based MILO marketing agency in 2016. He’s also managing partner of Detroit-based brand consulting firm Soul Motor Co. and a minority partner in Busted Bra Shop. Running a media company amid a long-term decline in advertising revenue had been challenging enough be-

fore the coronavirus pandemic further upended the industry. Strawter said he had no idea what was coming when he agreed to the purchase but said he did not even consider backing out. “Because of the way (COVID-19) has hit our community, it felt like it was more important than ever to move forward with it,” he said. Like other local media companies, B.L.A.C. has been hurt financially by the outbreak. It’s typically delivered to barber shops, beauty salons and churches throughout the area. However, since all those distribution points are closed, the publication went digital-only May 8. Strawter said he plans to bring back the print publication as soon as it makes sense for the business. The publication employs 15 fulltime workers who have been retained during the shutdown, though with some reduction in hours, Strawter said. Strawter said he plans to expand B.L.A.C. as a resource for metro Detroiters. He said he’ll have a better idea of what that looks like once operations start returning to normal. Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl


SCREENINGS

JOBS

From Page 3

From Page 3

Beyond health screenings, new guidance drafted by the Centers for Disease Control and Prevention released Thursday would give different organizations specifics about how to reopen while still limiting spread of the virus, including by spacing workers or students 6 feet apart and closing break rooms and cafeterias to limit gatherings. Many of the suggestions already appear on federal websites but haven’t been presented as reopening advice. Fuse Technology has joined what has become a crowded marketplace of technology suppliers in just a matter of weeks. Red Level Group, a Novi-based IT services and application development company, this month launched COVID ClearPass, an app that requires employees to give health declarations. Similarly, Quicken Loans Inc., the Detroit-based online mortgage company, has been developing an application for use by its employees. Should a Quicken Loans worker fail the screening questions, then the employee’s badge is turned off, denying them access to facilities. Meanwhile, Detroit-based workplace application developer Andonix has developed a new health screening app called Safely. The company is offering the app for free and has interested clients in manufacturing, construction and professional services. “We see that the pandemic is going to change our social and work habits in the same way that 9/11 changed the travel industry,” said Andonix CEO David Salazar Yanez.

“I think they jumped on it pretty quickly, to say ‘We’re going to go virtual,’ and they didn’t really wait to see what would happen,” said Journi CEO Richard Grundy, whose organization will provide laptop computers for its Grow Detroit trainees this summer. “The fact that they made that decision early enough gave us time to prepare for it.” Participants 14-16 years old will be paid to go through career exploration resource Virtual Job Shadow. They’ll learn about education requirements needed to enter a variety of fields and potential earnings, Hocker said. Grow Detroit will pay around $50,000 for 5,000 participant slots. On Educational Data Systems’ training platform, those 17-24 years old can engage with employers in high-growth industries digitally through projects and workshops. Participants will be able to enroll in occupational training in manufacturing, IT, health care, construction and customer service, according to Hocker. As of now the cost is estimated at around $130,000. The funding for Grow Detroit, managed by agency Detroit Employment Solutions Corp., comes from foundations and employer partners. Hocker expects this summer’s program to cost $11.7 million total, down at least $200,000 from 2019. In order to earn their stipends, the youths will need to do individual and group assignments and a capstone project. There’s a chance employers may still provide some on-site jobs, but

Implementing new policies The Small Business Association of Michigan has identified four so-called pillars around which it is encouraging employers to coalesce. Beyond daily symptom checks and screenings, the group is encouraging that businesses maintain social distancing; a sanitation and disinfecting schedule several times daily; and the use of personal protective equipment. Each of those items is on the agenda as employees slowly start going back to the Livonia office of Flat Rate Funding Group LLC, a transportation invoicing company. Because the company works with the trucking industry, it has been deemed essential, and a skeleton crew has been working onsite while most employees work remotely, COO Rob Trube said. Beginning this week, however, workers will have the option to return to the office. One of the first things they’ll find is a daily health screening using Andonix’s Safely app. Once employees answer the screening questions, the app generates a QR code that Trube described as akin to a mobile boarding pass used to board an airplane. Ultimately, Trube said that between the health screening and other mitigation steps, it all boils down to a balancing act as employees return to work. “My challenge has been ... how do I make (employees) feel safe and how do I operate the business?” Trube asked, noting that Flat Rate has invested between $1,500 and $2,000 in cleaning supplies and no-touch equipment.

Data as friend or foe The

Michigan

Department

of

The health screening software developed by Ferndale-based Fuse Technology Group | FUSE TECHNOLOGY GROUP

Health and Human Services is referring employers to federal CDC guidelines, which suggests health screenings as an “optional strategy” and generally encourages social and physical distancing. February 17, 2020 The Marana Group, a Kalamazoo-based data and document manDecember 2, 2019 agement firm with an office in South Bend, Ind., has been screening employees May 18,since 2020mid-February, company President David Rhoa said. Despite months of testing, however, he said he’s still not sure who should be taking temperatures and where that should be done. If an employee shows up and the temperature is deemed excessive, leading to the worker being turned away, were federal privacy laws violated? “We’re not doctors. Our policy has always been that if you don’t feel well, stay home,” Rhoa said. The data these health checks generate also leads to questions for some about how it’s stored and who has access to it. May 18, 2020 Gravier with Fuse Technology said the company’s program simply archives the health data in an encrypted format and provides limited access. Others see the health screening and gathered data as a competitive advantage as consumers start to venture out more in public and are looking for assurance they’ll be safe. Leelanau Cellars, a 150-acre vineyard on Northern Michigan’s Leelanau Peninsula, closed its tasting room in mid-March as mandated by Gov. Gretchen Whitmer. But because the vineyard is in the agriculture sector, which was exempted from Whitmer’s shutdowns, Leelanau Cellars’ 25 employees who work in wine production and distribution have remained on the job, said Bob Jacobson, owner of Leelanau Wine Cellars Ltd. For the past two months, Jacobson has been accumulating paperwork from employees answering a health questionnaire. Jacobson has purchased a digital service from Movista, a Bentonville, Ark.-based data company that has converted its employee task-management software into a mobile app-based platform for daily health screenings. “It makes some sense to try to keep records of all of this stuff because who knows where it’s all going?” he said. Customers may also want to know that a business is screening employees daily and keeping records, Jacobson said. “We don’t know what our customers are going to become comfortable with,” he said. — Crain’s Senior Editor Chad Livengood and The Associated Press contributed to this report.

that’s not clear yet, Hocker said. Michigan is in the third phase of a six-phase economic reopening plan.

plicants are completing their registrations now and then the team will make selections.

Digital access is key

Making online count

The shift to online isn’t like flipping a switch — not even close. Detroit Public Schools Community District estimates just 10 percent-20 percent of its students have consistent internet access at home. And that doesn’t include the Grow Detroit participants who aren’t enrolled in a DPSCD school. To get kids online this summer, Hocker hopes to piggyback off a major effort announced by the public school district last month. A $23 million public-private fund is being used to buy and distribute wireless internet-enabled tablets to all 51,000 pre-K-12 students starting in June. For Grow Detroit participants who aren’t in the school system, the city employment program plans to raise funds to get them those tablets and internet access. “This is still one critical area of need,” Hocker said. There wasn’t an estimate yet on RAIN’S the DETROIT BUSINESS how Cmuch tablets would cost. Grow Detroit also still needs to raise RAIN’S DETROIT BUSINESS fundsCto cover $1.8 million in participants’ stipend costs. ThCeRAIN six-week, 120-hour program is ’S DETROIT BUSINESS set to begin July 6 this year. Students will be paid stipends between $1,000 and $1,200. Asked about potential difficulties in getting young people to apply, Hocker said they’d received 13,227 applications for just 8,000 spots as of early this week. In 2019, more than 16,000 applied and in 2018, more than 13,000. Ap-

Detroit’s Parks and Recreation Division plans to work with Grow Detroit to possibly employ virtual tutors for the children who would usually go to Parks and Rec’s Summer Fun Centers for activities, spokesman Jeremy Thomas told Crain’s in an email, though it’s not solidified yet. In past years, Parks and Rec would have Grow Detroit participants work at its day camp and summer center programs. Journi expects to take on 55 trainees this year through GDYT. The nonprofit provided laptops last summer that had been donated by Detroit-based Quicken Loans Inc. It still has those computers and will be loaning them out this summer. Last year, Journi’s Grow Detroit cohort met for six weeks on Wayne State University’s campus in Midtown, CEO Grundy said, and took field trips to experience Detroit tech companies in action. This summer will be different. Grundy said they’ve hired more instructors this summer so (students) can have the support they need. Grundy said he’s talking with tech companies like Facebook and Amazon about virtual tours or interview sessions. He says it’s going to be hard for students to collaborate as well this year. A silver lining is they could get exposed to big companies outside Detroit. Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

Advertising Section

CLASSIFIEDS CRAIN’S DETROIT BUSINESS

To place your listing, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com www.crainsdetroit.com/classifieds

M

P

OB RJEAL ARKET LACE M ARKET PLACE FSTATE RONT E WEDDING sale SERVICES REQUEST FOR PROPOSALS MISCELLANEOUS Receivership of assets

of Visiting Physicians Business Residential Physicians Association, PLLC & RPA ManAmplify your impact while you’re Delight your Clients with the Best of Michigan agement, Inc. includes account Handmade Nut, Bakedbusiness Goodsis&closed, prepared to receivables, 7 vehicles, outstandsuccessfully reopen, reinvent your Chocolate Gift Trays. ing insurance, Medicare and Medstrategy to restart & rebuild your FREE Holiday cards w/your logo &business messagestronger. icaid claims, office equipment, office furniture, medical supplies, Guaranteed Christmas Delivery! call Jim 906-643-6643 and intellectual property. NibblesGifts.com 248-737-8088 Contact Sonya Goll at (248) 354-7906 ext. 2234 or sgoll@ Visit our store at 32550 Northwestern Hwy, Farmington Hills Youforcan reach this additional inforsbplclaw.com READERS ARE S S RA E mation, form purchase agreeaudience with your HAVE AN AVERAGE ment, financials of business, and real estate listings Executive Director, Audience Development deadlines for offers. NET WORTH OF or announcements. 2,280 ACRES MISCELLANEOUS

RJEAL OB & Analytics E FSTATE RONT

Entrepreneurs & Business Owners

ElopeUpNorth.com

CRAIN’S

MARKET PLACE $1.6 MILLION

REAL ESTATE

As a forward-thinking and transformational Audience Development Contact Suzanne Janik at sjanik@crain.com or 313-446-0455 for details. WEDDING SERVICES MISCELLANEOUS Executive, you will lead the strategy, development, and execution of LABORATORY SPACE MISCELLANEOUS audience plans via effective marketing practices with the goal of achieving revenue growth across six of Crain Communications’ core brands: Automotive News, Crain’s Business Publications, Modern Healthcare, Ad Age, Pensions & Investments, Polymer Group. By leveraging your focused ROI mindset and your experience as a modern, multi-channel marketer RESIDENTIAL PROPERTY you’ll decide how best to engage audience members during their customer journeys, and how best to allocate resources. Position could be 2,280 ACRES FOR SALE based in Detroit, Chicago, or New York City. Visit crain.com/careers/ for more information DOUBLE EAGLE RANCH North Central Michigan and available positions.

VISIT OUR WEBSITE:

www.crainsdetroit.com/classifieds

REAL ESTATE Business Development Sales Associate LABORATORY SPACE

The Global Polymer Group is looking for a Business Development/Sales Associate who will be expected to work with inactive accounts and new prospects to pre-sell the brand with the objective to set up a meeting

TheDoubleEagleRanch.com Call Kyle: 248-444-6262

MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 15

CRAIN’S READERS


COPING WITH COVID-19

QUESTIONS

From Page 1

Absolutely, said Sheldon Yellen, CEO of Birmingham-based recovery and restoration services firm Belfor, which has performed 7,100 COVID-19 related cleaning jobs since February including the now infamous Diamond Princess cruise ship. “Hire a professional. It doesn’t have to be Belfor, but don’t trust the guy that just mixed some bleach and water. I believe a deep clean before you let anyone back is paramount. That means your mechanical systems and your duct systems need to be cleaned, too. Have your carpets cleaned. Then a week later, I’d have them come in again for a regular cleaning. Keep that up for three or four weeks. A weekly cleaning is going to give people a lot of confidence.”  Should I temperature check employees before allowing them to enter? Yes. Most Michigan counties “strongly recommend” temperature screenings for all on site employees. The Centers for Disease Control recommends screeners either stand behind a partition or through a plexiglass window as the screener will be inside the ideal 6 feet of social distancing. Anyone with temperature above 100.4 degrees Fahrenheit should not be allowed inside  How do I get my office workers up several floors in an office tower? Creatively, said Nate Anderson, a partner for management consulting firm Bain & Co. in Chicago, which is advising members of the Original Equipment Suppliers Association. “This is one of the biggest bottlenecks, particularly in a multi-tenant building. What was learned out of Asia is that staggering start times in 15-minute windows works best. Do the same thing for stairwells. For elevators, you need to keep people spaced with proper markings as they wait. Limit the occupancy to four and have each person remain on a marked spot in the corner of the elevator. We encourage all companies to ask employees that are able to to take the stairs, particularly on the bottom four floors, to reduce the burden. If the building has enough space, make the stairs one way up and one way down.”  Should I make my office workforce that’s currently working from home return? Probably not, said Kristi Stepp, partner at Ann Arbor-based management recruiting and advisory firm Sigred Solutions. “Beyond the logistics, people are enjoying more flexibility working from home and likely want that to continue. If they’ve made it work, try to let them. Remember there are generational differences as well. This probably played into the millennial comfort zone, but baby boomers were probably more challenged and not feeling as productive and as engaged. Remember those may want to come back to work sooner than others.”  How, exactly, do I keep the bathrooms clean? Diligently, Yellen said. “We have boxes of gloves in our bathrooms. We put some pump sprayers in the bathroom full of disinfectant. It’s one in at a time and when they are done, they are asked to spray down the unit as they leave. On the outside of the door, they mark down the time they left, so the next person knows to wait 10 to 15 minutes before entering. That might not be workable for everyone, but businesses should try to maintain as close to cleaning between each person as possible.”  Should I maintain the emergency technology investments made to survive the pandemic? Yes, said Ray Telang, market managing partner advisory firm PwC. “Videoconference calls have been a part of our life for the last 20 years, but we very rarely used that format. Today, we’re using it more often than not. All of our people are. It’s provided a more personal experience through this pandemic and people are more comfortable with it now. This process was going to happen over time, but the pandemic accelerated it. We are where we ultimately would have been three-tofive years down the road.” 16 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

Two line leaders at Lear’s Flint plant eat lunch as the plant prepares to reopen on May 18. Plexiglass partitions separate workers as they eat. | DUSTIN WALSH/CRAIN’S

WALSH

From Page 1

The Southfield-based auto supplier held an open house, of sorts, for its production line leaders to get them acclimated with the rigorous new safety protocols as the plant is set to begin limited production Monday. Admittedly, walking into a production plant in the middle of a pandemic that’s claimed the lives of nearly 86,000 Americans in the last 100 days is nightmare fuel. I was fearful — for my safety and the safety of my family. But Lear published its “playbook” for reopening on April 6 — several companies have since published their plans — and more than a month later, I was offered the chance to witness and report on its implementation in person. Fear be damned. The opportunity for unfettered access and a plant tour with Lear CEO Ray Scott and his team of production leaders proved too juicy for my journalistic lizard brain to decline. Once inside, the Flint factory is largely the same as all modern manufacturing plants — organized and surprising clean. But the first thing workers will notice on Monday is an overabundance of signage, directing them down now one-way paths and blue circles on the floor neatly spaced 6 feet apart anywhere people may congregate. There is one way in and one way out of bathrooms, cafeterias and up and down stairs. Workers are instructed via orange dots on every sixth step how to maintain distance. Masks are required. Drinking fountains are also shut down, save for the water bottle filling stations. Sanitizer is everywhere, at least two within eye shot at any point in the plant. In the cafeteria, each four-person table is outfitted with quadrant of plexiglass, blocking respiration of unmasked employees as they eat. As Scott and the rest of the Lear crew meandered through the cafeteria, I politely interrupted two production line leaders to ask how safe they felt. They both indicated they felt comfortable, and I asked one of them to explain. “I came in shaking my head, but the level of thought they put into safety made me comfortable rather quickly,” she said. “It’s certainly safer here than the grocery store.” That’s a sentiment I overheard as I passed several employees on my tour. Granted, it’s important to note only about 50 of the plant’s 675 employees were present Thursday. The plant will restart Monday with only one shift of

about 225 employees. ’m known to have a bit of a potty mouth and throughout this idea of returning to work my biggest concern has been, and will always be, the toilets. I have asked at least a half dozen experts about bathroom protocols in the last week alone. At Lear’s Flint plant, every other urinal (I only went into the men’s room) is covered in orange tape, as well as the sinks. Workers are instructed to maintain distance as they enter, use the restrooms and wash up. Scott mentioned to Frank Orsini, president of the supplier’s seating division, that turning the water off

Drinking fountains are disabled with prominent signs, but a water bottle filler is allowed.

at the cordoned off sinks was important as workers at its Tuscaloosa, Ala., plant had used them anyway in a rush to get out of the restroom. Toilet stalls did not appear to be limited in any fashion. A more rigid cleaning schedule is also now a priority. In fact, cleansers and supplies are located on carts throughout the plant. Orsini said one worker per every 12-14 employees is dedicated to sanitization. The second-floor conference rooms and office space have also changed. No more than 10 people are permitted in a conference room and extra partitions were added between cubicles. But the main show at the plant is the seat production and work stations that were adjusted to meet the company’s new protocols. Plexiglass dividers were added between work stations and work flows changed to provide optimal distancing. That, of course, comes at a cost. Scott declined to discuss the costs associated with all the new safety measures, but effi-

ciency is certainly slowed. Orsini indicated on the tour that production will likely slow from 16 seats per hour to only 12. Scott quickly said, “I don’t care about volumes right now. Let’s get this (safety) right.” Maybe that’s just a peachy line to say in front of a reporter, trying to prove the health of Lear’s employees are more important than profits. But I didn’t get that sense from Scott. He mentioned more than once when I was nearly out of earshot that he’d push back on the customer — the Flint plant supplies complete seats to GM’s Flint Assembly a mere five miles southwest — if safety protocols were not working or compromised. Scott also recognizes the well-being of employees is directly related to profits long term. An outbreak of COVID-19 shuts down production, too. Scott and Lear appear to be committed to solving the pandemic puzzle as well as easing employees’ minds. During the open house Thursday and potentially into next week, the company was offering on-site antibody testing to its employees. A staff of four from Beaumont Health operated the testing — a serology test determines whether the patient has had COVID-19 and whether they now have antibodies against the virus. Crain’s reporter Jay Greene has written about his own experience with the antibody test in recent weeks. As Greene notes, as of now the antibody tests are experimental and can’t determine whether COVID-19 antibodies mean a person is immune to the virus ... yet. Scott hopes the tests could in the future allow the company improve efficiency and protocols if it knows who is and who is not immune, but acknowledges the testing limits. But he said even if it’s just data collection for the health sector, he’s happy to provide it to patients. He already got his antibody test and insisted I do so as well ... for the greater good or maybe just peace of mind. So, there I was, in the middle of an automotive manufacturing plant in Flint, getting blood drawn in the throes of a global pandemic. I felt safe and from my very limited point of view, the protocols and processes at the plant seem about as safe as one could hope they’d be while producing automotive seats in the current environment. I found out the next day that my antibody test was negative, and will know just how safe I was at the plant in the next two weeks. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

Supe

SC

From

C that lear a do er t with that can W ees at th “ope accl

 Lo bein I’m m appr gett feel I’m m that plac I’m n prod agai prod We’r that plac busi prot stop gett work

 Yo kno guid out I had lead critic the s of co way thos This no e upd thin an in com


tion y 12. vol.” y in h of han cott. was k on omfive not nizy rek of

d to sing ouse the ting eaulogy had antiJay nce

ody mine son

llow cols but said sec-

sted aybe

moood

nt of lant ey’d the

test was

COPING WITH COVID-19 we’re focused on. This isn’t a cure for the virus, but it is making sure we have all the right protocols to protect from spread in the event somebody comes into our plant that is a carrier. Critical for execution is communication. Because I’ll tell you what I have found is you have people who believe that this is fake and not real, to the extremists who believe they should wrap themselves in cellophane and never leave the house again. The first challenge of all of this was educating employees on what we know about the virus, and what we do know changes, but providing what they need to know when they come back in the work environment. I feel very comfortable that if you follow the protocols, you can be safe. That’s one of the tougher things ... maintaining that sense of urgency and focus on the disciplines and not getting lackadaisical. I think right now, as we begin to start back up, everyone is overly sensitive and focused on the virus, but if (a company and leaders) maintain the driving sense of urgency over a long period of time and allow employees to be comfortable with speaking up, people get more comfortable.

Supervisors walk through safety protocols with Lear CEO Ray Scott (in blue) and Frank Orsini, president of the company’s seating division (in white). | DUSTIN WALSH/CRAIN’S

SCOTT

From Page 1

CEO Ray Scott calls it a living document, one that’s consistently updated with lessons learned from each plant reopening. But it’s also a document about living ... and how and whether the broader workforce can remain healthy without a cure for the COVID-19 pandemic that’s claimed the lives of nearly 87,000 Americans. With roughly 225 of the plant’s 675 employees returning to work Monday, Crain’s sat down at the plant last week with Scott, 54, during an “open house” for plant production leaders to acclimate them with the new safety protocols.  Look, I’ll be honest, I’m nervous about being in a plant right now. Are you? I’m much more comfortable than I used to be. I can appreciate what you’re saying because when I was getting back into it I kept thinking, ‘This doesn’t feel right.’ But I don’t have those anxieties anymore. I’m more focused now and I’m definitely confident that we’ve done everything we can to put plans in place while we shut down to protect our people. I’m not going to do anything in respect to putting production over people. If we need to shut down again, we’ll shut down. If that means we can’t produce to our release schedules, then we won’t. We’re going to make sure our people are safe. With that mentality and the procedures we’ve put in place, I do feel confident. We, as a company and business, can’t stop the virus. But with the right protocols, and we’ve already proven this, we can stop the spread within a plant. The feedback we’re getting back from employees, they feel safer at work than they do in some cases at home.  You were the first company, at least to my knowledge, to come out with a reopening guide. Were you nervous about putting that out and being wrong? I had concerns, especially in trying to take a leadership position in an area where people could criticize quite a bit on how it’s not a failsafe or that the spread of the virus still happened. I had a lot of conversations with our general counsel all the way to the day before we released it because of those concerns. But we did put a disclaimer in there. This is a repository of what we’ve learned. We have no ego with it. If we find a better practice, we’ll update our playbook just as quickly. But I think the thing that led to my final decision was that it was an incredible piece of work from the team. If one company doesn’t understand the amount of work

it takes to run safely, then the whole supply chain is in trouble. If one goes down, we could all go down. In the best interest of all of us, if we’re sharing ideas, the better we’ll be. It’s been downloaded some 25,000 times now from restaurants to furniture makers. I never ever expected the level of response we got.  You’ve been open in Europe for three weeks and China longer. What adjustments to your playbook have you had to make? It’s not a one-size-fits-all strategy, but it’s a combination of things. Some of the changes have been small. We found the queue, the lineup to get

first employee hospitalization until several days after operations ceased (in late March). We’ve never seen the problems we had in Mexico. Even though Mexico (shut down manufacturing operations), they never really practiced social distancing and that created a lot of problems with a lot of companies. If there’s anything there, we’ve got to make sure we're continuing to educate on why you’re doing certain things and hopefully that can resonate outside of work. We had an issue in Tuscaloosa (Ala.) where one of our employees came down with COVID19. We did a great job. We protected all of our employees by quarantining that situation quickly. It did not impact any other employees, thankfully.

“I’M NOT GOING TO DO ANYTHING IN RESPECT TO PUTTING PRODUCTION OVER PEOPLE. IF WE NEED TO SHUT DOWN AGAIN, WE’LL SHUT DOWN.” — Ray Scott, Lear CEO

into a facility, wasn’t properly thought through. It’s good to understand when you’re trying to funnel in 50 to 100 people or more at a particular time what that queue should look like. Even though we had it spaced out appropriately for the start of the line, there was a bottleneck at the back of the line where people ended up being on top of each other, which is exactly what you don’t want to have entering the facility. So we had to make some adjustments there. Traceability is also something we’re continuing to learn. Eliminating the amount of access employees have throughout a plant is critical (to stopping spread). You could have a maintenance person that has access to the whole plant. You really want to minimize the potential exposure that even one individual can have on the plant. If you have somebody that’s been infected in a particular cell, it’s much easier to quarantine that particular area as opposed to the whole plant.

But (the employee) was at a party over the weekend with a bunch of people. That’s part of the problem. You can see it everywhere. I was driving down Woodward two Sundays ago and I thought it was the Dream Cruise. People were outside sitting next to each other, high-fiving each other because it was the first nice day. That’s a problem. And it speaks to this range of individuals that either say it’s fake, it’s all politically motivated, to the individual that will literally be upset with you if you come within 6 feet of them. We have this population that is on two different spectrums but then the rest of us are in the middle saying we have to get back to work sometime, so let’s be diligent and be smart. But there’s this bell-shaped curve with extremists on each side we’re also trying to help along. If we can teach those people why they should be practicing these types of behaviors, I think you’ve come a long way. You’re balancing things right.

 You’ve had outbreaks at plants, such as Mexico, correct? The city of Juarez has experienced a large number of cases which have been difficult to confirm as COVID-19 due to lack of testing capacity. It has been very challenging for us to get accurate and timely information about employee health, since the plants have been closed. We didn’t learn of our

 Is that why the plan is very heavy on pandemic response and quarantining? It’s the realization that you can’t prevent all exposure? Look, we can’t stop the virus outside of our plant, there’s a lot of things we don’t have control over. But inside our plant is where we have the ability to stop the spread of the virus, and that’s what

 The automakers shut down operations in Michigan in late March and Gov. Gretchen Whitmer’s “Stay Home” order prevented the industry from coming on line sooner. Did that help or hinder your ability to restart safely? I think the downtime gave us a chance to reset and prepare. It wasn’t that long ago that there was no (personal protective equipment) available. Trying to get your hands on mass quantities of PPE was nearly impossible. If the whole industry was pulling at PPE at the same time as hospitals and nurses needed it, we would have put even more pressure on our medical community. I think there were a lot of benefits to shutting down and recalibrating and determining best practices. Let’s also not forget how fast things were changing. The CDC at first recommended not wearing a mask in public then to wearing a mask. So this has evolved quickly and shutdown gave us time to adjust and to understand just how unpredictable this virus can behave and put things in place to allow us to protect our people. So, yeah, I think going down, though terrible and tough on a lot of companies to manage, was something that gave us time to do this right. I think if we had been running production while trying to manage the virus, it would have been much more difficult.  You’re operating one shift at most of your plants, when do you think you’ll be at full capacity in North America again? Our customers feel very optimistic that demand is there. They’ve had a strong pull through digital sales. For us, even though sales will still be down significantly, year-over-year, the customers are telling us there is a pent up demand for vehicles. But a lot of things still have to get worked out. Like how employment is impacted long term and how well stimulus does. I look at it more of a 12-month to 18-month period. I think we’re going to see some demand at least through this year, but not real recovery until the second half of next year.  The “Playbook” and its implementation will likely define your career. Lives literally hang in the balance. Do you recognize the gravity of that? Oh, I understand the gravity of that. I think one thing we set up early on as far as what we were going to focus on near term, the first thing was people. That’s got to be the number one thing. It wasn’t going to be resuming production or trying to get revenue back or trying to drive margins back up. One thing we didn’t do as a company is we didn’t go out and lay off and furlough everyone (Lear did lay off temporary and some hourly workers). We have a slogan that we all work for the plants. And the worst thing we could have done was let the plant managers and their teams go. If we hadn’t stayed focused on the plants, we would have never put together this playbook. I don’t know where I’ll be looking back, but I do think we got that right and it’s critical why we’re here right now and why I think our people are safe. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh MAY 18, 2020 | CRAIN’S DETROIT BUSINESS | 17


THE CONVERSATION

Ken Coleman sees inspiration in strange, challenging environment Michigan Advance: Ken Coleman knows Detroit. The historian, journalist, author and native Detroiter who tweets daily tidbits of Motor City history from the handle @HistoryLivesDet says the era of COVID-19 and its impact on Detroit is sure to have lasting consequences on the city. Coleman said he’s had to stop counting all of the people he knows who have died as a result of the coronavirus. Despite all of the tragedy, he | BY NICK MANES continues to keep a positive attitude. `Crain’s Detroit Business: You’ve written extensively about the impact COVID-19 has had on you personally, and more broadly, on the African American population of Detroit. How do the last couple of months fit into a historical perspective of the city? You know, we haven’t been through anything like this and history suggests to us that this is significantly different than even the 1918 flu epidemic, at least to the extent of how science and how government has responded to it. I asked the Library of Michigan, how does (the government response) to COVID-19 compare to the 1918 flu? The library pointed out to me that while the governor at the time did close businesses, theaters and big public spaces, all school districts weren’t closed. So it is very different, and we’re dealing with it in real time. What we’re hearing now is very different than what we heard six or eight weeks ago. ` What’s been the human toll that you’ve experienced? Knowing dozens of family and friends who have contracted the virus and probably 20 people — I’ve just stopped counting — who have died from it, it’s been tremendous. It gets depressing to keep a scorecard. In the early days, it was nine or 10. I’ve heard so many people this week. I went to a viewing at a funeral home (last month) ... and I’m going to another one this week. It makes it tough. My wife (Kim Trent) and I are trying to work from home. My son (age 11) is home, so we’re trying to, you know, make sure he’s doing his online learning. We’re having a great family bonding time in a time of tragedy. ` The city of Detroit has been on a largely upward trajectory, at least since emerging from bankruptcy. What do you think these few months could do to the years of generally positive trajectory? I’m very concerned, very concerned. Mayor (Mike) Duggan and others have pointed out that for example, casino revenue has very much helped the city fight its way out of emergency

I talked with my editor about writing a sort of a first-person essay about what I was seeing and how things were going. I mean, reporting from day to day, you’re kind of in a certain mode, you’re reacting to things, you’re reporting things. This one caused me to sort of sit down for a couple of days and think and analyze. ` And what did you determine? What I saw is a situation that’s very tragic for many people, but I saw some inspiring things happening within this environment. You know, seeing businesses — some of whom have been closed for two or three weeks — give back to the community (like) providing free food for first responders or government institutions, like the Detroit public schools ... giving out food to students and their families.

Ken Coleman

management and state control. That’s a stream of revenue, if you will, that has been very important to the city over the last five years. The fact that the three Detroit casinos have been closed for more than a month, I don’t think there’s even any projections about when they might reopen. That’s going to weigh heavily on Detroit’s fiscal situation. I mean, those are sort of big boxes if you will. But I think about all the small businesses, you know, some of whom just have opened in the last handful of years, some of them have been around for 30 or 40 or 50 years. Are they going to survive this thing? ` Toward the end of April we got a weekend with significantly warmer weather and people descended upon quintessential Detroit spots like Belle Isle, sparking fears of further spreading the virus. What’s your expectation for how Detroit looks and feels this summer during a period when some form of social distancing will still likely be required?

If things don’t get better, and what I mean by that is if we’re still in a stay-at-home mode handed down by government, 70 and 80 degree weather are going to cause people to come out. I’m a runner and I’ve run most days through this crisis. It’s OK wearing a mask when it’s 40 or 50 degrees, but I ran when it was nearly 70 and the temptation to take off my mask because it’s harder to breathe and the temptation to take off my gloves because my hands are just sweaty ... those types of things are going to cause people more and more to say, “You know what? The hell with wearing the gloves and the mask. It’s 80 degrees, I need some sun, I’ve been in the house all day or week.” So I’m very concerned about what the summer would look like if things don’t get better. ` You’ve written for the Michigan Advance that despite all of the death and all of the economic challenges, you still see some positives coming out of this. Can you explain how?

` What have your conversations been like with people who have battled through the coronavirus and are now recovering? These stories were inspiring. I talked to a Detroit couple, the husband and the wife both contracted the virus, and they told me in sort of very vivid fashion how they were scared to death. They lay in bed during those days crying and holding each other because their bodies were aching from the symptoms of the virus. In those days in March, we really did not know ... because it was so much uncertainty around what this virus is and what it does. Can you survive it? They both thought they were going to die. But yet, when I interviewed them several weeks later — after they first learned that they contracted it, and were on the road to recovery — they were very much interested in telling their story. And having that story amplified out to the general community about, “Hey, listen, this thing is for real, let’s not play games, stay at home whenever you can.” Those things were inspiring and when I thought about it, it was very consistent with Detroit. You know, this sort of Detroit vs. Everybody moniker is something that we all sort of embrace.

RUMBLINGS

Tesla readies first standalone gallery in Michigan

18 | CRAIN’S DETROIT BUSINESS | MAY 18, 2020

California-based electric vehicle maker Tesla Inc. is preparing to open a gallery in Clarkston. | MELISSA BURDEN/ AUTOMOTIVE NEWS

parts replacements, according to a spokesman. Customers can schedule service appointments online, on

their Tesla app or in person. A sign on a window earlier this month informed visitors of a new touch-free service experience in light of the coronavirus pandemic, allowing customers to scan a QR code to check in for an appointment. A table near the front of the service center had a sheet with further safety instructions and a bottle of hand sanitizer. A Tesla spokesman did not offer an opening date for the gallery. Michigan remains under a stay-athome order due to the coronavirus pandemic until May 28 and auto sales have been allowed online only.

REPORTERS

Annalise Frank, city of Detroit. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care and energy. (313) 446-0325 or jgreene@crain.com Nick Manes, finance and technology. (313) 446-1626 or nmanes@crain.com Kurt Nagl, higher education, business of sports. (313) 446-0337 or knagl@crain.com Kirk Pinho, real estate. (313) 446-0412 or kpinho@crain.com Dustin Walsh, senior reporter, economy and workforce, manufacturing, cannabis. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS

CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374 Group and Corporate Membership Sales Deb Harper, (313) 446-1623 or dharper@crain.com ADVERTISING/MARKETING

Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Events and Program Content Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Account Executive John Petty Senior Account Manager/Political Specialist Maria Marcantonio Advertising Sales Lindsey Apostol, Mark Polcyn, Sharon Mulroy People on the Move Manager Debora Stein, (917) 226-5470, dstein@crain.com Assistant Events Director Kacey Anderson Integrated Marketing Manager Kelsey Strachan, Kelsey.strachan@crain.com or (313) 446-1629 Insights Analyst Reginald Brown, reginald.brown@crain.com or (313) 446-1670 Senior Art Director Sylvia Kolaski Director of Media Services Joseph (Sam) Tanooki, (313) 446-0400 or sabdallah@crain.com Classified Sales and Sales Support Suzanne Janik CUSTOMER SERVICE

Single copy purchases, publication information, or membership inquiries: (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

Tesla Inc. recently opened its first brick-and-mortar service center in Michigan and is preparing an adjacent Tesla Gallery months after a legal victory gave the automaker a foothold in a state where its operations were previously barred. The building, on Big Lake Road in Clarkston, features prominent Tesla signage, “Coming Soon” decals and a parking lot filled with more than a dozen of Tesla’s luxury electric vehicles. The adjacent service center has been open since early March, offering software diagnostics and resolutions, hardware adjustments and

crainsdetroit.com

Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Executive Editor Kelley Root, (313) 446-0319 or kelley.root@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Group Director: Marketing & Audience Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Portfolio Manager Tim Simpson, (313) 446-6788 or tsimpson@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Riffenburg, (313) 446-5800 or driffenburg@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Senior Editor Chad Livengood, (313) 446-1654 or clivengood@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687 TIP LINE (313) 446-6766

When Tesla’s gallery opens, customers will be able to learn more about products and test drive vehicles, although they can’t make direct purchases there. The service center is the California-based automaker’s first in Michigan. The nearest location previously was in Toledo. Tesla opened a gallery location in the Somerset Collection mall in Troy in late 2016. Tesla in January scored a legal victory when it reached a settlement with the state of Michigan that allows it to sell and service its electric vehicles in the state, albeit through a subsidiary.

Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice Chairman Mary Kay Crain President KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except the third week in December, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2020 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.


CRAIN’S

THOUGHT LEADERS TAP INTO THE POWER OF

VIRTUAL INFLUENCE.

Crain’s Thought Leaders gives you an opportunity to showcase your expertise and address the Southeast Michigan business community about current events, trends and hot issues, from the comfort of your home office. Each Crain’s Thought Leader will have an opportunity to write a 400-word piece about their chosen topic; this piece will be published alongside a display ad in the printed issue. Thought Leader columns will also live in the content hub on CrainsDetroit.com for one year, appear in native ads online and in our e-newsletters.

See a topic you’re interested in influencing?

JUNE 8 // Mobility JUNE 15 // Human Resources JUNE 29 // Diversity & Inclusion JULY 13 // Labor Law // Selling fast! JULY 27 // Cybersecurity AUGUST 3 // Talent Attraction and Retention AUGUST 24 // Wealth Management SEPTEMBER 28 // IP Law OCTOBER 2 // Manufacturing OCTOBER 19 // Corporate Social Responsibility NOVEMBER 2 // Healthcare NOVEMBER 23 // Private Equity DECEMBER 14 // Economic Outlook // SELLING FAST! Close date 3 weeks prior to publication date; materials must be received 2 weeks prior to publication.

Contact Kristin Bull at kbull@crain.com for more information on this custom advertising opportunity


A 2020 Giving Guide Campaign Help our nonprofits during a time they need it most. Announcing Crain’s May Days of Giving, a monthlong crowdfunding campaign designed to help nonprofits during these challenging times. Now through June 3, over 30 Michigan charities will look to you to help raise essential funds they need to make an impact in the community.

Donate Today

maydaysofgiving.crainsdetroit.com Watch for the annual Crain’s Giving Guide, coming June 8.


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.