Crain's Detroit Business, June 29, 2020, issue by Crain's Detroit Business

THE CONVERSATION

COVID HEROES: Detroit Phoenix Center’s Courtney Smith takes mission to streets. PAGE 14

Michigan Association For Healthcare Quality President Rebekah Bundesen PAGE 19

CRAINSDETROIT.COM I JUNE 29, 2020

COPING WITH COVID-19

WHO’S MINDING THE STORE? Extra $600 a week makes it tough to find workers, even amid 20% jobless rate BY CHAD LIVENGOOD AND DUSTIN WALSH

Inside the two Mike’s Fresh Market grocery stores in Detroit, the checkouts and delis are understaffed because co-owner Jamal Abro can’t find enough workers for $15-an-hour jobs. At Shepler’s Ferry in Mackinaw City, Chris Shepler has received just seven job applications since March 1 and has roughly half of the employees he had a year ago running ferry boats to Mackinac Island. In recent weeks, Iileen Donnell has been turning down jobs for her Detroit-based residential and commercial cleaning service because she doesn’t have enough help, even just part time. And in downtown Detroit’s Capitol Park, Eatóri Market is keeping its outdoor patio closed on weekdays because owner Zak Yatim can’t find enough workers to manage the cafe side of his urban market. At a time when Michigan’s unemployment rate is hovering above 20 percent, each of these business owners blames their unusual labor shortage on the federal government’s unemployment assistance set to expire at the end of July. “Everyone’s taking their $600 stimulus, putting it in their pocket and running,” Shepler said. See WORKERS on Page 16

Wally Audess (left) and Sam Gappy stock a meat cooler at Mike’s Fresh Market at Seven Mile Road and Gratiot Avenue on Detroit’s east side. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

HEALTH CARE

FOCUS | DIVERSITY, EQUITY AND INCLUSION

Will this time be different? Will it make lasting change? Crain’s asked Black community and business leaders about this moment of national reckoning around racial inequity. PAGES 8-12

NEWSPAPER

Hospitals: Relief cash won’t cover losses Health systems in Michigan garner more than $4.4 billion in federal COVID-19 relief funding BY JAY GREENE

Michigan’s 10 top hospital systems are expected to receive $1.7 billion in COVID-19 relief grant funds from the federal government and $2.7 billion in Medicare advanced reimbursement loans that must be paid back by the end of the year. Several health system executives told Crain’s the $4.4 billion will not cover financial losses incurred by the coronavirus pandemic through June, as measured by lost revenue from elective procedures and surgeries and increased expenses for supplies, additional personal protective equipment and hazard pay. But if there is a second wave of COVID-19 infections this fall, as nearly all public health and infectious disease

experts predict, Michigan's residents and businesses could face another round of costly shutdowns and hospitals and other providers could also absorb even greater financial losses. Of the 10 systems, Southfield-based Beaumont Health is set to receive the most funding from the $175 billion contained in the two COVID-19 relief funding bills that were approved in late March. Beaumont will receive $828 million, including $321.2 million in grant funds and $506.8 million in loans, according to data collected by Good Jobs First and provided by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services as of June 26. See HOSPITALS on Page 18

Systems receiving the most COVID-19 relief Top 10 health systems in Michigan that received COVID-19 federal relief funds Medicare loans

Health System

Grants

MidMichigan UP Health Michigan Medicine McLaren Health Care DMC Tenet Henry Ford Health Beaumont Health Ascension Michigan Trinity Michigan Spectrum Health System totals

$49.3 M $121.5 M $5.8 M $5.1 M $116.9 M $269.6 M $146.5 M $344.2 M $163.2 M $149.6 M $399.7 M $408 M $321.2 M $506.8 M $242.6 M $402.5 M $165 M $219.5 M $128 M $228 M $1.74 billion $2.65 billion

* Henry Ford, Spectrum provided verified data based on amount received from all sources of relief funds. SOURCE: GOOD JOBS FIRST COVID STIMULUS WATCH, CENTERS FOR MEDICARE AND MEDICAID SERVICES, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, DATA AS OF JUNE 26 CRAIN’S DETROIT BUSINESS GRAPHIC

NEED TO KNOW

THE NEXT AUTO SHOW

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` CULTURAL INSTITUTIONS PLAN JULY 10 REOPENING THE NEWS: Seven cultural organizations in Detroit’s Midtown area will reopen July 10, following a fourmonth shutdown due to COVID-19. They include the Carr Center, Charles H. Wright Museum of African American History, Detroit Historical Museum, Detroit Institute of Arts, Hellenic Museum of Michigan, Michigan Science Center and The Scarab Club. WHY IT MATTERS: The groups have been collaborating since late April on a plan coordinated by Midtown Detroit Inc. to safely reopen. They tapped Ann Arbor-based NSF International to help develop new requirements and recommendations to keep staff and visitors safe.

` WHITMER ORDER ALLOWS PRO SPORTS, BUT NOT FANS THE NEWS: Gov. Gretchen Whitmer on Thursday allowed for the return of pro sports in Michigan as long as fans aren’t in attendance. The move followed Major League Baseball’s decision this week to set a 60-game schedule to start July 23 or July 24 in empty ballparks. Only staff of the facility and media can attend. WHY IT MATTERS: After several months almost entirely devoid of team sports, MLB and the Detroit Tigers would fill a cultural vacuum, at least on television.

ministration’s budget for the 2020-21 year, which included a 1.9 percent tuition increase, amid uncertainty caused by the COVID-19 pandemic. The university’s budget expires July 1. UM President Mark Schlissel said administrators would go back and work through changes to the budget targeted to be presented at the board’s next meeting July 16.

` JUDGE ORDERS SHUTDOWN OF ENBRIDGE LINE 5 THE NEWS: An Ingham County judge has granted Attorney General Dana Nessel’s request to order Enbridge Inc. to temporarily shut down its Line 5 oil pipeline in the Straits of Mackinac pending an investigation into a damaged support. Nessel sought the temporary restraining order after Enbridge quickly resumed sending oil through the west leg of its twin 20inch underwater pipelines at the bottom of Lake Michigan. WHY IT MATTERS: A week ago, Enbridge discovered a damaged support under the east leg of the pipeline, prompting a two-day shutdown of oil flowing through the four-mile-long pipeline at the straits.

` UM BOARD VOTES DOWN BUDGET, 1.9% TUITION HIKE THE NEWS: The University of Michigan board of regents deadlocked Thursday in a 4-4 vote on approving the ad-

WHY IT MATTERS: Regents debated whether students could afford the tuition increase in a recession, as well as financial and enrollment uncertainty as the university works out specifics of how fall instruction will proceed amid COVID-19 concerns. “We’ll bring back a budget in July ... and until then, we’ll live with continued uncertainty,” Schlissel said after the vote.

Auto show already thinking social distance ` Organizers of the 2021 Detroit auto show said that social distancing measures will be implemented for next year’s events. Distancing strategies to ensure safety of attendees at the June 1126 event will include contactless payments and hand sanitizing stations, officials said during an Automotive Press Association webinar Tuesday. The use of indoor and outdoor spaces beyond the TCF Center will allow attendees to spread out, rather than all being under one roof like past years, said Doug North, chairman of the 2021 auto show. There will be seven events throughout the two weeks around Detroit in Campus Martius, Spirit of Detroit, TCF Center, Hart Plaza and more. “One thing is certain, the future will be different from the past,” North said. Executive Director Rod Alberts said auto shows remain the best way to show a lot of products in a short time. He does not expect events to be replaced by one-dimensional virtual reveals. “Vehicles need to be experienced,” he said.

` OCUPHIRE DEAL WOULD PUT COMPANY ON EXCHANGE THE NEWS: Farmington Hills biotech company Ocuphire Pharma Inc. last week announced it had a reached a definitive agreement to merge with Rexahn Pharmaceuticals Inc. (NasdaqCM: REXN) of Rockville, Md., in a deal that would result in Ocuphire becoming publicly traded. WHY IT MATTERS: The deal provides a path to public markets for the privately held Ocuphire, headed up by CEO Mina Sooch. The company’s eye drugs are in middle- and late-stage testing.

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The use of indoor and outdoor spaces beyond the TCF Center will allow attendees to spread out, rather than all being under one roof like past years. | LARRY PEPLIN FOR CRAIN’S

FINANCE

SPORTS BUSINESS

This program has $600B available. Demand? Not so much BY NICK MANES

The early days of the federal Paycheck Protection Program in April were a mad dash as small businesses and bankers scrambled to access the potentially forgivable loans designed for businesses with 500 employees or under. Interest doesn’t seem to be as high, however, during the first days of the U.S. Federal Reserve’s Main Street Lending Program, which is geared toward financially stable middle-market companies facing pandemic-related challenges. The Main Street program is likely to only apply to a fairly small number of companies, unlike PPP, which offered relief to a wide swath of the small business marketplace. While some executives are kicking the tires and exploring whether one of the Fed’s lending facilities could be appropriate for their company, by and large, bankers, attorneys and CPAs say they’re not hearing much from clients these days about the program that opened for lender registration in midJune. “I have not heard anything with respect to great demand yet,” said Matt Casey, a partner focused on financial services in the Clinton Township office

“THEY GOT THROUGH IT LAST TIME AND THEY’VE FIGURED OUT HOW TO OPERATE AT LOWER LEVELS OF REVENUE.” — Jeffrey Terrill, senior vice president and group manager for corporate banking, Flagstar Bank

of law firm Warner Norcross + Judd LLP. Casey and others point to myriad reasons for muted interest in the program, which has been primarily developed over the last couple of months by officials in the Boston branch of the Fed. Among them: Limited participation by banks so far, a narrow scope of businesses that would qualify, and an overall sense of uncertainty by executives at this time when it comes to taking on debt. The overall stated goal of the program is to pump liquidity into companies that would otherwise be financially healthy, but are facing struggles due to the pandemic and resulting economic crisis. Companies that choose to make use of Main Street Lending have three options, or lending facilities, to choose from. The three are largely the same, but differ according to amounts that can be borrowed and considerations for a company’s outstanding debt prior to the crisis, as outlined in a memo from the central bank. Jeffrey Terrill, senior vice president and group manager for corporate banking at Troy-based Flagstar Bank, attributes some of the muted demand to companies having learned lessons from the last recession. See RELIEF on Page 17

TEEING UP FOR TV The Rocket Mortgage Classic will be played in front of TV cameras only, as the July 2-5 event is closed to fans. | ROCKET MORTGAGE CLASSIC

Rocket Mortgage Classic offers big opportunity for PGA, mortgage giant BY KURT NAGL

The Rocket Mortgage Classic in Detroit will be a sterile, return-towork affair. To appease health officials, that’s the way organizers must approach the upcoming PGA tournament, which will be the region’s first live sports event in a city hit hard by COVID-19. The PGA points to a nation of deprived sports fans to justify its restart, even after players have tested positive for the respiratory virus. Rocket Mortgage Classic title sponsor Quicken Loans Inc. says it kept the tournament alive to raise money for local charities. Having a captive audience during the July 2-5 tournament at the Detroit Golf Club presents big opportunities for both the sport and the Dan Gilbert-owned mortgage giant. “We’re confident that on the holiday weekend, we’ll see good increases in viewership, which obviously helps the brand, but most

Rocket Mortgage Classic  July 2-5 at Detroit Golf Club  Field of 156 golfers  $7.5 million purse  No fans allowed on site TV: Thursday-Friday on Golf Channel; Saturday-Sunday on CBS

importantly, shines a spotlight on the city,” said Casey Hurbis, chief marketing officer at Quicken Loans. The Charles Schwab Challenge — the PGA’s first tournament since suspending play in March — saw its highest TV ratings in 15 years during its June 11-14 run, according to CBS. The final round had more than 3 million viewers, up 50 percent from last year. The Rocket Mortgage Classic will be broadcast Thursday and Friday on the Golf Channel, switching to CBS for Saturday and Sunday coverage.

Quicken Loans is betting that brand exposure outweighs the sudden loss of spectator revenue and sponsorship income that typically funds a tournament. The “comeback city” theme that propelled the inaugural tournament to success last year will be even more prominent this time around, when some of the world’s best tee it up a mile down the road from the city’s emergency COVID-19 testing site at the State Fairgrounds. At the beginning of the year, tournament Director Jason Langwell was focused on making the tournament larger and more stadium-like. In April, when it was decided the tournament would forge ahead despite the pandemic, his task was the opposite — producing a major sports event with as few people as possible. Now, he’s just worried about the weather. With the planning and logistics nightmare mostly in the rearview, Langwell is ready for golf. See CLASSIC on Page 17

“THIS IS A WORKPLACE. WE’RE TREATING IT LIKE A RETURN-TO-WORK ACTIVITY BECAUSE IT IS JUST LIKE OTHER BUSINESSES RETURNING TO WORK.” Jason Langwell, tournament director

NONPROFITS

Senior living providers facing millions of dollars in lost revenue, new costs tied to COVID-19 BY SHERRI WELCH

Norma Wheeler, a resident of a Samaritas senior community,holds a sign for loved ones during a recent parade held on the campus of a Samaritas skilled nursing facility in Cadillac. | SAMARITAS

Nonprofit senior living providers are facing millions of dollars in lost revenue and new costs associated with the COVID-19 pandemic. Senior communities have seen populations fall as a result of COVID-19 deaths, people moving back in with family out of communities and decreased referrals of seniors coming for short-term rehab at skilled nursing facilities after elective surgeries. “People are not moving into senior living communities, or they are getting sick with COVID and need to be hospitalized,” said Kelli Dobner, chief advancement officer for Detroit-based Samaritas. “Every day they are not with us, we lose revenue.” At the same time, significant new costs for personal protection equip-

ment that’s now needed, “appreciation pay” and other staff incentives to keep caregivers coming to work are bringing unbudgeted costs. “This is an industry issue ... we all are experiencing these challenges,” Dobner said. Samaritas, which is operating on a $120 million budget, is forecasting a gap of $5 million for the year. “That’s a conservative approach to where we think we’re going to be ... based on reopening costs and lost revenue,” Dobner said. About 68 percent of the revenue gap stems from lost referrals and fewer number of people served across its programs, with the bulk of it, approximately $2 million, coming from reductions in the number of seniors in its independent living, assisted and skilled nursing facilities, Dobner said. Samaritas started the year with 611

residents in its five continuum-of-care communities. After dropping to 482 at one point, it’s now hovering around 500, Dobner said last week. Thirteen seniors in the nonprofit’s communities have died of COVID-19, she said. A total of 1,979 residents of nursing homes in Michigan had died as of June 21, according to data reported by the state. Another 19 are hospitalized due to COVID-19, and as of last week, 17 were recovering from COVID-19 at an off-site, third-party COVID care facility in Grand Rapids. Those at the off-site location are expected to return to Samaritas once they recover, Dobner said. The nonprofit budgeted to have 650 seniors in those communities for March-June, she said. See SENIORS on Page 15 JUNE 29, 2020 | CRAIN’S DETROIT BUSINESS | 3

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Property tax appeals deadline extended for property owners The property tax appeal deadline has been pushed back to Aug. 31 because of the COVID-19 pandemic. State Rep. Roger Hauck, Kirk R-Union TownPINHO ship, sponsored legislation last month that gives residential and commercial property owners additional time to file appeals of their property assessments. Gov. Gretchen Whitmer signed House Bill 5766 into law earlier this month. â&#x20AC;&#x153;With assessing units having been closed for almost two months and with some boards not being able to complete their work until much later than in the past, we have never seen so many taxpayers unable to obtain their final assessment information,â&#x20AC;? Hauck said in a statement. â&#x20AC;&#x153;Some taxpayers â&#x20AC;&#x201D; especially ones with small businesses â&#x20AC;&#x201D; have not even been able to meet with their advisers and make informed decisions about possible appeals. It makes sense to push everything back and provide people with a fair process as they are dealing with unprecedented times.â&#x20AC;? Stewart L. Mandell, partner and leader of Detroit-based law firm Honigman LLPâ&#x20AC;&#x2122;s Tax Appeals Practice Group, said he anticipates there will be an increase in property tax appeals this year as a result of the pandemic, among other factors. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think itâ&#x20AC;&#x2122;s going to be quite as significant as during the Great Recession, but there will be an increase,â&#x20AC;? he said. â&#x20AC;&#x153;A lot of folks had trouble getting their (property assessment) numbers and in the last couple weeks weâ&#x20AC;&#x2122;ve still been getting calls about that. Back in February and March when people would normally get their assessments confirmed, they were totally consumed with just trying to keep their businesses operating.â&#x20AC;? Among the commercial real estate sectors hit particularly hard by the global pandemic are hotels, retail and restaurant properties. Some parts of the retail sector going into the pandemic had already been hurting.

The long-vacant Fowler Building on Woodward Avenue downtown is being renovated in a $16.5 million project thatâ&#x20AC;&#x2122;s expected to begin later this year to bring retail and office space. | KIRK PINHO/CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

square feet of first-floor retail space â&#x20AC;&#x153;WITH ASSESSING UNITS and another 32,200 square feet of ofHAVING BEEN CLOSED FOR fice space on the seven floors above it. The documents say mechanical, ALMOST TWO MONTHS AND electrical, plumbing and life-safety systems need to be replaced, as do elevaWITH SOME BOARDS NOT tors. Construction is expected to start BEING ABLE TO COMPLETE in the middle or later part of the year THEIR WORK UNTIL MUCH and take about 16 months to complete. Its previous owner, an entity affiliatLATER THAN IN THE PAST, ed with New York-based Sequoia Property Partners, put it on the market in WE HAVE NEVER SEEN SO late 2018 for $22 million, or $396.40 for MANY TAXPAYERS UNABLE each of its 55,500 square feet. Sequoia paid just $700,000, or $12.61 per square TO OBTAIN THEIR FINAL foot, in 2012. ASSESSMENT Savills Detroit office INFORMATION.â&#x20AC;? â&#x20AC;&#x201D; State Rep. Roger Hauck, R-Union Township

Gilbertâ&#x20AC;&#x2122;s Fowler Building rehab to cost $16.5 million Dan Gilbertâ&#x20AC;&#x2122;s Bedrock LLC real estate company is seeking an Obsolete Property Rehabilitation Act property tax abatement for the building at 1225 Woodward Ave. it bought last year from a New York-based real estate speculator. According to documents filed with the Detroit City Council, Woodward Acquisition Company LLC, an affiliate of Bedrock, plans a $16.5 million conversion of the 1911 building into 4,400

adds retail brokerage

The Savills plc office in Detroit has added retail brokerage to its services. Launched last year by a pair of former Colliers International inc. brokers, Gregory Bockart Jr. and Peter McGrath, they have added another Colliers alum: Drew Chorney, who is now managing director of retail services. The office also added Shobit Gupta, Meghan Oâ&#x20AC;&#x2122;Connor and Carter Cerretani as associate directors specializing in tenant representation, a press release says. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

DETROIT RISING

Skidmore Studio’s pandemic pivot landed in fresh food delivery BY CHAD LIVENGOOD

Automotive suppliers made face masks and shields during the height of the coronavirus pandemic in response to shortages for personal protection equipment. Ford Motor Co. and General Motors Co. got into the ventilator-assembly business. Skidmore Studio, a longtime Detroit-based brand-building creative agency that has its roots in automotive advertising, launched a fresh food distribution business called MichiganFields.com during the peak of the coronavirus shutdowns this spring. “It doesn’t sound like something that would be a natural fit, right?” Skidmore Studio president and owner Drew Patrick said in an interview on Crain’s Detroit Rising podcast (available at crainsdetroit.com/podcast-subscribe). But the idea that Skidmore Studio could set up and operate a grocery delivery business wasn’t too far afield for a creative design company that works with packaged food brands. Skidmore had a plan on the drawing board for creating its own food brand, Patrick said. When the pandemic forced shutdowns of nonessential businesses in March, the team at Skidmore started considering how to pivot into different lines of work using their know-

Planted Detroit, an indoor growing facility on Detroit’s east side, is selling its lettuce and salad greens through MichiganFields.com, an online farmers market. | PLANTED DETROIT

how for building a brand. “When March rolled around and the world changed, we said, ‘What are we going to do to make sure that we’re not only surviving but thriving coming out of this situation, and how are we going to stay in business over the next two months knowing a lot of our clients are probably going to slow down with needs from us?’” Patrick said

Instead of launching its own food brand, Skidmore Studio’s designers built an e-commerce website for selling fresh or frozen vegetables, fruit, meat, fish and dairy from Michigan farmers and food processors. The farmers and food companies selling their products on MichiganFields.com include fresh chicken from Double L Farms in Cadillac, milk and

dairy products from Guernsey Farms Dairy in Northville, fresh breads from Zingerman’s Bakehouse in Ann Arbor, bacon from Jake’s Country Meats in Cassopolis and microgreens from Planted Detroit’s indoor grow facility on the city’s east side. Planted Detroit started selling through MichiganFields.com after the dining rooms of all of its restaurant

customers were closed during the pandemic, said Meg Burritt, managing partner of Planted Detroit. “There’s been a wonderful amount of demand,” she said. Skidmore contracted with Michigan Farm-to-Freezer to pick, package and store the food inside its 9,000-squarefoot temperature-controlled warehouse in Detroit’s Eastern Market. Michigan Farm-to-Freezer sells its Michigan-grown frozen vegetables and fruits on the website. As Skidmore stood up the e-commerce website, it bought refrigerated delivery vans to deliver groceries around Southeast Michigan. Delivery was “something we just very quickly had to figure out,” Patrick said, “and we did.” After designing a routing process, Michigan Fields is now delivering about 80 orders per day, Patrick said. Patrick fashions Michigan Fields as the local farmers market equivalent to Kroger stores using Instacart and Meijer stores utilizing Shipt for home-delivered groceries. “Drew (Patrick) has been talking about a home-delivered model for some time,” said Brandon Seng, owner of Michigan Farm-to-Freezer. “I think the pandemic just provided that opportunity for him to take action.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

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JUNE 29, 2020 | CRAIN’S DETROIT BUSINESS | 7

DIVERSITY, EQUITY AND INCLUSION

Will this time be different? What will it take to make lasting change? Is the response from the business community — and public commitments to diversity, inclusion and making things right in the workplace — enough?

Crain’s asked Black business and community leaders about this moment of national reckoning around racial inequity. Their responses have been edited and condensed. LA JUNE MONTGOMERY TABRON

CURTIS LIPSCOMB

It’s a time for collective action

‘You have people with long memories here’

A focus on equity has long been part of the DNA of the W.K. Kellogg Foundation and of its president and CEO La June Montgomery Tabron. In the wake of George Floyd’s death, Montgomery Tabron said she’s experienced a range of emotions, from anxiousness and sadness and fear for her two young, African American sons to hope. “I see signs that are different ... when I look at the crowds of demonstrators online and see the diversity in these crowds … I see our young people of every color, every hue, all standing together. And what I see now, more than I’ve ever seen, is white allies stepping up in every sector and every part of society saying ‘This is too much. This is not the America that I want to be a part of.’ That’s what’s going to lead to change. “(In) our Business Case for Racial Equity (report), we talk about how these disparities that we know about take an economic toll. How do we build systems that have opportunities for everyone? Things like opening up opportunities for entrepreneurs of color ... instead of just a general COVID relief effort, let’s do a specific one for people of color like we did with our Entrepreneurs of Color Fund and for businesses that lost out. “We’re a part of those conversations, and it is very hopeful to see that people now know that every organization, every company can make a difference.” — Sherri Welch

Curtis Lipscomb leads nonprofit LGBT Detroit, the largest Black-led LGBTQ center property in North America. The organization offers education, support and health services from Detroit’s Murray Hill neighborhood. Lipscomb talked with Crain’s about the intersection of sexuality and race during a time of protest: “There’s been a long history of conflict between the LGBT community and police in Detroit. LGBT people have been targeted here. But in my lifetime it got even more tough with the stigma of HIV. And so ... we had to work with those who we rely on for public safety, and it was hard when people thought of gay people as diseased people. We worked very hard to engage with our political leadership ... And I actually think there has been improvement, with an LGBT liaison in the (Detroit) police department. There’s been a transgender

“I SEE SIGNS THAT ARE DIFFERENT ... WHEN I LOOK AT THE CROWDS OF DEMONSTRATORS ONLINE AND SEE THE DIVERSITY IN THESE CROWDS … I SEE OUR YOUNG PEOPLE OF EVERY COLOR, EVERY HUE, ALL STANDING TOGETHER.”

MELINDA CLEMONS

‘A grant won’t fix it’

In this package Questions & Answers:

Also:

 La June Montgomery Tabron: It’s a time for collective action. This page

 No more lip service: Time to act on diversity. Page 9

 Curtis Lipscomb: ‘You have people with long memories here.’ This page

 LGBTQ workforce makes gains, but transgender discrimination pervasive. Page 9

 Melinda Clemons: ‘A grant won’t fix it.’ This page

Also at crainsdetroit.com:

 Andrew Mac Intosh: ‘Athletes and sports have always been doing this.’ Page 10

 D&I is a hot topic now, but it will fizzle out if companies fail to embed it in everything they do

 Felecia Pryor: ‘They have to recognize biases.’ Page 10

 More questions and answers from: Javier Evelyn, Darlene King, Chanel Hampton, Jeff Ponders II, Tony Denton and Amanda Alexander

 Rainy Hamilton Jr.: We need to start to build wealth. Page 10

8 | CRAIN’S DETROIT BUSINESS | JUNE 29, 2020

“THERE’S BEEN A LONG HISTORY OF CONFLICT BETWEEN THE LGBT COMMUNITY AND POLICE IN DETROIT.”

At times, Melinda Clemons is inspired by the global protests over racism and police brutality. At times, the vice president and Detroit market leader for Enterprise Community Partners Inc. is concerned and angry. “It really just depends, right? There are a whole slew of emotions that go along with what is happening with the protests and our administration’s response to it, as well,” she said. But regardless, she said, the opportunity exists for the national dialogue over race to continue. “You are seeing so many other people becoming involved in this now, particularly millennials and people of all different backgrounds coming together to acknowledge this problem. This is what inspires me. For the business community, there has been a lot of talk about acknowledging this is a problem. Sometimes it’s acknowledged, and

sometimes it’s not — that systemic racism actually does exist in America. I have seen a lot of interest in racial equity and diversity in the business community that we may not have seen previously, and that’s around the country. For example, we are building a program to support community development organizations, which are primarily run by people of color, and there is a ton of interest now. They want to find out more about it, more about our speaker series. People are much more engaged and interested. “(But) we have to think about how resources are allocated. That’s going to be critical, whether it’s the city, state or country. Where are resources going? This has been 400 years in the making. A grant won’t fix it. It’s going to require tremendous resources to fix it over a long period of time. It feels different, like we are in it for the long haul, but time will tell.” — Kirk Pinho

person hired by the police department. “I am a student of the ’67 uprising. I have argued that the ’67 riot is a queer riot, because the place where it happened was an after-hour place that gays and lesbians frequented. ... Black (queer) people, specifically, could not be in white LGBT bars, so they mingled amongst community. So that resonates with me often when I’m talking about the intersection of what it is to be Black and gay. “I believe you have people with long memories here. Believing that if there is a problem it can be worked out. Leadership in business and faith has entered spaces to ensure all types of voices are heard ... because we’ve seen what happens when you don’t. “I’m an optimist by nature. And you can’t talk about the now without talking about the work we’ve done.” — Annalise Frank

“YOU ARE SEEING SO MANY OTHER PEOPLE BECOMING INVOLVED IN THIS NOW, PARTICULARLY MILLENNIALS AND PEOPLE OF ALL DIFFERENT BACKGROUNDS... “

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No more lip service: Time to act on diversity BY DUSTIN WALSH

In the wake of nationwide protests against police brutality and racial injustice toward Black Americans, corporate America has reengaged its efforts to diversify its workforce. Diversity and inclusion is not a new topic, and companies have talked about expanding a pipeline of diverse talent, particularly Black talent, for decades. This is critical in Southeast Michigan and Detroit, where 77 percent of the city’s residents are Black. Black workers struggle to reach the halls of upper management. The result is a pipeline of young, diverse talent that enters but strives to leave in short order. Prejudice and racism have Black employees frustrated, with 35 percent of Black professionals intending to leave their job within two years, compared to 27 percent of white professionals, according to a December 2019 study, “Being Black in Corporate America,” by New York think tank Center for Talent Innovation. The report surveyed more than

“COMPANIES WANT TO DO EVERYTHING THEY CAN TO ATTRACT DIVERSE TALENT, BUT THEN DO NOTHING TO RETAIN THEM. YOU CAN’T HAVE A LIMITED NUMBER OF MINORITIES AND THEN WANT TO TREAT THEM LIKE EVERYONE ELSE.” — Bertie Greer, associate dean for strategy and planning and associate professor of global supply chain management, Wayne State University

3,700 white-collar professionals between the ages of 21 and 65 with at least a bachelor’s degree in June 2019. “You have to be identity conscious, not identity blind,” said Bertie Greer, the associate dean for strategy and planning and an associate professor of global supply chain management at Wayne State University. “Companies want to do everything they can to attract diverse talent, but then do nothing to retain them. You can’t have a limited number of minorities and then want to treat them like everyone else. The experiences and situations the minority is having is dif-

ferent. The truth is you may have to do something different; you’ll never see it if you’re not conscious to the identity of that person in the workplace.” Black workers rarely see an executive who looks like them, according to the study. Of the respondents, 19 percent of Black workers said a person of their race could never reach the top position at their company, compared to just 3 percent of white colleagues. The data backs up the suspicion. Of Fortune 500 companies, only 0.8 percent of CEOs are Black and only 3.2 percent are senior-level manag-

‘High tolerance’ for disrespect LGBTQ workforce makes gains, but transgender discrimination pervasive BY ANNALISE FRANK

Back in 1986, a hair salon client of Erica Carter’s, a pastor, wanted to perform an exorcism on her. “I said, ‘Well, Janice,’ and I never forget a name ... ‘This isn’t a choice,’” Carter, a transgender woman, recalled in an interview with Crain’s. “I explained everything to her based on medical science.” The Black native Detroiter, 54, has faced discrimination on the job many times over. She is a cosmetologist, singer-songwriter, actress and model, among other pursuits. Things have changed since 1986, Carter said. Availability of information has improved understanding, including in employment. Visibility has risen in recent years. And the U.S. Supreme Court delivered a major victory June 15 for the LGBTQ

workforce, arguing that civil rights law protects them from discrimination, based on sex. One case was the firing of late Michigan resident Aimee SteCarter phens, a transgender woman. But transgender individuals, especially those who are Black and other people of color, still get mistreated in the workplace, from misuse of pronouns to firing and violence. More than a quarter of Michiganders who identify as transgender have been fired, denied a promotion or not been hired due to their status. That’s according to the U.S. Transgender Survey by the Na-

tional Center for Transgender Equality in 2015 — the most recent year available. Carter, an activist who works with nonprofit LGBT Detroit, said as an independent contractor she’s been somewhat insulated from employer discrimination. But she’s still been “called everything — it, she-he, he-she.” “But I just kept myself in a very dignified space and people eventually come to terms with it,” she said. “I’m open about being a trans woman, and I’m proud of it ... I’m just too fabulous for all that mess.” Discrimination against transgender workers is commonplace and often blatant, said Jay Kaplan, staff attorney for the ACLU of Michigan’s LGBT Project. He said there’s less awareness about what it means to be transgender than there is for gay or lesbian identities.

ers, despite Black Americans making up 10 percent of degree holders, according to data compiled from the U.S. Equal Employment Opportunity Commission. Statistically, there should be upward of 50 Black CEOs on the Fortune 500, not just five: Marvin Ellison at home-improvement retailer Lowe’s; Kenneth Frazier at pharmaceuticals company Merck; Roger Ferguson at financial services firm TIAA; René Jones at M&T Bank; and Jide Zeitlin at Tapestry. “Maybe some of the past traditions on how you become a partner or an executive need to be evaluated in corporate America,” said Trinee Moore, director of human resources at the Detroit Public Library. “Whether it’s the law firm or the fire house, you have to look at the ladder to get to the top. Are these steps that other cultures can step into or not? What are your practices or your protocols? Is there a leadership school? Inclusiveness is key.” Scott Page, professor of complexity, social science and management at the University of Michigan, said the lack of Black executives is a numbers game gone afoul.

Companies focusing on recruiting only junior-ranking diverse employees will continue to struggle moving those employees through the ranks because they will inevitably lose them to companies with more diversity among their executive ranks. “The data is overwhelming,” Page said. “The reason diverse employees leave is that they will develop more and have a more interesting career elsewhere. One racial group may be more likely to leave if your environment is where that identity group does not feel they can be successful and grow. It’s that simple and you have to fix that. Without diverse leadership recruiting, you simply are going to struggle recruiting within an identity group. Without diverse leadership, diverse candidates are going to say, ‘There’s no one in my identity group that’s happy here.’” The void between Black workers and overwhelming white leadership proves problematic when it comes to in-person interactions, an important metric in establishing who should be promoted. See DIVERSITY on Page 10

Explainer: The T in LGBTQ LGBTQ is an acronym for an array of sexual orientations and gender identities including lesbian, gay, bisexual, transgender and queer. Often media or employers get terminology for these groups — and specifically transgender people — wrong out of lack of information or understanding. While preferences on language differ and evolve (and no accounting can be called exhaustive or correct for everyone), here are some rules of thumb from GLAAD, the Human Rights Campaign and Crain’s reporting:

queer, for example). ` Cisgender is a term for people who are not transgender. Put another way, their identity doesn’t differ from the gender typically associated with the sex they were assigned at birth. ` Widely accepted rules for terminology dictate that people call a transgender person by their chosen name, even if not legally changed. Referring to a no-longer-used name is often called “deadnaming.”

` Transgender is a term for someone with a gender identity different from the sex assigned to them at birth. It’s different from sexual orientation, which describes a person’s attraction to others.

` Use their preferred pronouns, and when you don’t know, ask (this is why you may see “she/her/ hers” or “they/them/theirs” in a Twitter profile or email signature). Using an incorrect pronoun is often called “misgendering” and can increase stigmatization.

` Gender identity includes not just man or woman, but those whose identity doesn’t fit in those boxes (non-binary or gender-

` Violence and discrimination disproportionately impact transgender Black women and transgender women of color.

See LGBTQ on Page 12

JUNE 29, 2020 | CRAIN’S DETROIT BUSINESS | 9

FOCUS | DIVERSITY, EQUITY AND INCLUSION FELECIA PRYOR

ANDREW MAC INTOSH

Athletes have been doing this When ex-NFL quarterback Colin Kaepernick took a knee during the national anthem in 2016 to protest police brutality, it enraged those who saw it as an act of disrespect. The gesture has taken on new meaning with the killing of George Floyd, who died after a police officer knelt on his neck for more than eight minutes. Sports have long been a platform for social justice, said Andrew Mac Intosh, senior director of leadership and education with RISE, a nonprofit launched by billionaire Detroit native Stephen Ross to end racism. The difference now is that teams can no longer ignore it. “There’s a lot of sports impacting society and society impacting sports. That symbiotic relationship needs to be examined … I think in the last few weeks, a lot more people have sat up

“I DO THINK THERE IS GOING TO BE LASTING CHANGE COMING OUT OF THIS, BUT I ALSO THINK IT’S HOW YOU VIEW CHANGE.”

RAINY HAMILTON JR.

and taken notice. We’ve seen a lot more athletes come forward, a lot of sport organizations come forward. I think it would be sad if we felt this was a new thing. Athletes and sports have always been doing this, but it’s just getting a lot more recognition now. “I do think there is going to be lasting change coming out of this, but I also think it’s how you view change. I think change can be viewed as small steps that you take towards a goal. .... “I think there’s now a lot more of what I would define as a strategic focus on doing this work. There’s been a lot more support from all sectors of society, and not just Black Americans, not just minorities — a lot more white people being involved at all levels of society. I think all that is going to make this something that is powerful and that is lasting.” — Kurt Nagl

‘They have to recognize biases’

Felecia Pryor has hired workers around the world. She’s currently “I’VE BEEN AN the head of human resources for Auburn Hills-based powertrain ADVOCATE OF PEOPLE auto part supplier BorgWarner — OF NON-COLOR which has 29,000 employees in 18 countries. But her job is expected to HOLDING DIVERSITY get even bigger as the company is ROLES.” working to close its more than $1 billion acquisition of Delphi Technologies plc. Delphi employs roughly 21,000 across 24 countries. Previously, she led Ford’s HR department and worked in HR roles in Asia for the automaker. Diversity has become Pryor’s top priority at BorgWarner, working to implement the strategies the industry has used to increase women among its ranks to people of color. She wants to do this by engaging white leaders in active roles to increase diversity. “I’ve been an advocate of people non-color holding diversity roles. How to moveofforward Black people, people of color, we in a new “normal” of workplace. know what our struggles are. We do Diversity & Inclusion spark session: our best when there is a trusted and rebuild their communities? I &toBenefits spark space communicate that.session: It’s so think you first have to lookCompensation at the fiimportant for non-people nancing. I’m involved in theTalk developabout Talent spark session: of color to see through the eyes of others. ment of downtown Detroit in the ParThat can be very powerful. I know I adise Valley district and we are go in with a bit more respect when and he said, ‘I don’t see color.’ We working with the banks to finance there is a person that’s not a person had a good relationship. He was a construction and get a final nod in of color advocating for diversity. white man. But I told him to never short order, but the city and the state They are in a position to influence say that beyond these walls. It’s OK need to look at the practices of makin a way that doesn’t seem self-serv- to see color. You are ignoring the ing finance and dollars available to ing. As a Black woman, when I’m most important aspect of who I am local developers so we can start to talking about Black men or Black if you don’t see that I am Black and build wealth. I heard on talk news females or Latino men or Latina a woman. If you don’t see my color about reparations. I don’t have a powomen, some leaders put their or my gender, don’t see that as an sition on that. I think the fact that this shields up. They see it as more asset, you are ignoring that as a bacountry was built on slaves’ free labor self-serving than it truly is. A sic fact of who I am. You don’t see has definitely kept the African Amernon-person of color that is speak- color? No one wants to hear that. ican community from advancing, ing in the same way, who is listen- People have worn that as a badge from wealth and ownership in our ing and understanding the issues, that says, ‘I am not racist’ for years. family structures. How do we modify they can help people recognize You are treating me as an invisible our lending practices to allow more how advancing D&I in any space instead of honoring me as a whole people of color to own their homes, can make us all better. But they person if you don’t see the whole own real estate, so we can start to have to recognize biases. In a previ- me.” amass some wealth?” — Dustin Walsh ous job, I coached a senior manager — Kirk Pinho

We need to start to build wealth For Rainy Hamilton Jr., who is principal-in-charge and president/ associate of the Detroit-based architecture and planning firm Hamilton Anderson Associates, the recent wave of protests against police brutality and systemic racism feels different than what he’s seen before. “It’s new. It’s in your face. It’s in color, from multiple vantage points,” he said. One of the changes he hopes that will result from the movement is increased access to capital for Blackowned businesses and developers. “First thing that comes to mind is, we are going to need to do a better job of making finance available to more individuals. That means our banking institutions need to look at their lending policies, look at the numbers. How much money has been invested in Detroit with developers, those that want to invest in

DIVERSITY

From Page 9

Only 31 percent of Black respondents to the “Being Black in Corporate America” survey said they have access to senior leaders at work, versus 44 percent of white respondents. “Companies can do a good job of bringing people in, but if their voice is not heard, they are always looking to go somewhere else where they are making a contribution and it’s noticed,” Moore said. “If a company is serious about retaining diversity hires, it has to embrace that ethos all the way through leadership.” Metro Detroit’s longstanding battle with racial segregation and racism plays a decisive role in retaining talent as well, said Page. According to the “Being Black in Corporate America” survey, 79 percent of Black professionals in the Midwest said they have experienced racial prejudice at work. That compares to just 44 percent in the Northeast, 56 percent in the South and 66 percent in the West. While Detroit is a majority black city, the suburbs are quite the opposite. Oakland County, for instance, is only 14 percent Black and 75 percent white. 10 | CRAIN’S DETROIT BUSINESS | JUNE 29, 2020

“WE ARE GOING TO NEED TO DO A BETTER JOB OF MAKING FINANCE AVAILABLE TO MORE INDIVIDUALS.”

Convincing a Black hire to stay may be more challenging, especially if they hail from a more diverse region like Chicago or New York City. “If I’m a diverse hire and I’m not Page married or have family in the area and I get an offer from a firm with diverse talent in Chicago or Houston, that may be more attractive. An offer from a community with your identity would be harder to pass up,” Page said. Felecia Pryor, executive vice president and chief human resources officer at Auburn Hills-based auto supplier BorgWarner, said the challenge is less about location and more about experience. “We’re on a journey like everyone else,” Pryor said. “We are consistently being purposeful with our recruitment strategies, but it’s about getting people in the door and keeping them around. Everything now revolves around the employee experience. We can no longer afford a one-size- fitsall experience. We have to have these more tailored and bespoke experienc-

es to help people of color.” Pryor, who has been at BorgWarner for roughly a year, said she’s steering the 29,0000-employee company toward more meaningful inclusiveness by using some of the same programs created to promote women in the auto industry for persons of color, such as resource groups and mentoring programs. BorgWarner is launching a mentoring program in the near future. “No different than we do for women, we need to do that for Black people, for Asian people, for Hispanic people,” Pryor said. “We all want the same things but our cultures are still different and we need to work on that. I would love to, of course, see more middle-management people of color, we don’t have enough of those. I would certainly like to see an Asian leader on our strategy board and a Black man or woman or other person of color on our board of directors.” Mentoring increases the ranks of diverse managers and leads to more diverse subordinates and more tolerant work environments, according to a 2016 study by Harvard University. But mentors must be diverse to attract diverse talent, David Thomas, president of Morehouse College, a historically black men’s college in Atlanta, former

business professor at Harvard University and dean of the business school at Georgetown University, told Crain’s last year. “People are naturally more likely to mentor people they identify with,” Thomas said. “They say, ‘I see in you what I saw in myself at that time in my career.’ When I look out, it’s easier for me to see myself in a young African American man than a young white female. I instinctively assume that guy wants to be like me, a chip off the old block. But she’s likely exhibiting the same behaviors. I should recognize that.” At companies that have effective mentorship programs and other inclusiveness programs, such as voluntary diversity training for managers, diverse employees tend to be happier and more likely to stay. Black workers in the “Being Black in Corporate America” survey identified several efforts that made them more likely to remain with their current company. For Black women surveyed, 33 percent were satisfied with their advancement in their company because of clear expectations for inclusive behavior, versus just 6 percent at companies that offered no clear expectations. A positive reputation around diversity

led 31 percent to say they intended to remain at their company, versus just 8 percent that didn’t have a positive reputation. “To really have a successful climate ... you have to control it, have to handle it,” Greer said. “There are real consequences to your intentional actions as an employer. When employees see that you’re changing, then climates get better.” For Black men, 38 percent of Black respondents who worked at companies that provided funding to attend conferences for people of color intended to stay put, versus just 14 percent for companies that didn’t. Another 37 percent of Black men responding to the survey said they were happy at their current company that offered in-person bias awareness training versus 16 percent at companies that did not. “Companies know how to do this,” Moore said. “There’s nothing we can say that hasn’t been said. Companies have to want this sincerely and put in the work. All the work has been done already, they just have to implement it. The engagement and success is up to them.” Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

FOCUS | DIVERSITY, EQUITY AND INCLUSION

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FOCUS | DIVERSITY, EQUITY AND INCLUSION

LGBTQ

From Page 9

â&#x20AC;&#x153;There is a high tolerance and a high mentality for disrespect,â&#x20AC;? said Jeynce Poindexter, transgender advocate at Equality Michigan and founding board member of the Trans Sistas of Color Project. â&#x20AC;&#x153;For misgendering, for outing ... A situation where someone may (not be visibly transgender) and going to work and someone goes and tells the superior, and theyâ&#x20AC;&#x2122;re fired. We have to have a level of respect so that we even can connect. If you donâ&#x20AC;&#x2122;t honor me as a person, youâ&#x20AC;&#x2122;re not going to hear me.â&#x20AC;?

Kaplan

Poindexter

Kaplan said policies like gender-based dress codes and conditions about restroom use can be harmful. Mistreatment isnâ&#x20AC;&#x2122;t limited to traditional workplaces, Poindexter said. In the past, though still in the social

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justice field, she said she experienced issues like being micromanaged, triple-checked or deferred. It can also happen in smaller companies, without a designated human resources department, she said. â&#x20AC;&#x153;A lot of Black trans women, our first level of violence and harsh disrespect, it comes from right within our household,â&#x20AC;? Poindexter said. â&#x20AC;&#x153;So then you tell a person to get out and expect them to make it through life disconnected, unsupported, unstabilized, and not invested (in). Thatâ&#x20AC;&#x2122;s a hard pill to swallow, but it is our reality.â&#x20AC;? Poindexter also co-chairs Fair and Equal Michigan, a ballot initiative to amend state law (the Elliott Larsen Civil Rights Act) to prohibit discrimination based on LGBTQ status. The recent U.S. Supreme Court decision bans employer discrimination, and Poindexter said Fair and Equal is now weighing its options on how to move forward.

Discrimination reporting

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Transphobia, a dearth of legal protections and lack of trust in the law has meant low public reporting of harassment or discrimination in the workplace for transgender individuals. â&#x20AC;&#x153;A thing to keep in mind is itâ&#x20AC;&#x2122;s certainly an undercount, because a lot of people still donâ&#x20AC;&#x2122;t realize they have these remedies available,â&#x20AC;? Kaplan said. The U.S. Equal Employment Opportunity Commission started tracking charges filed for discrimination based on gender identity or sexual orientation in 2013. And Michiganâ&#x20AC;&#x2122;s Department of Civil Rights was able to take and process such complaints starting in May 2018.

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Aimee Stephens speaks in Washington, D.C., Oct. 8 as the U.S. Supreme Court considered whether civil rights law prohibits job discrimination against LGBTQ individuals. | MOLLY KAPLAN FOR ACLU

Nationally, the Equal Employment Opportunity Commission received 1,868 charges of sex discrimination based on LGBTQ status in fiscal 2019, according to data on its website. Thatâ&#x20AC;&#x2122;s 7 percent of total sex-related charges filed and 2.5 percent of total charges for the year. LGBTQ cases also resulted in less monetary benefits paid out â&#x20AC;&#x201D; $7 million total, or 4 percent of the benefits for all sex-related charges. In Michigan, 43 LGBTQ-related charges were filed in fiscal 2019, or 1.8 percent of total equal employment opportunity charges, according to commission spokeswoman Kimberly Smith-Brown.

Supreme Court ruling The most prominent recent local case of transgender workplace discrimination is that of Aimee Stephens. She died May 12, before the U.S. Supreme Court ruling in her sex discrimination lawsuit for being fired by a Garden City funeral home after coming out as a transgender woman. â&#x20AC;&#x153;The consequences of the discrimination for Aimee Stephens losing her job, this was her purpose in her life, sheâ&#x20AC;&#x2122;d got great evaluations, sheâ&#x20AC;&#x2122;d got a raise,â&#x20AC;? said Kaplan of the ACLU. The ACLU represented Stephens in the case. â&#x20AC;&#x153;So the economic consequences of losing her work. Then trying to find other jobs in that field, she had a great degree of difficulty. She underwent some training to be a medical assistant because she couldnâ&#x20AC;&#x2122;t find work in the funeral home business.â&#x20AC;? But what does the Supreme Courtâ&#x20AC;&#x2122;s decision mean for transgender and other LGBTQ people in Michigan? â&#x20AC;&#x153;Michigan, up until very recent times, itâ&#x20AC;&#x2122;s sort of been a mixed bag when it comes to recognizing protections for sexual orientation and gender identity and gender expression,â&#x20AC;? said Matthew Disbrow, partner and labor and employment attorney for Detroit-based Honigman LLP. But, Disbrow said, two conservative Supreme Court justices joining the decision likely means more Michigan jurists will be persuaded to interpret the state civil rights act as the high court did for the federal Civil Rights Actâ&#x20AC;&#x2122;s Title VII. He expects to see more employment discrimination-related court challenges come through the system. Kaplan said employers should understand that if they discriminate against LGBTQ employees, they can

be held liable under sex discrimination in civil rights law.

Uphill battle Transgender people still face an uphill battle in employment. Nineteen percent of transgender Michigan residents were unemployed as of 2015, the latest U.S. Transgender Survey. It had 27,715 respondents, 894 of which were in Michigan. The stateâ&#x20AC;&#x2122;s overall unemployment rate for that year was 5.4 percent. Of those surveyed, 27 percent reported losing a job, being denied a promotion or not getting a job due to their identity. Sixteen percent of those who had jobs reported being verbally harassed for those same reasons, while nearly a quarter reported mistreatment such as having to use a bathroom different from their identity, being told to present as the wrong gender in order to hold onto a job or having their private information shared without consent. Michigan has around 32,900 residents who identify as transgender, or 0.43 percent of the population, according to a 2016 Williams Institute study. It ranks 40th in the nation for transgender-identifying population. â&#x20AC;&#x153;At the end of the day, from the â&#x20AC;&#x2DC;80s to now, itâ&#x20AC;&#x2122;s a whole lot better, but the challenge is still there,â&#x20AC;? Carter said. â&#x20AC;&#x153;I will say ... the young people are up for the challenge. Theyâ&#x20AC;&#x2122;re not hiding, and itâ&#x20AC;&#x2122;s a wonderful thing to see.â&#x20AC;? Companies looking to bridge the divide, said Poindexter of Equality Michigan, need to allow space to say theyâ&#x20AC;&#x2122;ve done things wrong and correct them. â&#x20AC;&#x153;The number one thing, if you want to know how to engage or uplift a community ... is you go to that community, you identify a person or connect with that person and you allow them to tell you how to do that to cultivate a plan of how to engage,â&#x20AC;? Poindexter said. â&#x20AC;&#x153;That just goes back to community engagement 101.â&#x20AC;? People respond to deliberate investment in safe, accepting spaces, she added. She pointed to when Starbucks expanded health benefits for transgender employees. â&#x20AC;&#x153;I know people who literally went to work at Starbucks for that reason,â&#x20AC;? Poindexter said. Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

CRAIN'S LIST: LAR LARGE GES ST MINORITY MINORITY-O -OWNED WNED BU BUSINE SINES SSE SES S Ranked by 2019 revenue Company name Location Contact info

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Piston Group

3000 Town Center, Suite 3250, Southfield 48075 (313) 541-8674 www.pistongroup.com

21 22

Type of business

$2,880.0

1059 NA

African American/ Black

Automotive supplier

2,051.9

1448 1274

African American/ Black

Automotive seating/interiors

-7

NA 835

African American/ Black

Provides full module assemblies, mechanical and robotic subassemblies, ultrasonic and vibration welding, plastic injection molding and sequencing services to the automotive industry.

$2,864.5

Bruce Smith CEO

858.9

Camaco LLC

Arvind Pradhan chairman

508.0

-1

NA 50

Asian

Automotive seat structure assemblies

NYX Inc.

Chain Sandhu chairman

426.0

-6

NA NA

Asian

Automotive supplier specializing in plastic interiors and sub-system components

Acro Service Corp.

Ron Shanani president and CEO

390.6

NA 2575

Asian

Staff augmentation, outsourcing and IT and engineering consulting, application development and enablement, relational database design and development, Web design and development

Prestige Automotive

Gregory Jackson chairman and CEO

339.0

NA NA

African American/ Black

Elder Automotive Group

Tony Elder president

331.0

3 3

-2

NA NA

Hispanic/Latino

Global Automotive Alliance LLC

William Pickard chairman

288.7

266 NA

African American/ Black

Warehousing, contract assembly, freight forwarding, contract logistics, procurement, quality control and inventory management

Royal Oak Ford/Briarwood Ford

Eddie Hall Jr. president

270.5

253 NA

African American/ Black

Automobile dealership

The Ideal Group Inc.

Frank Venegas Jr. chairman and CEO

270.0

449 423

Hispanic/Latino

Technosoft Corp.

Radhakrishnan Gurusamy president and CEO

165.0

NA 120

Asian

Chemico LLC

Leon Richardson president and CEO

164.0

108 NA

African American/ Black

Systems Technology Group (STG)

Anup Popat chairman and CEO

149.0

620 617

Asian

Digital transformation, cloud integration (AWS, Azure, Google), mobility solutions, artificial intelligence, machine learning, Big Data analytics, IOT consulting and software integration services

Devon Industrial Group

David Burnley Sr. president and CEO

142.0

NA NA

African American/ Black

Construction management, general contracting, program management, design build, pre-construction and decommissioning services

Avis Ford Inc.

Walter Douglas Sr. chairman and CEO

132.1

104 NA

African American/ Black

Automobile dealership

Epitec Inc.

Jerome Sheppard CEO

125.0

850 1115

African American/ Black

IT, engineering and professional staffing

James Group International Inc.

John James chairman

122.0

174 128

African American/ Black

Supply chain solutions, services in IT, export/import logistics, assembly, consolidation/deconsolidation

MPS Group Inc.

Charlie Williams chairman

120.0

180 164

African American/ Black

Waste management, paint shop cleaning and management, industrial cleaning and oil rig consulting

Bill Perkins Automotive Group

Bill Perkins president

118.7

70 NA

African American/ Black

Automobile dealerships

Advantage Living Centers

Reginald Hartsfield and Kelsey Hastings owners

116.0

1700 NA

African American/ Black

Skilled-nursing homes, assisted living

Altimetrik Corp.

Raj Vattikuti chairman

112.0

155 NA

Asian

12701 Southfield Road, Building A, Detroit 48223 313-243-0700 dmsna.com 37000 12 Mile Road, Suite 105, Farmington Hills 48331 248-442-6800 www.camacollc.com 36111 Schoolcraft Road, Livonia 48150 734-462-2385 www.nyxinc.com 39209 W. Six Mile Road, Suite 250, Livonia 48152 734-591-1100 www.acrocorp.com 20200 E. Nine Mile Road, St. Clair Shores 48080 586-773-1550 www.prestigeautomotive.com 777 John R Road, Troy 48083 248-585-4000 www.elderautogroup.com 2801 Clark St., Detroit 48210 313-849-3222 www.gaasolutions.com

27550 Woodward Ave., Royal Oak 48067 248-548-4100 www.royaloakford.com 2525 Clark St., Detroit 48209 313-849-0000 www.weareideal.com One Towne Square, 6th Floor, Southfield 48076 248-603-2600 www.technosoftcorp.com 25200 Telegraph, Suite 120, Southfield 48033 248-723-3263 www.thechemicogroup.com 3001 W. Big Beaver Road, Suite 500, Troy 48084 248-643-9010 www.stgit.com

29200 Telegraph Road, Southfield 48034 248-355-7500 www.avisford.com

Minority group of ownership

Detroit Manufacturing Systems LLC

Vinnie Johnson chairman

Local employees Jan. 2020/ 2019

Epsilon Technologies LLC

4617 W. Fort St., Detroit 48209 313-842-3300 www.bridgewater-interiors.com

Majority owner

Percent change

Bridgewater Interiors LLC

535 Griswold St., Suite 2050, Detroit 48226 313-221-1600 www.devonindustrial.com

Revenue ($000,000) 2019/2018

24800 Denso Drive, Suite 150, Southfield 48033 248-353-6800 www.epitec.com 4335 W. Fort St., Detroit 48209 313-841-0070 www.jamesgroupintl.com

38755 Hills Tech Drive, Farmington Hills 48331 313-841-7588 www.mpsgrp.com 13801 S. Telegraph Road, Taylor 48180 734-287-2600 www.taylorchevy.com 25800 Northwestern Hwy #720, Southfield 48075 248-569-8400 AdvantageLiving.net 1000 Town Center, Suite 700, Southfield 48075 248-281-2500 www.altimetrik.com

1,969.3

918.8

515.0

452.0

371.0

306.5

336.5

274.8

230.8

226.3

165.0

146.0

142.0

121.3

128.7

100.0

119.0

120.0

110.1

114.0

88.7

Automobile dealerships, real estate and insurance

Automotive dealerships

General contracting, specialized miscellaneous steel manufacturing and distribution of protective barrier products, global supply chain management, other Information technology and IT-enabled consulting services and business process outsourcing IT services and technology enabled health care solutions. Chemical manufacturing, chemical management

Software company

Want the full Excel version of this list â&#x20AC;&#x201D; and every list? Become a Data Member: CrainsDetroit.com/data

This list of minority-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, the companies provided the information. NA = not available. 1 Holding company for Piston Automotive, Irvin Automotive, Detroit Thermal Systems and Airea. 2 Epsilon Technologies LLC is the majority owner and is an entity comprised entirely of African American investors (one of which is the Hall family). 3 Crain's estimate. 4 On June 3, 2019, Epitec purchased MSXI Staffing LLC. JUNE 29, 2020 | CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS | 13

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Detroit Phoenix Center CEO Courtney Smith (right) and crew deliver care packages. | ALICIA PRICE

Pandemic forces Detroit Phoenix Center to take mission to streets Care packages including food, face masks delivered to needy BY LAILA HMAIDAN

When Michigan’s coronavirus stay-at-home orders went into effect in late March, Courtney Smith and her team at Detroit Phoenix Center were forced to close their drop-in center when the landlord shuttered the building out of an abundance of caution. “We thought, how are we going to serve the young people and what are they going to do? Where are they going to go? And how can we still provide them with the support they need?” the nonprofit’s CEO said. The Detroit Phoenix Center, located in a wing of the Bethel Community Transformation Center in the city’s North End neighborhood, provides resources, support and a safe, nurturing and inclusive environment for high-risk and homeless youth. The center was started in 2017 by Smith, a Crain’s 2018 Twenty in their 20s honoree. To date, the center sees about 1,200 drop-in visitors annually at its resource center. Before the pandemic, Detroit Phoenix Center offered on-site services such as a food pantry, access to a computer lab, showers, laundry, lockers, a meditation room and a recreation activity room. Additionally, youth could walk in and get meals, clothes, hygiene products, counseling, transportation assistance as well as educational and career support. “The next thought was, OK, since they can’t come to us, how do we get to them?” Smith said. One of the first things Smith and her team did was empty out the onsite pantry and distribute the food and supplies in care packages. With the help of another nonprofit, Enjoy Detroit, they placed the items into boxes and began delivering them to Detroit’s homeless youth. The care packages were packed and delivered biweekly. They included necessities such as food, personal hygiene products, face masks and reading material along with notes of

Courtney Smith | DETROIT PHOENIX CENTER

encouragement from friends and donors. “We have been to hotels and homes that aren’t in the best conditions. Just being out in the neighborhood, being able to see first-hand the living conditions of those we service, we are able to see how much of our services are needed and how vulnerable they are during COVID,” Smith said. “Just being able to see the smile on their faces when we deliver or when we see their homes, or when their parents cry because they weren’t able to get food, we are able to see that impact immediately.” The bundles are still being distributed as the pandemic continues. To date, 1,500 care packages have been delivered, and the team has provided wraparound support to more than 150 enrolled families consistently. “One of the things I would say consistently throughout the process is that poverty doesn’t pause during the pandemic,” Smith said. The nonprofit also sought out partners and grants that could help it transform the way it reaches and interacts with the youth. Smith and her team launched a virtual program to make many of the support initiatives available online. They also distributed computers and internet routers, removing barriers that youth may have to connect to those programs.

The hardware and internet support were made possible by a $15,000 grant from United Way for Southeastern Michigan and other donors including the Jacob Family Foundation. United Way also assisted with household goods and essentials while the city of Detroit provided PPE for staff and youth and their families. Since many of the youth Smith works with are highly mobile and transient, locating and reaching them can be a challenge, which is why Smith and her team help youth with maintaining a cell phone. It allows them to conduct weekly checkins and be sure the address they have on file is correct before making a delivery. Additionally, the organization worked to place youth in hotels, shelters, temporary homes or provided rental assistance thanks to another $15,000 grant from the McGregor Fund to provide emergency housing assistance. “I think Courtney is a great leader and she has high expectations for her team and anyone that is affiliated,” said Sade Beck, program coordinator for Detroit Phoenix Center. “She created the center because it is close to her heart and anyone who is on the team should have the same drive and expectation as she does. ... It’s something that is needed, and (homeless youth) is not something that gets a lot of attention.” For Smith and her team, the process served as a learning experience. The adjustments they had to make brought about new perspectives that will likely be adopted into future initiatives. “We realized very early on in this process that some of the families we serve, we may see only one or two youth that may be part of the program. But during COVID, we realized we need to serve the entire family,” Smith said. “Before we may not have served the young 6-year-old sibling. Now we know we have to serve the entire family because that is critical.”

CRAIN’S NEWS

SENIORS

Crain’s wins nine awards in national competition

From Page 3

But its actual population was 603 in March, 565 in April and 541 in May. The lower population numbers translate to decreased dollars coming in. “Based on the downward trend in census, we do not expect to meet our annual budget and have been preparing for a census in the range of 530-600 in the remaining months of the year,” with the lowest population forecast in the fall in anticipation of a resurgence of COVID-19 then, Dobner said. Outside of its senior living facilities, Samaritas has lost revenue with fewer referrals in other programs, as well, including its foster-care program, a treatment program for women referred by the Michigan Department of Corrections for treatment related to trafficking and/or addictions, support services for people with disabilities and refugee services which had been focused on people coming from African nations early in the year, Dobner said. Just under a third of Samaritas’ multimillion-dollar funding gap stems from the unbudgeted costs of purchasing PPE, cleaning supplies, technology to keep seniors connected to family and physicians and $1.39 million in employee appreciation pay and food brought in so staff doesn’t have to go off-site to get a June meal 15, and2020 then have to go back through check-in processes. Samaritas employs close to 1,000 frontline people providing care for seniors across 18 sites in the eastern, western and central parts of the state, and other employees delivering services for people with disabilities and children in foster care, Dobner said. Other senior living providers are incurring the same costs. While Presbyterian Villages of Michigan generally saw stable occupancy in its 32 communities, it didn’t have any new tenants moving in until late May/early June, President and CEO Roger Myers said. The biggest hit to its revenue — a loss of $3 million to $4 million — came with the lack of referrals of short-term rehab patients to its skilled nursing sites in Chesterfield Township and Jackson, which dried up when elective surgeries were discontinued in the region, he said. “So where we’d normally have 30-35 short-stay patients that were going through a recovery in a nursing home ... for 10-20-day stays ... right around the middle of March that all ceased. It’s just now beginning to restart.” Occupancy in its nursing homes, typically at 95 percent, dropped to less than 60 percent during the pandemic, he said. PVM did not disclose how many people it had in its skilled-nursing and assisted-living sites before and after the pandemic but said six residents of its communities died of COVID-19. “We won’t overnight rebuild the occupancy to what it was preCOVID,” Myers said. “Right now we think that by early December we’ll be back to where we were in February.” Like Samaritas, PVM, which is operating on a budget of about $146 million, has had incrementally higher costs related to things like PPE and appreciation pay for employees, he said. It recently implemented a 10 percent to 15 percent pay cut for about 40 of its 500 employees. Those seeing

Betty Wallace, left, and Louise Wilkes play bingo while social distancing at Samaritas’ Bloomfield Hills community. | SAMARITAS

Dobner

Myers

cuts were at the executive and management-level, with an annual salary of $75,000 or more, Myers said. “We think that will only be in place through the end of this year. If we can increase our revenue back to where it was sooner, then we can reverse some of those reductions back.” It also tabled the launch of construction on a $25 million expansion in Chesterfield Township to add 130 units of independent living cottages and an aggregate building. Individual donors are really stepping up to support in areas like PPE, Myers said. “Our objective is to be able to say2,at the end of this that December 2019 philanthropy covered 100 percent of added PPE cost.” And while it will take time to recover from the financial impact of the pandemic, Myers said PVM’s outlook is still very positive. “There’s been a heightened appreciation for technology that was always in our plan but now is even moreso,” he said, to help residents feel less isolated and to consult with their physicians through telehealth visits when possible. United Methodist Retirement Communities and Porter Hills, which came together under joint management last year, are facing a $3 million-$3.5 million revenue gap, said President and CEO Steve Fetyko. The two have a combined budget of about $150 million, making them the second-largest nonprofit senior living organization in Michigan, behind Trinity Health. About half of their budget is aligned with senior living communities on the east and west sides of the state. The rest funds home and community-based services delivered through the Program for All-Inclusive Care for the Elderly program. UMRC and Porter Hills have seen 41 positive cases of COVID-19 and 14 deaths, as a result, among the 164 senior residents in its skilled nursing facilities, Fetyko said last week. The combined occupancy of the two nonprofits’ nursing homes was around 88 percent before the pandemic, he said. It dropped to a low of 70 percent and now is sitting at about 77 percent.

Fetyko

Brightman

Assisted living and independent living communities have seen smallCRAIN ’S DETROIT BUSINESS on a er losses in terms of occupancy percentage basis, Fetyko said. Roughly $2 million of the revenue gap UMRC and Porter Hills project is tied to lower numbers of referrals in skilled nursing — as few as 400 on a given day, down from 450 at the start of the year — and also lower numbers of people moving in to assisted living and independent living, Fetyko said. While skilled nursing referrals have begun to pick up with elective surgeries resuming in recent weeks, new residents coming into the assisted living and skilled nursing facilities have still been low, he said. “What we’re hearing as a common theme is they want to know that there’s the ability for … family and others to visit them in the community.” A state order prohibiting visits to senior living facilities except in end-oflife situations was set to expire June 26. In addition to cutting costs, senior living providers are working to raise

dollars to help fill the gaps. UMRC and Porter Hills secured roughly $1.5 million in CARES Act dollars through the Centers for Medicaid Care, Fetyko said. They also launched a “Not All Heroes Wear Capes” campaign that raised over $1 million between mid-March and mid-June to help cover the costs of PPE and putting 760 employees up in hotels to protect their families from COVID-19 spread, said Wendy Brightman, president, UMRC and Porter Hills foundations. Samaritas is shifting from galas to themed, drive-in movie fundraisers in Detroit in August and in Grand Rapids in September. And eight senior living providers jointly applied and secured $120,000 in grants from the Community Foundation for Southeastern Michigan to support PPE costs and staff incentive pay. The group included: Samaritas, PVM, UMRC/Porter Hills, Church of Christ Care Center, EHM FoundaRAIN’S Senior DETROITLife, BUSINESS tion, C Jewish Wellspring and Woodhaven Retirement Communities. Samaritas is part of a similar collaborative seeking joint funding on the west side of the state, Dobner said. “We learned long before COVID hit that collaboration was the way to go. This crisis has proven that tenfold.” Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

Crain’s Detroit Business won nine awards in an annual national journalism competition put on by a trade group for business newspapers and magazines. Awards announced Thursday by the Alliance of Area Business Publishers included three Gold first-place awards and a Silver second-place award for Best Overall Publication. The following entries were recognized by judges from the University of Missouri School of Journalism: ` Gold, Best Personality Profile, Dustin Walsh, for “Oil in his Blood,” a profile of racing and automotive legend Jack Roush. ` Gold, Best Local Coverage of a National Business/Economic Story, Dustin Walsh, “All Tapped Out? Not So Fast,” which explained why microbrewery closings might not mean that the industry is oversaturated. ` Gold, Best Editorial, Chad Livengood, “Take the $500 milPage 1 lion, governor, and start building bridges,” an editorial that pushed for fixes to bridges to be prioritized. ` Silver, Best Overall Publication, Large Tabloids ` Silver, Best Ancillary Publication, Giving Guide, Sherri Welch and Sonya Hill. ` Silver, Best Investigative Reporting, Kirk Pinho and Bill Shea, “Is the District Detroit delivering?” an investigation of how much of the Ilitch family’s promised development had come to fruition. ` Silver, Best Overall Design, Large Tabloids: David Kordalski and Beth Jachman ` Silver, Best Use of Photography/ Illustrations ` Bronze, Best Feature Layout, David Kordalski “This is a vibrant, well-designed, well-edited publication that breaks new ground with every issue,” judges commented on Crain’s Best Publication entry.

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Salem Jamoua is a butcher at Mike’s Fresh Market at Seven Mile Road and Gratiot Avenue. The market’s owner says applicants have asked for $20 an hour, which his business can’t support.| LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

WORKERS

From Page 1

As Michigan’s economy has reopened from the coronavirus lockdown, service industry employers have found themselves competing for lower-wage workers with a generous $600 weekly pandemic unemployment assistance benefit that Congress and President Donald Trump approved in March to effectively incentivize workers to stay home to mitigate spread of the virus. “It’s really hard to find staff right now,” said Yatim, the owner of Eatóri Market. “People are collecting that unemployment, and they don’t want to come back to work.” While the unprecedented social safety net may be crimping the labor market, new economic data shows it’s also boosting the household incomes and consumer spending in low-income households and helping prop up the economy. Some economists contend that if Congress lets the benefit expire at the end of July, it could cause new job losses from a depletion of stimulus spending. Charles Ballard, an economist at Michigan State University, said Congress should consider extending the weekly benefit at a lower amount. “That incentivizes those that can to come back to work without, hopefully, significantly harming those that need the benefit,” he said. When combined with Michigan’s $362 maximum state unemployment benefit, laid-off workers have been collecting up to $962 per week since late March and will continue to do so through July 25 when the PUA benefit expires. After that, the state’s unem16 | CRAIN’S DETROIT BUSINESS | JUNE 29, 2020

ployment benefit has been extended from 21 weeks to 39 weeks. The maximum weekly unemployment benefit works out to $24-anhour, or the annualized equivalent of $50,000 a year — more than twice Michigan’s $11.05-an-hour median hourly wage for food service preparation and serving jobs. “It’s hard to compete with that,” said Donnell, co-owner of Clean Clutter Cleaning Service in Detroit who pays $12 an hour for residential cleaners. “People are not responding to employment right now, especially when you’re doing a physical job like we do. They’d rather be at home.” New data from the federal Bureau of Economic Analysis shows the $600 weekly benefit boosted incomes by $842 billion in May, accounting for 14.6 percent of wages and salary income, nearly six times the historic high of 2.5 percent in 2010 for unemployment benefits as a source of income, according to the Economic Policy Institute. The PUA benefit, combined with the federally funded extension of regular unemployment benefits, has injected $11.5 billion into Michigan’s economy over the past three months, according to the Department of Labor and Economic Opportunity. Michigan’s unemployment trust fund, which was one of the best-funded worker safety nets in the country at the outset of the pandemic, has paid out an additional $2.8 billion in state benefits, according to the state labor department. Michigan ranked fourth nationally with 1.08 million workers claiming the $600-a-week unemployment benefit during the week ending June 6, according to the most recent U.S. Department of Labor data available. Arizona had the most workers get-

ting the PUA (1.4 million), followed by California (1.33 million) and Pennsylvania (1.18 million). Michigan’s PUA rolls swelled when small-business owners, self-employed and gig economy workers were, for the first time ever, able to claim an unemployment benefit. That was “desperately needed for many, many workers” as a temporary relief when their ability to make a living was halted by government shutdowns due to the coronavirus outbreaks, said Patrick Anderson, CEO of the East Lansing-based Anderson Economic Group. “But going on past July would cause some continued disruption in the lives of those workers as well as those businesses,” Anderson said. “The longer you’re out of the workforce, the more difficult it is to reenter.”

Spending boost While lower-wage workers may be sitting on the sidelines of the economy, new consumer spending data suggests pandemic unemployment payments have given them more money to spend. Despite Depression-level unemployment, consumer spending in Michigan as of June 17 is up 0.5 percent compared with January, according to a seasonally adjusted real-time economic tracker of Opportunity Insights, a research website run by Harvard University. The increased spending is buoyed by consumers in low-income ZIP codes across the state, according to the Harvard tracker. Spending by consumers in low-income ZIP codes increased 4.8 percent since January, compared to a

Eatori Market in downtown Detroit’s Capitol Park has kept its cafe and outdoor patio closed on weekdays because of a shortage of workers. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

drop in consumer spending of 6.8 percent among high-income ZIP codes in the state and a drop of 0.1 percent among middle-income ZIP codes, according to the data. Raj Chetty, economist at Harvard University and author of a corresponding study to the data, attributes the CARES Act’s pandemic unemployment assistance payments of $600 for the increased spending. Michigan workers, employed and unemployed and regardless of education, would receive 130 percent of their wages under the state and federal unemployment program, according to research by the Upjohn Institute. The increase in spending in Michigan is almost exclusively by apparel and general merchandise, up 12.1 percent since January, and grocery, up 7.3 percent. Entertainment and recreation spending has plummeted by 38.2 percent, according to the tracker. Transportation spending is down 41.9 percent, restaurants and hotels spending is down 21.9 percent and spending on health care is down 16.5 percent. But it’s important to note the spending increase in low-income ZIP codes likely is much less on a dollar-to-dollar basis in the wealthier ZIP codes, said Nick Juhle, senior vice president and director of investment research at wealth management firm Greenleaf Trust. “These are the people who typically spend the most, certainly more than someone on the poverty line that is spending a little more now,” Juhle said. “It’s primarily their spend is going to be essential. That essential spending won’t change and will force many back to work if the unemployment payments end.”

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CLASSIC

From Page 3

“This is a workplace,” he said. “We’re treating it like a return-towork activity because it is just like other businesses returning to work.” A handful of PGA players and staff have tested positive for coronavirus since returning to play, including Cameron Champ, Nick Watney and caddies for stars Brooks Koepka and Graeme McDowell. The pandemic has cost the tournament a commitment from one of the game’s biggest names, Phil Mickelson. Tiger Woods is more than a longshot. But the field is star-studded nonetheless with players such as Jason Day, Bubba Watson, Bryson DeChambeau, Rickie Fowler and last year’s underdog winner Nate Lashley, set to compete for a piece of the $7.5 million purse. “The field’s coming together really nicely,” Langwell said. “It’s looking amazing out here. A lot of the branding has gone up. While we don’t have the same hospitality structures that sit on them, the red mesh looks beautiful, and I think it’s going to pop really well on TV.” Rocket Mortgage will be the only brand visible on TV. Signage will be displayed behind tee boxes and greens and other areas of the course that provide solid TV backdrops. There will also be a massive Rocket Mortgage sign in the pond on the 14th hole that will play in aerial footage, Hurbis said. “We are going to be everywhere with some innovative signage and branding that has not been done on the tour before,” he said.

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‘A temporary phenomenon’ Barring an extension by Congress, the $600 weekly pandemic unemployment benefit is set to sunset at the end of July. “This a temporary phenomenon,” Juhle said. “Landscaping companies can’t get labor and construction can’t get labor back, for instance, because how fast the industry snapped back alongside the additional unemployment payments. But that’s set to expire and you’re already hearing Senate Republicans talk about an extension being a nonstarter.” Hoyt Bleakley, an economist at the University of Michigan, called the difficulty in finding workers a “predictable consequence” of the CARES Act, but suspects workers will begin returning to work before the payments run dry by August. “Some workers will want to return before PUA ends so as not to be the last person in line for rehiring,” Bleakley said. “And firms might offer one-time hiring bonuses to attract workers back from UI.” In some cases, the unemployment benefit may be pushing up wages. Abro, co-owner of Mike’s Fresh Markets on Gratiot and Livernois at Seven Mile Road, said he normally pays $14 to $15 per hour for stockers and cashiers. He says his grocery store margins won’t support $16 an hour. But recently, Abro said he’s been having job applicants ask for $20 per hour. “They know we’re in a jam, and they’re asking for blood,” Abro said. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

‘Not concerned’ about cancellation Asked if he was nervous about the tournament being canceled as COVID-19 cases accumulate, Langwell said not at all. “I have a call with the PGA Tour twice a day … and that’s been happening since March,” he said. “I’m

RELIEF

From Page 3

“They got through it last time and they’ve figured out how to operate at lower levels of revenue,” said Terrill. Still, Fed bosses contend that the program is just in its infancy and will still likely pay dividends for the economy. “These are still early days in the program, and we are seeing a steady stream of interest,” Boston Fed President Eric Rosengren said in remarks about the program on June 19. “We encourage lenders who have not yet registered to explore the program. … Lenders have a vested interest in the resilience of the businesses in their market, and this program gives them a way to help bridge those businesses that were sound before the pandemic to better days.”

Kicking tires Still, there are those seriously considering the program. Among them is Jeff Benore, president of Benore Logistic Systems Inc., headquartered in Erie in Monroe County. Benore’s company, which handles inbound supply chains for an auto manufacturer in South Carolina and a tire manufacturer, saw business go from operating at full capacity to

The Detroit-based mortgage giant will have a large share of signage at the made-for-TV Rocket Mortgage Classic. | ROCKET MORTGAGE

not hearing anything about that, and there’s no conversation about that. We’re not concerned about that.” PGA Tour commissioner Jay Monahan released a statement June 24 about the COVID-19 cases on tour. “While we have been thorough in building and implementing a program that mitigates as much risk as possible, we knew it would be impossible to eliminate all risk,” he said. The field of 156 players at the Rocket Mortgage Classic will travel to the Detroit tournament on a PGA Tour charter flight. Each traveler is required to submit a saliva test before boarding the flight. Additionally, each player will be tested for the virus upon arrival. Players and caddies are not permitted to travel outside of the tournament grounds besides to and from their hotels. Most are staying downtown at the Shinola, Westin Book Cadillac and Courtyard Marri-

ott, while a handful have rented properties on the course, Langwell said. Only employees essential to running the tournament, and a select number of media members, are permitted on site. They will be subject to thermal screening before entering the grounds. Whereas last year there were several thousand volunteers and tournament employees, there will be 300 or fewer on site at any given time this year. “We’re able to spread out over 220 acres of Detroit Golf Club,” Langwell said.

“IT ALLOWS US TO REALLY STRATEGICALLY GROW HERE IN THE LONG TERM. WE SEE IT AS A REAL BENEFIT.”

Huntington Bank as its potential lender, and accounting firm UHY LLP to develop a plan and make a final decision on whether to take on the debt. Multiple advisers said that’s familiar territory for many companies right now: executives are still in the planning stages and working through details with attorneys and CPAs before bringing a prospective deal to their lender. Tom Alongi, a partner at UHY and the managing director of UHY Advisors, notes that banks are still very much testing the waters on the program and seeking clarity on several fronts, including their senior lender status, should a business not make it. “It seems like the lenders are not quite ready for prime time,” Alongi said. Michael Tierney, president and CEO of the Community Bankers of Michigan trade group, concurred, saying his members are feeling a bit of fatigue from the PPP work, especially with the work of trying to get loans forgiven now taking up time. “They are all up to speed on the program, but I would tell you the majority are taking a bit of a breather,” Tierney said of some of the hesitancy of banks to dive into the Main Street program. “They are prepared to assist long-term clients who might want

— Jeff Benore, president of Benore Logistic Systems Inc.

about 10 percent once the virus took hold in March , he said in an interview. Business has now begun to rebound, but a loan through the program could help the company to replace some aging equipment and free up cash flow in the short term because of deferred interest payments, he said. “It allows us to really strategically grow here in the long term,” Benore said of the prospective loan. “We see it as a real benefit.” Benore said the company is looking at the Priority loan, one of three lending mechanisms that make up the Main Street Lending Program. The Priority loan offers a five-year term of between $250,000 to $50 million. When initially unveiled, the minimum loan was set at $500,000, but that was lowered to give more companies an opportunity to access the capital. The company is working with

Raising charity funds Without packed stands, the tournament lost most of the engine that generates money for charity. The tournament last year raised $1.1 million for local nonprofit organizations. Laura Grannemann, vice president of strategic investments for

Quicken Loans, said the company is confident about raising at least as much this year, mainly through a separate fall outing at Detroit Golf Club. The money will be used to seed a fund that will be administered by the United Way for Southeastern Michigan in partnership with the city of Detroit. The goal is to eventually build the fund with other corporate money and provide internet access to the 100,000 households in the city that lack it by 2025. “We know that technology is incredibly powerful, especially at a time where every resource that we have as a community has to be accessed online, whether its education, employment, housing support, food distribution, connectivity to friends and family,” Grannemann said. Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl the loan, but most are looking at this as more of an accommodation than a product they really want to market in a major way.”

Changes ahead? Throughout the course of the PPP, which is set to expire this week, the U.S. Small Business Administration and the Department of Treasury would regularly tweak and update guidance. Experts expect the same to happen for the Main Street program. Short of some significant changes, or changes by Congress, the program is sure to be “under-utilized,” said Seth Ashby, a partner in the Grand Rapids office of law firm Varnum LLP. “The Fed has done what they can to make this palatable to the most eligible borrowers,” Ashby said, but ultimately believes the program as designed is too limited in scope to be of much use to many companies. Still, he said he has clients looking at Main Street, who — like Benore — believe the Priority loan facility offers some opportunity, particularly as a way of refinancing some existing debt. “But it’s a narrow band within the mid-market space,” he said. “Unless things change, or Congress takes other action, it’s going to be underutilized.” JUNE 29, 2020 | CRAIN’S DETROIT BUSINESS | 17

HOSPITALS

From Page 1

Henry Ford Health System received $807.7 million, including $399.7 million in grant funding and $408 million in loans, said system officials. Ascension Michigan has received $645.1 million, including $242.6 million in grants and $402.5 million in loans, according to federal data. Beaumont treated the most COVID-19 patients in Southeast Michigan, followed by Henry Ford and 14-hospital Ascension Michigan. So far, the coronavirus pandemic has claimed 490,000 lives worldwide and more than 125,000 in the U.S., including 6,133 in Michigan. COVID-19 kills about 3.4 percent of those infected, far higher than the 0.1 percent deaths for seasonal flu, according to the World Health Organization. The allocation of funds to hospital systems was not based on numbers of COVID-19 patients treated, but on a formula based on the providers’ amount of Medicare fee-forservice revenue and total net patient revenue. Despite the influx of federal funds that appears to have stabilized health systems and minimized employee furloughs, U.S. Sen. Gary Peters issued a report June 23 that concluded Michigan so far has received nearly $130,000 less per patient than the national average of $160,286. He said the difference appears to be because Congress didn’t consider COVID-19 “hotspots” like metro Detroit when it allocated the funds. For example, North Dakota reported the third-lowest number of coronavirus cases but received $327,570 per case compared with Michigan’s $31,045 per case. Peters also said 41 percent, or $72 billion, of the funding Congress approved through the CARES Act has not been distributed. “Places like Detroit did not receive the funds despite being hit very hard and that’s simply unacceptable,” Peters said. Funding delays “increased ... the number of people who are laid off or are on furloughs.”

Henry Ford Health System projects lost revenue of nearly $500 million by June 30. | CRAIN’S DETROIT BUSINESS

“PLACES LIKE DETROIT DID NOT RECEIVE THE FUNDS DESPITE BEING HIT VERY HARD AND THAT’S SIMPLY UNACCEPTABLE.” — U.S. Sen. Gary Peters

Systems brace for losses Robin Damschroder, CFO with expected to be mass produced until Detroit-based Henry Ford, which op- mid-2021. Michigan is one of several states erates six hospitals in Southeast Michigan with more than 32 health that saw a consistent decline the past centers, said the system is preparing month and flattening of infections, for a second wave to hit this fall, al- hospitalizations and deaths. Howevthough the hope is that it will only be er, late last week, as businesses began half as bad as the first wave that start- to reopen, daily COVID-19 cases ed in early March. Damschroder said “EVEN IF WAVE TWO Henry Ford projects lost IS HALF OF THESIZE revenue of nearly $500 million by June 30. In OF WAVE ONE, 2019, Henry Ford reportTHAT’S ANOTHER ed net income of $138.7 million on total revenue $200 MILLION IN of $6.3 billion for a 2.2 REVENUE LOSS.” percent margin. “Even if wave two is — Robin Damschroder, CFO with half of thesize of wave Detroit-based Henry Ford one, that’s another $200 million in revenue loss” for the sec- started to rise again past 300 for the ond six months of 2020, Damschrod- first time in three weeks. er said. “We are very anxious about what Use of relief funds? will happen,” she said. “We are very prepared and confident we can keep Bret Jackson, president of the Ecopeople safer. But at the same time, we nomic Alliance for Michigan, said he don’t know what (COVID-19) is go- is concerned that hospitals will use ing to bring.” the COVID-19 related revenue losses Most public health experts believe to pass along higher costs to employCOVID-19 infections have been in- ers. Another concern is that the moncreasing nationally and predict a sec- ey hospitals have received from the ond wave will hit this fall without the CARES Act will be used to purchase protection of a vaccine, which is not struggling physician practices or ex18 | CRAIN’S DETROIT BUSINESS | JUNE 29, 2020

CRAIN’S FILE

pand health care operations. “It was important for Congress to support these facilities and medical groups that were restricted from taking care of patients,” Jackson said. “What I am concerned how they will cover the lost revenue and that somehow the employer community will be the target of hyper-inflation of prices.” Executives at Beaumont, Henry Ford and Trinity Health told Crain’s that none of the funds received by federal or state sources will be used to purchase struggling physician practices or used to expand market shares. The CARES Act did not directly prohibit such business moves, experts said. But there are questions about whether the systems needed to furlough as many employees as they did. By a Crain’s analysis, more than 10,000 health care workers were furloughed or laid off in Southeast Michigan beginning in early April. Health system officials said they made the right calls in furloughing employees as many services were drastically scaled back. They said they needed to reduce expenses because relief funding was weeks away. “Even though our revenue went down 50 percent in the state of Michigan, we furloughed only 10 percent of our workforce (of 28,000 employ-

ees in early April). So we did not match dollar for dollar at all,” said Rob Casalou, president of the Michigan, Georgia and Florida markets with Trinity Health, a Livonia-based system of 93 hospitals. Health care experts interviewed by Crain’s also say lobbying efforts are underway to ask Congress to forgive the $78.4 billion nationally loaned to the health systems. Overall, Michigan hospitals received about $2.94 billion, said CMS. Casalou said he favors either complete loan forgiveness or another round of financial grants for hospitals. “We bore the brunt of this pandemic and the medical costs side,” Casalou said. “We did it by giving up all of our other work and we ended up losing hundreds of billions of dollars in the process.” Casalou also said he also worries about a second wave of COVID-19 hitting this fall. “(Forgiving the loans) would absolutely put us in much stronger shape in terms of being able to come out of this,” he said. So far, Casalou said Trinity Health Michigan has received $132 million in grant funding. The Catholic system also received $219.5 million in Medicare pre-payments. “We didn’t use it for any other purpose than to pay the expenses that we needed to incur as well as to offset lost revenue,” said Casalou. “We put a halt on all of our capital spending in everything to conserve cash.” Casalou said even though health systems have billions of dollars in reserves and at least 100 days cash on hand, the vast majority is locked up in investments and restricted by bond covenants. “(People) looked at one side of our balance sheet which shows all this cash, but what they don’t see is all our debt,” he said. “Those bond covenants and the bondholders require that you carry a certain amount of cash in order to cover your debt. Trinity and others, we came dangerously close to triggering the bond covenants because we weren’t earning enough cash.” Casalou said health systems also received additional funds because Congress deferred a 2 percent Medicare cut related to sequestration and added 20 percent to Medicare reim-

bursements for patients who had COVID-19. Starting in March, Trinity Health Michigan experienced a 50 percent drop in patient activity, resulting in operating losses of $50 million in March, $84 million in April, $53 million in May and another $20 million in June for a four-month loss of $207 million . As of mid-June, Trinity Michigan hospitals treated 1,986 patients with

“WE BORE THE BRUNT OF THIS PANDEMIC AND THE MEDICAL COSTS SIDE.” — Rob Casalou, president of the Michigan, Georgia and Florida markets with Trinity Health

428 deaths, far fewer than Beaumont, which treated 8,049 patients with 906 deaths. “Without (the federal grant and loan money) we would be deep into the red,” Casalou said.

Henry Ford’s struggles Through June 15, Henry Ford said it had treated 3,947 patients. But as the numbers of patients hospitalized with COVID-19 increased, patients with other medical issues were asked to postpone treatments. Last week, Henry Ford only had 16 hospitalized COVID-19 patients. “When we got to the end of March, our revenue dropped by 25 percent. Our weekly cash on hand dropped by almost 50 percent in five weeks,” Damschroder said. The federal COVID-19 relief payments of $807.8 million helped keep Henry Ford financially afloat. “I was using that cash to pay payroll, supplies, pharmaceuticals,” she said. “If we didn’t receive that cash from Medicare, I (might have had) to go into our investment portfolio.” Henry Ford and Trinity Michigan have recalled more than half of furloughed employees as patient volume has picked up. “We’re bringing them back and this point we are about six or eight weeks ahead of the schedule that we first had when we put the furloughs out there,” Damschroder said. “We think that that is good news.” Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

THE CONVERSATION

Quality is what Rebekah Bundesen is preaching

crainsdetroit.com

MICHIGAN ASSOCIATION FOR HEALTHCARE QUALITY: Rebekah Bundesen, senior provider performance specialist with Priority Health, is currently serving a one-year term as president of the organization. Founded in 1974, MAHQ was formed to improve health care quality across the state by bringing like-minded people such as nurses, clinical providers and those working in information management and quality improvement to create a networking and education forum to exchange ideas. Each year the association presents an annual conference and its leaders are available for corporate trainings, speaker presentations and general advice. | BY JAY GREENE  Crain’s Detroit Business: What role does the association have in improving quality for Michiganders? Rebekah Bundesen: When you think of quality, it is all relative. For physicians, some see quality as having a friendly conversation and then receiving good news on the patient experience. For others, quality is whether their decisions and the care itself were accurate for the patient. Medical errors are the third leading cause of death. That needs to be reduced. We need to close the gap by working with doctors to improve their quality scores. We also work with hospitals the same way. The association is meant to be a resource to help those who work in the industry and seek to improve health care quality in all areas. We have a wide range of diverse leaders on the board that can appeal to many different fields within health care.

my spine and joints the past 10 years. I have good and bad days. I started using a power chair this past year so that I can be more mobile and active during my pain flares. I have a spine cord stimulator (Nevro HF10 device) that has helped immensely. I’ve been going through some of the adaptive needs that I have and it really opened my eyes to a new perspective. I try and remember this perspective every day as I work in the health care field. Every physician group I work with seeks to manage the risk of their population. The one thing I remember is that I likely am one of the medium to high-risk patients on their lists. The programs I work on and advocate for really truly help people. I make sure it is the same level of care that I would want for myself.

Rebekah Bundesen is president of the Michigan Association for Healthcare Quality and a specialist with Priority Health.

 What do you do as president and what are your goals? As president, I’m responsible for rallying the troops and making sure the corporate bylaws are followed. I oversee the board of directors and our committees. We consist of a wonderful team that is diverse on many levels from time in health care service to ethnicity, age and professional experience. Many of the directors act as chairpersons of their own committees.  You are currently a senior provider performance specialist at Priority Health. What are your duties there? My job at Priority Health is actually really cool. Sometimes I kind of feel like a secret agent behind the scenes. I’m always trying to dig around and figure out how I can improve health care. So I do a lot of research behind the scenes. I just never thought I’d be able to use math and analytics to help others. But here I am. My day consists of running reports, looking at trends and high cost areas. Then I create dashboards and reporting mechanisms and strategize with providers and executive teams to improve patient care. It’s very mathy, very analytic, but I also get to build

relationships with leaders at hospitals, systems and physician practices.  Tell me more about yourself. Like anyone, I want to do a good job at what I do. That’s why I keep learning and networking to figure out best practices. I teach undergrad classes online at Liberty University and I’m pursuing a Ph.D. in epidemiology so I can continue to contribute to this field. I began my career in a nursing home, then a practice group, and now I have been at three different health insurance companies. My focus is business process improvement. I have a certified professional in health care quality certification as well. I grew

up in Waterford in Southeast Michigan and graduated from Central Michigan University, where I also completed my master’s degree. I have three dogs I’m obsessed with, a husband and 12-yearold son named Dakota. He is taller than me now, I can’t believe it. I am also involved in animal rescues as a volunteer. I’m passionate about helping others and love to use my skills and knowledge to make the world a better place.  Describe the physical limitations you have been dealing with. I have a progressive disease (lumbar spondylosis with spinal stenosis and battered nerve root syndrome) affecting

 What are health plans doing to improve quality? The first thing health plans need to do is get an accurate picture of all of the claims that are coming in. If you are a patient and not aware of a claim, which is a bill, after you see your physician, we may see some diabetes or hypertension going on with you. That’s all we know from claims. We don’t know if you have complications. We don’t know if you have issues with your medications. Maybe you have. Maybe you have transportation issues or a language barrier. We try to make sure as a health plan that we’re capturing the full scope of your illness so we can work with your physician to improve your care. One of my jobs is to make sure we are in touch with your physician so we have a correct picture of your condition in case we need to get you enrolled into a care management program. For example, if you are a diabetic, we probably need your lab information to make sure everything is being managed appropriately. We want to make sure you getting are getting what you need as a member. I just want members to know I’m here. I’m behind the scenes. I’m making sure that everything goes smooth.

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

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 REPORTERS

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RUMBLINGS

Crain’s May Days of Giving tops $82,000 raised for local nonprofits Crain’s inaugural May Days of Giving charitable event raised $82,312 for 32 nonprofits from 379 donors. The program was created as part of Crain’s annual Giving Guide, which moved up from the fall to the spring because of increased need caused by the COVID-19 crisis. Nonprofits that took part in the Giving Guide were able to create their own fundraising page on the May Days website at maydaysofgiving.crainsdetroit.com. A sponsorship from Huntington Bank picked

up the tab for service fees charged by the donation platform MightyCause. The Detroit Goodfellows had the most donations at 64, raising a total

of $8,855. The Michigan Hispanic Collaborative raised the largest dollar amount, at $10,590 from 60 donors. Other highlights of the program, which ran from May until Saturday, included:  Matching donations to New Day Foundation for Families, from Garden Fresh Inc. founder Jack Aronson’s Artichoke Garlic Foundation  Matching gifts from another donor to the Autism Alliance of Michigan to honor the memory of Sean Taglione, a 12-year-old boy who died

when he fled his home and was hit by a car  A $5,000 gift from Cynthia and Edsel Ford to Detroit Goodfellows  An anonymous $5,000 gift to Forgotten Harvest For some of the participating nonprofits, the program represented their first online donation portal. Though this campaign has ended, the donation pages for individual nonprofits continue to accept donations; click on the names of individual charities from the list at maydaysofgiving.crainsdetroit.com.

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.

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