Crain's Detroit Business, Aug. 24, 2020 issue by Crain's Detroit Business

Lasting legacy: Colleagues recall developer Eric Means after his death at 48. PAGE 5

Rough seas: Inside-out economy, stock market produce unusual agreement among finance pros. PAGE 8

CRAINSDETROIT.COM I AUGUST 24, 2020

EDUCATION

ILLUSTRATION BY ANDREA LEVY FOR CRAIN’S DETROIT BUSINESS

SEARCHING FOR EQUITY AMID CRISIS

The coronavirus crisis has caused us to look at education through a new lens, laying bare the longstanding inequities in how we deliver and pay for the schooling of our children. In this month’s Crain’s Forum, we take a new look through that lens at the consequences of previous attempts to create a more equitable system and some of the challenges schools are facing in this most uncertain time for education.

ALSO IN FORUM

Funding tiers: How exceptions add up to inequities. PAGE 14

Virtual or live: There’s no one-size-fits-all for learning. PAGE 15

Technology: It’s tough to get tech in students’ hands. PAGE 17

Voices: Three advocates offer their views. PAGE 16 Q&A: Detroit schools superintendent Nikolai Vitti. PAGE 17

NONPROFITS

Food banks expect demand spike as school-meal waiver ends NEWSPAPER

BY SHERRI WELCH

When school is back in session, free lunches will stop for some at-risk children. Children too young to attend school and the newly vulnerable peers of students enrolled in free and reduced-cost breakfast and lunch programs will no longer be eligible to receive food through a federally

funded program that has helped keep them fed since March. A federal waiver that took effect after schools closed to provide free food for all children through food boxes distributed by emergency providers at driveup sites around the region ends Aug. 31 or the first day of school, whichever is earlier. Schools will shift back to the regular school-year programs that provide food only for enrolled students.

And that will leave outstanding need for emergency food providers to fill without the ability to seek reimbursement. The gaps left by resuming the regular school meal programs represent the fourth wave of need to come at food providers since the pandemic began. See MEALS on Page 22

NEED TO KNOW

GETTING AROUND

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` JOBLESS RATE FALLS, BUT RECOVERY SLOWS

` STATE REACHES $600M SETTLEMENT ON FLINT’S WATER THE NEWS: Gov. Gretchen Whitmer and Attorney General Dana Nessel have agreed to a historic $600 million settlement with Flint residents over state government’s role in Flint’s disastrous lead-tainted water crisis. Whitmer, Nessel and law firms representing Flint residents in a class action lawsuit announced the settlement Thursday, a landmark agreement more than six years after Flint switched from Detroit’s Lake Huron-fed water system to using the Flint River for its drinking water to save money while under the control of state emergency manager. WHY IT MATTERS: Flint’s water switch — predicated on saving money while the city was being run by state-appointed emergency managers — is blamed for causing toxic lead in aging water pipes to leach into the city’s drinking water after state environmental officials did not require Flint’s public works department to add corrosion control chemicals to the water.

THE NEWS: The state’s unemployment rate recovered to 8.7 percent in July — a full 1.5 percent below the national average — job losses are still happening and the number of jobs returning, or being created, in the state is slowing. For the week that ended Aug. 15, 16,938 people in Michigan filed new jobless claims, down from the revised up total of 18,997 a week earlier, according to the U.S. Department of Labor. WHY IT MATTERS: A slowing return of jobs following massive job losses amid lockdowns in March and April dims hopes for a sharp recovery.

` MSU DOES ABRUPT SWITCH, GOES ONLINE-ONLY FOR CLASSES

Self-driving shuttle takes to streets ` A self-driving paratransit shuttle pilot is being deployed to help senior citizens in Detroit. Last year, French company Navya received a mobility grant from PlanetM, the Michigan Economic Development Corp.’s mobility arm, to deploy such a shuttle. This month, a Navya Autonom shuttle began operating along a preprogrammed 1.3-mile route in Detroit, connecting Brush Park Manor senior center and Brewster Homes to the Detroit Medical Center Heart Hospital, according to a news release. The free, wheelchair-accessible shuttle runs 9 a.m.-5 p.m. weekdays and is exclusively for use by residents of the two communities. A safety operator is on board to ensure passenger safety and educate passengers about the shuttle. It will operate through mid-October. The deployment is a partnership among Navya, the state’s Office of Future Mobility and Electrification, PlanetM, clean-energy business accelerator NextEnergy and fleet optimization service Bestmile. Other partners are Flagstar Bank, AARP, DTE Energy Co. and IXR Mobility, which provides the safety operator.

THE NEWS: Michigan State University announced that all fall classes would start in a remote format and told students to stay home as the first day of the semester neared. WHY IT MATTERS: Other universities, such as the University of North Carolina, have faced coronavirus outbreaks after returning in person to campus, despite measures taken to dampen the spread of the disease. MSU President Samuel Stanley, a physician and infectious disease specialist, said it is “unlikely we can prevent widespread transmission of COVID-19” if undergraduates return to campus.

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`POSTAL CHANGES PUT ON HOLD UNTIL AFTER ELECTION

A Navya Autonom Shuttle is being used in a self-driving service between the Detroit Medical Center and Brush Park Manor | NAVYA

THE NEWS: Postmaster General Louis DeJoy said he is suspending changes to mail service that raised concerns over slow delivery of ballots in the fall election after President Donald Trump criticized the vote-by-mail process. WHY IT MATTERS: The announcement follows concerns from Democrats and others over apparent mail slowdowns. Local union officials told Crain’s last week that 10 mail-sorting machines had been removed throughout Michigan facilities this summer.

`AMAZON AIMS TO EXPAND LOCAL OFFICE PRESENCE THE NEWS: Amazon.com Inc. plans to expand its Tech Hub in Detroit, adding 100 jobs and acquiring more than 25,000 square feet of additional office space in the city at 150 W. Jefferson. The jobs at the hubs will include engineering and product management roles as well as others across various departments, including Amazon Web Services, the Alexa virtual assistant team, advertising and Amazon Fresh. WHY IT MATTERS: The move is part of a larger plan to create 3,500 tech and corporate jobs across six cities in the United States, the Seattle-based online retail giant announced Tuesday morning.

TRANSPORTATION

RETAIL

Hopes ride on futuristic connected corridor Plan would link Detroit, Ann Arbor BY NICK MANES AND ANNALISE FRANK

On the same day Gov. Gretchen Whitmer announced her Stay Home, Stay Safe executive order in March that prevented “nonessential” businesses from operating in-store hours, Steve Geppi, CEO of Diamond, announced the closing of the company’s distribution system.

With a newly introduced plan to install a “connected corridor” between Detroit and Ann Arbor, factions remain at odds over whether it’s best to look toward futuristic transportation trends or focus on more urgent needs. Meanwhile, it’s difficult to not get caught up in the excitement about the promise of easier commutes, new mobility jobs and increased economic development along the corridor while remaining cautious and listening to needs. On Aug. 13, government and business leaders including Gov. Gretchen Whitmer and Ford Motor Co. Executive Chairman Bill Ford Jr. announced they were moving forward on planning mobility-centric roadway improvements through Wayne and Washtenaw counties. The state selected Cavnue, a subsidiary of New York City-based Sidewalk Infrastructure Partners LLC, to lead the effort. It is first tasked with working out the logistics of a throughline for connected and autonomous vehicles between transportation hot spots like Ford’s under-renovation Michigan Central Station in Detroit’s Corktown neighborhood, Detroit Metropolitan Airport in Romulus and the University of Michigan in Ann Arbor. The funding and timeline for building the ambitious corridor remains unclear. That means there’s more than enough room for big promises from officials as well as optimism and skepticism from outside observers. Carla Bailo, president and CEO of the Ann Arbor-based Center for Automotive Research, said she expects the proposed project to pay significant dividends for the state’s economy for several years and further solidify Michigan’s standing as a leader for mobility initiatives.

See COMICS on Page 21

See CORRIDOR on Page 21

C. Scott Lovejoy of Back to the Past Collectibles: “We made the decision we weren’t going to be a new comic-book store anymore.” | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

CORONAVIRUS AND KRYPTONITE Is the incredible staying power of comic book stores in jeopardy? BY DUSTIN WALSH

A sign at Back to the Past Collectibles in Livonia. | LARRY PEPLIN FOR CRAIN’S

Back to the Past collectibles and comics shop is mutating. The 30-yearold pop culture warehouse on Plymouth Road east of I-96 in Livonia is managing the COVID-19 shockwave that shuttered comic book shops across the country and derailed comic book distribution for months. For C. Scott Lovejoy, owner of the shop, the pandemic accelerated industry trends in quick succession. On March 23, the largest comic book distributor in the country, Diamond Comic Distributors, zapped the industry to a halt by temporarily suspending distribution of comics to stores. Diamond distributes half of the industry’s comics market. Comic

shops generate much of their revenue on Wednesdays, known as New Comics Day, but with Diamond out of commission, sales evaporated. Snap. Back to the Past was out of the new comics business and avenging the loss by doubling down on the vintage collectibles market. “Everything we were going to order was on backorder and it was just a giant mess,” Lovejoy said. “The new comics rack has been in decline for decades and the wheels were really falling off. We made the decision we weren’t going to be a new comic book store anymore.” For generations, comic books have opened the world to cosmic powers, seers, crime fighters and world sav-

ers. The industry has been as resilient as Wolverine’s adamantium through recession, war and unrest. But neither Martin the Manhunter nor comic book store owners could have predicted the economic shock of a global pandemic like COVID-19.

A dark night

HEALTH CARE

Annual survey: Midsize employer benefit costs up 3 percent this year BY JAY GREENE

A new survey shows that midsized employer benefit costs in Michigan are expected to rise 3 percent this year after companies make plan changes and 5 percent if they don’t make changes. Holding down health care costs often depends on how much employees use medical and hospital services. Because of the unpredictability of the COVID-19 pandemic, however, predicting future costs and

premium increases is much more difficult, say consultants with Troybased Marsh and McLennan Agency LLC. Before COVID-19 hit Michigan in March, many of the 381 companies participating in the Marsh and McLennan 17th annual Mid-Market Group Benefit Survey planned to focus on employee retention and recruitment in a tight labor market, tweaking well-being plans and continuing to encourage high-deductible health plans with health sav-

ings accounts. But the global coronavirus pandemic changed some employer strategies from cost shifting more expenses to workers this year to taking care of employees as they return to work, encouraging use of telemedicine, work-at-home options and well-being programs, said Jackie Webster, vice president of health and benefits and survey co-lead at Marsh and McLennan. See SURVEY on Page 22

Employer actions to control costs Midsized employers are taking steps to reduce employee health benefit costs. These range from shifting more premium costs to employees to rewarding employees for price-shopping for cheaper health services. Action

Reduce current plan design (increase deductibles, copayments, coinsurance, etc.) Increase employee contributions Shift more aggressively to families (increase 2 person or family contributions at higher rate than employees) Introduce a new lower cost health plan option Add income-based contributions Implement a tobacco surcharge program Eliminate coverage for specific specialty drugs Add Expert Medical Opinion Program Add program that rewards employees for price shopping specific procedures Add Narrow Network SOURCE: MARSH AND MCLENNAN AGENCY

COVID-19

Pre-COVID-19

54% 56%

28% 52%

17% 20% 2% 4% 2% 7%

16% 24% 13% 13% 15% 16%

19% 4%

29% 13%

CRAIN’S DETROIT BUSINESS GRAPHIC

AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE INSIDER

Magic Plus LLC, long working on the redevelopment of the former state fairgrounds site, is no longer part of the project. Instead, the investor group involved with Magic Plus has created a new entity and added some new investment partners as part of Uptown Development Partners LLC. | CITY OF DETROIT

New solutions that bring the flexibility employees need.

For J.D. Power 2020 award information, visit jdpower.com/awards.

4 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

State fairgrounds investor group creates new entity For the better part of a de- million and put in a new $7 million transit cencade, Magic Plus LLC was ter. The other portion of the site is owned by Upthe entity working on a deal to develop the former Mich- town Gateway Partners. “The Amazon facility and a multimodal tranigan state fairgrounds site. sit center will take the city to the next level, creThat has come to an end. Now, it is Uptown Gate- ating jobs and opportunities while providing way Partners LLC. Magic greater accessibility for all,” Uptown Gateway Plus — which consisted of Partners said in a statement last week. Kirk Magic Plus paid $472,464 for the 16 acres NBA legend Earvin “Magic” PINHO Johnson, Michigan State ($29,529 per acre) for its land, which consists of University trustee and de- 11 acres or so north of a transit stop along veloper Joel Ferguson as well as Marvin Beatty Woodward and the remaining acreage to the of Greektown Casino-Hotel — has been tossed south. to the side in favor of the new ownership group. Beatty is out. Ferguson and Johnson remain in, according to a statement. New to the fold are Ben and Doug Maibach of Southfield-based general contractor Barton Malow Co.; and Gregory Kelser, the Detroit Pistons broadcaster for FOX Spots Detroit as well as a former NBA player himself. Former Detroit Mayor Dennis Archer and his son, Dennis Archer Jr., CEO of Ignition Media Group and founder and president of Archer Corporate Services, are listed in a statement as part of the new investment group, but Archer Jr. said last weekthat neither he nor his father have officially committed to being involved in the plans, al- The Parking REIT Inc. owns the deck immediately though they are supportive of the project. “The west of the Renaissance Center. | COSTAR GROUP INC. final investor structure has not been finalized as of today,” said Christopher Stralkowski, exec- What’s in store for the parking utive project manager for Ferguson’s Lan- deck west of RenCen? sing-based Ferguson Development. “It is in process.” The owners of the parking deck at 414 ReHe added: “The site is currently being divid- naissance Drive West fell behind on their loan ed into several separate parcels for various earlier this year, according to one company that ownership structures that represent distinct monitors commercial real estate debt, and and diverse ownership groups.” there could be some difficult financial converWhat most of the Uptown Gateway investors sations ahead for its owner. (and possible investors) have in common are The Parking REIT Inc., based in Las Vegas, ties to Michigan State Unisays it is current on its Bank versity. All but Archer Jr. “THE AMAZON FACILITY of America loan for $31.5 went to the East Lansing million (current balance of school for at least some of AND A MULTIMODAL $29.38 million), with their post-secondary edu- TRANSIT CENTER WILL TAKE monthly payments of cation; Archer Jr. attended $194,000. The 10-year loan the University of Michigan. THE CITY TO THE NEXT has a 5.52 percent interest Uptown Gateway Partners LEVEL, CREATING JOBS AND rate and matures in FebruLLC is a “doing business ary 2027, the real estate inas,” or DBA, for an entity OPPORTUNITIES WHILE vestment trust says in a ficalled Spartans for Detroit PROVIDING GREATER nancial filing with the U.S. LLC, which was registered Securities and Exchange ACCESSIBILITY FOR ALL.” last year. Commission. Regardless, that group — Uptown Gateway Partners New York City-based would be a big winner at Trepp LLC says The Parkthe end of the day if the current plans for the ing REIT is current on the debt and is not on a broader 158-acre site materialize. watchlist or being handled by a special serLast week, Mayor Mike Duggan and others vicer. Yet DBRS Morningstar, a division of Chiannounced that Seattle-based Amazon.com cago-based Morningstar Inc., says The Parking Inc. is expected to be a 3.8 million-square-foot REIT is 30-59 days delinquent on its loan on user at the city-owned site at Eight Mile Road the 1,275-space garage west of the Renaisand Woodward Avenue that would be jointly sance Center, with an appraised value of developed by Detroit-based Sterling Group and $57.15 million. Dallas-based Hillwood Enterprises LP. The developers are slated to buy the 142 acres for $9 See INSIDER on Page 5

OBITUARY

Detroit developer Eric Means, ‘bright young star,’ dies at 48 Means Group had been working Cambria Hotel project BY KIRK PINHO

Mayor Mike Duggan said in a Tuesday morning statement that Means was “a Detroit developer Eric Means died suddenly bright young star in DeMonday. He was 48. troit’s redevelopment and Means, the CEO of Detroit-based developer one of the finest examples The Means Group Inc., had been working on of Detroiters rebuilding Dethe development of the $50 million Cambria Hotel project at Lafayette Boulevard and Third troit.” Avenue. He had also been part of the team that Last year, The Detroit redeveloped the former Metropolitan Building Means News wrote about Means’ downtown into the 110-room Element Detroit efforts in Highland Park, at the Metropolitan Building, along with De- which included renovating a Hanna Street home troit-based developer The Roxbury Group. He for a longtime city resident after it bought her old one as it prepared to build a 450,000-square-foot also had a project in Highland Park. Means is survived by his wife, Tracy, and industrial building in the area. “He was a man with a heart as big as his vithree children. “He was an inspiring man of incredible heart sion,” Duggan said. and vision and a man who believed deeply in Richard Hosey, owner of Detroit-based not only the cities of Detroit and Highland Park, Hosey Development LLC, said Means was a tebut also in doing right by the people who call nacious developer he befriended as a member those communities home,” of the city’s development The Means Group said in a “HE WAS AN INSPIRING community. statement. “He was dedi“He was one of those people who endured and cated to mentoring the next MAN OF INCREDIBLE got things done,” said generation of developers HEART AND VISION AND A Hosey . and always put the focus on “He was also one of those his team instead of himself. MAN WHO BELIEVED people I enjoyed just hangNevertheless, Eric has left a DEEPLY IN NOT ONLY THE lasting legacy that we will ing out with and grabbing a proudly continue in his CITIES OF DETROIT AND drink to decompress. He memory. Our hearts go out HIGHLAND PARK, BUT got his projects across the to Tracy, Arie, Willow and line, which is a big deal in Brandon, as well as all who ALSO IN DOING RIGHT BY Detroit, but also he was just were fortunate enough to THE PEOPLE WHO CALL a nice guy.” know Eric and call him a Architect Rainy HamilTHOSE COMMUNITIES friend.” ton, founder and president City Council President of Detroit-based Hamilton HOME.” Brenda Jones, in a FaceAnderson Associates, called Means “a very kind book post Monday evening — The Means Group and gracious soul.” calling him “more than a “I enjoyed a dinner with him late last year developer” and “a supporter for the people in Detroit,” also said in her post that Means was a and had hopes of connecting again but then the pandemic took over,” Hamilton said. “We were veteran of the U.S. Navy. “This rising young man’s star was extin- discussing ways and opportunities to work together.” guished far too soon,” Jones said. Means is the second Detroit developer to die The Means Group website also says the company did work on other projects like the Garden this month, following the Aug. 2 death of longTheatre and Garden Center apartments on time Detroit developer Joel Landy. Woodward, Lafayette Towers in the Lafayette Park neighborhood, and the Red Truck Pro- Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB duce space in Eastern Market.

INSIDER

From Page 4

The DBRS Morningstar data could be lagging behind, although The Parking REIT declined to say whether they had been delinquent on their BoA loan recently. When it was still known as MVP REIT Inc. prior to a merger between it and MVP REIT II Inc., The Parking REIT paid about $55 million for the deck in 2017, I reported at the time. (The company says in its filing that the purchase price was $55.476 million.) That deck is of key importance to The Parking REIT. The SEC disclosure says it represents 22 percent of the company’s revenue in the first six months this year, compared to 17.3 percent last year. Even worse, for the first six months of the year — which includes the time before the first COVID-19 cases hit Michigan — revenue at the deck was $153,000, compared to $589,000 the year prior, representing a 74 percent decrease. Uncertainty for the deck lay ahead, the company says. Bank of America loan covenants on the deck require it to maintain $2.3 million in cash and cash equivalents. While it is currently in compliance with the requirement, it doesn’t expect

to meet that requirement beyond Q3 without unloading some of its assets — which it may not be able to do. It also may fail to negotiate a waiver on that minimum balance requirement. That, in turn, could trigger a default and the bank could call the note. Sure, there’s a lot that would need to happen in the next few months in order for that to happen, but I’ll be keeping an eye out.

Boji recovers from COVID-19 Ron Boji, the Lansing-based developer who is active in Royal Oak and other Southeast Michigan communities, says he caught COVID-19 and recovered. “I was bad for every bit of three to four days at most — just like a bad flu, real tired, Boji sore, my body was very weak. I did get a temperature of 100 for a few nights, had a dry cough and was bored shitless for 10 days (during quarantine),” Boji told me. Boji was lucky. He survived and recovered in fairly short order, and neither his wife or daughters contracted it, he said.

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Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 5

From

COMMENTARY

Virtual Detroit Homecoming offers changes, opportunities ince September 2014, one of the hottest tickets in town was the annual, invitation-only Detroit Homecoming. Crain’s Detroit Business created the initiative to bring successful Detroit-area “expats” back to Detroit to inspire them to re-engage with the people and projects that are part of the city’s revitalization. Thanks to the financial support of local companies and charitable foundations, the initiative grew, attracting successful people with ties to Detroit from all industries. And naturally, many local nonprofit, business and civic leaders wanted the chance to meet them. COVID-19 has brought changes — and opportunities — for Detroit Homecoming. Last week, we opened registration for a series of livestream sessions and small, socially distanced in-person experiences in September that include “immersions” in five neighborhoods and “restaurant takeovers” centered on specific topics and interests. With our partner, the Downtown Detroit Partnership, we’ve also planned a public open-air market downtown with makers, retailers and food trucks to close the week of activities on Sept. 25. “Expats” have “first dibs” on virtual and live experiences. (If you have friends, former colleagues or adult children who are living elsewhere, this is a good time to give them this link — detroithomecoming.com — to apply to attend.) But we’re also tapping what could be the largest pool of Detroit expats in the country — suburban Detroiters — to apply to attend by telling us their Detroit story at the same link. We’re excited to bring to the virtual Detroit Homecoming, which begins Sept. 21, some remarkable speakers with Detroit connections: ` Detroit-born Byron Allen, who is probably the most successful Black media mogul in the country, with a portfolio of properties that includes the Weather Channel, a production studio, a handful of TV stations and several cable networks. Byron issued a 10-point agenda for Corporate America in June to address racial equity in the wake of George Floyd’s very public death. ` Rosalind Brewer, a Cass Tech alum who is group president and COO of Starbucks, a member of Amazon’s board of directors and chair of the board at Spelman College, her alma mater. ` Robin Washington, a corporate director on the boards of Salesforce and Alphabet, Google’s parent company. ` Dan Doctoroff, who grew up in Birmingham and now is founder of Sidewalk Labs. He was the keynote speaker at the first Homecoming in 2014 and will return to discuss the future of cities, beyond COVID-19. ` Dick Costolo, former CEO of Twitter and now a tech investor. ` Troy native Deirdre O’Brien, senior vice president of retail and people at Apple Inc., who ranked No. 32 on Fortune magazine’s list of 50 Most Powerful Women last year. ` Michigan State University alum Mark Hawkins, president and CFO of Salesforce. ` Detroit native Dan Okrent, author of the new book, “The Guarded Gate: Bigotry, Eugenics, and the Law That Kept Two Genera-

Mary

KRAMER

GETTY IMAGES/ISTOCKPHOTO

Group Publisher tions of Jews, Italians, and Other European Immigrants Out of America.” ` Serial entrepreneur and Grosse Pointe native Eric Ryan will speak on building companies with “artists and operators.” Eric has changed the dynamics of three consumer-facing product categories in Method (“green” cleaning products), Olly (vitamins) and Welly (first aid products). With the support of three foundations — Ford Foundation, DTE Energy Foundation and W.K. Kellogg Foundation — we launched a series of Detroit Homecoming webcasts in May and June that attracted 250 Homecoming alumni and more than 2,200 local viewers. We suspect the audience will grow in September.

WE’RE ALSO TAPPING WHAT COULD BE THE LARGEST POOL OF DETROIT EXPATS IN THE COUNTRY — SUBURBAN DETROITERS — TO APPLY TO ATTEND BY TELLING US THEIR DETROIT STORY. Meanwhile, the impact of Detroit Homecoming has exceeded our original expectations. We’ve tracked hundreds of millions of dollars in investments we can link back to Homecoming as a catalyst, including the Ballmer Group’s decision to include Detroit in its philanthropy footprint (leading to one recent announcement: its $3 million donation to the Motown Museum’s capital campaign announced last week.) September has always had a “back-toschool” feel that goes hand-in-hand with fall “homecomings” for alumni. Even virtually, this year will be no exception for Detroit Homecoming.

MORE ON WJR ` Listen to Crain’s Group Publisher Mary Kramer and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

COMMENTARY

$2.8B in school funds could help get state out of jam M

ichigan public schools are sitting on at least $2.8 billion in savings, and some state lawmakers are starting to eye these fund balances as a way to make up for a $1 billion shortfall in K-12 school tax revenue. The combined fiscal year 2019 general fund balances of local school districts and county or regional intermediate school districts totaled $2.3 billion, with another $528 million sitting in the bank accounts of ISDs that’s dedicated to special education programs, according to Michigan Treasury Department data. With the state facing a monstrous budget deficit from the coronavirus pandemic triggering high unemployment and decreased consumer spending, some lawmakers are actively exploring how to force school districts to spend down their fund balances to offset direct cuts in per-pupil funding. “I think all districts should consider using some of their fund balance to get through this year,” said state Sen. Wayne Schmidt, a Traverse City Republican who chairs the Senate’s K-12 appropriations subcommittee. The specter of the lawmakers effectively raiding the savings accounts of school districts has the potential to be a huge political fight in Lansing next month. “You can’t say ‘local control’ out of one side of your mouth and then say ‘spend your fund balance down’ out of the other side,” said Bob Shaner, superintendent of the Rochester Community School District, which has built up a 21 percent balance of $36.6 million. Local control is largely a myth in Lansing these days. The Sept. 30 deadline for the Legislature approve a School Aid budget is fast approaching, and a bailout from Congress in the middle of a momentous presidential election seems less and less likely by the day. So lawmakers are starting to scramble to find ways to close the gap without raising taxes or having to cast a vote on record of cutting school funding by $1 billion. School finance consultants advise districts to maintain a fund balance of 10 percent to 12 percent of annual operating expenses, largely to manage cash flow during the month of September when school districts

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 6 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

Chad

LIVENGOOD

receive no aid payment from the state (a state budget-balancing gimmick from the early 2000s that really needs to be fixed). The most recent data compiled by the Treasury Department shows fund balances are all over the map. Detroit Public Schools Community District, which was effectively bankrupt in 2016 until getting a $617 million state bailout, had

THE MOST RECENT DATA COMPILED BY THE TREASURY DEPARTMENT SHOWS FUND BALANCES ARE ALL OVER THE MAP. a $139.5 million fund balance in fiscal year 2019 that was nearly 19 percent of its operating budget, according to the Treasury Department. Plymouth-Canton Community Schools is sitting on a 21 percent fund balance of $37.8 million, while Livonia Public Schools has socked away $30.9 million, or 19 percent of its annual operating budget. Dozens of small school districts all across the state have fund balances that are onethird or more of their annual expenditures. Ecorse’s school district has a nearly 40 percent fund balance. The 135-student school system in Northport in Leelanau County has a 60 percent fund balance of $2.6 million. Glen Lake’s 660-student school district in Leelanau County has a 107 percent fund balance of $13.9 million, meaning those schools could operate for a year without any new state aid and still have a 7 percent fund balance left over. See BALANCES on Page 7

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

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Schmidt argues the current economic crisis and tax revenue shortfall necessitates dipping into savings to weather the storm. “That’s kind of what it’s there for,” he said. Earlier this summer, lawmakers agreed to tap Michigan’s $1.2 billion rainy-day fund, using $350 million to balance this year’s budget deficit. More — or possibly the rest — of the $840 million rainyday fund could be depleted in the 2021 fiscal year. Michigan has a law that Republicans put on the books in 2015 that sets off a trigger at the Treasury Department when a school district’s fund balance dips below 5 percent. Schmidt said he’d be willing to waive Treasury’s intervention for two years in order to let districts spend below the 5 percent fund balance mark. School districts this could apply to include Ann Arbor, Grand Rapids, Holland, Jackson, Lansing, Walled Lake and Warren, all of which had fund balances last year hovering around 6 percent or 7 percent. There also are school districts that ran up deficits in the 2019 fiscal year and were forced to borrow money from the state to make up for the shortfall. Districts with negative fund balances included Beecher, Hazel Park, Pinckney, Flint, Vanderbilt, Pontiac, South Lake and Benton Harbor, which had a 14 percent negative fund balance. “There are some districts that could be in trouble, and this COVID could tip it,” Schmidt acknowledges. At the intermediate school district level, the fund balances are generally much healthier than at local districts. Just three ISDs in Kent, Midland and Macomb counties had general fund balances below 10 percent in the 2019 fiscal year. But in the special education programs, it’s a different story. Wayne County’s regional educational service agency (RESA) has a special-education fund balance of $240 million — 101 percent of its annual budget. The special education fund balance has built up over the past decade as a result of Wayne RESA levying its full 3-mill property tax and salaries and benefits for special education instructors costing less than expected, Superintendent Randy Liepa said. Liepa said Wayne RESA has been trying to spend down the fund balance on one-time expenditures and reimbursing local school districts for unfunded costs to transport disabled students. Wayne County’s special education millage is earmarked just for teaching children with special needs. “For anybody in Lansing who thinks we can take that money to cover and give it to school districts to cover general ed, K-5 classroom sizes or to pay for PPE equipment or cover the utilities costs, we can’t,” Liepa said. Like anything with education funding, it’s complicated. But these high-percentage fund balances at school districts are already on the radar of lawmakers desperate to get out of a billion-dollar budget hole before October.

ECONOMY

Workshare program saved state unemployment fund $212M BY CHAD LIVENGOOD

Nearly 97,000 laid-off workers in Michigan have gone back to work part time during the pandemic with a partial unemployment benefit that has saved the state’s unemployment insurance trust fund $212 million, the Labor Department said Wednesday. Michigan has had the highest enrollment of any state in the workshare program, which allows employers to call back laid-off workers at reduced hours while they continue to collect partial unemployment, said Jeff Donofrio, director of the Michigan Department of Labor and

Economic Opportunity. The federally funded plan became popular with employers and employees alike in May, June and July because workers could continue to collect the $600-a-week pandemic unemployment insurance benefit until it expired in late July. The 97,000 workers who enrolled in the program through 2,500 employers were able to draw down $450 million in federally funded unemployment benefits, including the $600 added benefit, Donofrio said. State officials sold the workshare program to employers as a way to gradually ramp up operations after Michigan’s two-month coronavirus

shutdown to mitigate spread of the coronavirus. In many cases, workers were able to earn more each week working fewer hours. Enrollment in the program has dropped down to about 59,000 workers, according to the Labor Department “As the $600 benefit has not been extended, a lot of people have fallen off the workshare program,” Donofrio told Crain’s on Wednesday. The state of Michigan was the largest employer to take advantage of the federally funded workshare program by furloughing 28,000 employees one day per week throughout the summer and having them apply for un-

employment benefits through the Unemployment Insurance Agency. Those employees qualified for partial unemployment insurance as well as the $600 weekly pandemic unemployment assistance, effectively increasing their weekly pay. “Even if you take out that 28,000 from the 97,000 we had, we’d still be No. 1 in the nation of workshare participants,” Donofrio said. Workers enrolled in the workshare program get a portion of the state’s maximum $362 weekly unemployment compensation, ranging from $36 for a 10 percent reduction in hours to $217 for a 60 percent reduction in hours.

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INSIGHTS Wealth managers detail their likes, dislikes in upside-down market.

WEALTH MANAGEMENT

PAGE 9

RIDING THE WAVES ILLUSTRATION BY TREETY VIA ISTOCK

GDP plunges, markets rise — and advisers try to keep clients from getting seasick BY TOM HENDERSON

In February, it would have seemed that something like this could only happen in some dystopian novel, this being: A financial crisis that would soon cause the U.S. Federal Reserve and the U.S. Congress to team up to triple the finance stimulus to the economy that had been provided during the Great Recession of 2008-2009, yet, despite that help, the second quarter would see by orders of magnitude the largest contraction of GDP since the Great Depression, a decline at an annualized rate of 32.9 percent. If you had known that in February, you would have also known that by mid-August, we all would be living in a dystopian world, not reading a dystopian novel. But, at least in the world of financial markets, IRAs and large life savings being managed by wealth managers, you would have been dead wrong.

8 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

“IT’S BEEN A TUG OF WAR BETWEEN EPIC FISCAL STIMULUS — WHICH AT NINE AND A HALF TRILLION DOLLARS IS ABOUT 44 PERCENT OF GDP, WHICH IS ABSOLUTELY UNPRECEDENTED — AND THE UNKNOWN OF SHUTTING DOWN MAJOR PARTS OF THE ECONOMY.” — David Sowerby, managing director and portfolio manager of Ancora Advisers LLC

Financial markets are humming along like they were before anyone heard the term “COVID-19,” hitting record highs or flirting with them. News of the shocking decline in GDP came July 30. The following week, the NASDAQ exchange hit its all-time high four days in a row, finishing at 10,941.91 on Aug. 5, the same day the Dow was up for the fourth straight day, by 373 points to finish at 27,201, within sight of its all-time high of 29,551 on Feb. 12. “The good news is the GDP is backward-looking and markets are forward-looking. The economy is starting to expand,” said Anne MacIntyre, president and CEO of Annie Mac Financial LLC in Sterling Heights. “It’s been a tug of war between epic fiscal stimulus — which at nine and a half trillion dollars is about 44

percent of GDP, which is absolutely unprecedented — and the unknown of shutting down major parts of the economy. The stock market has been more focused on the stimulus, which is why markets have rallied so much,” said David Sowerby, managing director and portfolio manager of Ancora Advisers LLC in Bloomfield Hills. The Nasdaq is tech-heavy, and the stay-at-home economy has been a huge revenue driver for tech stocks. Where would the economy be without Zoom and online ordering of every kind of consumer staple, edible and readable? And the Dow was up on optimism on various COVID-19 vaccine fronts and on Congress making progress toward more stimulus. See MARKET on Page 11

FOCUS | WEALTH MANAGEMENT

Sharing the wealth management insight

Wealth advisers list their investment likes, dislikes — and what they’re avoiding like a virus BY TOM HENDERSON

Coronavirus has led to unusual but hardly surprising unanimity about much of what is in or out of favor by wealth managers. There is more agreement on where clients should or shouldn’t put their money this year than there has been in past years of this annual wealth-management report. With everyone working at home and companies likely to see the benefits of permanently reducing their commercial space, commercial real estate is way, way out. As are airlines and hotels and, with a falling dollar as a result of trillions in stimulus money, U.S. Treasuries. Always in favor as a hedge in troubling times? Gold. Now, more so than ever, literally, as it has hit all-time highs. And given the importance of treating people, getting them well and eventually finding a cure, health care is in everyone’s portfolio, as is technology, given how it has connected us from home and allowed us to work and allowed us to do all our retail and grocery shopping online. Here are some typical reactions that reflect what their contemporaries are saying: “When do I get on an airline and go to a conference and stay in a hotel where the conference is?” asked David Sowerby, the managing director and

portfolio manager of Ancora Advisers LLC in Bloomfield Hills. The answer: Who knows, but not any time soon. “The days of flying to New York or Chicago and having a three-day meeting, those things are in the rear-view mirror,” said Scott Bork, senior vice president and director of investments for TCF Bank in Detroit. “I’m concerned commercial real estate will be permanently impacted,” said Mike Dzialo, president and chief investment officer of Managed Asset Portfolios LLC in Rochester. Here are some investments that 17 wealth managers like and don’t like, and their insights into the economy in the time of COVID-19.

John Augustine ` Chief investment officer, Huntington Bank, Columbus, Ohio Likes: Blue-chip U.S. stocks; health care technology; consumer discretionary; digital real estate investment trusts (REITs), which invest in cell towers and data centers Dislikes: Foreign stocks, corporate bonds, energy, basic materials, commercial real estate investment trusts Insight: “Markets have almost become defiant regardless of COVID. They want to go up. With this much cash sloshing

around looking for a home, markets will keep going up. It’s almost contrarian to our current circumstances, but they are captive to the oceans of liquidity. Brokerage Augustine companies are reporting huge numbers of new accounts.”

Melissa Spickler ` Managing director, Merrill Lynch’s Spickler Wealth Management Group, Bloomfield Hills Likes: Technology, health care, environmental, dividend-paying stocks, biotechs with a long track record Dislikes: Emerging markets, international, energy Insight: “I’m going into my 40th year and can count seven of these crashes. Not panicking on Black Monday in 1987 set the tone for my career.”

Tony Catalina ` Director of private banking, Fifth Third Bank Private Banking, Birmingham Likes: Communication services, utilities

Spickler

Catalina

Dislikes: Fixed income, energy, industrials Insight: “Markets are inherently forward-looking. We’re long-term investors. We’re not day traders.”

Mike Dzialo `President and chief investment officer, Managed Asset Portfolios LLC, Rochester Likes: Technology (Nokia, Microsoft, Micron); health care; consumer staples; gold; Grupo Herdez S.A. (a Mexican maker of salsas, chips, guacamole and condiments) Dislikes: U.S. banks, manufacturing, industrials, transportation, commercial real estate Insight: “We’re seeing an economic rebound, but you need to distinguish between a rebound and a recovery. There won’t be a recovery until at least 2022.”

Dzialo

Fratarcangeli

Jeffrey Fratarcangeli ` Managing principal, Fratarcangeli Wealth Management of Wells Fargo Advisors, Birmingham Likes: Blue-chip dividend paying stocks, technology, biotech, industrials, consumer discretionary Dislikes: Utilities, energy, consumer staples, gold Insight: “Heading into this pandemic, we had one of the strongest economies I had seen in my career. This is a strong possibility we’ll continue on that trajectory. There are obviously a number of uncertainties, but uncertainty leads to opportunity. Very accommodative Fed policies have pumped an enormous amount of liquidity into the market. The demand is off the charts; the problem we face is in the delivery.” See INSIGHT on Page 10

AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 9

FOCUS | WEALTH MANAGEMENT

INSIGHT

From Page 9

Kevin Granger ` Senior vice president and senior investment adviser, PNC Wealth Management, Troy Likes: Dividend paying large-cap stocks, technology, infrastructure, emerging markets

Granger

Dislikes: Value stocks, shopping-center REITs, commercial real estate, hotels

`Senior partner of Merrill Lynch’s Aubrey Lee Jr. and Julius Readus Group, Farmington Hills; first vice president, Merrill Lynch Wealth Management/Bank of America

Insight: “Where we are with a potential vaccine or cure is important, but there is a lot of trepidation on individuals’ part in taking a vaccine that has been so rushed.”

Leon LaBrecque ` Chief Growth Officer, Sequoia Financial Group, Troy Likes: Dividend paying large-cap U.S. stocks, JP Morgan, Berkshire Hathaway Dislikes: Developed international stocks, short-term bonds, energy, commercial real estate, Amazon, Alibaba Insight: “Everyone was saying, ‘You gotta buy Tesla. You gotta buy Tesla.’ I never would have thought that coming out of COVID, the car company with the best performing stock would be Tesla, and it’s a world where no one is traveling anywhere.”

LaBrecque

Aubrey Lee Jr.

Likes: Health care, U.S. utilities, consumer staples, corporate bonds, gold, financials Dislikes: Government bonds, energy, materials Insight: “We feel pretty good about where we are headed. We’re going to have some starts and stops, but it’s proving to be a faster recovery than we thought.”

John Lynch `Chief investment officer, Comerica Wealth Management, Dallas Likes: Gold, technology, growth stocks, materials Dislikes: Real estate, utilities, energy, value stocks, fixed income Insight: “Investors are looking at a return to record profitability in 2021, and I think

Lee

Lynch

that will be hard to achieve. I’m all for a rising market, but that depends on a strong foundation of corporate profitability, and I’m not saying that’s going to be there.”

Anne MacIntyre `President and CEO, Annie Mac Financial LLC, Sterling Heights Likes: Large-cap stocks, U.S. and Japan over other developed international, communication services, health care, technology Dislikes: Short-term bonds, China, small- and mid-cap stocks Quote: “They’ve been talking about regulating tech for a long time, but big technology companies are big contributors to both sides. One thing to watch for? How the S&P performs. If the S&P is up for the last three months before a presidential election, the incumbent has won every election since 1980 and 87 percent of elections since 1928.”

Nancy Meconi `Partner, Plante Moran Financial Advisors LLC, Auburn Hills

MacIntyre

Meconi

Palacios

Likes: Small-cap value stocks, high-yield municipal bonds, international developed market equities Dislikes: Long-term U.S. Treasuries, real-estate investment trusts Insight: “After this significant bounce off the bottom, investors should be ready for more volatility. Markets are fairly richly valued. Risks remain for a reversal.”

Angela Palacios `Partner, director of investments, Center for Financial Planning, Southfield Likes: Gold and gold-mine companies, high-yield municipal bonds, fixed annuities Dislikes: U.S. large caps, commercial real estate Insights: “We think there might be a little more inflation than people are thinking.”

Jim Robinson `CEO, Robinson Capital LLC, Grosse Pointe Likes: Mortgage REITs, including AGNC Investment Corp., which buys govern-

Robinson

ment-backed mortgages; business development companies (BDCs), which loan to public and private companies; VanEck Vectors BDC Income ETF, which invests in publicly traded BDCs; silver; Bitcoin; municipal bonds; tax-exempt closed-end funds, which buy portfolios of municipal bonds and leverage them up with short-term borrowings. Dislikes: Commercial REITs, brick and mortar retail, travel, entertainment, traditional banks, Tesla. Insight: “Everyone is saying, ‘When our lease is up, we’re looking for a smaller footprint.’Your whole reason for an urban lifestyle is going to change.”

Peter Schwartz `Principal, Gregory J. Schwartz & Co., Bloomfield Hills Likes: Energy, oil, financials Dislikes: Gold, growth stocks, technology Insight: “I like things that are out of favor. At some point, we’ll be back to normal, and I’d rather buy low. Small-cap stocks have been hit harder by the pandemic,

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but the small-cap index usually leads us out of recessions.â&#x20AC;?

David Sowerby `Managing director and portfolio manager, Ancora Advisers LLC, Bloomfield Hills; co-manager of the Ancora Dividend Value Equity Fund. Likes: Some technology (Apple, Accenture, Texas Instruments); health care (Amgen, Johnson & Johnson, Humera, Allergen); U.S. small-cap Dislikes: High-flying tech stocks trading at very high price-to-earnings rations (Tesla, Amazon, Netflix, PayPal, Shopify); long-term U.S. Treasuries; non-U.S. developed markets. Insight: â&#x20AC;&#x153;I did a Bloomberg TV interview at the beginning of the year about risks in the coming year. I said itâ&#x20AC;&#x2122;s the risk you donâ&#x20AC;&#x2122;t know you have to worry about. And here we are. In the end, I have confidence that the pharmaceutical industry will more than rise to the occasion.â&#x20AC;?

Scott Bork ` Senior vice president and director of

MARKET

From Page 8

But in March, when the Dow was collapsing toward what many worried was a bottom that would take years to crawl out of, money managers werenâ&#x20AC;&#x2122;t talking about markets looking forward, or the strengths of tech; they were using all the logic, hand holding, arm twisting and cajoling they could muster to keep their clients from selling on the way down. â&#x20AC;&#x153;We had to talk some clients off the ledge,â&#x20AC;? said Lyle Wolberg, a partner in Southfield-based Telemus Capital LLC. He said that after the runup in markets in the year before the COVID crash, he had been rebalancing clientsâ&#x20AC;&#x2122; portfolio, which, fortuitously as it turned out, meant taking a larger cash position. â&#x20AC;&#x153;We had cash on hand and didnâ&#x20AC;&#x2122;t have to panic.â&#x20AC;? â&#x20AC;&#x153;I earned my Ph.D. in human behavior and psychology the last six months,â&#x20AC;? said Peter Schwartz, a principal in Gregory J. Schwartz & Co. of Bloomfield Hills. â&#x20AC;&#x153;Luckily, most clients heeded our advice and didnâ&#x20AC;&#x2122;t sell, and many of them have ended up breaking even or even making a little. People who benefit from investing are the ones who control their emotions. â&#x20AC;&#x153;Ninety percent of stock price is based on future earnings. People were shocked the stock market came back as quickly as it has, but markets are looking out three months, six months, nine months. Thereâ&#x20AC;&#x2122;s a disconnect between the headlines and what the market is doing,â&#x20AC;? he said. Melissa Spickler, managing director of Merrill Lynchâ&#x20AC;&#x2122;s Spickler Wealth Management Group in Bloomfield Hills, timed things well. The last two weeks of February and the first two

Bork

Wolberg

investments, TCF Bank, Detroit Likes: Health care; technology; gold; silver; emerging markets Dislikes: Enery, hotels, cruise lines, sit-down restaurants, big-box and mall retail Insight: â&#x20AC;&#x153;Our group fells the market got ahead of itself and is a bit overpriced. There will be at some point in time a correction. Iâ&#x20AC;&#x2122;m not saying a correctin of 20 percent, but I think there will be a pullback.â&#x20AC;?

Lyle Wolberg ` Partner, Telemus Capital LLC, Southfield Likes: Value stocks, securitized credit, AAA- and AA- rated municipal bonds, gold Dislikes: High-yield bonds, corporate real estate, growth stocks, high-yield municipal bonds Insight: â&#x20AC;&#x153;In March, the hurricane moved in and we got hit. Now, weâ&#x20AC;&#x2122;re in the eye of the storm, and the stimulus helped. We just donâ&#x20AC;&#x2122;t know what the back end of the storm will bring.â&#x20AC;?

weeks of March, she sharply increased her clientsâ&#x20AC;&#x2122; cash position. â&#x20AC;&#x153;When the markets started going down in February, no one thought the virus would become what it has become. I had made a lot of money for my clients in the previous year. I wanted to take a bit of profits and give everyone a year to 18 months of cash,â&#x20AC;? she said. â&#x20AC;&#x153;When the markets went down, I told my clients that they wouldnâ&#x20AC;&#x2122;t stay down long.â&#x20AC;? Mike Dzialo, the president and chief investment officer of Rochester-based Managed Asset Portfolios LLC, said that while the markets have bounced back strongly, driven by the economic stimulus and technology companies serving the needs and wants of a locked-down society, the changes wrought will have serious long-term implications for society and for investors. â&#x20AC;&#x153;Companies can have people working anywhere in the country. A lot of companies are headquartered in high-cost markets, and they are going to be downsizing.â&#x20AC;? People have quickly grown accustomed to people-less delivery and service, and more is coming. â&#x20AC;&#x153;Walmart is testing a store in Arkansas that doesnâ&#x20AC;&#x2122;t have any cashiers, and White Castle has introduced a robotic grilling arm called Flippy. It costs White Castle $3 an hour to run, and Flippy doesnâ&#x20AC;&#x2122;t call in sick,â&#x20AC;? he said. In March, before lockdown, Bowling Green University in Ohio debuted a fleet of 30 robots to replace humans while delivering food to students from Dunkinâ&#x20AC;&#x2122; Donuts, Jamba Juice, Panda Express, Starbucks and others. â&#x20AC;&#x153;In five to 10 years, we wonâ&#x20AC;&#x2122;t have any cashiers, we wonâ&#x20AC;&#x2122;t have stock people,â&#x20AC;? he said.

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FOCUS | WEALTH MANAGEMENT

MARKET

From Page 11

For the annual Crain’s report on wealth management, there are often disagreements on what will be the important issues in the coming year for them and their clients. In the past, that has included: Will there be a Brexit? How near is a record bull market to coming to the end? Is President Donald Trump serious about tariffs, and what might that mean? Do the emerging BRIC markets (Brazil, Russia, India and China) still retain their luster? How would oil hitting an all-time high of $147 a barrel (in 2008) affect the economy? This year COVID-19 dominated all

discussions. Even the presidential election was almost an afterthought. “I had lunch with a client not too long ago, and the conversation didn’t get to the election until mid-meal,” said Tony Catalina, director of private banking for Fifth Third Bank Private Banking in Birmingham. “In mid- to late July of an election year, that would normally be the first thing we’d discuss. It didn’t come up until we were 35 minutes into the lunch.” As for the election, the consensus among the 17 advisers interviewed for this section was that whoever wins the presidency almost doesn’t matter so much if there remains a divided government. Other areas of general agreement? Keep investing in health care and technology; go for the gold despite

its no longer being an Olympic year; and count on higher taxes.

Gridlock “Historically, it is important to have a split Congress,” said MacIntyre. “When there is a split Congress, markets have been up 17.2 percent. When it’s a Democratic Congress, markets were up 10.7 percent. When it’s a Republican Congress, markets were up 13.6 percent.” “Split power is a good thing. We’re assuming one party will not control all three branches,” said Wolberg. “Gridlock has been good for the markets,” said Leon LaBrecque, chief growth officer at Sequoia Financial Group in Troy. “It will be more prob-

lematic for markets if the Democrats win all three, but I don’t think the sky will be falling if there is a Democratic sweep.” “When one party controls everything, that’s a red flag for market returns,” said Sowerby. “If there’s a Democratic president and a Republican Senate, that might be the best-case scenario,” said Nancy Meconi, partner in Plante Moran Financial Advisors LLC of Auburn Hills. “But don’t let politics be a primary driver of your investment decisions.” “Regardless of who wins the presidency, as long as we have a divided House and Senate, that’s seen in my world as a good thing,” said Jeffrey Fratarcangeli, managing principal of Wells Fargo Advisors’ Fratarcangeli

Wealth Management of Birmingham. A contrarian view is held by Aubrey Lee Jr., senior partner of Merrill Lynch’s Aubrey Lee Jr. and Julius Readus Group in Farmington Hills. His group currently rates the chances of a Democratic sweep at 63 percent, and he is fine with that. “Investors are really taking in stride the odds of a sweep. Policies to cut unemployment will outweigh what will likely be higher taxes,” he said.

Taxes Speaking of taxes: “Whoever gets in in November, taxes have to go up. They have to pay for all this stimulus,” said Spickler. “Tax rates are going to go up no matter who wins the White House,” said John Augustine, the chief investment officer for Columbus-based Huntington Bank, Columbus, Ohio. “Higher taxes will come next year regardless,” said Jim Robinson, CEO of Grosse Pointe-based Robinson Capital LLC. “We think whatever happens in the election, there will be an increase in estate taxes,” said Wolberg. “Politicians like to tax people who can’t vote, and that’s people who have passed away. Now is the time to do some planning to reduce your estate taxes.”

Gold Gold hit a record high of $2,030.72 on Aug. 5, taking none of the financial advisers by surprise. “We like gold because we think the dollar is heading lower,” said Dzialo. “The euro is at a two-year high versus the dollar. The investment world is looking for something other than the dollar, and currency moves tend to be long term.” Angela Palacios, a partner and director of investments for the Center for Financial Planning in Southfield, said she isn’t just buying gold, she’s buying gold-mine companies, too. “Precious metals all become popular when the perception is that central banks are doing crazy things,” said Robinson. Wolberg echoed that, saying it made sense to take a larger gold position when the Fed and Congress started pouring money into the economy. “The size of the U.S. deficit meant it was likely to be good for gold prices,” he said. “If you think the dollar will continue to fall, and it’s at its lowest level in years, gold is in play,” said MacIntyre. “I normally don’t have gold, but I bought gold as a hedge,” said Spickler. “I expect the U.S. dollar to weaken and gold to be strong,” said Scott Bork,senior vice president and director of investments for Detroit-based TCF Financial. “Gold and silver still have some upside potential.” “I’m not a gold bug, but when people are worried about pandemics, gold is a good thing to have in your portfolio,” said Sowerby. “Once referred to as the ‘barbarous relic’ by economist John Maynard Keynes, gold continues to serve both as a safe haven and a store of value for many global investors, particularly during a time of heightened uncertainty,” said John Lynch, chief investment officer of Comerica Wealth Management in Dallas. “Gold is in the unique position of offering the possibility of protection against both inflation and deflation.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 12 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

CRAIN'S LIST | LARGEST SE MICHIGAN EMPLOYERS Ranked by full-time employees January 2020 COMPANY NAME LOCATION CONTACT INFO

TOP LOCAL EXECUTIVE(S)

FULL-TIME EMPLOYEES IN SOUTHEAST MICHIGAN JAN. 2020

FULL-TIME, EMPLOYEES IN SOUTHEAST MICHIGAN JAN. 2019

WORLDWIDE EMPLOYEES JAN. 2020

WORLDWIDE EMPLOYEES JAN. 2019

TYPE OF BUSINESS

FORD MOTOR CO.

Jim Hackett 1 president and CEO

46,000 2

46,000

Automobile manufacturer

UNIVERSITY OF MICHIGAN

Mark Schlissel president

36,323

35,350

52,488 3

51,203 3

Public university and health system

FCA US LLC

Michael Manley CEO

34,833

35,016

90,000

92,722

Automobile manufacturer

GENERAL MOTORS CO.

Mary Barra chairman and CEO

32,320

37,381

163,579

167,440

Automobile manufacturer

BEAUMONT HEALTH

John Fox president and CEO

27,128

27,577

27,172

27,591

Health care system

HENRY FORD HEALTH SYSTEM

Wright Lassiter III president and CEO

26,929 4

Health care system

U.S. GOVERNMENT

18,893 4

18,879

1,997,242 4

2,002,363

Federal government

ROCK VENTURES 5 1050 Woodward Ave., Detroit 48226 800-251-9080;

Dan Gilbert chairman and founder

18,096

17,887

29,916

30,008

Organization that connects and serves Dan Gilbert's portfolio of companies, investments and real estate

TRINITY HEALTH

Mike Slubowski president and CEO Robert Casalou president and CEO, Mercy Health and Saint Joseph Mercy Health System

14,575

16,245

131,000

Health care system

ASCENSION MICHIGAN

Kenneth Berkovitz SVP and ministry market executive

12,830

20,491

21,190

Health care system

U.S. POSTAL SERVICE

Richard Moreton acting district manager

11,500

11,000

500,000

Postal service

STATE OF MICHIGAN

Gretchen Whitmer governor

9,644

9,544

State government

CITY OF DETROIT

Mike Duggan mayor

9,408

9,457

9,408

9,457

City government

DETROIT MEDICAL CENTER

Audrey Gregory group CEO

9,191

9,800

9,802

Health care system

DTE ENERGY CO.

Jerry Norcia president, CEO and director

7,438

6,855

10,756

10,526

Energy company

BLUE CROSS BLUE SHIELD OF MICHIGAN/BLUE CARE NETWORK

Daniel Loepp president and CEO

7,399

7,157

10,699

10,177

Nonprofit mutual insurance company and subsidiary companies

ILITCH HOLDINGS INC.

Christopher Ilitch president and CEO

7,000

6,955

25,000

24,776

Food, sports and entertainment and real estate development industries

DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT

Nikolai Vitti superintendent

6,992 6

6,056

6,992 6

6,056

Public school system

WAYNE STATE UNIVERSITY

M. Roy Wilson president

5,913 2

5,913

Public university

MCLAREN HEALTH CARE CORP.

Philip Incarnati president and CEO

5,440 2

5,440

Health care system

MAGNA INTERNATIONAL OF AMERICA INC.

Swamy Kotagiri president

4,818

5,187

166,000

174,000

Mobility technology

COMERICA BANK

Michael Ritchie President- Michigan Market

4,373

4,465

7,748

7,865

Financial institution

ZF NORTH AMERICA INC.

Franz Kleiner CEO

4,150

3,556

147,800

148,970

Automotive supplier in driveline and chassis technology as well as active and passive safety technology

ROBERT BOSCH LLC

Mike Mansuetti president

3,800

3,600

400,000

410,000

Technology and services supplier for mobility solutions, industrial technology, consumer goods and energy and building technology

OAKLAND COUNTY

David Coulter county executive

3,618

3,556

3,618

3,556

County government

1 American Road, Dearborn 48126 313-322-3000; www.ford.com Ann Arbor 48109 734-764-1817; umich.edu

1000 Chrysler Drive, Auburn Hills 48326-2766 248-576-5741; www.fcagroup.com 300 Renaissance Center , Detroit 48265 313-667-1500; www.gm.com 26901 Beaumont Blvd., Southfield 48033 248-898-5000; www.beaumont.org 1 Ford Place, Detroit 48202 800-436-7936; www.henryford.com 477 Michigan Ave., Detroit 48226 313-226-4910; www.usa.gov

20555 Victor Parkway, Livonia 48152 734-343-1000; www.trinity-health.org

28000 Dequindre Road, Warren 48092 www.ascension.org/michigan 1401 W. Fort St., Detroit 48233-9998 313-226-8678; www.usps.com 3042 W. Grand Blvd., Cadillac Place, Suite 4-400, Detroit 48202 313-456-4400; www.michigan.gov 2 Woodward Ave., Coleman A. Young Municipal Center, Detroit 48226 313-224-3700; www.detroitmi.gov 3990 John R, Detroit 48201 313-745-5146; www.dmc.org

1 Energy Plaza, Detroit 48226 313-235-4000; newlook.dteenergy.com

600 E. Lafayette Blvd., Detroit 48226 313-225-9000; www.bcbsm.com

2211 Woodward Ave., Detroit 48201 313-471-6600; www.ilitchcompanies.com 3011 W. Grand Blvd., Fisher Building, Detroit 48202 313-240-4377; www.detroitk12.org 42 W. Warren, Detroit 48202 313-577-2424; www.wayne.edu

One McLaren Parkway, Grand Blanc 48439 810-342-1100; www.mclaren.org 750 Tower Drive, Troy 48098 248-631-1100; www.magna.com

411 W. Lafayette, Detroit 48226 248-371-5000; www.comerica.com 12001 Tech Center Drive, Livonia 48150 734-855-2600; www.zf.com 38000 Hills Tech Drive, Farmington Hills 48331 248-876-1000; www.boschusa.com 1200 N. Telegraph Road, Pontiac 48328 248-858-1000; www.oakgov.com

Researched by Sonya D. Hill: shill@crain.com | This list of Southeast Michigan employers encompasses companies with locations in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Number of full-time employees may include

full-time equivalents. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual figures may vary. NA = not available. NOTES: 1. Will retire later this year and be succeeded by COO Jim Farley. 2. Crain's estimate. 3. Includes approximately 15,000 in-state part-time employees. 4. As of July 2019. 5. Most of the assets of Rock Ventures now fall under Rocket Companies Inc. which became a publicly traded company on Aug. 5 and trades under the ticker symbol RKT. 6. Figures are FTE counts from the Center for Educational Performance and Information.

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

AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 13

EDUCATION

ARITHMETIC OF INEQUALITY

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COVID pressures lay bare longstanding splits in funding for schools BY CHAD LIVENGOOD | Gardenia Avenue in Madison Heights is a stark

dividing line for education equity in Detroit’s suburbs. On the south side of the street, children living in the Madison District Public Schools get $8,111 in taxpayer support for their education each year. On the north side, kids whose parents moved into the Lamphere school district get $10,789 contributed to their education each year — 33 percent more than the kids across the street. Demographically, there’s little difference between the two school districts in the same city of 30,000 residents. About 51 percent of Lamphere’s students are from low-income families, 16 percent come from homes where English is not the primary 14 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

language and 16 percent have disabilities requiring costly special education services. In Madison, 70 percent of the students come from low-income families, 8 percent are English language learners and 11 percent have disabilities. The only difference is that Lamphere was the beneficiary of a special deal state lawmakers cut on Christmas Eve of 1993 that enshrined the right for the taxpayers of Madison Heights’ northern school district to pay higher taxes to maintain historically better-funded schools. The question of equitable school funding has taken on new urgency, with financial pressures brought on by the coronavirus pandemic and a focus on racial inequities following a summer of protests demanding change. See FUNDING on Page 18 ILLUSTRATION BY ANDREA LEVY FOR CRAIN’S DETROIT BUSINESS

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Q&A | NIKOLAI VITTI The chief executive of Detroit Public Schools Community District talks about funding inequities. PAGE 17

LIVE OR VIRTUAL?

Schools confront reality of remote learning Parents, educators, advocates wrestle with questions that don’t have one-size-fits-all answers BY KURT NAGL

half a year behind at the end of the school year in 2021, and at the maximum, a couple of As Renee Boogren tried to figure out how to years.” Boogren’s daughter will be a sophomore at teach her Wayne State University biology students to do dissections over the internet, she Seaholm High School in Birmingham, which worried that the Zoom classes for her adult son had planned to offer a virtual academy and with autism were unproductive, that her high in-person classes, but made a last-minute deschool daughter might be falling behind in her cision to go fully remote. One of her sons is entering his junior year studies and that her other son’s college experiat Albion College, which has boasted a total ence was forever cut short. “I can’t imagine how hard it is on parents return to classes on campus. He figures he’ll get a few weeks in before an outbreak sends with elementary school kids,” she said. It was a full house for the Boogrens this spring him packing back home. Her other son and summer with vargoes to Troy Center ious levels of learning “HIS CLASS MET for Transition, a and teaching taking (REMOTELY) TWICE A p o s t - s e c o n d a r y place throughout. school for young Welcome to educaWEEK — ‘WHAT DID adults with develtion in the era of YOU EAT FOR opmental disabiliCOVID-19. BREAKFAST’; ‘LET’S ties. Boogren said As school adminishis teachers did the trators across MichiTALK ABOUT THE best they could for gan scramble to make plans for the WEATHER ’ — THAT’S NOT REAL LIFE.” her son, who is nonverbal, but she’s fall with fragmented — Renee Boogren, on the virtual education desperate for faceand rapidly changing her son, who has developmental disabilities, to-face learning in guidance from gov- received early in the pandemic. the fall. ernment and health “His class met (remotely) twice a week — officials, Boogren has a new worry: When will it be safe to return to the classroom during the ‘What did you eat for breakfast’; ‘Let’s talk about the weather ’ …” Boogren said, describpandemic? It’s a question being asked by millions of ing the content of the Zoom calls. “That’s not teachers, students and parents and one that real life. How do you teach job skills? You has no definitive answer. For each of the don’t want your child to be on public assisstate’s 540 school districts and 100 colleges tance forever. You want your kid to contribute. “I was staying up all hours trying to do all and universities, there is a mix of plans — online, in-person, hybrid, cohorts, late start, ear- these plans, setting up Google accounts so I could communicate with my students, and ly finish, etc. Amid all of the confusion, one thing is clear: here it was my kid, who really needs it the Remote learning will play a bigger role than it most, was being reduced to these Zoom sessions that weren’t individualized.” ever has, and it will not work for everyone. For her part, Boogren assumes biology class “We have no idea the amount of academic loss that we’re going to have even if it was will be conducted remotely again in the fall. in-person instruction,” said Tonya Allen, pres- Wayne State, along with the University of ident of the Skillman Foundation and chair of Michigan, Michigan State University and othGov. Gretchen Whitmer’s Return to Learn Ad- ers, have plowed millions of dollars into online visory Council. “When you add losing several learning in anticipation of all or most classes months at the end of last school year and then being remote this fall. Grade schools and high you think about the disruption we’ll see in schools are making similar investments. this school year, I think we can expect that many of our students will be, at minimum, a See REMOTE on Page 18

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About Crain’s Forum Crain’s Senior Editor Chad Livengood is leading a monthly series of in-depth reports on major public policy issues and topics that relate heavily to the economy and quality of life in Southeast Michigan and the state as a whole. In addition to the monthly reports, Crain’s Forum will have periodic virtual and (eventually, we hope) live events focused on some of the topics. Crain’s has created an invitation-only Forum membership for companies and organizations keenly interested in supporting policy discussions. Forum members participate in planning events and editorial board meetings on a wide range of topics. Forum Members for 2020-21 include Consumers Energy Co., the Michigan Association of Health Plans and the Michigan State Medical Society. For more information about Crain’s Forum membership, contact Group Publisher Mary Kramer at mkramer@crain.com.

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AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 15

EDUCATION

COMMENTARY

Time to overhaul Michigan’s arbitrary school-funding model don’t have access to 21st century BY DOUG MAIBACH technology? Another example is our state’s cons chairman of Barton Malow Entinued lack of investment in career terprises, I can tell you firsthand and technical education programs Michigan’s businesses rely on our that prepare students for in-demand K-12 schools to prepare students for careers in the skilled trades. the real world and careers in the Here’s the good news: The panglobal economy. demic has provided a rare opportuUnfortunately, long before and nity to reassess our priorities, which during the COVID-19 pandemic, Doug Maibach is must begin with our kids. It’s time for Michigan has failed to invest in a K-12 chairman of lawmakers to adopt a new school school funding approach that meets Barton Malow funding approach that gives all stuthe individual needs of all students Enterprises and a and positions them for success. dents a shot at success. member of the The pandemic has shined a bright School Finance The School Finance Research Collight on the enormous inequities and Research laborative has provided the roadmap to get us there, whether students are lack of fairness in how we fund our Collaborative. bound for college, technical training, schools that limit opportunities for apprenticeships or jobs right after students to one day compete for jobs. The public health crisis has also shined a graduation. The collaborative is a broad-based, huge spotlight on the glaring disparities already bipartisan group of business leaders and educain place due to our obsolete school funding ap- tion experts from all corners of Michigan who all proach. One example is the digital divide, agree: It’s time to fix Michigan’s broken school which magnifies the lack of access to technolo- funding approach. In 2018, the collaborative provided Michigan’s gy and broadband across our state. How can we prepare students for 21st century careers if they first comprehensive school adequacy study. The

COMMENTARY

study determined the true cost to educate a child in Michigan, with a base per-student amount and additional resources for special education, students living in poverty, English language learners and CTE programs. By adopting this approach, Michigan can leave behind an arbitrary school funding model that treats all students as if they have identical needs. The collaborative is part of a growing chorus of bipartisan voices calling for a new school funding approach that meets unique student

contracting, and with that comes the likelihood of significant school cuts. Worse yet, cutting the budget would hamper a safe return to school and likely worsen growing inequities in our schools. That makes it more important than ever to heed the collaborative’s research, and there has never been a better time to ensure every penny spent on our schools is dedicated to helping students succeed. In the coming days, Michigan’s K-12 students will return to school, either in person, remotely

THERE’S NO QUESTION ABOUT IT: OUR ECONOMY IS CONTRACTING, AND WITH THAT COMES THE LIKELIHOOD OF SIGNIFICANT SCHOOL CUTS. WORSE YET, CUTTING THE BUDGET WOULD HAMPER A SAFE RETURN TO SCHOOL AND LIKELY WORSEN GROWING INEQUITIES IN OUR SCHOOLS. needs. Over the past few years, numerous other school funding reports have reached the identical conclusion, including those issued by former Gov. Rick Snyder, former Lt. Gov. Brian Calley, Michigan State University professor David Arsen and Business Leaders for Michigan. There’s no question about it: Our economy is

or a combination of the two. In all cases, our kids will only continue falling behind without a new school funding game plan that helps all students succeed, regardless of learning challenges, income, ZIP code or other circumstances. We owe it to our kids and Michigan’s economic resurgence to make this critical investment today.

COMMENTARY

Shield vulnerable K-12 students Education equity an ‘empty from harshest funding cuts notion’ for charter school kids BY MIKE JANDERNOA

In fact, one estimate suggests that the lifetime earnings of Michigan’s current K-12 students could inichigan has long way to go to crease by $27 billion if their educabecome a national talent centional achievement matched the ter, but the decisions our state leadnational average. That’s a lot of ers make now about education money that could be flowing into funding could make it even harder our communities and businesses, to meet the talent demands of our as well as closing a good portion of region and state for decades to the income inequality gap. come, especially with Baby Boom- Mike Jandernoa is And yet, school investment in ers wanting to retire. the founder and Michigan has long been unequal, Unless we take the necessary chairman of 42 with vulnerable students getting steps to ensure equitable opportu- North Partners nities for all students and create the and former CEO of less, despite needing more. Already, the highest-poverty districts foundation for a skilled workforce, Perrigo Co. in Michigan receive less funding it will also be harder to emerge from than the wealthiest districts in the COVID-19 economic crisis in Michigan. Following school closures resultthe years ahead. Forecasts show that almost two-thirds of ing from the COVID-19 pandemic, these jobs in just five years will require some educa- funding gaps and inequities are expected to tion beyond a high school diploma. And yet, grow even worse. The result now is that far too many of Michiwhen compared to other states on the National Assessment of Educational Progress (NAEP), gan’s children are deprived of equal opportuMichigan student achievement is mediocre at nity for success, which is not only devastating best, while our most vulnerable students lag for their futures — but also for the future econear the bottom nationally, which doesn’t nomic health of our great state. Today’s state political leaders can start to rebode well for many of our future graduates or verse the impact of earlier ill-advised decieconomy. Those lackluster results should not be al- sions by choosing now to invest in equitable public education, first and foremost. As part of lowed to continue. As a business leader and a board member of that, Michigan should transition to a per-pupil TALENT 2025, a group working to ensure an on- funding system that addresses students’ going supply of world-class talent in West Mich- needs, prioritizes equity and effectiveness, igan, I know how important it is for all children and closes the gap in per-pupil funding disparacross our state to have the resources and op- ities across the state for low-income students, English learners, and students with disabiliportunities to achieve at their highest level. Research shows that money, while not the ties, recognizing their higher needs. If the current economic crisis necessitates only factor, makes a difference when it comes to student achievement. That’s because vul- budget cuts for the FY 2021 school year, vulnerable students like low-income students, nerable students must be shielded from the English learners, and students with disabilities harshest cuts in order to give every student equal access to opportunities for a successful need additional resources to succeed. In fact, higher funding for low-income stu- future. We can’t afford to wait, especially if we hope dents not only can raise their educational attainment but boosts their lifetime compensa- to build a skilled workforce for a strong, prostion and helps the economy for the rest of the perous economy. Our state’s leaders should commit to a more state. Supporting our students in need helps equitable education funding system that helps Michigan in several ways, including by raising close the gaps between Michigan’s rich and the quality of our talent pool, increasing their poor districts and supports our most vulnerafuture earnings, and infusing more money into ble children. The time is now to create opportunity for all. our overall economy.

16 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

BY MADELINE BLACK

thing. Don’t they deserve technology security, too? So you’ll have to forgive charter n the surface, the concept is a school families if they scoff at the simple and obvious one: Every notion of “equity.” Seemingly at evchild in Detroit deserves to be treatery turn, they’re being told that ed equitably. Every child deserves a their children are worth less in the great education, and access to the eyes of education decision makers. same opportunities. And yet, that’s The solution, of course, is just as not at all how it works. simple as the concept: Every child How you’re treated depends in Madeline Black is large part on what type of school the superintendent deserves to be treated equitably. Evyour family has chosen for you. If of WAY Academies, ery child in Detroit has dreams of a brilliant future. Why would we inyou’re in a traditional public school, a network of tentionally hold half of them back? you get more money, more assets, charter schools in Students want to be in a great school more resources. If you’re in a char- Detroit and Flint. that’s providing them a great educater public school, you get less montion. They don’t care how the school ey, less assets, less resources. That’s been the case since the first charter is set up, so why should we? Treat all students fairly. Show them that “eqschool opened in Michigan in 1994, and it’s only gotten worse. If you’re a charter school family in uity” is more than just a hollow promise. If Detroit, “equity” is nothing but an empty notion. you’re allocating funding or resources or techIt’s not fair, it’s not right and it’s devastating nology or whatever, make sure that all students to our students. If a family decides that a char- matter, that all students have access to the ter school is the best option for their child, same opportunities to grow and learn. It’s worth nothing that when it comes to acthey’re immediately treated as something lesser. Their choice is not respected and their child ademic performance in Detroit, charter schools lead the way. By any metric — acais valued less. Last fall, charter school students — and demic growth, SAT scores, graduation rates, charter school students alone — were singled college enrollment — charter schools are the out for a $240-per-pupil cut by the governor. By highest-performing schools in the city. Charter schools don’t lag behind when it comes the time the money was finally restored a few months later, responsible but painful cuts had to performance, so why should they lag behind already been made, eliminating much-needed when it comes to equity? What could they accomplish with equitable funding and resources? teachers, programs and resources. And speaking of equity, it’s important to realize And then the COVID-19 crisis hit, and charter school students were singled out again. The for- that parents deserve equitable choices, as well. mula used to distribute funding through the We need to make sure they have a robust selecCoronavirus Aid, Relief, and Economic Security tion of quality school choices in the city. And we (CARES) Act provided tens of millions of dollars need to make sure that all of those schools have more for the traditional public schools in Detroit, access to the same funding and resources. The time has come for this “us vs. them” deamounting to three times as much on a per student basis — money the district then used to try bate to end. We’re all “us.” As a city, we have so and lure charter teachers away. (At least they much ground to make up when it comes to education. We’ve made some significant strides, know talent when they see it.) Yet another example: When private industry but we have so much more to do. We can’t hold half the students in our city rightly recognized that students in Detroit were badly in need of devices and technology for behind. We can’t deny them the funding and their COVID-19 remote learning, they offered resources they need to succeed just because millions of dollars to help. A wonderful gesture we don’t like the type of school they attend. It’s time to show all of our students and fam— but the money only went to the traditional public schools. Half the students in Detroit at- ilies that they matter. Their choices matter. tend charter schools, but they didn’t receive a Their education matters. Their future matters.

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Q&A DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT CHIEF EXECUTIVE NIKOLAI VITTI

Southfield schools get $3,000 more per student than Detroit. Here’s why it matters. NIKOLAI VITTI BECAME the Detroit Public Schools Community District’s chief executive three years ago as the state’s largest school district was emerging from a near-death financial crisis. Now, Vitti begins his fourth school year as superintendent facing a new crisis caused by the coronavirus pandemic that threatens the stability of Detroit’s K-12 school system. DPSCD plans to offer full in-person instruction for students as well as an online-only option for parents who want to keep their children at home to minimize risk of contracting the virus. Vitti is trying to steer the 50,000-student school district through this latest crisis while still advocating an agenda for a more equitable school-funding model in Michigan. DPSCD gets Michigan’s minimum foundation grant of $8,111 per student each school year. Vitti recently spoke with Crain’s Senior Editor Chad Livengood on the Detroit Rising podcast about education funding and how Detroit’s neighboring school districts in Southfield have a competitive advantage for talent, students and facilities with $11,300 in per-pupil funding. Here is a partial transcript. | BY CHAD LIVENGOOD ` Livengood: If you could just rewrite the school finance law, how would you go about it? Vitti: There’s been work done through Launch Michigan and other initiatives that have put together a plan to overcome the shortcomings of Proposal A (of 1994). I think one thing that would need to be done is to elevate the ceiling, if you will, for per-pupil funding. If you increase at the minimum per-pupil funding — a combination of state aid and local effort through the 18 mills operating mills — then I think that addresses the inequity that’s generated by the hold-harmless clause. I think it would be politically difficult to redistribute money from one district to another. I just don’t think that’s politically possible. Although it might be morally right, I don’t think politically that could happen. If you set the ceiling at a higher level per pupil — let’s say $10,000 — and that’s the threshold, then through the combination of local millage and state aid, you raise everyone to a higher level — and you can eliminate some of that inequity. In fact, you would eliminate it. And then you move to a weighted student formula, where students that have special needs, students that are English language learners and students who qualify for free and reduced lunch would yield a higher per-pupil amount, which would then give DPSCD and others that serve large (at-risk) populations more funding. Or, at a very singular level, for those districts that are serving children even individually who qualify for free and reduced lunch, have special needs or are English language learners, they’ll generate more revenue per student for those students. That’s how I would rewrite this current state law regarding state funding.

Detroit students work at socially distanced desks during a summer school class at Brenda Scott Academy, a pre-K-8 school. | DPSCD

` Livengood: To raise the ceiling, how do you fill in the ceiling with more money? Vitti (chuckling): I answered your question as it relates how I would rewrite the law, if you will. But if I were the governor or I was the Legislature, what I would argue is that more funding has to be allocated to K-12. I think that’s a matter of looking at what’s currently funding or possibly raising taxes in order to justify or pay for that increase. I think multiple studies have been done on

where Michigan ranks per pupil as far as K-12 education. But more importantly is trying to eradicate the inequity that exists in the current formula. I think Proposal A was a step in the right direction, but the Legislature didn’t reach its final destination regarding equity.

Vitti

` Livengood: I always look at Southfield as an example of this — a neighboring district to you, they get $11,300 per kid, you get less

than $8,200 from the school aid formula and you are in competition (for students) with Southfield, I would imagine. Vitti: Yeah, that’s one of the better examples, because Southfield does have more of a diverse population as far as socioeconomics and other challenges. They do recruit our teachers, they definitely recruit our students and our families. When you look apples-toapples on what they’re able to pay their teachers, the investments they’re able to make in their buildings, I think those are two areas where you see the inequity more than anything else. When I became superintendent and I was starting to study our salary schedule for teachers versus other teachers’ salary schedules, that’s when I started banging my head against a wall to say, ‘Well, what are they doing that we’re not? How are they able to fund their salary schedules and we’re not?’ As I dug, I better understood how the 18 mills operate and the hold-harmless clause. But that’s really the answer to the question — they’re able to pay their teachers more and they have better buildings. ... They have more what I would call flexible dollars that can be used in multiple ways. State dollars ... are more flexible in their use, where federal dollars are categorical and very restricted. We can’t increase teacher salaries just through federal funding and we can’t use one cent of federal funding on our buildings. So there lies the challenge regarding an equitable education. Listen to the full interview with Nikolai Vitti on the Detroit Rising podcast at crainsdetroit.com/ podcasts, on iTunes, Stitcher or wherever you get your podcasts.

REMOTE LEARNING

Getting technology for remote work into hands of students a challenge BY ANNALISE FRANK

A public-private effort to get computer tablets and internet connectivity in the hands of Detroit public school students is nearly fully funded. Organizations including DTE Energy Co., the Skillman Foundation and Quicken Loans Inc. joined the Detroit Public Schools Community District in announcing a fundraising campaign in April to help students without laptops at home access school materials. It started after the pandemic put Detroit’s digital divide in the forefront of the minds of some of the city’s money-laden elite. Nearly $20 million of $23 million had been raised as of Wednesday, Detroit Public Schools Community District Superintendent Nikolai Vitti told Crain’s. But the process of distributing those wireless internet-enabled iView brand tablets hasn’t been quite as successful. Approximately 50 percent of them have been handed out so far, Vitti said.

DTE Energy Co. volunteers Joanne Taylor (left) and Yolanda Shaw (center) train with Chanita Hill, DPSCD IT Field Service Specialist to help Detroit Public Schools Community District students in picking up their new computer tablets at Cass Technical High School in Detroit. | MARK HOUSTON

“For those parents that didn’t pick up their device, for whatever reason, we’re going to identify three days in late August for parents to come back ... and obviously we’ll get to other students when the school year starts,” he said. He added that he expects, by the time the school year starts Sept. 8, 80 percent-85 percent will have been given out. Getting the tablets isn’t the first priority for all families, he said, who may be struggling during the pandemic. As of June, an estimated 45 percent of Detroit residents were unemployed, a University of Michigan survey found. Once the iView tablets came in, the district had to unpack them and code them for individual students so they could activate the internet, Vitti said. Volunteers and school district staff have been distributing them, offering a couple of dates per school for parents to come, show identification and receive the tablet. See TECHNOLOGY on Page 20 AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 17

EDUCATION

REMOTE

From Page 15

Boogren said the trial by fire in March taught her a lot about teaching remotely. She hopes the same for her counterparts, and that it translates into a better-quality education for all students this fall.

More than just school School means more than education. Especially in underserved communities, students rely on school for shelter, food and nurturing — all lost in remote learning. “If someone asked me if I thought we were ready to go back to school, I would say absolutely not,” said Michelle Davis, dean of culture at Davis Aerospace Technical High School in Detroit. “But it’s complicated and it’s layered, and school has become the epicenter in the urban community.” Detroit Public Schools Community District is the largest in the state with 50,000 students. The district said it will offer a choice between remote and

in-person learning this fall. When classrooms were closed in March, the district, with help from corporate partners, rolled out a plan to provide every student with laptops and internet, as well as deliver meals daily. It is impossible to keep close tabs on every kid, however, especially from afar. That reality hit home for Davis a couple of months ago when she discovered one of the brightest students at her eastside high school living in some of the worst conditions she had ever seen. “They didn’t have any water, they didn’t have any heat, no electricity, no furniture, the roof was caving … They literally were living in abject poverty,” Davis said. The student was a 17-year-old who had a 3.8 grade point average when the pandemic forced schools to close. Davis had received reports from his teacher that he was not completing assignments. After making contact with the student, Davis learned he was living with his 20-year-old sister. Their parents had died, and they had no family or friends who could help them. But they had the community, and an advocate in Davis.

18 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

Higher local taxpayer support for 22 metro Detroit school districts that were held harmless from a 1994 constitutional amendment changing the way public education is funded in Michigan has created an uneven distribution of tax dollars to schools. Under Proposal A, those 22 school districts were granted the right to generate additional tax revenue to support their schools. LAPEER

Richmond Brandon

Oxford

Armada

TY ST. CLAIR COUN

“If Lamphere is getting $10,000 per kid and Madison is getting $8,000 per kid, that’s a $50,000 gap per classroom,” said Randy Speck, who was Madison’s superintendent from 2012 to 2019. “It becomes a have and havenot situation in just that same town.” The Lamphere school district is one of 43 districts in Michigan classified as “hold-harmless” districts that are the only districts allowed to tax residential, commercial and industrial property more to support their schools after voters approved Proposal A in 1994, a landmark constitutional amendment that capped property taxes for the operations of most other school districts. More than a quarter-century later, untangling this hold-harmless system is seen as one of the biggest obstacles to achieving Proposal A’s long-sought public policy goal to make education funding in Michigan more equitable. “The original sin was to say we’re just going to hold people harmless and in 25 years we still haven’t gotten everybody up to where those districts were (in funding),” said Rob Fowler, CEO of the Small Business Association of Michigan, who is active in education reform initiatives. But reworking Proposal A is a political minefield that few policymakers have attempted to traverse. Hold-harmless school districts include the wealthiest enclaves in Michigan — Bloomfield Hills ($12,263 per student), Birmingham ($12,284) and Grosse Pointe ($10,224) — whose residents resisted an equalized funding model as then-Gov. John Engler and lawmakers crafted Proposal A in December of 1993. “It’s the only way they were going to get a deal to be able to get the votes to put a new school funding policy in place,” said Dianne Byrum, a partner at Byrum & Fisk Advocacy Communications in East Lansing who was a state representative for Ingham County at the time. Other school districts that got their high state funding effectively frozen in time include those with large industrial taxpayers that boosted the

The harm of hold-harmless: A system of haves and have-nots

Romeo Holly Lake Orion

MACOMB COUNTY

Clarkston OAKLAND COUNTY

New Haven

Rochester

Waterford

Pontiac

Utica

Avondale Huron Valley

West Bloomfield

L’Anse Creuse Warren Consolidated

Birmingham Novi

Farmington

Royal Oak 2

Southfield

Northville Livonia

$8,601-$9,000 $9,001-$10,000 $10,001-$11,000

7 14

WayneWestland 19 SOURCE: SENATE FISCAL AGENCY CRAIN’S DETROIT BUSINESS GRAPHIC

$8,201-$8,600

Detroit

Plymouth-Canton

Less than $8,200

16 28

Per pupil allocation

3 12

Anchor Bay

WASHTENAW COUNTY

Troy

Bloomfield Hills

Walled Lake

South Lyon

Chippewa Valley

Grosse Pointe

From Page 15

taxable property to generate more revenue. One example is Jefferson Schools in Monroe County, home to DTE Energy Co.’s Fermi 2 nuclear power plant. That school system, where nearly half of the 1,500 students live in poverty, gets $11,540 per student, $3,400 more per child than surrounding districts. Hold-harmless districts also are located in some of the most remote corners of the state, such as the three-student school system on Bois Blanc Island in Lake Huron, which gets $15,916 per student. Twenty-two of the 43 hold-harmless school districts are in metro Detroit — in communities that historically had higher taxes to pay teachers more, have smaller class sizes and offer more programs. They also are communities with higher real estate values than neighboring districts: Royal Oak, Novi, Troy, West Bloomfield, Farmington Hills, Grosse Ile, Warren and Ann Arbor. Because they’re at the top of the funding scale, those districts also have seen little growth in their per-pupil funding over the past decade. In West Bloomfield, the per-pupil foundation grant has grown by $50 since 2010. With a declining birth rate and stagnant state funding, the 5,300-student district shuttered an elementary school building in 2012. “It’s been very difficult for our district to deal with basically the same funding level from 10 years ago,” said Kyle Anderson, assistant superintendent of business and operations at the West Bloomfield School District. Michigan’s school funding gap has narrowed over the past decade through a formula lawmakers implemented that gives the lowest-funded districts double the increase of the higher-funded school systems. Madison’s per-pupil funding has increased from $7,173 in 2011 to $8,111, 13 percent over a decade, while Lamphere’s foundation grant has grown by less than 2 percent. The proportional value of the Madison district’s per-pupil grant has risen from 68 percent of Lamphere’s grant in 2011 to 75 percent in the 2019-2020 school year, a Crain’s analysis shows. “Prop A closed the gap, but it

Dearborn 37

WAYNE COUNTY 1 Van Buren

didn’t drastically change the haves and the have-nots,” said David Hecker, president of the American Federation of Teachers-Michigan.

What equitable funding looks like

Romulus

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

Allen Park Berkley Centerline Clarenceville Clawson Clintondale Crestwood Dearborn Heights Eastpointe Ecorse Ferndale Fitzgerald Fraser

ISD

been pushing for a rewrite of Michigan’s school finance law that weighs the cost of a child’s needs. Multiple studies have found that

“As soon as the community knew that we had children that were in trouble, in the middle of a pandemic, when so many people have financial uncertainty, they gave so tremendously,” Davis said. She started a GoFundMe campaign that raised $20,000 in four days. A contractor went out to fix up the house, eating much of the cost. The student caught up with his schoolwork. But how many other bright futures could fall through the cracks? Allen said the pandemic could create a perfect storm for children who were already struggling. “I would say I am extraordinarily worried about the loss that our students will face,” she said. “It isn’t just the academic loss. I think we need as many caring adults right now as possible in the lives of children to make sure that they’re doing OK.”

With a population of 10,000, Highland Park has just one public school, a pre-K-8 charter academy with 300 kids — about 25 percent of whom lack internet connectivity. “That’s our biggest issue right now,” said Zakia Gibson, chief education officer and compliance director at Barber Preparatory Academy, operated by Detroit-based Promise Schools. The company also operates Jalen Rose Academy and MacDowell Preparatory Academy in Detroit. It received a federal PPP loan in the range of $1 million to $2 million. Gibson said even with the financial assistance, she expects Barber Preparatory Academy to run a deficit after state funding cuts and increased costs for PPE and cleaning supplies. The school aims to begin in the fall with remote classes, but it remains to be seen if students and teachers will be ready by then. Gibson said the school is distributing Google Chromebooks to every student at a total investment of $60,000, but that doesn’t include connectivity. To solve that issue, administrators are looking at providing mobile hot

In the Detroit-bound enclave of Highland Park, there is also poverty, but not the same level of philanthropy commanded by the state’s largest city.

14 15 16 17 18 19 20 21 22 23 24 25

Garden City Hamtramck Harper Woods Hazel Park Highland Park Inkster Lake Shore Lakeview Lamphere Lincoln Park Madison MelvindaleNorth Allen Park

26 27 28 29 30 31 32 33 34 35 36 37 38

Mt. Clemens Oak Park Redford Union River Rouge Riverview Roseville Southgate South Lake South Redford Van Dyke Warren Woods Westwood Wyandotte

Map boundaries

Coalitions of business, labor, educators and philanthropy such as Launch Michigan and the School Finance Research Collaborative have

Lack of resources

$11,000+

Numbered districts key

County

School District

students with special education needs who require more individualized instruction and those who come from poorer families without as

Off- and on-campus students in the Educational Psychology and Educational Technology Ph.D. program at Michigan State University interacted last spring through iPads affixed to robots that allowed them to swivel or move about the room. | JEFFREY SEGUIN/MSU COLLEGE OF EDUCATION

spots, which would cost an estimated $150 per student per year. Gibson said funding that has been a challenge, especially because it isn’t clear if they

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much educational support cost more to educate. School Finance Research Collaborative’s 2017 study found the average cost of educating a K-12 student in Michigan is $9,590. Four and 5-year-olds in preschool cost $14,155 annually, the study found. That group did not identify a funding source for filling the nearly $1,500-per-student gap in funding for the majority of school districts that receive the minimum foundation grant. The hot-iron issue of raising taxes for education was tabled headed into this election year — and essentially scrapped for the foreseeable future after the coronavirus pandemic began wreaking havoc on Michigan’s public health and economy in March. The state’s School Aid Fund is now $1.1 billion short for the fiscal year that begins Oct. 1. With a stalemate in Congress over bailing out states, school districts are writing budgets assuming cuts of as much as $600 per student, which would wipe away most gains made since the Great Recession. The specter of a one-size-fits-all cut has prompted Education Trust-Midwest, a Royal Oak-based school reform organization, to propose that lawmakers base those cuts more on individual needs of each student instead of an across-the-board reduction as they’ve done in years past. Education Trust Midwest developed what it calls a “fair funding scale” to create five scenarios: A standard across-the-board cut. For their example, they used the $470 per student cut that former Gov. Rick Snyder and the Republican-controlled Legislature imposed in 2011.  A proportional 5.6 percent cut (the total reduction from a $470 per student cut).  A reduced cut for working-class and high-poverty school districts.  A reduced cut for school districts with higher proportions of students with additional needs.  No cut for students in a district from low-income families, English language learners and those with disabilities. For the last scenario, the cuts would hit the wealthiest districts by an average of $764 per student. The

are able to use PPP funds for it. “We have to figure out sustainability,” Gibson said. “Our students are very transient. We have students in and out of our schools just for economic reasons. We are attempting to figure out how to accommodate all of our students but not lose the investment.” Issues are much the same in River Rouge School District, which encompasses four schools and 2,300 students.

poorest districts would absorb a $147-per-pupil cut. How these cuts shake out for hold-harmless districts depends on how many students they have living in poverty, according to hypothetical cuts Education Trust-Midwest provided Crain’s for this report. Under the fifth scenario, dubbed “No Cuts for Vulnerable Students,” the $12,364 per student that Bloomfield Hills gets would be reduced by $833 per student and Novi’s $8,839 per pupil would be slashed by $856 or 9.7 percent. The Bloomfield Hills and Novi school districts have poverty rates of 11 percent and 9 percent, respectively. Lamphere, with its 51 percent of low-income students getting free or reduced lunches, would see its

“THIS IS ABOUT SAYING, YES, THESE SCHOOLS ARE FUNDED AT THE SAME FOUNDATION LEVEL, BUT THE NEEDS OF THEIR STUDENTS ARE RADICALLY DIFFERENT.” — Brian Gutman, external relations director for Education Trust-Midwest

$10,789-per-pupil grant reduced by $464 or 4.3 percent, while the Madison district’s cut would be about half that. Kingsbury Country Day School, a charter school in Oxford with 9 percent of its 320 students growing up in low-income households, would see its state minimum foundation grant of $8,111 reduced by $853 or 10.5 percent under Education Trust-Midwest’s equity funding model. By comparison, Global Heights Academy, a charter school in Dearborn, would receive no reduction in state funding because 99 percent of the 252 students live in poverty and the school has a high percentage of students with special needs or who don’t speak English at home. “This is about saying, yes, these schools are funded at the same foundation level, but the needs of their students are radically different,” said Brian Gutman, external relations director for Education Trust-Midwest. “We were dealing with a pandemic of poverty before the coronavirus,” said Tarence Wheeler, director of corporate and community affairs for the district. Wheeler said one of the most profound impacts of the pandemic has been the damage on kids’ mental health. Being suddenly and indefinitely torn away from peers, coupled with experiencing deaths of loved ones due to the coronavirus, has been devastating for them, he said. Wheeler and Superintendent Derrick Coleman also thought up a program, dubbed “We Love You Fridays,” where they would pop in on students at the end of the week for surprise wellness checks. It was a small gesture that went a long way during quarantine, Wheeler said. “There’s some things that Zoom, FaceTime and Google Classroom won’t show you, and that is how that kid is really doing,” he said. “When a superintendent shows up at your house for a nondisciplinary action, you can’t do nothing but smile and appreciate that.” Wealthier school districts certainly

Changing the conversation Fowler, the SBAM CEO and a former school board member in Haslett, said the pathway to getting the votes in the Legislature for a funding system that gives schools more money for a student with special needs or living in poverty is fraught with challenges. “What I know is if you’re a rural legislator, you get extra credit for saying, ‘All of the money goes to fillin-the-blank urban area and I’m going to fight to bring it back to this district,’” Fowler said. “The political math is tough for equity.” The challenge, Fowler said, is changing the post-Proposal A conversation from equal funding for all students to equitable funding. “It’s going to take some real policy leadership to change the thinking and the political math on this whole thing,” he said. “Because we’re so orientated to making sure the funding formula is fair — and fair meaning equal.” Back in Madison Heights, the Madison district shoulders the cost of educating a higher proportion of children living in poverty than the Lamphere district with threefourths of Lamphere’s per-pupil funding. Speck, the former Madison schools superintendent, uses a different landmark in Madison Heights to lay out the disadvantage Proposal A cemented between the city’s two school systems, which are both accept students from neighboring areas along the Oakland and Macomb county border. On 12 Mile Road between I-75 and John R Road sits a Home Depot store and a Lowe’s store. Like Lamphere and Madison, both big-box home improvement stores are competing for the same customers every day. “I used to say if Lowe’s had to operate at a 30 percent competitive disadvantage than Home Depot, Lowe’s wouldn’t be able to stay in business,” Speck said. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

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are not immune to the challenges of the pandemic, but they don’t suffer from the same lack of resources required for effective remote learning. “… As schools decide to go virtual and go remote, there are lots of wealthy parents who are deciding to hire teachers, hire tutors to work with their children one-on-one,” Allen said “… There’s so many people in our community who can’t make that choice at all, and I worry greatly that the inconsistency that we see across the state and even in local regions will be exacerbating inequity.” Allen said she thinks schools need to at least offer in-person classes, or else risk leaving behind the most vulnerable students. The all-remote or all-in-person approach by some districts also missed the mark, Allen said. “The key in this whole conversation is options,” she said. “What I would have hoped is that we would have seen more options for children and families to meet individual needs for children that are the most vulnerable.” Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 19

EDUCATION

TECHNOLOGY

From Page 17

“For a district like ours, with all the challenges we face and the criticism that we often face, we have received just about none when it comes to the deployment process,” he said. The district said in April that just 10 percent-20 percent of families had been able to consistently access the internet or an internet-con-

nected device at home to video chat with teachers or use online learning tools after Gov. Gretchen Whitmer closed down schools to help stem the coronavirus’ spread. The public-private investment funds internet connectivity through the tablets for six months. After that, students could be “transitioned to a low-cost, hard-wired connection,” a news release said at the time. Those with need could get their internet funded longer by the district.

DPSCD will be financially responsible for sustaining the tablet program after this initial giveaway, as well as reinvesting in older devices so they can be used again. The district contracted with Long Beach, Calif.-based nonprofit Human IT to provide customer service to the laptop-acquiring families for free, and help refurbish older laptops. The district also selected T-Mobile to provide the first six months of hotspot internet access.

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UBS to open downtown Detroit office By Annalise Frank

October 30, 2017 | crainsdetroit.com

• UBS plans to open wealth management office in Detroit in mid-2018 • Office to include 6,000-squarefoot space30,nonprofits and civic October 2017 | crainsdetroit.com

UBS to open downtown Detroit office By Annalise Frank

groups • UBS plans to open wealthcan use free of charge • Bedrock-owned buildings office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018 6,000-squarethe effect food insecurity• Office had onto includeUBS plans to open an office in downfoot space nonprofits and civic Detroit in mid-2018, the company Annalise Frank growing groups meByand my peers up, andcan usetown free of charge announced Monday. • Bedrock-ownedUBS buildings Group AG’s U.S. and Canadian UBSan plans to open wealth this•was opportunity toundergoing make a renovations wealth management business, New Jermanagement office in Detroit sey-based Wealth Management change I wish an adult UBScould plans to open an office UBS in downin that mid-2018 Americas, to lease 13,000 square UBS will lease 13,000 feet from Bedrock LLC starting around mid-2018 in two buildings: the Grintown Detroit in mid-2018, theplans company • Office to include 6,000-squarefeet on the connected sixth floors of nell Building (center left) at 1515 Woodward Ave. and the Sanders Building (center right) at 1529 have made for me.” announced Monday. foot space nonprofits and civic buildings at 1515 Wood- Woodward Ave. Group AG’sneighboring U.S. and Canadian groups can use free UBS of charge ward Ave. and Fourteen metro Detroit employees don’t really have adequate resources wealth management business, New 1529 Jer- Woodward Ave. • Bedrock-owned buildings The twoManagement buildings built around 1900 are will move to the downtown office to or adequate office space to host dosey-based UBS Wealth undergoing renovations by Detroit-based will lease LLC 13,000 feet from Bedrock LLC starting around mid-2018 buildings: Grin- meetings or things nor events the or board start, but the office has the capacity toin two Americas, plans toowned lease 13,000 square UBSBedrock nell Building (center at 1515 Woodward andnew the Sanders Buildingalong (centerthose right) at 1529 Bush said. and are undergoing said left) lines,” hold another six toAve. eight staff memon inthe connected sixth floors of renovations, Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All RightsUBS reserved. plans to open anfeet office downAve. for bers, Bush said. It will act as an extension John Bush, 60, WoodMichiganWoodward market head UBS’s investment in the new ofneighboring buildings at 1515 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD1134 town Detroit in mid-2018, the company UBS Wealth ManagementFourteen Americas.metro of fice will resources be “significant,” he said, as its the other wealth management offices. don’t really have adequate Detroit employees announced Monday. ward Ave. and 1529 Woodward Ave. “The real impetus open atonew The twoCanadian buildings built around 1900 arefor us “uniqueness Bush is based Birmingham office space to hostcomes do- at a price.” He said willto move the downtown office out to ofortheadequate UBS Group AG’s U.S. and office inBedrock Detroit is to support what’s owned by Detroit-based LLC he could or not yet provide an estimate but travels to to the will meetings norothers eventsand or board things start, but the goofficeoffice, has the capacity wealth management business, New Jering renovations, on in the city, ” saidhold Bush, a Detroit and are undergoing said on the be spending in thealong Detroit branch. those lines,” Bush said.cost of the build-out, as some another six to eight new stafftime memsey-based UBS Wealth Management nativemarket who grew City. “We John Bush, 60, Michigan headup forin Garden have yet The location have a less UBS’s investment in the new of- to be finalized. said. will act asDetroit an extension fromBush Bedrock LLCItstarting around mid-2018 in twowill buildings: the Grin- contracts Americas, plans to lease 13,000 square UBS will lease 13,000 feetbers, UBS Wealth Management Americas. really felt like we wantedofto have a physfice will be “significant,” hecompany said, as its the other wealth management offices. The plans to start its buildtraditional, more “urban” feelright) than 1515 Woodward Ave. and the Sanders Building (center atthe 1529 feet on the connected sixth floors of nell Building (center left) at “The real impetus for us to open new ical presence downtown to reinforce “uniqueness comes at saidnext year, depending Bush is based outothers, of the he Birmingham outa price.” processHe early said. New York-based architecAve. a neighboring buildings office at 1515 Wood- toWoodward in Detroit is our support go-particular vision what’s for this areatravels and toture he will could not yet an estimate office, but the firm others and will Cale on when renovations on the buildings Verderame design the provide ward Ave. and 1529 ing Woodward don’t really have adequate resources Fourteen metro Detroit employees on in theAve. city,”tosaid Bush, a Detroit reinforce our on Barton the cost of the build-out, as some be spending time inspace; the Detroit branch. are complete. Southfield-based Malow The two buildings builtnative around 1900 areup in adequate office space to have host dowill moveCity. to tothe officelocation to or will who grew Garden “Wedowntown commitment contracts finalized. The Detroit have aon less based in Switzerland, employs Co. has signed as general contractor.yet to beUBS, owned by Detroit-based Bedrock nor events or board or things start, thea physoffice has the capacity really felt likeLLC we wanted tobut The company plans to startacross its buildtraditional, moreto“urban” than the outmeetings the city. ” have 60,000 54 countries. About 34 UBS feel plans to rent about half of the and are undergoing renovations, along those lines,” Bush said. early next year, depending hold six to eight new he staff memical presencesaid downtown toWealth reinforce others, said. New office York-based architecUBS another — 6,000 square out feetprocess — at no cost percent of them work in the AmeriJohn Bush, 60, Michiganour market head UBS’s investment the renovations new of- on the buildings bers, said. It will act an extension vision for for thisMparticular oninorganizations, when tureasfirm VerderametoCale will design theother a n aBush g e marea e n tand cas, according to a news release. UBS nonprofits and UBS Wealth Management will beMalow “significant,” he said, as its of the other also wealth management offices. ficeBarton to Americas. reinforce our Americas are be complete. space; Southfield-based Bush said. The space will called UBS Wealth Management Americas em“The real impetus for commitment us to open a new “uniqueness comes at a price.” He said is based thehas Birmingham to has Bush based signed on as Woodward general contractor. metro De- out ofCo. ploys 280employs in Michigan, 225 of whom Gallery. Its UBS, design and in artSwitzerland, office in Detroit is to support what’s go- office, but travels to theUBS heabout couldhalf not an estimate others and the city. ” 60,000 across 54 countries. 34 Detroit. plans towill rent will out of yet the provide troit offices in are basedAbout in metro aim to showcase Detroit’s history ing on in the city,” said Bush, on the cost the build-out, asthem somework in the Amerispending Detroit branch. UBS a Detroit Wealth B be percent office — 6,000 square at noofcost irm i n g h a time m , in the The wealth management business andfeet a— hub-and-spoke layout ofwill renative who grew up in Garden contracts have yet tocas, be finalized. M a n a gCity. e m“We e n t Troy, The Detroit locationtowill have a and less other according to a news release. UBS nonprofits organizations, Farmington recorded operating income of $2.13 flect the city’s road system. really felt like we wanted to have a physAmericas also Hills, The plans to startManagement its buildtraditional, more “urban” Wealth Americas em- quarter of 2017 — a Bushfeel said.than The the space will becompany called Plymouth in the third “Some of theUBS organizations that op- billion ical presence downtown reinforce has tometro De- others, he said. New York-based outdesign process early year,280 depending architecploys in Michigan, 225 of whom Woodward Gallery. Its and art next John Bush erate and Dearborn. and provide services in the city 7 percent increase over last year. our vision for this particular area and troit offices in ture firm Verderame Cale when renovations the buildings the onDetroit’s in metro Detroit. willwill aimdesign to showcase history areonbased to reinforce our B i r m i n g h a m , space; Southfield-based complete. Malow arelayout The wealth management business andBarton a hub-and-spoke will reReprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. commitment to Troy, Farmington Co. has signed on as general UBS, basedis prohibited. in Switzerland, employs income recorded operating contractor. flectFurther the city’s road without system. duplication permission Visit www.crainsdetroit.com. #CD936of $2.13 Hills, Plymouth the city.” billion in About the third “Somehalf of the organizations that op60,000 across 54 countries. 34quarter of 2017 — a UBS plans to rent out about of the John Bush and Dearborn. UBS Wealth 7 percent and provide city work percentinofthe them in theincrease Ameri-over last year. office — 6,000 squareerate feet — at no cost services Management to nonprofits and other organizations, cas, according to a news release. UBS Reprinted with permission from Crain’s Crain Communications Inc. All Rights reserved. Americas also Wealth Management Americas emBush said. The space will be Detroit calledBusiness. UBS © 2019 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936 has metro DeWoodward Gallery. Its design and art ploys 280 in Michigan, 225 of whom troit offices in will aim to showcase Detroit’s history are based in metro Detroit. Birmingham, The wealth management business and a hub-and-spoke layout will reCRAINSDETROIT.COM I MARCH 9, 2020 I Troy, Farmington recorded operating income of $2.13 flect the city’s road system. Hills, Plymouth THE CONVERSATION “Some of the organizations that op- billion in the third quarter of 2017 — a John Bush erate and provide services in the city 7 percent increase over last year. and Dearborn. Bedrock LLC

Bedrock LLC

UBS to open downtown Detroit office

Bedrock LLC

hroughout Dandridge Floyd’s careers — whether as a social worker, attorney or assistant superintendent of Oakland Schools — making change has always been a center point. When United Way pitched a framework to Oakland Schools for a countywide breakfast program to address poor nutrition as a way to improve academic achievement, Floyd — who experienced food insecurity growing up — knew firsthand the powerful impact it could have. To secure the needed funds, Floyd led a team that earned support from all 28 local districts to finance the program — despite the fact that a majority of them would see no benefit. “The local districts were phenomenal,” Floyd said. “The biggest surprise was how quickly it happened. Education is a democratic system and democracy can be very slow, but this happened in six to seven months. That showed how committed people were to making sure the students of Oakland County have everything they need to be successful.” In a county where over 7,000 children suffer from hunger, and only two in five eligible students access a school breakfast, Floyd said a common misperception is that “Oakland County is rich.” “That makes this program all the more important, because if that is the bias or the thought process people have about Oakland County, then these kids would have never gotten help.” In a groundbreaking public/nonprofit partnership between the Oakland County Board of Commissioners, Oakland Schools and United Way, Oakland County is Better with Breakfast was born. “I’m impacting lives now,” Floyd said. “I know the effect food insecurity had on me and my peers growing up, and this was an opportunity to make a change that I wish an adult could have made for me.” — Laura Cassar

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Albert Berriz talks workforce housing, Ann Arbor and Cuba

Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. | BY KIRK PINHO Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936

MCKINLEY INC.: Ann Arbor-based real estate company McKinley Inc. saw the writing on the wall for its retail portfolio a few years ago and cut bait, turning its focus primarily to its large crop of tens of thousands of workforce housing units across the country. One of the people at the helm of that decision was Albert Berriz, CEO and managing member, who came to America as a young boy fleeing Cuba and now steers a large company with a portfolio valued at more than $4 billion. `Crain’s Detroit Business: Can you talk a little bit about how the McKinley portfolio began and where it’s at today? Berriz: McKinley started in 1968 in Ann Arbor, and it was founded by (former U.S.) Ambassador Ron Weiser. It started in the student housing business and eventually transitioned into more traditional multifamily housing, and in addition to that, office and retail, as well. Today, we’re primarily a workforce housing multifamily operator. We have essentially disposed of our retail and office assets in an effort to really focus on multifamily and also focus on an asset class that I think is more in line with our current goal, which is to have a generational multifamily real estate enterprise and a pool of assets that really are long term in nature.

`I don’t think it’s overblown to use the word “crisis” for Ann Arbor’s affordable housing situation. Give us your perspective on how the city should go about addressing it. I think it’s a supply issue. The reality is that Ann Arbor has not really welcomed solutions from the private sector and has only sought solutions from the public housing side or the community nonprofit side. And both of those groups, while I think they’re very well intentioned, don’t have the capital and the expertise to resolve the problem at the scale it’s needed. To put it in perspective, you know, the Washtenaw County study that came out had a need of about 3,000 units. And if you look at the cost per unit today, and let’s say $250,000 or $300,000 per unit to build a brand new unit today, you know, it’s an $800 million to a $1 billion problem, so I don’t think that’s a problem that gets resolved on the public side or on the community nonprofit side. You know, they have to go to places to seek capital and there just isn’t enough capital, nor do they have enough resources or expertise to resolve the problems. So the city I think, by and large, has attempted to do this in those ways because they really haven’t welcomed the private side. And there is a lot of expertise and there’s a lot of capital that could do this, from the private side perspective. It just hasn’t been the way that Ann Arbor operates, so you see what has happened in Ann Arbor year over year, decade over decade is there’s a lot of conversations about affordable housing, but there’s no solutions.

a way that we never expect to sell them. We expect to invest in them so they last for long term, and we just couldn’t see that on retail. We saw a significant degradation of our rent rolls. We had buildings that were, let’s say, 70 percent to 80 percent investment-grade credit tenant composition and then we saw that we saw that quickly degrade. We just didn’t see a place where we could really have an asset class retail that would last for the long run. And then office in many ways, the same way. The way people are shopping and the way people are occupying offices today, the risk profile is very different than it was, let’s say, when we were making those investments 20 and 30 years ago, so for us, it was the right move. It’s paid off because, had we held many of the assets today, they would be significantly compromised. I think they would be worth a lot less. We started those sales about six years ago, and we sold a lot of that early on, so we sold them still at a time they were being valued significantly more than they would be worth today, in our opinion. And we sold some big buildings. I mean, these weren’t small buildings. We sold a 1 millionsquare-foot shopping center, for example, in Norfolk, Va., which is one of the largest power centers in the state of Virginia. So these weren’t small assets. So they were important for us to move them out at the right time, and for people that thought that was there was a good upside for them, so we actually sold them at good prices, and certainly we couldn’t have sold them at those prices today.

trajectory was to where you are today in terms of the head of McKinley. I left (Cuba) compliments of Fidel Castro in early 1959 because of the Cuban Revolution. We had to flee. It was survival to leave the country at the time and my parents relocated to Miami. We were fortunate for that. We’re fortunate to have left alive, fortunate to have resettled in what is without question the greatest country on the planet. I was not born here. I was born in Havana and I emigrated as a Cuban refugee just before I was 4 years old with my parents.

20 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020 Dandridge Floyd, 37

Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools

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October 30, 2017 | crainsdetroit.com

UBS to open downtown Detroit office By Annalise Frank

October 30, 2017 | crainsdetroit.com

• UBS plans to open wealth management office in Detroit in mid-2018 • Office to include 6,000-squarefoot space30,nonprofits and civic October 2017 | crainsdetroit.com

UBS to open downtown Detroit office By Annalise Frank

groups • UBS plans to open wealthcan use free of charge • Bedrock-owned buildings

office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018 6,000-squarethe effect food insecurity• Office had onto includeUBS plans to open an office in downfoot space nonprofits and civic town Detroit in mid-2018, the company Annalise Frank growing groups meByand my peers up, andcan useannounced free of charge Monday. • Bedrock-ownedUBS buildings Group AG’s U.S. and Canadian UBSan plans to open wealth this•was opportunity toundergoing make a renovations wealth management business, New Jermanagement office in Detroit sey-based Wealth Management change I wish an adult UBScould plans to open an office UBS in downin that mid-2018 Americas, to lease 13,000 square town Detroit in mid-2018, theplans company • Office to include 6,000-squarefeet on the connected sixth floors of have made for me.” announced Monday. foot space nonprofits and civic

UBS to open downtown Detroit office Bedrock LLC

September 2, 2019 | crainsdetroit.com

Albert Berriz, CEO and managing member, McKinley Inc.

UBS will lease 13,000 feet from Bedrock LLC starting around mid-2018 in two buildings: the Grinnell Building (center left) at 1515 Woodward Ave. and the Sanders Building (center right) at 1529

buildings at 1515 Wood- Woodward Ave. Group AG’sneighboring U.S. and Canadian groups can use free UBS of charge ward Ave. and Fourteen metro Detroit employees don’t really have adequate resources wealth management business, New 1529 Jer- Woodward Ave. • Bedrock-owned buildings The twoManagement buildings built around 1900 are will move to the downtown office to or adequate office space to host dosey-based UBS Wealth undergoing renovations by Detroit-based will lease LLC 13,000 feet from Bedrock LLC starting around mid-2018 buildings: Grin- meetings or things nor events the or board start, but the office has the capacity toin two Americas, plans toowned lease 13,000 square UBSBedrock nell Building (center at 1515 Woodward andnew the Sanders Buildingalong (centerthose right) at 1529 Bush said. and are undergoing said left) lines,” hold another six toAve. eight staff memon inthe connected sixth floors of renovations, Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All RightsUBS reserved. plans to open anfeet office downAve. for bers, Bush said. It will act as an extension John Bush, 60, WoodMichiganWoodward market head UBS’s investment in the new ofneighboring buildings at 1515 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD1134 town Detroit in mid-2018, the company UBS Wealth ManagementFourteen Americas.metro of fice will resources be “significant,” he said, as its the other wealth management offices. don’t really have adequate Detroit employees announced Monday. ward Ave. and 1529 Woodward Ave. “The real impetus open atonew The twoCanadian buildings built around 1900 arefor us “uniqueness Bush is based theadequate Birmingham office space to hostcomes do- at a price.” He said willto move the downtown office out to ofor UBS Group AG’s U.S. and office inBedrock Detroit is to support what’s owned by Detroit-based LLC he could or not yet provide an estimate but travels to to the will meetings norothers eventsand or board things start, but the goofficeoffice, has the capacity wealth management business, New Jering renovations, on in the city, ” saidhold Bush, a Detroit and are undergoing said on the be spending in thealong Detroit branch. those lines,” Bush said.cost of the build-out, as some another six to eight new stafftime memsey-based UBS Wealth Management nativemarket who grew City. “We John Bush, 60, Michigan headup forin Garden have yet The location have atheless UBS’s investment in the new of- to be finalized. said. will act asDetroit an extension fromBush Bedrock LLCItstarting around mid-2018 in twowill buildings: Grin- contracts Americas, plans to lease 13,000 square UBS will lease 13,000 feetbers, UBS Wealth Management Americas. really felt like we wantedofto have a physfice will be “significant,” hecompany said, as its the other wealth management offices. The plans to start its buildtraditional, more “urban” feelright) than 1515 Woodward Ave. and the Sanders Building (center atthe 1529 feet on the connected sixth floors of nell Building (center left) at “The real impetus for us to open adowntown new ical presence to reinforce “uniqueness comes at saidnext year, depending Bush is based outothers, of the he Birmingham outa price.” processHe early said. New York-based architecneighboring buildings at 1515 Wood- Woodward Ave. office in Detroit is our to support go-particular vision what’s for this areatravels and toture he will could not yet an estimate office, but the firm others and will Cale on when renovations on the buildings Verderame design the provide ward Ave. and 1529 ing Woodward don’t really have adequate resources Fourteen metro Detroit employees on in theAve. city,”tosaid Bush, a Detroit reinforce our on Barton the cost of the build-out, as some be spending time inspace; the Detroit branch. are complete. Southfield-based Malow The two buildings builtnative around 1900 areup in adequate office space to have host dowill moveCity. to tothe officelocation to or will who grew Garden “Wedowntown commitment contracts finalized. The Detroit have aon less based in Switzerland, employs Co. has signed as general contractor.yet to beUBS, owned by Detroit-based Bedrock nor events or board or things start, thea physoffice has the capacity really felt likeLLC we wanted tobut The company plans to startacross its buildtraditional, moreto“urban” than the outmeetings the city. ” have 60,000 54 countries. About 34 UBS feel plans to rent about half of the and are undergoing renovations, along those lines,” Bush said. early next year, depending hold six to eight new he staff memical presencesaid downtown toWealth reinforce others, said. New office York-based architecUBS another — 6,000 square out feetprocess — at no cost percent of them work in the AmeriJohn Bush, 60, Michiganour market head UBS’s investment the renovations new of- on the buildings bers, said. It will act an extension vision for for thisMparticular oninorganizations, when tureasfirm VerderametoCale will design theother a n aBush g e marea e n tand cas, according to a news release. UBS nonprofits and UBS Wealth Management will beMalow “significant,” he said, as its of the other also wealth management offices. ficeBarton to Americas. reinforce our Americas are be complete. space; Southfield-based Bush said. The space will called UBS Wealth Management Americas em“The real impetus for commitment us to open a new “uniqueness comes at a price.” He said is based thehas Birmingham to has Bush based signed on as Woodward general contractor. metro De- out ofCo. ploys 280employs in Michigan, 225 of whom Gallery. Its UBS, design and in artSwitzerland, office in Detroit is to support what’s go- office, but travels to theUBS heabout couldhalf not an estimate others and the city. ” 60,000 across 54 countries. 34 Detroit. plans towill rent will out of yet the provide troit offices in are basedAbout in metro aim to showcase Detroit’s history ing on in the city,” said Bush, on the cost the build-out, asthem somework in the Amerispending Detroit branch. UBS a Detroit Wealth B be percent office — 6,000 square at noofcost irm i n g h a time m , in the The wealth management business andfeet a— hub-and-spoke layout ofwill renative who grew up in Garden contracts have yet tocas, be finalized. M a n a gCity. e m“We e n t Troy, The Detroit locationtowill have a and less other according to a news release. UBS nonprofits organizations, Farmington recorded operating income of $2.13 flect the city’s road system. really felt like we wanted to have a physAmericas also Hills, The plans to startManagement its buildtraditional, more “urban” feel than the Wealth Americas em- quarter of 2017 — a Bush said. The space will becompany called Plymouth in the third “Some of theUBS organizations that op- billion ical presence downtown reinforce has tometro De- others, he said. New York-based outdesign process early year,280 depending architecploys in Michigan, 225 of whom Woodward Gallery. Its and art next John Bush erate and Dearborn. and provide services in the city 7 percent increase over last year. our vision for this particular area and troit offices in ture firm Verderame Cale when renovations the buildings the onDetroit’s in metro Detroit. willwill aimdesign to showcase history areonbased to reinforce our B i r m i n g h a m , space; Southfield-based complete. Malow arelayout The wealth management business andBarton a hub-and-spoke will reReprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. commitment to Troy, Farmington Co. has signed on as general UBS, basedis prohibited. in Switzerland, employs income recorded operating contractor. flectFurther the city’s road without system. duplication permission Visit www.crainsdetroit.com. #CD936of $2.13 Hills, Plymouth the city.” billion in About the third “Somehalf of the organizations that op60,000 across 54 countries. 34quarter of 2017 — a UBS plans to rent out about of the John Bush and Dearborn. UBS Wealth 7 percent and provide city work percentinofthe them in theincrease Ameri-over last year. office — 6,000 squareerate feet — at no cost services Management to nonprofits and other organizations, cas, according to a news release. UBS Reprinted with permission from Crain’s Crain Communications Inc. All Rights reserved. Americas also Wealth Management Americas emBush said. The space will be Detroit calledBusiness. UBS © 2019 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936 has metro DeWoodward Gallery. Its design and art ploys 280 in Michigan, 225 of whom troit offices in will aim to showcase Detroit’s history are based in metro Detroit. Birmingham, The wealth management business and a hub-and-spoke layout will reCRAINSDETROIT.COM I MARCH 9, 2020 I Troy, Farmington recorded operating income of $2.13 flect the city’s road system. THE CONVERSATION Hills, Plymouth “Some of the organizations that op- billion in the third quarter of 2017 — a John Bush erate and provide services in the city 7 percent increase over last year. and Dearborn. Bedrock LLC

`Can you give thumbnail sketch of coming here and what your

Bedrock LLC

`You were talking a little bit earlier about how McKinley got out of retail and office. What led to that decision and how has that reflected or shaped your business strategy? It was a risk profile that we were just not comfortable with. We are a generational business and so we look at our assets in

`What consumes your day outside of the office? My wife and I walk. We like to boat, so those are the two things. In our summers we live at Saugatuck, and it’s a great place to live. We’d live there year-round, but it’s a little too cold in the winter.

PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

` Explain workforce housing versus affordable housing. We’re not in luxury housing. Our residents are working. They’re going to wake up tomorrow morning and go to work. Our average rents are, for example, in Washtenaw County, about $1,100 to $1,200 or in Orange County, or Seminole County, Florida, $1,400 or $1,500. So these are affordable rents. And the difference between us and affordable housing is our buildings are not subsidized. They’re all market rate, and they’re all privately owned. The owners are not receiving any form of subsidy, nor are the residents. However, if you wanted to sort of assess residents and low-income housing tax credit deals compared to ours, they’re probably not too dissimilar, the median incomes. The McKinley residents in, let’s say, Washtenaw County, when you look at the numbers are probably not going to be too much different than what you would see in a traditional LIHTC deal. But again, our buildings, the primary differences, our buildings are market rate and they’re not subsidized any way.

Mark Beilein has relocated to Oswald Companies’ Bloomfield Hills location. As an Employee Benefits Advisor, he specializes Beilein in working with clients to plan, consult, and deploy strategic benefit plans. In this role, Beilein is responsible for new business development and the service and retention of existing accounts. He has Carey previous experience in industrial distribution sales and management. Steve Carey joins Oswald Companies as a Property & Casualty Risk Management Specialist. He will lend strategic advice and develop personalized insurance plans to clientele across a broad range of industries. Carey sits on the board of the Southeast Michigan Construction Academy and holds the designation of Certified Authority of Workers’ Compensation.

INSURANCE

Globe Midwest Adjusters International Globe Midwest Adjusters International is pleased to announce the promotion of Danielle Levin Gabbard to partner. In 2010, Danielle joined GMAI as a licensed public adjuster. In 2017, Danielle assumed the position of National Director of Claims where she managed a team of adjusters handling over Two Hundred Million Dollars in claims a year. As partner, Danielle will use her industry knowledge and adjusting expertise to ensure GMAI remains the best public adjusting firm in the business.

NONPROFIT

Lighthouse Lighthouse, a Pontiacbased nonprofit dedicated to fighting homelessness and poverty, is thrilled to welcome Dr. Rita Fields as its Chief Talent & Strategy Officer. In this role, Dr. Fields serves as a member of the Lighthouse leadership team and acts as the day-to-day talent and internal business operations leader for the nonprofit that once helped her through a desperate time. As a teenager, Dr. Fields was homeless and was assisted by South Oakland Shelter which merged with Lighthouse in 2019.

Detroit as ‘national model’

Internet access challenges

James Jack, who grew up in South Lyon, co-founded Human IT eight years ago and is expanding into Detroit. He anticipates a long relationship with the public school district and thinks Detroit could be a “national model” for boosting internet access. Human IT is also partnering on Connect 313, another public-private connectivity initiative that’s being led by Dan Gilbert’s portfolio of companies and Joshua Edmonds, Detroit’s director of digital inclusion since last spring. Human IT’s job with DPSCD isn’t just to be its Connected Futures IT department. It is also expected to consult with families, showing them more long-term internet options that serve their whole home through Comcast Corp., AT&T or other avenues. Jack said it’s generally $10-$20 a month on the lowcost end. TheC11-employee RAIN’S DETROITnonprofi BUSINESSt sells refurbished tech directly to individuals with low incomes and other nonprofits, as well, and plans to do that from its new Detroit set-up. It’s finalizing hiring for a processing and refurbishing facility at Focus: Hope’s building on Oakman Boulevard. Jack hopes to eventually open a retail space in Detroit, too, offering computer repair services. But he declined to provide a timeline, citing delays due to the pandemic. “The second physical location is Detroit — it’ll be really our first entry into another city, physically,” Jack said. “It’s really a big step for us, and we hope to make Detroit bigger and better than our L.A. location. It’s really a special thing happening in Detroit, as far as digital inclusion goes.”

As many as 40 percent of Detroit residents lack broadband internet access, the city estimated last year. Marginalized residents and those in neighborhoods outside greater downtown are more widely affected and more likely to lack the technology necessary for information access and communication, according to Mapping Detroit’s Digital Divide, a 2019 report by the Urban Collaboratory at the University of Michigan. It estimates 70 percent of Detroit school-age kids don’t have internet

AS MANY AS 40 PERCENT OF DETROIT RESIDENTS LACK BROADBAND INTERNET ACCESS, THE CITY ESTIMATED LAST YEAR. at home and that many rely on smartphones for access. “Many of those affected are schoolaged kids that need the Internet to complete their homework, submit job applications, or simply socialize with their classmates,” the report said. Connected Futures’ fundraising continues. It was quick at the start but getting the final approximately $3 million has been more difficult, said Jerry Norcia, president and CEO of Detroit-based DTE Energy Co. “I think that once you announce a project, and you get rolling, you lose a little bit of steam,” Norcia said. “People think, ‘Ah, they’ve got enough.’ So we just have to keep telling our story ... I’m very confident we’ll close out the balance. And we’ve also started raising for the charter schools, as well.” Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

TECHNOLOGY

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COMICS

From Page 3

Geppi cited in his announcement a lack of stores open to the public, supply chain issues that ravaged everything from the food industry to retail beyond comics and production delays. “If your doors remain open, it’s likely you will have customers who will continue to seek diversion from events of the world,” Geppi said in a statement sent to shop owners. “Special sales, promotions, and even eBay can help you bring in cash during this trying time. Product for which you’ve already paid may well hold some of your answers. For those retailers who remain open in various forms, I encourage you let loose your own creativity.” New Comics Day, occurring every Wednesday across the U.S. since 1970, was no more. “Comic stores have historically been gathering places; community is the most important thing about these stores,” said Milton Griepp, CEO of Madison, Wis.-based ICv2, an online trade publication covering retailers in “geek culture.” “That community engages in commerce through these stores, but (consumers) are gathered around each other for their common interest. Maintaining that community is critical to survival.” Beyond losing the weekly New Comics Day, shops lost Free Comic Book Day, an annual promotional event, similar to independent music stores Record Store Day, designed to bring new and old customers into independent comic shops and boost sales. The event is held annually on the first Saturday in the month of May. Green Brain Comics in Dearborn relies on upward of 10 percent of its annual sales on Free Comic Book Day alone, averaging about 1,200 customers. “It’s without a doubt our biggest day of the year,” said Dan Merritt, who coowns Green Brain with his wife, Katie. “It’s a big community builder for us and helps us bring in and retain new customers for the rest of the year. Not being

Back to the Past Collectibles is in Livonia. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

able to have that was the difference between a successful May and an utter washout.” Diamond restarted distribution in late May, but problems persisted after the second largest comics producer DC Comics severed ties with Diamond in early June. Diamond has long been labeled a monopoly — the U.S. Department of Justice investigated Diamond in 1997 for antitrust issues but ultimately dropped the suit in 2000 — and DC shifted to two different distributors, Lunar Distribution and UCS Comics Distributors. Merritt said Lunar and UCS are owned by large online retailers, New York-based Midtown Comics Inc. and Fort Wayne, Ind.-based Discount Comic Book Service, whose operations threaten independent comics stores. He also said both distributors have been plagued with delays, leaving shops struggling to get comics on shelves. “It totally creates a conflict of interest,” Merritt said. “I’m giving all of our financial information to our competition. These are largely untested organizations that almost immediately failed out of the gate. That’s played a big factor in a lot of people’s decisions to stay in this business or not.”

Back to the Past chose to exit the new comics business. Green Brain is sticking it out.

Excelsior! Green Brain reopened in early June and has remained aloft largely due to a committed client base that turned to the shop’s website during the pandemic and through a grant from the Ann Arbor-based nonprofit Book Industry Charitable Foundation. The foundation has played hero to more than 637 comic book stores through its Comicbook United Fund, distributing nearly $1 million to help independent shops pay for emergency expenses and bills related to COVID-19 shutdowns. It also distributed more than $225,000 to individuals who work at comics shops to supplement income lost during shutdowns or pay medical bills. The foundation was founded by Borders Group employees in 1996 as the Borders Group Foundation, using funds donated from employees to assist other employees with medical expenses and other issues. But when Borders was liquidated in 2011, the foundation spun out to assist independent book

CORRIDOR

From Page 3

The corridor, as proposed, she said, would allow for acceleration of testing for autonomous and connected vehicles that would likely allow for increased data collection, better understanding of how goods can be moved on electric vehicles and increased likelihood of more startups operating in the mobility space. The proximity to testing facilities such as the American Center for Mobility at the Willow Run site in Ypsilanti and the University of Michigan’s Mcity in Ann Arbor allows for testing before vehicles are moved on to the corridor. Between Ford’s planned Corktown project at the former Michigan Central Station, facilities like the American Center for Mobility and a host of suppliers spread around the region, there are ample opportunities for new connections. So says Chris Rizik, the CEO and fund manager of the Ann Arbor-based Renaissance Venture Capital Fund and a longtime Southeast Michigan technology investor. “So I think the notion of trying to connect them all, not only by just going down Michigan Avenue, but understanding you need sort of an infrastructure testbed for all this,” Rizik said. “And so the idea of picking the road that connects all these assets that exist currently with the idea that it does become sort of an infrastructure testbed, that makes sense.”

Cavnue, a subsidiary of New York City-based Sidewalk Infrastructure Partners LLC, is leading a multicounty effort to create an autonomous and connected vehicle corridor from Ann Arbor to Detroit. | CAVNUE

Economic impacts Trevor Pawl, Michigan’s chief mobility officer, introduced the ambitious project Aug. 13 as one that “we believe will fundamentally change, transform regional transit in Michigan and the world.” Transportation is laced into the fabric of the state’s history, anchored by the Motor City, he said. “So it only makes sense that together, the state, national, industry leaders all here today that Michigan do something that’s never been done ... something that will

shape the future of mobility globally ... Today, we begin building the road of the future.” In the simplest terms, this would be a public lane with upgraded infrastructure to support connected and self-driving vehicles. A vision for future transportation investment released by the Southeast Michigan Council of Governments last year anticipated between 20 percent and 85 percent of passenger vehicle traffic would be autonomous by 2045. But officials said last week they envision it as more. They have lofty aspira-

stores with physical bricks-and-mortar locations across the U.S. In 2017, the foundation began assisting independent comics shops as well. “Book stores are cornerstones of their community and our mission is to promote reading and a sense of community,” said Pamela French, executive director of the foundation. “Providing people a place to go to where they feel welcome, come in and find a safe, accepting place. This is a time of crisis and uncertainty and people want that connection even more. Comic book stores help fill that void and help people feel more connected.” The Comicbook United Fund was funded by comic book authors, artists, fans and third-party fundraisers like Creators 4 Comics, founded by popular comics writer Sam Humphries. Green Brain received a grant from the foundation that helped supplement the shop’s losses during a 10-week shutdown. “As a business completely dependent on the new comics cycle, the shutdown could have easily been doom for us,” Merritt said. “(The foundation) funding was a great help.” Green Brain also received a $5,000 matching grant from the Michigan Economic Development Corp.’s crowdfunding grant program Patronicity. But, ultimately, the survival of comic book stores like Green Brain and Back to the Past has been attributed to growing interest in the medium, which has shifted away from superheroes to graphic novels. Graphic novels have grown from a $450 million market in North America 2014 to $765 million last year. In fact, graphic novels surpassed comic book sales by $410 million last year, according ICv2 data. The most popular graphic novels are “Dog Man,” a children’s graphic novel written by the Captain Underpants creator Dav Pilkey, and “My Hero Academia,” a Japanese manga series, Griepp said. “Superhero sales are declining,” Griepp said. “There are a bunch of theories about it. But I think content is

king. I think the stories probably aren’t that great right now. Plus the superhero itch is getting scratched in enough ways — TV, movies and video games.” However, “Batman” and “X-Men” remain popular comics, he said. Merritt said website orders exceeded expectations but have “decreased back down to normal” since reopening in June. “We still have hope,” Merritt said. “Things continue to look positive for us as they look positive for the state.” Meanwhile, Lovejoy and his team are picking through a massive collectibles collection they consigned with a family of a deceased shop owner in Pensacola, Florida. The family sent three semitruck loads of collectibles to the shop for auction after finding Back to the Past via an internet search. Lovejoy said another firm offered the family $40,000 outright for the collection, but through their auctions, they’ve “lapped that number” a few times and are less than 40 percent through the collection. Comics are collectibles, but not all collectibles are comics, and Lovejoy said Back to the Past is happy for the transition COVID-19 pushed upon them. “We crammed five years of change into five months,” Lovejoy said. Griepp said the pandemic has blown a hole in his ability to forecast sales in 2020, but expects the resiliency of comics to hold up as it has in past recessions. “I’m calling this a live experiment in the attention economy,” Griepp said. “The pandemic has dramatically altered the things that take people’s attention, things that eliminated time. Live sports are eliminated. Live performances are eliminated. Sports on TV is greatly reduced. Parties are mostly gone. People aren’t going out to eat or even to work in some cases. They have all this time on their hands. So the other things that were formerly getting less attention, get more. That includes comics ...”

tions, saying it would improve access to safe transportation, resilient roads and reliable public transit — all while encouraging economic development along the roadway. Officials said that if realized, the corridor would tap communities for new jobs in mobility and encourage new businesses to spring up along the route. “Having the ability to connect one of the best universities in the world with one of the best airports in the world with thriving suburbs and an energized urban core is every economic developer’s dream,” Khalil Rahal, assistant Wayne County executive, said at the announcement. But it’s a long road to reality. The first step is a two-year feasibility study on costs, engineering and traffic flow by Cavnue. The Michigan Department of Transportation contracted with Cavnue but isn’t paying the company for its planning work or to build the actual infrastructure, if the two parties decide to go ahead with it. The private company will be looking to recoup its money through operations later on. It may also apply for federal funding. Physical investments in the roadway could range from hardening the pavement — autonomous vehicles usually drive in the same spot, which wears down the road — to installing machine-readable road markings, highly reliable internet connectivity and separation barriers, said Michael Shapiro, vice president and project

manager for Sidewalk Infrastructure Partners. “While the total cost of implementation will be sizable, (Sidewalk Infrastructure Partners) expects that the cost per mile will be significantly lower than alternatives such as traditional light rail transit, while providing better safety, lower congestion, and greater capacity and speed than buses and other alternatives,” the state of Michigan said in a statement describing the corridor business model. Sidewalk Infrastructure Partners comes to the project out of a competitive state bidding process. The independent company is a spin-off and “portfolio company” of Google parent Alphabet Inc.’s urban innovation startup, Sidewalk Labs LLC. It is led by Brian Barlow and Jonathan Winer, two veterans of Sidewalk Labs, which in 2018 planned a pioneering smartcity development in Toronto. The company canceled the 12-acre plan this May, citing in a blog post the pandemic’s toll on the economy. Asked about any potential economic impact on the Michigan project, Shapiro said he sees Sidewalk Infrastructure Partners’ ability to provide capital for road infrastructure as making it “a good partner to the public sector, as there are concerns about the recession and the budget.

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

Contact: afrank@crain.com; (313) 446-0416; @annalise_frank Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 21

SURVEY

From Page 3

The 381 responding companies from Detroit to Grand Rapids have workforces that range from 100 to 10,000 employees. The average workforce is 1,023 with the median at 300. About 20 percent of companies have unions and 20 percent are auto suppliers. Marsh and McLennan’s group benefits survey usually is released in late May. But the firm decided to delay the results until it could conduct a survey on what employers are doing to react to the COVID-19 pandemic. In May, a COVID-19 supplemental survey, based on 130 respondents, found few companies have instituted on-site testing programs for COVID-19 or hired outside companies to manage their workforce screening programs. “Employers are sensitive to the fragile environment. The impact of the pandemic on health benefit plan design and strategies varies widely among employers as they make plan

Clark

Webster

renewal decisions,” said Rebecca McLaughlan, president and CEO of MMA’s employee health benefits practice, in a statement. Webster said some employers, including nursing homes and fitness centers, have been hit hard by COVID-19. How hard companies have been hit depends on their location and type of company. “The question is how long can (some companies) provide benefits,” Webster said. “Manufacturing companies have some people working at home and some go into plants. They seem to be running well as far as working.” On the whole, Kim Clark, senior vice president of health and benefits and

survey co-lead, said very few companies have reported coronavirus outbreaks within their workforces. “A large auto supplier was back 100 percent. They had cases, but not from the plant. People brought it in,” Clark said. “There has been a minimal amount of COVID that has hit the employer market. When we talk with carriers, the (populations) hit the most are (people covered by) Medicaid and Medicare.” While the survey found that more employers (54 percent vs. 28 percent) considered increasing deductibles and co-pays at a greater rate because of the COVID-19 pandemic earlier this year, Webster said most employers have decided to scale back further cost shifting to take pressure off their workforces. For 2021, Webster said many companies have shifted benefit strategies from competing for talent to preparing to address what many believe will be rising health care costs as people see their doctors for delayed or postponed elective procedures. Companies also want to refocus employee financial and social well-being programs based

on what is hoped to be a post-COVID environment. “The majority of employers surveyed don’t anticipate making significant changes for 2021 as a result of COVID-19, but indicate they do plan to implement strategic cost control strategies such as increasing deductibles and co-pays,” Webster said. Nationally, employer benefit costs are projected to rise 5 percent after plan changes this year, up from 3.4 percent in 2019, according to the Mercer National Survey of Employer-Sponsored Health Plans. Those averages are still much lower than the 6.9 percent increase in 2010, the year the Affordable Care Act was enacted. In Michigan, Marsh and McLennan’s survey found that midsized employers health benefit costs are projected to rise 3 percent this year after plan changes compared with 3.2 percent in 2019. Those numbers are lower than the 5 percent increases for 2017 and 2018, Marsh and McLennan said. Webster said it is hard to predict cost increases for 2021, but she believes it will range between 3 percent and 5

MEALS

School programs Once school starts, schools will be able to provide meals only to children enrolled in their district, said Diane Golzynski, director of health and nutrition for the Michigan Department of Education. Parents won’t be able to pick up extra food for younger siblings at home as they have through programs provided by nonprofit food providers during the pandemic. And the school-provided meals won’t be available on weekends or days

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

Problems, solutions?

From Page 1

Waves of students and families, senior citizens and contract, service industry and small business employees now facing food insecurity have been coming to food pickup sites since spring, providers said. Lines at those sites are expected to grow even more with the expiration or reduction of federal assistance that has enabled many food-insecure families and individuals to fill gaps during the pandemic. That includes expanded unemployment and an additional $300 million in Supplemental Nutrition Assistance Program (SNAP) benefits in Michigan alone. On the supply side, the amount of food provided by the U.S. Department of Agriculture to states is set to drop back down to prepandemic and pre-trade-mitigation levels by year’s end, drastically reducing the amount of free food available for emergency assistance. “For us, what that adds up to is the potential to be overrun with families that just don’t know what to do,” said Gleaners President and CEO Gerry Brisson. He and other emergency food providers are assuming a minimum increase of 15 percent to start in demand for food assistance, something that could add up to over 1 million pounds of food per month just for Gleaners The increased demand from all fronts is expected to present financial and operational challenges, food providers said. “We are at a point now where if no action is taken, there is definitely trouble coming by October,” Brisson said. “There’s going to be too many people showing up at food distributions and not enough food.”

percent in Michigan. Other survey findings include the following: `Organizations continue to proactively manage their prescription drug programs with 45 percent of Michigan employers now incorporating 4th or 5th copay tiers, up from 43 percent last year. `Consumer-driven health plans continue to grow with more than half (58 percent) of Michigan employers surveyed offering a CDHP plan, up from 55 percent in 2019. `Michigan employers offer telemedicine services at a greater rate than nationally (86 percent versus 75 percent). More are focusing on digital technology solutions for teletherapy and mental health. `Going beyond physical and mental wellbeing, organizations are increasingly focused on financial well-being (78 percent in 2020 versus 71 percent in 2019) and social well-being (48 percent versus 43 percent).

People pick up food at Gleaners’ mobile food site in Warren. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

schools are closed for holidays. Statewide, in-school meal programs provided an average of 1.15 million meals each day in Michigan in fiscal 2019, with about 750,000 students receiving a free or reduced-cost lunch and about 400,000 getting breakfast at school, Golzynski said. The emergency food network “is, in many ways, on the outside of the solution set because the responsibility and onus will be put onto the school systems when it comes to school meal programs,” said Kirk Mayes, president and CEO of Oak Park-based food rescue Forgotten Harvest. The logistics of how to get meals to all students enrolled in the meal plan is happening on a school-by-school basis. The state’s largest district, Detroit Public Schools Community District, plans to provide in-school meals for students on campus and grab and go meals for online students when school resumes Sept. 8, said Chrystal Wilson, assistant superintendent of communications. About 65 percent of students in the district qualify for free or reduced lunch. During the spring, the district distributed more than 1 million meals, she said, and it provided grab and go meals over the summer. Warren Consolidated Schools is looking at evening and weekend

22 | CRAIN’S DETROIT BUSINESS | AUGUST 24, 2020

pickup of meals for families concerned about getting there during the work day, Golzynski said. Other districts are considering sending food home with students or on a bus. There’s no requirement for a daily pickup from the schools, so several days worth of food could be picked up or dropped off at a time. Schools will most likely send home prepared meals or meal kits rather than groceries, but they could opt to send home a gallon of milk rather than individual cartons, she said. But she and emergency food providers expressed concerns that some families will face hurdles in accessing the meals provided by schools, given lack of transportation, work schedules and other factors. The return to the school-delivered meal programs will take emergency food providers out of the distribution and federal reimbursement equation. But providers said families will still turn to them to fill the gaps. Gleaners, Forgotten Harvest and Food Gatherers stepped up distribution in the spring as need rose and created drive-up meal box pickup sites closer to families to help get food to students who counted on the free and reduced-costs meals at school. On average, Brisson said, Gleaners is providing food for 5,192 kids per

day through the current program. The question for food banks and rescues is how people who aren’t able to take advantage of grab and go meals at school are going to get boxes of food they can go home and prepare, said Phillip Knight, executive director of the Food Bank Council of Michigan. Before COVID, Michigan’s seven food banks/rescues distributed an average 2.6 million pounds of food every week, he said. During the pandemic, the network has been providing an average of 4.5 million pounds of food. A projected, 15-percent increase in demand would translate to demand for another 675,000 pounds of food in Michigan every week. “Where’s that food going to come from? We’re probably going to have to buy it. That’s going to take money.”

Demand rises, aid expires The shift in the federally funded food program for students comes as expanded unemployment and SNAP benefits providing food assistance as part of COVID-19 relief expire and turbulent economic conditions continue. The Food Bank Council of Michigan is projecting increased demand for food will rise again over the next few months and last through June 2022.

COVID-relief food programs have significantly boosted the amount of free food coming to emergency providers from the USDA to address growing food insecurity. But by year’s end, those food supplies will drop back to prepandemic levels, just as demand for emergency food assistance is once again rising. Gleaners is currently getting an average of 3.2 million pounds of food from the USDA per month, Brisson said, or more than triple the amount it was getting before COVID-19 with U.S. Department of Agriculture Farm Service Agency trade mitigation subsidies. That accounts for about half of the 6 million to 7 million pounds of food it distributed each month between April and July. He expects the amount of food Gleaners is getting from the USDA to drop back to 300,000 pounds per month starting Jan. 1 with the elimination of both the trade mitigation and COVID-19 relief subsidies. Gleaners is operating on a $22 million cash budget but is projecting it will spend about $29 million this year, he said. “In September I think we’ll be OK. We have some excess cash and people are donating,” Brisson said. “By October, if nothing changes, I think we start to sweat a little.” Now that some of the temporary resources put in places to help meet rising demand for food assistance are going to be taken away, “our position as a resource for community ... is being weakened,” Mayes said. “But at the end of the day, it’s our priority to make sure the kids, the senior and the vulnerable populations in our community have food...we’ll do everything we can to figure it out.” Michigan legislators designated $9 million to the Food Bank Council of Michigan for emergency food, said Knight, who is chairing the Food Security Council created in early August by Gov. Gretchen Whitmer to look at the causes of food insecurity and solutions for addressing them. With the new state funding, “we’re trying to place the orders for the food ... but have it delivered to us in January,” Knight said. “That might be a Band-Aid on a bullet wound, but we know we have that. It’s going to be a huge help.” Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

THE CONVERSATION

Jack Sobel on WSU’s med school, his biggest disappointment and what’s next WAYNE STATE UNIVERSITY SCHOOL OF MEDICINE: After serving five years as dean during one of the most turbulent times in the 152-year history of WSU’s medical school, infectious disease specialist Jack Sobel begins a new chapter in his 55-year career that began in Johannesburg, South Africa, where he met his wife of 55 years, Audrey. Sobel, who stepped down to resume patient care and research duties, had been dean since summer 2015, when WSU President M. Roy Wilson, M.D., needed him to turn around the medical school. The university’s faculty practice plan faced multimillion dollar financial losses, the medical school was on accreditation probation and more than a decade of underfunding by longtime partner Detroit Medical Center threatened the school’s reputation and left its future in doubt. | BY JAY GREENE ` What are your thoughts as you go back to private practice and research? My thoughts are everywhere. What am I going to do for the rest of my life? I have no desire to retire. I am physically well. But at 78, you shouldn’t have a five-year plan. Was I going to become an infectious disease specialist again? I always set the bar very high. Anybody who thinks a clinician can drop off for six years and come back ... you lose your touch. I agonized about it. I am a world expert in genital infections in women. I will continue to see patients two days a week, conduct laboratory research, write papers, teach, work with residents and fellows. I look forward to being a clinician and teacher again. ` You became dean in June 2015 when the medical school was facing many problems with finances, accreditation and leadership. What were your top accomplishments? First, I injected integrity, honesty and transparency at the top and the faculty sensed confidence in our direction. I had some very competent leadership in the deans. Two, we were able to develop a whole new curriculum. Normally it takes five to six years, but I hired competent people, and we came out of probation with the Liaison Committee for Medical Education. Three, we brought University Physician Group out of bankruptcy. The policy decision made eight years ago to take UPG out of Detroit and serve the northern suburbs where the paying patients are did not fit our mission. I reversed that. Four, while I was unable to reverse the negative impact of DMC because of its owner (for profit Tenet Healthcare), I hired a leadership team to stand up to DMC. Five, we brought financial stability to the med school. Six, we’ve hired 15 new scientists and faculty.

school will never thrive without a new partnership. We had the framework of a wonderful partnership that was nearing completion when it was all torpedoed by a faction of the board of governors who had no understanding of what a medical school was, never consulted or understood our needs and allowed their personal animosity toward President Wilson to cloud their behavior and judgment. They were blinded by personality issues. That dysfunction was enough to undermine the new energy that existed at Ford and destroyed our chance at solidifying our future and improving health for the people of Detroit. It was a real tragedy. I will take this failure to my grave. ` What do you think of your successor, Mark Schweitzer? I have enormous confidence in Mark. He is sincere, savvy, tough and has grit. He works extremely hard and is great at multitasking. He’s 20 years younger than I and belongs to a different generation. One early victory is he has found alternate sites to train our medical students in Southeast Michigan. He also is working to finalize a new compensation plan for clinical faculty. It is a system patched together the past three or four decades. Jack Sobel, M.D.

` Why did the medical school flail around the past decade? Stabilizing the medical school is not enough. Being stable means just not going down in ranking. We need to thrive, but in order to thrive you need resources. Wayne State suffered bitterly with funding reductions the last few years from the state and DMC. We subsidized DMC and propped them up as they cut resources to us.

` What was your biggest disappointment as dean? For years, the previous leaders at Henry Ford looked down on Wayne State and DMC. With new leadership at Ford, and Wright Lassiter (III) as CEO, there emerged a new opportunity for first time in decades to strike a partnership that would be mutually beneficial and greatly enhance care for the people of Detroit. The medical

` Final thought about the medical school? DMC did well with handling COVID. But it was the ER clinical group and the WSU residents and faculty who ran all the ICUs. They were loyal to the citizens of Detroit. Now, the future of Wayne State is tied completely with the future of DMC and its ability to provide the resources we need. UPG is going to be strong in the future, but everything depends on DMC. Will it be sold and to whom? Do we still have an opportunity to see DMC turn back into a top academic medical center? Only time will tell.

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

Joe Dumars Fieldhouse in Shelby Township closes for good

Siegel

Joe Dumars Fieldhouse in Shelby Township

The Shelby Township fieldhouse opened in 1994. Siegel estimated the venue at 45300 Mound Road has hosted more than 7,500 basketball teams, 9,000 roller hockey teams, 3,000 volleyball teams and 10,000 parties. Around a dozen managers and more than 100 temporary workers

were affected by the closure. Siegel, whose day job is CEO of the Jewish Community Center of Metropolitan Detroit, opened the Detroit location at the former Michigan State Fairgrounds in 2005. The fieldhouse’s namesake, the shooting guard who spent his entire NBA career in Detroit,

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RUMBLINGS

Joe Dumars Fieldhouse in Shelby Township is closed for good and hosting a farewell sale of everything from sports memorabilia to furniture made of original Pontiac Silverdome flooring. After 25 years, the 100,000-squarefoot hub for basketball and roller hockey will not reopen, owner Brian Siegel told Crain’s. It closed in midMarch when Gov. Gretchen Whitmer put the state into lockdown. “Our Shelby facility is a chapter we’re sad to close,” Siegel said. The open house sale is scheduled for 1-5 p.m. next Saturday and Sunday.On offer will be collectible jerseys and photographs, sports equipment and other items.

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still has a small ownership stake, as does Scott Kaufman, former CEO of the Jewish Federation of Metropolitan Detroit. Since late March, the Detroit fieldhouse has served as the city’s main coronavirus testing site. The property is owned by the state, which entered into an undisclosed financial agreement with Siegel regarding its use for testing. Once the health crisis subsides, the Detroit location will reopen, Siegel said.

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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.

AUGUST 24, 2020 | CRAIN’S DETROIT BUSINESS | 23