Crain's Detroit Business for Sept. 21, 2020

THE CONVERSATION

Actor, singer Deborah Joy Winans

Lansing: Much more than government town PAGES 8-13

PAGE 22

CRAINSDETROIT.COM I SEPTEMBER 21, 2020

MACK AVENUE REBIRTH

How FCA and an army of contractors raced against time to put together the 1st new auto assembly plant in Detroit in three decades

REVVED UP AND READY TO GO

BY CHAD LIVENGOOD

Inside

When Fiat Chrysler Automobiles’ engineers started evaluating in 2018 whether two engine plants on Detroit’s east side could be converted into a vehicle assembly plant, they knew the structural configuration of the ceiling would be an obstacle.

Powertrain plants are built for ground-level conveyor assembly of engines.

Full vehicle assembly plants re-

 A list of the main contractors involved in building the assembly and paint components of the new plant. Page 20

quire different load-bearing ceiling structures to hold up the weight of a two-ton sport utility vehicle coming down the line.

“We felt it was doable,” said Ben Monacelli, senior manager for building construction and manufacturing at FCA. “But we didn’t realize how

Remote work could bring revenue hit

Detroit anticipates $160 million city income tax shortfall The city of Detroit stands to lose $160 million in income taxes as many workers shift to telecommuting amid

the coronavirus pandemic.

People with jobs at businesses in Detroit who live outside the city do not have to pay city income taxes for the hours they work elsewhere, per

NEWSPAPER

VOL. 36, NO. 38 l COPYRIGHT 2020 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

PEPLIN FOR CRAIN’S DETROIT BUSINESS

Left: Equipment was installed as the plant was built. | FCA

See FCA PLANT on Page 20

DETROIT

BY ANNALISE FRANK

Above: An aerial view of FCA’s new Mack Avenue plant as it nears completion. | LARRY

extensive it was going to be.”

To transform the old Mack I engine plant into an assembly plant, iron-working construction contractors ended up having to cut 112 steel trusses in the ceiling and add 553 reinforcements to the building’s trusses to support the weight of next-generation Jeep Grand Cherokees set to roll off the assembly line in the first quarter of next year.

the state of Michigan. And that’s making things messy.

With many people cooped up in home offices or balancing laptops while lounging on the couch during the pandemic, income tax policies are under scrutiny. And cities that have relied heavily on that money — like Detroit — are likely to end up with less revenue.

Michigan’s largest city estimates a $410 million budget shortfall from the pandemic — including $160 million in income taxes, the city’s biggest source of revenue by far. Part of that anticipated income tax loss stems from the recent rise in work from home.

See SHORTFALL on Page 19

DETROIT HOMECOMING VIRTUALLY HAPPENING THIS WEEK This year's Detroit Homecoming VII has gone mostly virtual and is open to all Crain's readers. The event, produced by Crain’s, seeks to engage successful Detroit “expats” with their hometown and spur investment in the city: When: Monday-Friday, Sept. 21-25 To attend: Full schedule and registration at detroithomecoming.com Program highlights: The Future of Cities, featuring Dan Doctoroff, Sidewalk Labs; Jamie Hodari, Industrious; Darryl Robinson, CommonSpirit Health Social Media & Our Future, former Twitter CEO Dick Costolo; Sam Gill, Knight Foundation Corporate Response

to Racial Equity/Racial Justice Imperative, featuring Byron Allen, founder/chairman/CEO, Allen Media Group/ Entertainment Studios; Roz Brewer, COO, Starbucks; Robin Washington, board member, Alphabet and Salesforce; Darren Walker, Ford Foundation

Byron Allen

What This Pandemic Teaches Us, virologist Nathan Wolfe and university presidents Samuel Stanley, Mark Schlissel and M. Roy Wilson.

NEED TO KNOW

CRIME AND COURTS

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` LINEAGE RAISES $1.6B TO CONTINUE SHOPPING SPREE THE NEWS: Novi-based cold-storage specialist Lineage Logistics raised $1.6 billion from investors including Oxford Properties Group, private equity firm BentallGreenOak and Dan Sundheim’s D1 Capital Partners as the pandemic pressures the food supply chain. The closely held real estate investment trust plans to use the equity to expand, in part by pursuing acquisitions, Co-Chairman Adam Forste said.

WHY IT MATTERS: Lineage has grown into the largest company in its industry through a breakneck series of acquisitions over the past few years. The latest fundraising values Lineage at $15.5 billion including debt, Bloomberg reported, citing people with knowledge of the matter. If it were public, it would be the third-largest U.S. industrial REIT by enterprise value, behind warehouse owners Prologis Inc. and Duke Realty Corp.

` COLLEGE TOWNS TAKE PRECAUTIONS ON COVID-19 THE NEWS: Health authorities in Ingham and Ottawa counties imposed coronavirus-related restrictions on college students. More than 30 off-campus residences, mostly fraternities and sororities, were asked to quarantine near Michigan State University, and students at Grand Valley

State University were asked to shelter in place after more than 600 cases of the virus in that community.

conferences scheduled to start earlier. It would have been frozen out otherwise.

WHY IT MATTERS: How much the virus might spread at colleges was a big question mark coming into the fall, and colleges have approached virus safety in different ways.

` HOME SALES PICK UP, PRICES KEEP RISING

` BIG TEN DECIDES TO START FOOTBALL IN OCTOBER THE NEWS: Less than five weeks after pushing football and other fall sports to spring in the name of player safety during the pandemic, the Big Ten conference changed course Wednesday and said it plans to begin its season the weekend of Oct. 23-24. Each team will play eight games in eight weeks and the conference championship game will take place Dec. 19 — if all goes well.

WHY IT MATTERS: The schedule would allow the conference to still compete for the national championship with

THE NEWS: The metro Detroit home and condominium sales market continued its rebound last month from lows experienced during the COVID-19 pandemic. According to Farmington Hills-based Realcomp Ltd. II, home sales in the multiple listing service rose 4.6 percent yearover-year in August from 9,262 to 9,692 and pending sales — an indicator of future market performance — rose 18.3 percent from 8,575 to 10,146.

WHY IT MATTERS: The industry lost much of the spring selling season to COVID-19 lockdowns. Low inventories of homes for sale have crimped sales but led to continuing price increases.

` STOCKX CO-FOUNDER JOSH LUBER LEAVES COMPANY THE NEWS: Josh Luber, the co-founder of StockX, has formally left the Detroit-based company that operates as a “stock market of things,” with a focus on sneakers and various luxury goods. Luber stepped away from the role of CEO last summer, but had remained as a company frontman. He left to “pursue interests outside of the

Jeweler DuMouchelle pleads guilty to wire fraud ` A prominent Birmingham jeweler has pleaded guilty to one count of wire fraud in the U.S. District Court for Eastern Michigan.

Joseph Gregory DuMouchelle, 58, faces federal prison time for his role in the fraud, which involved millions of dollars in rare diamonds and investors across the country.

Sentencing is scheduled for Jan. 13.

Sentencing recommendations are for 121 to 151 months (10 years, one month to 12 years, seven months) in prison for fraud more than $25 million, said Gina Balaya, spokesperson for the U.S. Depart- Joseph DuMouchelle ment of Justice.

Steven D’Antuono, special agent in charge of the FBI in Michigan, said in a press release that DuMouchelle — who owns Joseph DuMouchelle Fine & Estate Jewellers LLC at 251 E. Merrill St. in downtown Birmingham — committed the fraud “to help maintain a lifestyle he could no longer afford.”

DuMouchelle is the son of the late auctioneer-appraiser Lawrence DuMouchelle, owner of the DuMouchelle Art Galleries in Detroit.

company,” StockX said in a statement

` CORRECTIONS

WHY IT MATTERS: Luber, 42, helped build the Dan Gilbert-backed company into “unicorn” status: a valuation of more than $1 billion. StockX said earlier this year that it had surpassed $2.5 billion in merchandise sold on its platform since launching in 2015.

` A 40 Under 40 profile for Alex Calderone in the Sept. 7 issue gave an incorrect age for him. He is 39. ` A 40 Under 40 profile of Michael Ambrose gave an incorrect line of business for his father. His company sold medical supplies.

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HEALTH CARE

Minority recruiting for COVID-19 vaccine testing faces hurdles

BY JAY GREENE

In the race for a COVID-19 vaccine, researchers are recruiting in metro Detroit in hopes of addressing a problem that affects much medical research.

One of the criticisms of the fasttracked COVID-19 vaccine trials is that research tests usually have low participation among people of color, a fact that disturbs doctors and civic leaders and could lead to a greater mistrust about the effectiveness of the coming coronavirus vaccine.

Minority groups, especially Black people, have long distrusted the health care system because of a history of un-

“IF YOU ARE LEAVING NO STONE UNTURNED, I WOULD THINK AN ORGANIZATION LIKE OURS MIGHT HAVE BEEN APPROACHED, BUT WE WEREN’T.” — N. Charles Anderson, CEO of the Urban League of Detroit and Southeast Michigan and a past director on the Henry Ford board

ethical human research, said Herman Sullivan, M.D., a board member and former president of the Grand Rapids African American Health Institute.

Sullivan said that distrust goes back to the infamous 40-year Tuskegee syphilis study, which ended in 1972, where treatment for syphilis was in-

tentionally withheld from African American men and their families.

“It is an outgrowth from the institution of slavery,” said Sullivan, a neurologist at Mercy Health in Grand Rapids.

“Those scars and the remembrance is still there. It fosters distrust to be involved in clinical trials because it feels

to many like experimentation.”

Minority representation in coronavirus trials, which are trying to push the limit on speed in scientific research, has been low, while incidence of the disease in minority communities, including majority-Black Detroit, has been high.

Sullivan pointed out that a Phase 2 trial for the COVID-19 antiviral remdesivir by Gilead Sciences had only 11 percent minority participation, when minorities are infected by coronavirus by about 48 percent, depending on the state or county, according to the Centers for Disease Control and Prevention.

Jay Jagannathan, a neurosurgeon in

Detroit, said vaccine research requires a representative cross section of racial groups to rule out dangerous side effects.

“You don’t want the vaccine to cause more problems than the disease,” Jagannathan said. “It’s good the University of Michigan and Henry Ford (Health System) are recruiting.

They will have a good cross section of the communities.”

One of the reasons Moderna selected Henry Ford Health System as a vaccine test site was its historic relationship with the Black community in Detroit.

See VACCINE on Page 17

FINANCE

REAL ESTATE

Michigan Women Forward to become CDFI

Plans small-business lending initiative

BY NICK MANES

DAN GILBERT’S SAFEST BET

The former Sakthi property becomes by far Dan Gilbert’s biggest foray into industrial real estate | COSTAR GROUP

Sakthi deal moves real estate mogul into industrial space

BY KIRK PINHO

Dan Gilbert made hundreds of millions of dollars’ worth of risky bets on downtown Detroit.

Now, he has pulled off his most unexpected — but possibly his safest — real estate maneuver.

By purchasing the 37-acre former Sakthi Automotive Group USA Inc. property in southwest Detroit out of receivership, the billionaire mortgage mogul has staked his claim in an area farflung from the downtown core where his vast real estate empire is concentrated, but also in a property class widely considered to be among the strongest in the region: Industrial space.

With the COVID-19 pandemic ongoing and no end in sight, retail and hospitality space — a pair of Gilbert’s core property types — have been battered as people

“I WAS ON A CONFERENCE CALL LAST WEEK AND WE TALKED ABOUT WHAT SCARES US NEXT.” Jim Shevlin, president and COO, CWCapital

turned increasingly to online shopping and travelers and convention-goers stayed within their own four walls, either by government mandate or by choice.

Office space — Gilbert’s largest asset class (see box) — remains a looming question mark, as landlords and brokers sit on edge trying to grasp the true fallout as many people remain working from home, leaving some offices virtually empty.

“I was on a conference call last week and we talked about what scares us next,” Jim Shevlin, presi-

dent and COO of Bethesda, Md.based special servicer CWCapital, whose special servicing portfolio has quintupled to $5 billion or so since the start of the pandemic, said in an interview with Crain’s.

“We have been through retail and hospitality, and office is next. You are not going to see the blow up until the tenants roll. Do they renew, leave or reduce?”

Sam Hamburger, vice president of acquisitions for Gilbert’s Bedrock LLC real estate firm, said the company “remains confident in all those asset classes” and that exploring the need for industrial space came over a year ago when it encountered difficulties finding Waymo space in the city (ultimately the company ended up at American Axle & Manufacturing’s Holden Avenue campus).

See GILBERT on Page 18

With the COVID-19 pandemic ongoing and no end in sight, retail and hospitality space — a pair of Gilbert’s core property types — have been battered. | LARRY PEPLIN FOR CRAIN’S

Amid an increased push to spur business growth among Detroit women and communities of color, those entrepreneurs could soon find themselves with another avenue for startup capital.

Michigan Women Forward, a Detroit-based nonprofit women’s advocacy organization, has long played a role in spurring business creation with various lending pro- Cassin grams. Now it has begun the process of scaling up those efforts and becoming a Community Development Finance Institution, or CDFI. The mission-focused lending organizations are typically focused on low-to-moderate income areas and certified by the U.S. Department of Treasury.

In doing so, the organization hopes to over time have a fund of $10 million to provide small loans of less than $50,000 each to a wide variety of needed businesses in Detroit neighborhoods.

MWF’s initial five-year goal — through 2024 — is to fund 1,268 new women-owned businesses, with at least 65 percent of those loans to women of color.

Michigan Women Forward President and CEO Carolyn Cassin, 68, told Crain’s that the nonprofit organization has been growing toward expanding its lending capabilities for years and had a small business relief fund in place this past spring as the COVID-19 pandemic wreaked economic turmoil.

By getting designated as a CDFI, Michigan Women Forward will be able to expand its lending capabilities, tapping funds from community foundations and the federal CDFI Fund.

See CDFI on Page 18 SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE INSIDER

A chance to buy a Macomb County event venue during a global pandemic has arrived

Solutions for every business and budget are here for you.

If you want to buy an across the state except for two regions Up event center during a pan- North.

“It’s a 15,000-square-foot building and 10 demic in which many remain wary of gatherings people total are allowed in it at this time. That and large indoor ones are is hard to understand. But it is what it is,” prohibited, now is your Kosch said. “Ask anybody in the industry, and what are you down year to date, 80 percent chance.

The Bravado Event Ven- down? When you look at event venues in this ue in Clinton Township climate in this region, in this state, May Kirk heads to online auction through October is 75 percent of the year.”

PINHO I was curious how you deal with marketing Sept. 28-30 with a starting a property for sale when a substantial portion bid of $400,000.

Damian Smoter, vice president on Bethes- of its revenue stream has been impacted by da, Md.-based special servicer CWCapital’s the pandemic.

“You’re getting in this business for such a RealINSIGHT Marketplace team working on the auction, said the owner had been discuss- lower cost to operate than anyone else would ing a sale prior to the COVID-19 outbreak in get in,” said Jeffrey Cavazos, vice president of health care brokerage serMichigan.

“We started the conversavices for Southfield-based “WE DECIDED THAT Farbman Group, which is tion in February,” Smoter also working on the sale. said.

BY THE END OF “If you were to open up Owner Gordie Kosch, your own place, or remodel a founder and CEO of Kosch SEPTEMBER, THINGS place and build it out, you’re Dining Solutions, said the HAD SETTLED TO A going to be at least double the event venue at 36217 S. Gracost,” he said. “It’s an opportiot Ave. takes a big chunk of POINT WHERE WE his time and he’s looking to FELT LIKE WE COULD tunity to get into this type of “lessen the load.” business, despite it being “I’m 62 and now have three GET GOOD ACTIVITY down right now. I don’t think grandchildren with a fourth AND WE WEREN’T COVID is going to be around on the way. I’ve been in this forever or, if it is, we’ll learn to business my whole life. I WRONG.” deal with it.” started 40 years ago and a — Damian Smoter, vice Smoter said: “We are getyear, nine months ago, said I president, CWCapital’s ting interest from all types of think I’m ready to lessen RealINSIGHT Marketplace team users/investors, not only some of the load,” he said. those in the catering/restauSmoter said the auction had been delayed rant space. Some prospective bidders will because of the onset of COVID-19. keep a similar concept, and some are thinking “But then we decided that by the end of outside of the box with future uses. All are September, things had settled to a point drawn by the prominent location, high qualiwhere we felt like we could get good activity ty construction and condition, and iconic hisand we weren’t wrong,” Smoter said. tory which make it a very desirable site.”

Under executive orders by Gov. Gretchen Cavazos also said there is the potential for Whitmer, indoor gatherings of more than 10 the building to be converted to medical uses. people are banned, as are outdoor gatherings, The building is about 14,400 square feet

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REAL ESTATE

Former Free Press building apartments now leasing Project is part of $113 million redevelopment

BY KIRK PINHO

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

4 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

Leasing for 105 new apartments in the former Detroit Free Press building has begun, marking the next phase of the historic building’s life after being vacant for more than two decades.

Dan Gilbert’s redevelopment of the nearly century-old building cost about $113 million, said Sam West, senior communications associate for his Detroit-based Bedrock LLC real estate company, in an email.

That includes $90 million for construction, up from $78.9 million in July 2018, $15 million in soft costs like architecture and engineering, and $8.425 million for the September 2016 purchase of the building, which has been renamed The Press/321.

The $90 million construction cost is up 29.1 percent from the original price tag of $67.9 million. The increase from $78.9 million to $90 million is the result of beefing up residential amenities like installing a rooftop pool as well as the AutoParkIt parking garage, West said.

Studio apartments, which range from 419 to 530 square feet, start at $995 per month.

One-bedroom units start at $1,300, with square footages between 499 and 736.

Two-bedroom units, which range from 1,017 to 1,165 square feet, start at $2,720 and three-bedroom units, which are 1,234 square feet, start at $3,405 per month, Bedrock said.

Move-ins begin in the middle of next month for the Albert Kahn-designed building at 321 W. Lafayette Blvd.

The project also includes about 8,000 square feet of retail and 55,000 square feet of office space.

The Free Press in 1998 moved into what became known as the Detroit Media Partnership building at 615 W. Lafayette Blvd., a property now owned by Gilbert and occupied by what is now his Rocket Companies Inc. mortgage company. The Free Press, The Detroit News and their joint business operations were housed there until they moved into the Gilbert-owned Federal Reserve Building at 160 W. Fort St. in 2014.

Gilbert, through Pyramid Development Co. LLC, bought the building from Shanghai-based DDI Group for $8.425 million in September 2016. DDI paid $4.2 million for it in an October 2013 online auction. Previ-

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The Bravado Event Venue in Clinton Township is heading to an online auction Sept. 28-30. | COSTAR GROUP INC.

and sits on about 1.9 acres, according to the listing. There have been renovations of about $2 million in 2013, it says. The property was built in 1977.

Kosch also said his catering company has work with Walsh College in Troy and Jimmy John’s Field in Utica, but the status of those are unknown given the pandemic.

Another noteworthy building The roughly 185-foot, 14-story Oakland Town Center building at 28 N. Saginaw St. in downtown Pontiac — the city’s tallest — has hit the market in recent weeks for $2.95 million, or $24.95 per square foot.

It was last sold in 2012 by a court-appointed receiver for $1.25 million ($10.58 per square foot) to an affiliate of Pontiac-based Todd Enterprises. (Fun tidbit: Viktor Gjonaj was one of the brokers on that deal when he was with Southfield-based Signature Associates Inc.)

The Southfield office of Marcus & Millichap Real Estate Investment Services Inc. has the listing this time around.

Gordon Navarre, one of the brokers marketing the property, said it had been on the market in January with a buyer under contract but that fell through. He declined to disclose who that was. It was relisted about six weeks ago.

“No offers yet but anticipate a few soon,” said Navarre, who is first vice president of investments for Marcus & Millichap.

It is being marketed as a redevelopment play for its 118,000 or so square feet.

Marketing materials say a redevelopment could include 16,500 square feet of commercial space and 132 apartments, with 120 one-bedroom units at 600 square feet and 12 two-bedroom units with 800 square feet.

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

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The former Detroit Free Press building at 321 W. Lafayette Blvd. is being turned into 105 apartments, 55,000 square feet of office space and 8,000 square feet of retail space in a redevelopment with a total price tag of $113 million. | COURTESY OF BEDROCK LLC

ously it was owned by Emre Urali, through Free Press Holdings LLC, who bought it in December 2008 from an entity tied to Southfield-based Farbman Group for $1.65 million.

Gilbert’s net worth is $48.1 billion, according to Forbes. He has been redeveloping and developing real estate in Detroit since what was then Quicken Loans Inc. moved to the

city’s central business district from the suburbs a decade ago.

New York-based Turner Construction Co. was the contractor on the project, while Detroit-based Kraemer Design Group was the architect.

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Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 5

COMMENTARY

DANIEL SAAD

Lost academics: Parents, kids tested by virtual school

EDITORIAL

A way to move the needle: Deposits in Black-owned banks In recent months, we’ve seen countless corporate moves aimed at fixing the intractable racial inequities in the U.S. Companies have held town hall sessions for employees, created diversity and inclusion committees and hired C-suite officers focused on diversity.

But one tangible move that companies can make doesn’t even have to cost anything — it’s as simple as money in the bank.

In recent weeks, Detroit-based First Independence Bank — the state’s largest Blackowned bank — has received attention and financial support from far bigger bank competitors.

It’s received an investment from a SIGNIFICANT banking goliath, Bank DEPOSITS BY of America Inc., which took a 5 perJUST A FEW cent stake in the COMPANIES bank. But another WOULD MAKE A move, by Comerica Inc., is one that can MEANINGFUL be replicated by any company.

DIFFERENCE. Comerica is making a $10 million move to inject capital into Black-owned banks, including $2.5 million to First Independence.

What’s that capital? It’s essentially a deposit. And deposits are what allows banks to lend money out — to consumers, and to businesses. That suggests a path for other companies, who have to keep their money somewhere, to make a difference in Black communities.

First Independence is not a big bank. It’s

just outside the 50 largest in the state, according to Crain’s data. Significant deposits by just a few companies would make a meaningful difference in its ability to lend and help capital flow to the communities where it does business.

Banks typically loan out 80 percent to 90 percent of their deposits. If 10 large companies each deposited $10 million, that’s $80 million to $90 million in loans that a bank like First Independence could make that it couldn’t before.

Black-owned banks write more mortgages for Black homeowners, provide a larger share of support for Black small businesses. The more money that flows, the greater the opportunities for building wealth among African Americans.

Moving the needle on racial injustice has become an imperative for corporate America. Where companies stash their cash does make a difference.

I started Monday with a rigorous game of hide-and-seek — the best one Twin A had ever played. I found him hiding in the laundry basket under a blanket. He didn’t give away his hiding spot with laughter this time, because he didn’t want to be found.

Twin A was avoiding me and the new responsibility of virtual junior kindergarten. After some complaining — “It’s so boring!” and “I don’t like school!” — he reluctantly sat down for his first daily class at 8:15 a.m. Then another at 8:45 a.m. and 9:15 a.m. and 10:10 a.m. and 11:45 a.m. and then a music class at 2:45 p.m.

My wife and I schedule our own work meetings around this new, and often fluid, schedule as best we can. Inevitably one parent is handling this solo, a roving pit crew sprinting from child to child to toggle mute buttons and offer snacks and hydration as they, too, navigate this new gauntlet.

By the end, someone always breaks down.

My kids, my wife or me.

We, like most working parents during this pandemic, are trying to give our kids the standard of education they would have received previously. But it’s a faux replacement. We’re all just Indiana Jones swiping the Golden Idol from its pedestal and replacing it with a bag of sand. And, like Indy, we’re now running from the booby traps and boulders of a failed plan.

There. I said it. ... Hold on ... “Yes, I’ll be right there.” Sorry, I need to step away to unmute Twin B’s Chromebook.

For working families with young children like mine, virtual education is not working.

This is our family’s first foray into the public school system. They were in a local day care center until the pandemic hit Michigan in March and left all four of us at home. We knew virtual learning in the spring didn’t go well (three-quarters of surveyed teachers said students were less engaged during virtual instruction than in class before the pandemic and that engagement declined over the course of the rest of the year). But my wife and I had high hopes teachers and administrators would

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.

Frustration boils over as virtual learning fails to keep one of the Walsh twins engaged.| TANJA WALSH

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 | SEPTEMBER 21, 2020

Dustin

WALSH

be able to adapt and craft new ways to learn new technologies. We, seemingly, were wrong.

But we keep trying because, frankly, we don’t know what else to do. School is a lifeline to regular life we’re grasping for after nearly six months of pushing our kids outside to play or in front of an educational television show while we work. Luckily, for the past 10 weeks or so, we’ve had the assistance of my in-laws after several months of quarantining and being safe as the coronavirus played out in the spring. But these septuagenarians from a successor state of the former Yugoslavia are not equipped to aid my children in learning. In fact, my 5-year-olds help them with technology.

Let me be clear. My family is privileged to have two working parents and family support.

Erect statues for the real heroes like the single parents and those having to go to the office, grocery store or factory daily for a paycheck and manage this. You have my respect and adoration.

I am complaining and moaning for a reason and it’s not to completely disparage school districts. There is no shining model of remote learning to look toward. Almost every parent in every country who is doing some form of virtual schooling is experiencing the same thing.

South Korea, an absolute technological powerhouse, only earlier this month began investing in digital technologies for schooling after 70 percent of its schools closed. European countries are also far behind in virtual learning. Germany also only recently invested in digital technologies for high school and most of that money hasn’t been used.

The U.S. is actually a leader in this space, even if it doesn’t feel like it. It sort of makes sense as Google, Facebook, Zoom and others have created learning platforms. My kids will use SeeSaw, a virtual dashboard to share and monitor work, when the district can get it up and running. Its rollout has been delayed twice in the first six days of school.

The issue at hand, from my perspective, is that administrators responded to home learning by trying to put the classroom in the home: a structured day built around the traditional school schedule. Maybe this works for older students who can sit idle in front of a laptop or iPad for hours at a time — Roblox anyone? — but it doesn’t translate well to kindergarten-age students.

Obviously, there’s the debate about screen time for young minds, but my wife and I try not to worry about that, mostly because my kids have learned more from watching educational programs like “Octonauts,” “Wild Kratts” and “The Magic School Bus” than I’ve ever taught them. They are practically experts on amphibians.

See VIRTUAL 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.

OTHER VOICES

What AG’s office can — and can’t — do on Beaumont merger

BY DANA NESSEL

Much has been said — and even more has been speculated — about the possibility of Beaumont Health joining forces with nonprofit health care sysDana Nessel is tem Advocate AuMichigan’s attorney general. rora Health. The passion for this issue and the deep loyalty to Beaumont is clear.

What appears to be less clear to those outside my office is the actual role the Department of Attorney General has when it comes to reviewing such a transaction.

In fact, our authority is very clear — but limited. It does not extend to approving the overall transaction between Beaumont and any other organization. That authority and responsibility rests with Beaumont’s board of trustees.

Our role is to ensure that Beau-

mont’s charitable assets continue to ward with any additional information. be utilized in the manner they were As a result, until the Beaumont board designated. That means we are autho- takes action, our function regarding rized to protect the donations, en- this transaction is delayed.

If and when dowments, etc., the Beaumont made to BeauOUR AUTHORITY IS VERY board decides mont to make to move forsure the money is CLEAR — BUT LIMITED. used appropriward in their partnership with Advocate Aurora ately.

Even before that, however, the Health, you can expect that our deBeaumont board must act and submit partment will conduct an extensive to us their proposal for moving for- examination of the terms and paramward — something they have not yet eters of the proposed arrangement.

This process will include a thordone. In fact, while they have reached out to my office to alert us to the pos- ough review that will take many sibility of some kind of organizational months. The review will involve not change, the board has not moved for- only attorneys and auditors from my

office but also independent experts with expansive experience in these types of transactions. Furthermore, we recognize that the surrounding communities are deeply invested in Beaumont’s future.

Accordingly, we plan to set up a public forum to provide an opportunity for impacted community members to voice any concerns or questions. Our review process will also include staff interviews with board members, executives, doctors and nursing staff.

Yes, my office has a role to play if Beaumont decides to continue with their announced path — and we take that role very seriously.

Should the Beaumont board choose to move forward, something they have not done yet, we will be thorough, deliberate and thoughtful as we work to protect Beaumont’s charitable assets. But we will not act prematurely or outside our authority, despite the impassioned calls from some. In the meantime, we continue to prepare our next steps and communicate with stakeholders.

I would like to encourage those who feel the need to submit comments on this matter to email my office directly at AG-Hospital@michigan.gov. I would appreciate the public’s input as we continue through this process.

VIRTUAL

From Page 6

Educators and administrators want to give the children the tools and education they need to learn, but that logic is flawed. Schools, for better or worse, serve in many capacities and one is a place for kids to go while parents work.

They can’t serve that purpose to parents now. So the role they must play is not ensuring students have the tools to succeed, but that parents do.

Online lessons, Zoom meetings and SeeSaw assignments are doing very little to keep my kids engaged. IT support has now fallen to parents. Meanwhile, teachers are struggling as well. They, too, are learning an entirely new lesson plan on the fly. It's real-time archeology, digging up the old bones of education and trying to display them in a way that works in the 21st century. Their patience should be commended. But maybe there’s a new age solution.

Teachers making teachers?

School districts should educate parents. Teachers should be serving as lifelines to overwhelmed parents like us in how to educate our children and allow us to meander through lesson plans at a pace and time that works for this unforgiving ripple in time. My work is forgiving earlier in the week, so spending extra time learning letters or numbers or how to tell time would be an easy task for me. My wife can do nights later in the week when she is free from conference calls and other high-octane auto engineering stuff.

But, as is, monitoring and assisting a six-course daily regimen of story time, show-and-tell and letter learning is not sustainable for working parents. I don’t know how to do this. I don’t know how long we can do this. For the past two weeks, after my wife and I put the twins to bed, we stay up later into the night than we’d like discussing our daily failures — and there are many — and how we can improve the school experience.

Pulling our kids out of school and calling this a gap year is on the table. So is waiting for in-school learning to resume and jumping on that chance.

We don’t know what to do and unlike Indiana Jones, there’s no writers’ room to ensure a happy ending that only celluloid can deliver.

Thumbs up on working for a cool company.

For the fifth time in as many years, Greenleaf Trust has been named a “Cool Place to Work” by Crain’s Detroit Business. The #2 “cool” firm, as a matter of fact. Is it because of our superb benefits package, collegial teamwork, and offices in Michigan’s most dynamic cities?

Or is it, instead, because of our emphasis on continuous personal and professional growth, and a corporate culture that puts our clients’ interests ahead of our own? The all encompassing answer is, ‘Yes!’ To see if a cool career is in your future, visit greenleaftrust.com/careers.

34977 Woodward Avenue, Birmingham, MI 48009 248.530.6200 greenleaftrust.com

SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 7

AVOIDING ERRORS ARUtility’s app helps prevent costly, dangerous excavation mishaps

CRAIN’S MICHIGAN BUSINESS: LANSING

PAGE 10

B

CAPITAL IDEAS

M

Lansing is known as a government town. But the city in the middle of the state is much more than that.

From an iconic retailer of musical instruments with a national reputation, to cutting-edge startups smashing atoms sprung from research at Michigan State University, our capital city and its region have plenty going on outside the halls of governance.

GETTY IMAGES/ISTOCKPHOTO

A view of downtown Lansing.

 Elderly Instruments finds niche in vintage music business. THIS PAGE

 Building parts for smashing atoms — and building atoms.

PAGE 9

 Company’s efforts to produce diamond materials crystallizing. PAGE 10  Science-grade diamond crystals a complex field.

PAGE 11

 First 2 investments made for statewide early-stage venture capital fund. PAGE 13  How to cure cancer by shooting electrons. PAGE 13

“I’M THE NEXT KEEPER OF ELDERLY. I HOPE TO DO IT FOR AS LONG AS MY DAD HAS.” — Lily Werbin, store manager, Elderly Instruments

BY T

Elderly Instruments plays a tune that draws musicians far and wide

BY TOM HENDERSON

In 1971, Stan Werbin, an avid musician, had just got his master’s degree in biochemistry from the University of Michigan and thought there might be a more fun way, at least for a little while, to make, if not quite a living, at least a little money.

So he and a friend, Sharon McInturff, another recent college graduate, started buying and selling older fretted musical instruments like guitars, banjos and ukuleles out of a house.

A year later, they decided things were going well enough to put the business, Elderly Instruments Inc., on a more formal footing. They rented an 8-by-10-foot space in the basement of a retail building in East Lansing and opened for business on July 5 that

8 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

year with maybe 15 instruments for sale.

The word “elderly” reflected their plan to sell only vintage instruments, though the business has since expanded to include amplifiers, strings and other accessories, CDs, record albums, books about music and even some new instruments.

They didn’t own an adding machine or a calculator, figuring out charges with pencil or pen on a piece of paper.

Over the next few years, the business repeatedly expanded, eventually taking over the entire basement before moving in 1983 to its current location, a three-story brick building near downtown Lansing that was built in 1914 to house the local chapter of the International Order

of Odd Fellows.

“We joke that the odd fellows never left,” said Lily Werbin, Stan’s daughter, who runs the business day to day.

McInturff sold her interest in the business in 1986 and now owns an antique store in Lansing. Eventually, Werbin bought two buildings adjacent to the Odd Fellows building, one which had housed a post office and the other an advertising company, and expanded further. The store now has 36,000 square feet of space.

Stan’s wife, Sandy Dykins, joined the business in 1990 and continues to help out in HR. Lillian joined the business part time in 2014 after getting her marketing degree from Western Michigan University and is now chief operating officer. Stan still

Elderly Instruments founder Stan Werbin (left); his daughter and store manager Lily Werbin (center); and Stan’s wife, Sandy Dykins (right), in front of a mural that adorns part of their store in Lansing. | ELDERLY INSTRUMENTS

It mon Inc. Stat sup tors trea L ed a fede prod dioa The 40,0 U.S. sis thos Th com mat thro vest tors N isot sup rope wan fore prod the N com duc with nium muc lem Cur mad um.

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Building parts for smashing atoms — and building atoms Michigan State University spinoff finds its business plan accelerating even during pandemic

GETTY IMAGES/ISTOCKPHOTO

BY TOM HENDERSON

ore

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It has been a highly eventful 14 months for Lansing-based Niowave Inc., a 2005 spinoff from Michigan State University that makes parts for superconducting particle accelerators and radioactive isotopes for treating cancer.

Last July the company was awarded a grant of $15 million from the federal government to expand its production of molybdenum-90, a radioactive isotope known as Mo-99.

The isotope is used in more than 40,000 medical procedures in the U.S. each day, including the diagnosis of heart disease and treating those with cancer.

That grant was contingent on the company getting $15 million in matching funds, which it has done through a combination of equity investing from mid-Michigan investors and revenue sources.

Now, all of the U.S. needs for the isotope are supplied by five global suppliers, in Australia, Canada, Europe and South Africa, and the U.S. wants to eliminate the reliance on foreign sources. Currently Niowave produces only small quantities of the isotope.

Niowave was one of four U.S. companies that got grants to produce commercial amounts of Mo-99 without using highly enriched uranium, which makes production much safer and eliminates the problem of what to do with nuclear waste.

Currently, the imported Mo-99 is made using highly enriched uranium.

The other companies were North-

The management at Niowave Inc., Mike Zamiara (left), Terry Grimm and Matt Burba. | NIOWAVE

Star Medical Radioisotopes LLC of Beloit, Wis.; Shine Medical Technologies of Janesville, Wis.; and Northwest Medical Isotopes of Corvallis, Ore. One use of funds from the first grant was for Niowave to increase its research and production team, with the goal to eventually double the head count at the time of 65.

The pandemic delayed a lot of that

hiring, but by late August, the company was holding a series of daily in-person interviews with prospective employees, looking to hire chemists; nuclear, mechanical and electrical engineers; CNC machinists, welders and draftsmen and women. It hopes to be at 100 employees by early next year.

Pre- and post-pandemic, Niowave beefed up its management team.

Mike Zamiara was hired as president and CFO last October. A former partner at the accounting firm Plante Moran, he has his own technology consulting firm in Traverse City, Integrated Systems Consultants; from 2005-2010 was president and CEO of Lansing-based Orchid Orthopedic Solutions, a contract manufacturer of orthopedic devices with five plants in the

comes in most days, but, being in his 70s, cut back his activities when COVID-19 hit hard in March.

“He still has a hand in everything and still does the appraisals on super vintage, one-off instruments,” said Lily. “My first business card said I was the spawn of Stan. I’m the next keeper of Elderly. I hope to do it for as long as my dad has. I was born in 1990, and seven weeks later, my parents had me at a guitar trade show.

I’m living the dream, surrounded by music and people who care about music. I am in an island of kindness.”

Elderly Instruments went to online or curbside service only in March, resuming in-store operations on June 15, though it still pushes curbside service when possible.

Trying out a guitar, especially a vintage one with a high price tag, is a hands-on proposition, so Lily bought some UV lights and turned a lesson room into a UV sterilization room, where guitars and banjos, up to 10 at a time, can be bathed in the

U.S.; and from 2010-2015 was president of Traverse City-based Hawkeye Consulting LLC, whose focus was pharmaceutical and medical-device companies.

In July, Matt Burba was hired as COO. Previously, he had been with Orchid Orthopedic Solutions for 18 years in a variety of roles, the last three as chief commercial officer.

Niowave hopes to get another large round of federal funding to accelerate the commercialization process. The company met a Sept. 30 deadline for applying for a second grant. Terry Grimm, Niowave’s co-founder, CEO and senior scientist, said he expects at least two of the other companies to join him in seeking a share of the $35 million that is available. He expects to get word of an award before the end of the year.

“We think we made a very strong case,” he said.

“We already have matching funds lined up for that grant,” Zamiara said. “Our existing group of investors has been fantastic. Over 85 percent of our stockholders are within on hour of where we are sitting.”

Over the years, the company has generated $75 million in grants and $10 million in angel investing. The company has also got $248,500 from Red Cedar Ventures, the investment arm of the MSU Foundation.

“They’re in an exciting space,” said Jeff Wesley, Red Cedar’s executive director. “And they have been so capital efficient bringing this technology along.”

See NIOWAVE on Page 12

virus- and germ-killing light. One lasting effect of COVID on the business, so far, is that lessons, once a big part of the business, have been put on hold for the foreseeable future.

The store employs 38, many of them with more than 20 years of seniority. The inventory includes about 1,000 guitars, banjos and other fretted instruments. There is a large repair shop downstairs, which employs seven full time, and a variety of showrooms. Lily is an avid banjo player, so her favorite showroom is the banjo room. “My first tattoo was a banjo on my knee,” she says with a laugh.

“I grew up singing in a professional children’s choir, the MSU Children’s Choir, and ran an a cappella group in college,” said Lily. “I am a novice musician on banjo, guitar and ukulele, although ultimately I am a much better audience member, and so I usually volunteer to listen or sing.”

See ELDERLY on Page 12

SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 9

FOCUS | LANSING

Company’s efforts to produce diamond materials crystallizing

BY TOM HENDERSON

Great Lakes Crystal Technologies Inc., a company launched in August 2019 to create a domestic commercial source of ultra-high-performance diamond materials, is about to graduate from the Michigan State University’s VanCamp Incubator east of campus.

The company grew out of more than 25 years of research at MSU and a collaboration with the Fraunhofer USA Center for Coatings and Diamond Technologies, a facility located on campus and part of Plymouth-based Fraunhofer USA Inc., a nonprofit research and development organization founded in 1994 to form research partnerships with universities, industry and state and federal governments. It is affiliated with the Fraunhofer Society, a large research organization based in Munich, Germany.

These kinds of synthetic diamond crystals go far beyond traditional markets for synthetic diamonds such as jewelry and grinding materials for the factory floor.

They are used in the latest, most sophisticated sensors to detect elementary particles like molecules and their ions when studying objects in

space and to learn more about the sun’s corona and magnetic fields and the atmospheric composition of planetary objects.

They will also be crucial to making optical elements for next-generation spectrometers, beam splitters, synchrotrons and something called x-ray free-electron lasers.

The company has licensed five issued and one pending patent from MSU. It plans to license future MSU patents, to file its own patents, and to pursue joint patents involving federally funded research and development contracts.

Great Lakes’ co-founders are MSU Professor Timothy Grotjohn and industry veteran Keith Evans.

The company has signed a nonbinding letter of intent to move into a manufacturing facility in the Lansing area and is looking at six more.

“We know one thing for sure, we’ll have our own building in the next month,” he said. “Five thousand square feet will do it for a few years; we’ll want to have expansion space near by.”

Great Lakes hopes to finish raising a seed funding round of $2 million by the end of this year to establish its first diamond manufacturing line and plans to raise a Series A round of

$20 million next year to equip its manufacturing center, which it wants fully functional by 2022. It has already bought its first machine from a supplier in North Carolina.

Giving it credence in its fundrais-

ing is an impressive list of four Phase I Small Business Innovation Research or Small Business Technology Transfer grants it got in its first year, a total of $590,000 from the U.S. Department of Energy, the U.S. Air

Force, the Navy and NASA. Each project targets the development of advanced applications using highperformance diamond materials.

(See related story, Page 11.)

Currently, the company must buy

Paul synt co-fo co-fo VanC

The company has applied for a patent on its technology, whose app pulls information from a utility’s geographic information system as well as other industry data bases.

In August 2019, ARUtility was honored with the Vendor To Watch Award at the annual Smart Water Summit in Scottsdale, Ariz., which drew 56 smart-tech vendors vying for awards in three categories. ARUtility won its award in a vote of more than 100 utility executives in attendance.

The company was chosen to participate this summer in the fifth annual Conquer Accelerator program, an intensive 10-week program for five startups that helps fine tune their

business plan and marketing, provides mentoring and other support and working space. Twenty-nine companies applied for the program, which is run by Spartan Innovations, a subsidiary of the MSU Foundation.

The program also came with an investment of $20,000 from Red Cedar Ventures, the foundation’s investment arm.

“I really like the experience of the founders. Both have worked in the utility space for years. It’s a unique technology, a disruptive technology that is already getting traction in the market,” said Jeff Wesley, Red Cedar’s executive director.

ARUtility graduated from the ac-

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GREAT

ARUtility technology helps prevent costly, dangerous excavation accidents App shows 3D image of underground cables, gas lines, pipes

BY TOM HENDERSON

The backstory of ARUtility LLC, a 2018 startup that just graduated from the Conquer Accelerator program at Michigan State University, is one of how a boss found how one of his hires talked to his cat so interesting he decided to go into business with him.

Alando Chappell became Joseph Eastman’s boss at the Lansing Board of Power and Light in 2014. “I was looking to hire an engineer. I interviewed him, I loved him and brought him on board,” he said. “He was an excellent engineer.”

One Monday in 2017, Chappell asked Eastman what he had done over the weekend.

“He said, ‘I was bored, so I created an app that speaks to my cat,’” recounted Chappell.

With the app he created, while he was on vacation Eastman could call home and talk to his cat through a toy robot.

Chappell thought there was a more practical thing to be accomplished than talking to cats and got Eastman to write some code that would help them with a fantasy football league, which became a kind of beta version for the next software Eastman would write for the company they would launch.

The “AR” in ARUtility stands for augmented reality, and the compa-

ny’s technology allows those doing utility work in the field to download a 3D image to a smart phone or tablet of the various buried cables, gas lines or water pipes below where they are about to work, preventing dangerous and expensive accidents during excavation.

“The idea for the company came from being out in the field on a project with a natural gas pipeline that was hit by an excavator,” said Eastman, the company’s president and CEO. He got his civil engineering degree from the University of Michigan and is a licensed engineer with 14 years of experience inspecting gas, water, sewer and electric lines. One role at the Board of Water and Light included being project manager for the program that replaced lead service lines in the city, and he previously worked as an engineer for the Holland Board of Public Works and the Michigan Public Service Commission.

One day, he was performing an on-site inspection for a water-main installation. Markings on the ground had been inadvertently removed, and the contractor struck an underground gas line, which spewed natural gas over the site, caused the evacuation of nearby residents and cost project delays and tens of thousands of dollars.

“We just saw the need. You’d see the same issues all over the state,”

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

said Eastman.

“Being a manager, you look at the number of injuries, the number of accidents, the number of delays. We knew if we took a known problem and created a process to reduce accidents, we’d have something amazing,” said Chappell, the COO, who has more than 20 years of experience in the field and a bachelor’s degree in organizational management.

Utility industry estimates that accidents involving damage to buried utilities cost more than $1.5 billion globally and cause more than 400 deaths.

Before the two launched ARUtility, Eastman, as he did with the app for his cat, wrote all the software code.

“We needed a minimally viable product, which took a lot of hours,” said Eastman. Since then, he has written four or five upgraded versions.

Soon after they launched, they presented their business plan at The Hatching, a pitch competition for startups hosted by the Lansing Economic Area Partnership, the Michigan Economic Development Corp. and the Lansing SmartZone. ARUtility won the event and the grand prize of $2,000. That also led to an award of $3,200 from the MEDC’s Business Acceleration Fund, which they used to buy pop-up banners and rent booths at trade shows and to pay for a video they could send to potential customers.

“TH COM BE ON NA TH EXC

— Jo and

FOCUS | LANSING

ach t of ighials.

Paul Quayle, director of diamond synthesis (left); Timothy Grotjohn, co-founder and technical adviser; and co-founder Keith Evans outside the VanCamp incubator in East Lansing. |

buy

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Alando Chappell (left) and Joe Eastman, co-founders of ARUtility. | ARUTILITY

“THE IDEA FOR THE COMPANY CAME FROM BEING OUT IN THE FIELD ON A PROJECT WITH A NATURAL GAS PIPELINE THAT WAS HIT BY AN EXCAVATOR.” — Joe Eastman, president and CEO, ARUtility

the diamond crystals used in its SBIR and STTR projects from suppliers in Japan, Russia and Europe. It will make its own diamond crystals as well as become a supplier to other companies now buying them from abroad.

It has also booked an additional $400,000 in federal contracts and was approved in late August for a Phase II SBIR grant by the Air Force, the terms of which are still being negotiated.

Depending on results of its Phase I contracts, the company could get up to $5.6 million in Phase II awards over the next two years.

Great Lakes Crystal has also received a Michigan Business Accelerator Fund grant of $13,500, $75,000 from the Michigan Emerging Technologies Fund and $60,000 from Red Cedar Ventures, the investment arm of Spartan Innovations, which runs the VanCamp Incubator. Spartan Innovations is a subsidiary of the MSU Foundation.

“What I love about Great Lakes Crystal is it is leveraging core competencies of the university and Dr. Grotjohn’s efforts. and obviously the diamond market has great opportunities,” said Jeff Wesley.

In July, Evans made a Zoom pitch for investment capital to the Grand Rapids-based Grand Angels and its affiliated angel groups around the state, the Michigan Capital Network, and has other pitch meetings scheduled.

The company’s business plan calls for it to begin generating revenue from commercial sales in 2022, to hit $50 million in revenue in 2025 and

more than $250 million in 2028. The 2025 forecast includes $40 million in commercial sales and $10 million in federal R&D contracts.

According to Evans, the lack of domestic manufacturing of high-performance diamond materials has created pent-up demand in the market, with a wide variety of applications, including advanced photon optics, high energy particle detection, next-generation electronics and diamond-based materials that will enable what is expected to be the huge market of quantum computing.

“We estimate the addressable market for high-performance diamond materials to be $600 million today with strong potential to surpass $4 billion over the long term,” said Evans. “People say, ‘You’re targeting too many markets, you should focus.’

These are big markets and we like them and we think we can sell to all of them.”

He said prospective customers include the Brookhaven National Laboratory in New York; Lockheed-Martin; Los Alamos National Lab; Micro-LAM Inc., a maker of advanced cutting tools in Kalamazoo; and the SLAC National Accelerator Laboratory, originally named the Stanford Linear Accelerator Center, in Menlo Park, Calif.

Evans joined Spartan Innovations in June 2019 as an entrepreneur-in-residence to mentor startup companies. He didn’t just want to mentor Great Lakes Crystals; he

celerator in August, and Eastman and Chappell decided to remain at the VanCamp Accelerator in East Lansing, east of campus and part of the University Corporate Research Park, another subsidiary of the MSU Foundation.

Having graduated from the accelerator program and having put together a strong pitch desk, Eastman and Chappell are arranging upcoming pitches for equity funding with such organizations as the Grand Rapids-based Grand Angels, Invest Detroit and Ann Arbor-based Augment Ventures.

On Sept. 10, Eastman and Chappell did a Zoom pitch for capital to Plug and Play Ventures, a highly respected VC firm in Sunnyvale, Calif. that focuses on seed- and early-stage funding for tech companies. Typically, the VC firm invests $150,000 in winning companies at its pitch events, which also includes a 10-week stint at its accelerator in Sunnyvale.

The next day, Eastman and Chappell got the word that they had been accepted into the accelerator, which starts at the end of the month, for what will be a virtual accelerator this year because of COVID-19. They have not been told, yet, about the size of an investment.

ARUtility was one of 200 companies invited to start the Plug and Play process, with 20 making the cut for an in-depth pitch.

On Sept. 15, the company was one of six early-stage companies pitching for funding at a virtual event hosted

by Red Cedar Ventures and the Grand Rapids SmartZone.

ARUtility generates revenue through the software-as-a-service model, charging customers either per local meter for electric compa-

nies or per customer for other utilities.

The company has three pilot programs currently, with the Lansing Board of Water and Light and in Zeeland and Plainfield, and Eastman says he is in discussions for pilots in the UK, Australia and Canada.

ARUtility has one major customer in South Melbourne, Australia, fieldGO Pty. Ltd., which provides companies to monitor in real time projects in the field. It has some 300 customers globally, and they can choose to use ARUtility’s technology, too. If they do, ARUtility gets paid a fee.

Eastman said the company is looking to hire two full-time developers.

He and Chappell are currently the only two employees.

A big part of ARUtility’s pitch for funding is a key partnership with Redlands, Calif.-based Esri, a global leader in cloud-based location intelligence and mapping. ARUtility has been named as an emerging business partner in the company’s startup program.

Founded in 1969, Esri’s software is deployed in more than 350,000 organizations, including 90 of the Fortune 100 companies and all 50 state governments.

Its startup program allows promising emerging tech companies to incorporate its location analytics into their services and solutions for free for up to three years. The program is open to companies with less than $1 million in annual revenue.

ARUtility projects revenue this year of $147,000, $2.2 million next year, $9.8 million in 2022 and $22.2 million in 2023.

See DIAMOND on Page 12

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

See if you’re ready for the science of diamonds In its first year, Crystal Lake Technologies Inc. won four Small Business Innovation Research or Small Business Technology Transfer grants, from the U.S. Department of Energy, the Navy, the Air Force and NASA. Reading some of the wording of the solicitations by those federal entities that the company responded to offers a window into how complex the world of science-grade diamond crystals can be.

FROM THE NASA SOLICITATION: “This subtopic solicits development of advanced in-situ instrument technologies and components suitable for deployment on heliophysics missions. Advanced sensors for the detection of elementary particles (atoms, molecules and their ions) and electric and magnetic fields in space and associated instrument technologies are often critical for enabling transformational science from the study of the sun’s outer corona, to the solar wind, to the trapped radiation in Earth’s and other planetary magnetic fields, and to the atmospheric composition of the planets and their moons.”

FROM THE NAVY: “Objective: Develop an electrically driven, sub-nanosecond, semiconductor pulse sharpener to improve

the performance of high-power microwave pulse generators by reducing/sharpening the rise time of a driving pulse, preserving the trailing edge of the pulse and increasing the bandwidth of the output.”

FROM DOE: “Grant applications are sought for the development of growing large diffraction-grade diamond crystals for the manufacturing of X-ray optical elements for monochromators, beam-splitters, spectrometers, phase plates used at present and next generation synchrotron and FEL X-ray facilities, as well as future quantum computing implementations. Requirements for these crystals include: 1. Diffraction quality: for various Bragg reflections including Miller indices (111), (220) and (400), near perfect reflectivity with bandwidth deviations from the ideal Darwin curve to within < 1%; peak reflectivity > 99%.

2. Topographical quality: for various Bragg reflections including Miller indices (111), (220) and (400), spatial variations in the Bragg angle from the ideal direction to within 200 nrad over a 5x5 mm2 area.

3. Thermal conductivity: > 1800 W/m K. All righty then.

— Tom Henderson

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SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 11

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DIAMOND

From Page 10

Lily Werbin in the banjo showroom of Elderly Instruments. | ELDERLY INSTRUMENTS

ELDERLY

From Page 8

High-end banjos and guitars on display are typically several thousand dollars, though it isn’t unusual to pick one up with a price tag of $5,000 or more.

“We keep our really special guitars and banjos and one-offs in the vault,” she said.

How special do they get?

Last December, a rare Gibson Les Paul on consignment sold for $225,000. Paul made just a few guitars with a sunburst finish from 195860, built expressly for that new kind of music called rock’n’ roll, and they are, obviously, in extreme demand.

Now, the store has a Gibson F-5 mandolin designed and made by an iconic craftsman named Lloyd Loar, who dated it and signed it on March 31, 1924. One of only 326 made signed by Loar, it is listed at $120,000.

Michael Gay is a business growth consultant with the Michigan Small Business Development Center in Lansing, and has been helping Lily grow her business skills for the last four and a half years as she has taken more and more control of the business.

“I’ve watched her drink from the proverbial firehose as she’s worked with her father to learn and master one aspect of the business after another,” he said. “She has exceptional people skills and, like all good leaders, invariably puts the good of the team and the business ahead of her personal needs. She’s thoughtful, humble and more than willing to listen to new ideas, criticisms and insights, and to act on them when it’s appropriate to do so.

“Elderly has been a Michigan landmark for 50 years. They were my

first road-trip destination when I got my driver’s license in the mid-1970s and made the trip to Lansing from Flint to purchase a Gibson Les Paul, and I have little doubt that Lillian will help ensure that Elderly continues to serve musicians for another 50 years,” he said.

“We want to make sure musicians get instruments that have been taken care of,” said Lily. “A lot of our reputation was built on our personality, almost whimsical but not quite. To be whimsical in the 2000s isn’t easy.”

In the last two years, Elderly, which has had a strong online presence for more than 20 years, has sold instruments to customers in 50 states and in 67 countries, ranging from Andorra to Bosnia and Herzegovina to the Faroe Islands to Vatican City to New Caledonia to Oman and Sri Lanka.

Stan said it never entered his mind in the early days that one day the business would be almost five decades old and be selling instruments around the world.

“My partner and I had just finished college and we thought, ‘What are we going to do?’ I’d played guitar and banjo, and I thought we could search through consignment stores and antique shops and find old instruments we could sell for a profit.

It was just something that might make a little money and we’d have fun doing it,” he said.

He said Lily’s passion for the business has also been a pleasant surprise. “Ten years ago, I wouldn’t have believed she’d ever be interested in running the business. She gets it and gets it way, way better than I did when I was her age.”

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

12 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

wanted to help run it. He became president and CEO when the company was founded. Grotjohn is the lead technical adviser and continues as a professor at MSU and chair of electrical and computer engineering.

Evans, who got his Ph.D. in physical chemistry from Purdue University, previously was president and CEO at Kyma Technologies Inc., a supplier of semiconductor materials for next generation lighting and electronics applications. Before that, he was an executive at several technology companies and from 1984-1996 was a group leader at the Air Force Research Laboratory in Dayton, Ohio.

In August, the DOE announced an award of $12.4 million to establish an Energy Frontier Research Center at Arizona State University to investigate next-generation materials and reinvent the electrical grid. Several researchers at other universities are part of the ASU project, including Grotjohn.

According to Grotjohn’s bio at the university, “a strong focus of his work is the use of models, including electromagnetic, plasma dynamic, and plasma chemistry models for the design and control of microwave plasma reactors used for materials processing. Specific processes studied have included diamond chemical vapor deposition, amorphous carbon deposition, semiconductor etching and microwave-generated plasma discharges operated as ion and radical sources.”

It is the process known as chemical vapor deposition that Great Lakes Crys-

NIOWAVE

From Page 9

In 2005, when Niowave was founded, the business model was to be a contractor for the U.S. Dept. of Energy and to build accelerator components and do consulting for various DOE labs and research universities. The plan was to eventually become a manufacturer of radioisotopes.

Grimm had left the Massachusetts Institute of Technology to join MSU in 1994. MSU had become a world leader in nuclear physics in the 1960s when it build the first superconducting cyclotron in the world.

That cyclotron had been replaced by more powerful units over the years, and by 2005, MSU was in negotiations with the Department of Energy over how to fund and build the world’s largest linear particle accelerator.

“I saw that whether it got built or not, there was a future in this technology. I said, ‘I’m going to spin out a company and make isotopes,’” said Grimm. To make isotopes, he had to build his own particle accelerator, and Niowave also began making accelerator components and selling them to labs around the world.

MSU began building that linear particle accelerator in 2014. What became known as the Facility for Rare Isotope Beams is expected to be fully on line next year or, more likely, in 2022. The cost of the nuclear research facility grew to $765 million, with the DOE contributing $635.5 million to the project, the state contributing $94.5 million and MSU $35 million.

Its particle accelerator will create rare isotopes not normally found on earth, with potential applications for medicine, homeland security and industry.

tals will use to grow its diamonds.

“The compelling properties and potential importance of crystalline diamonds have been well understood for more than a century, but producing diamond crystals is not easy,” said Evans.

“Michigan State University researchers understood early on that the chemical vapor deposition approach has the most promise in terms of cost, quality and scalability.”

MSU began efforts at making diamond crystals through chemical vapor deposition in 1985. Grotjohn joined MSU in 1987, and Fraunhofer began its partnership with the school in 2003.

Joining Great Lakes Crystal in June as director of crystal growth and principal investigator on the various federal grants was Paul Quayle, who got his Ph.D. in condensed matter physics at Case Western Reserve University in Ohio. For the last two years, he had been a post-doc in Grotjohn’s group at MSU. “If we’re successful and build a nice materials company, there are a lot of companies who will want to buy us,” said Evans, who said potential buyers could include an IT company pursuing quantum computing, a defense contractor developing quantum sensors,

“WE GET PINGED ABOUT ONCE A WEEK FROM SOME PHARMACEUTICAL COMPANY THAT WANTS OUR ISOTOPES. WE SHIP ISOTOPES ALL OVER THE WORLD.”

at nearly the speed of light to make cancer-killing isotopes. It is a former school building, Walnut Elementary, built in 1937 as a federal public works project during the Depression, just north of the capital in a part of Lansing now known as Old Town.

It also served as the home of the Lansing Board of Education, so it has extra nice architectural touches, including a large boardroom that serves Niowave nicely.

When Niowave bought the building in 2006, it had been out of operation for a year. “When we bought it, the neighbors loved it. There had been so many schools closed in Lansing, and everyone was worried about what was going to happen to this building,” said Grimm.

An added bonus, which resonated with him as the CEO of a company hoping to help cure cancer, was when he found out what the wooden rails were that lined the school halls, and what the steel rods were that were mounted in classrooms. The rails were to help students who had contracted polio navigate their way around in a building that opened nearly 20 years before Jonas Salk invented the polio vaccine.

Blankets were heated and hung on the steel rods for those same kids if they were feeling chilled.

“When we were told that, it made it special,” said Grimm. They continue to remind him of how far science has come since the building was built, and as inspiration for how far Niowave wants to take it.

An example of Niowave taking the building on a scientific journey? The old gymnasium has been retrofitted with a Class 100 clean room.

— Mike Zamiara, president and CFO, Niowave

Meanwhile, from 2005-2015, more than half of Niowave’s revenue came from selling accelerator parts to the CERN lab in Switzerland and other European labs, DOE labs and research universities. Over time, larger volumes of isotopes were produced and that line of revenue increased.

Grimm said that accelerator parts account for less than 20 percent of revenue today.

“We get pinged about once a week from some pharmaceutical company that wants our isotopes,” said Zamiara. “We ship isotopes all over the world.”

Another use of last year’s grant is to go from small-batch to large-batch production of its isotopes by increasing the size of the production facility near the Lansing airport, currently a 14,000-square-foot facility opened in 2014. The company plans to break ground on an expansion there next year and hopes to add up to another 100,000 square feet that will be fully operational by 2023.

The right setting Niowave’s headquarters building is the last thing you’d expect for a company making particle accelerators and bombarding uranium with electrons

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

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FOCUS | LANSING

On the Rise: First 2 investments made for statewide early-stage venture capital fund

BY TOM HENDERSON

MSU Professor Timothy Grotjohn and Keith Evans, president and CEO of Great Lakes Crystal Technologies, signing the incorporation documents for the company. | GREAT LAKES CRYSTAL

an X-ray components manufacturer or a medical-device manufacturer.

“But, hey, we could also become a world leader and keep the company.

Do something interesting. There could be an IPO,” he said.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

The Michigan State University Foundation has made the first two investments from a new early-stage fund created by the Michigan Strategic Fund.

The Michigan Pre-Seed Fund III, which has got initial funding of $3 million from the state, will do business under the name Michigan Rise.

Its executive director is Jeff Wesley, who is also executive director of Red Cedar Ventures, an investment arm of the MSU Foundation.

Unlike Red Cedar Ventures, which invests in early-stage companies with a connection to MSU, Michigan Rise will invest in companies throughout Michigan. Michigan Rise began operating in August. Wesley said the plan is for the state to invest $3 million in each of the four subsequent years, with the MSU Foundation committing a total of $2.4 million.

Prem Bodagala is a director of Michigan Rise. He joined Red Cedar Ventures last October and spent the previous two years as a director at Detroit-based Invest Michigan, which was the fund manager for the $10.3 million Michigan Pre-Seed Fund II. Wesley said companies will get initial investments from the fund of $50,000 to $150,000, with follow-on investments able to bring the total

commitment to any one company of $250,000.

Michigan Rise will work closely with the Michigan Economic Development Corp.’s Entrepreneurship and InWesley novation Initiative to provide mentorship and technical assistance in addition to funding in the MEDC’s target investment areas of advanced mobility, advanced manufacturing and materials, alternative energy, agricultural technology, information technology, homeland security and defense and life sciences.

“As the entrepreneurial ecosystem rebounds from the ongoing pandemic, this funding will be vital in ensuring Michigan’s early-stage startups have the tools necessary to scale and succeed,” said Nataliya Stasiw, portfolio manager with the MEDC’s Entrepreneurship and Innovation team, in a press release in August. “We are grateful to partner with Michigan State University Foundation to provide this support, and further demonstrate the innovation and resilience of Michigan’s workforce and economy.”

Though the fund didn’t formally begin accepting applications atmich-

iganrise.com until Aug. 10, it had deals already in the pipeline by then and made its first two investments by mid-August, in Genomenon Inc., an Ann Arbor company that has developed cloud-based software tools that automate the interpreting of genome sequencing, and East Lansing-based GreenMark Biomedical Inc., which is seeking approval for a rinse that helps with early detection of cavities, as well as working on related technology that can help restore tooth enamel.

Genomenon is a 2014 spinoff from the University of Michigan, and Wesley said that normally a preseed fund wouldn’t invest in a company that is 6 years old, but the company was in the midst of raising a round of equity funding that got put on hold when the pandemic hit. “Genomenon we have known and worked with for a while. With COVID, their Series A was pushed back, and we were more than willing to step in and help with this bridge round,” he said.

He said it helped, too, that Genomenon has a CEO, Mike Klein, who has grown and sold other successful tech companies. “Mike is great, and I have known him for a long time,” he said.

The creation of Michigan Rise is another example of MSU’s outreach in entrepreneurial support. It has just launched its second Conquer Accelerator program, this one in Grand

Rapids. Patterned after the Conquer Accelerator program in East Lansing, five Grand Rapids startups offering high-tech products or services are getting 10 weeks of intensive mentoring and advice on fundraising, supply-chain management and marketing. They also get $20,000 in funding in exchange for 5 percent equity.

Originally scheduled to be held in MSU’s Grand Rapids Research Center, Wesley said that because of COVID-19, this first accelerator program will be done virtually. It started on Sept. 14 and ends Nov. 20.

The accelerator program began in East Lansing in 2015 and has invested $500,000 in 25 companies.

Established in 1973 as an independent nonprofit, the MSU Foundation helps commercialize technologies invented by MSU faculty, staff and students. It also operates Spartan Innovations, which runs programs to encourage entrepreneurship, and the University Corporate Research Park.

A report last February said that since 2013, Red Cedar Ventures had invested nearly $5 million in 73 companies, which in turn leveraged $152 million in additional outside investment, including $99 million from out-of-state venture capitalists, and had created 424 jobs.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

How to cure cancer by shooting electrons

BY TOM HENDERSON

Niowave Inc. derives its first name from the first three letters of the element niobium, which is a key part of a superconducting electron linear accelerator, and from the last part of the word “microwaves,” which generate the electric field in the accelerator to get electrons racing at close to the speed of light.

Niowave’s particle accelerator is formally known as a superconducting electron linear accelerator, or linac for short. It accelerates electrons to almost the speed of light. Electrons weigh very close to nothing, about one-two thousandth the weight of a proton or neutron, which by the standards of daily life are almost weightless themselves.

But accelerating them to close to the speed of light, which travels 186,000 miles per second, can create quite a force. Niowave collides the electrons into a liquid metal target to generate high energy X-rays, and those X-rays travel through the liquid metal into the uranium target.

The uranium target weighs about 22 kilograms, or 48.4 pounds, and is contained in rods in the form of uranium oxide. There is not enough uranium in the target to maintain a chain reaction, so there is none of the danger or waste associated with one.

The uranium atom has 92 protons and 143 neutrons in its nucleus and 92 electrons spinning around it to make an atom. When Niowave’s X-rays interact with the uranium nuclei, they create a variety of isotopes of different elements, ranging from zinc all the way to europium, with an atomic number of 63.

“THERE ARE CHEMICAL STEPS TO REMOVE THE ELEMENTS. THE CHEMISTS LOVE IT. ‘HERE ARE 30 ELEMENTS, SEPARATE THEM OUT.’ THEY HAVE A FIELD DAY.” — Terry Grimm, Niowave’s cofounder, CEO and senior scientist

The $15 million federal grant Niowave got last year was to ramp up commercial production of molybdenum-99, or Mo-99, an isotope of the element molybdenum, which has an atomic number of 42.

The atomic number refers to the number of protons in an element. An isotope is the same element but with a different number of neutrons, which gives it different chemical properties. The “99” in Mo-99 refers to the number of neutrons in that isotope.

Terry Grimm, Niowave’s co-founder, CEO and senior scientist, said that company chemists separate out the various elements created when the uranium is bombarded, and then the remaining uranium is bombarded, again.

“There are chemical steps to remove the elements. The chemists love it. ‘Here are 30 elements, separate them out.’ They have a field day,” said Grimm.

The chemistry of using Mo-99 to kill cancer cells is well understood.

Mo-99 doesn’t actually do the killing itself. It decays into an isotope of the element technetium known as Tc-

99m, which is the killer. An atom of Tc-99m binds to something called a chelator, which is a small molecule that binds very tightly to metal ions.

That molecule and the Tc-99m then link to something called a targeting molecule, which can include antibodies or proteins that allow the chelator and Tc-99m to be accepted by a receptor on tumor cells. The isotope then destroys the tumor cell.

Producing commercial volumes of Mo-99 will be a large revenue generator, but company President and CFO Mike Zamiara said a bigger financial benefit will come from figuring out the chemistry that will allow some other isotopes made from bombarding uranium with X-rays to attach to and kill cancer cells, too.

Of particular interest, he said, are the series of lanthanide elements from atomic weight 57 to 63 on the periodic table — lanthanum, cerium, praseodymium, neodymium, promethium, samarium and europium.

Figuring the chemistry of turning an isotope into a cancer killer can be a bonanza.

Lutathera, a drug based on an isotope of lutetium, was 15 years in development by Advanced Accelerator Applications, a French company spun off from the CERN laboratory in Switzerland. In 2017, to get ownership of that drug and other radioisoptopes developed by the company, Swiss-based Novartis International AG bought Advanced Accelerator for $3.9 billion.

“That’s what we visualize as our future,” said Zamiara.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

A VISION FOR GROWTH IN 2020.

That’s Business Elevated.

Let’s get there together.

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COMMUNICATIONS

Advertising Section

PEOPLE ON THE MOVE

To place your listing, visit www.crainsdetroit.com/ people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

Truscott Rossman moved its headquarters to the third floor of the Dinan Building in Eastern Market. | ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Public relations firm Truscott Rossman moves headquarters to Detroit Firm sees shift to direct content marketing from public affairs

BY ANNALISE FRANK

Public relations firm Truscott Rossman has moved its headquarters from Lansing, where it’s been since 2011, to Detroit’s Eastern Market.

Business has boomed at the company’s Detroit office, which had been in the Renaissance Center for seven years, CEO John Truscott said. The agency started moving to 2362 Russell St., Suite 301, early this year, but progress and the announcement got slowed due to the coronavirus pandemic.

The Detroit operation is nearing 50 percent of Truscott Rossman’s revenue, up from 10 percent-20 percent.

Lansing was its original home, and where Truscott founded his own firm before he merged with Kelly Rossman-McKinney in 2011.

“We were always known as a public affairs firm … but we’ve expanded so much with the changes in the industry and the media and we’ve had to adapt,” he said.

Space in news media is shrinking,

Truscott

Fournier

the media bureaus in Lansing are smaller and increasingly companies are looking to publish content directly for consumers, Truscott said. The agency is using social media more and expanding into marketing. And Detroit, with its reputation and national reach, makes sense as a home base, he said.

The communications strategy agency has around 100 clients and offices in Lansing, Grand Rapids and Washington, D.C., as well as Detroit.

Detroit clients include TCF Bank, Blue Cross Blue Shield of Michigan, Detroit Medical Center, the city of Detroit, Wayne County and Detroit

Thermal Systems.

Truscott Rossman has seven staff in Detroit out of 24 total. Its 2019 revenue hit approximately $5 million, and it’s up 15 percent year to date in 2020.

“Part of it is internal communications, as everyone is going remote,” Truscott said. “We have picked up a lot of crisis work, especially over the summer. Culturally, we are in this big upheaval and shock right now (related to diversity) and we have a lot of people just trying to figure out how to do things right.”

Ron Fournier, former Crain’s Detroit Business editor and publisher, joined Truscott Rossman as president in 2018 and heads the Detroit office. Co-founder Rossman-McKinney retired from the firm and later became Attorney General Dana Nessel’s communications director.

The firm also revamped its logo and website with the move.

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

DEALS&DETAILS  CONTRACTS  Judson Center, Farmington Hills, a nonprofit human service agency and newly designated Certified Community Behavioral Health Clinic, entered a partnership with The Salvation Army Eastern Michigan Division, Southfield, a social services organization, to provide behavioral health and drug addiction treatment and post-treatment services and onsite primary care to individuals at The Salvation Army Harbor Light Macomb facility in Clinton Township, part of The Salvation Army Eastern Michigan Harbor Light System, which also has locations in Detroit and Monroe. Harbor Light offers substance abuse treatment services, including in-patient

medication assisted detoxification, 14- to 90-day residential treatment, outpatient treatment, case management, peer recovery services, legal aid and pastoral care. Websites: judsoncenter.org, salmich.org  Edcor, Troy, an education benefits administrator for employers, is expanding its partnership with Ashford University, San Diego, Calif., an online college. The new program Ashford University is offering is Edcor professional leadership training in general professional leadership and health care leadership. Websites: edcor.com, ashford.edu  Siren, Royal Oak, a communications firm, is the agency of record for the Royal Oak Downtown Development Authority; Bateel USA, grower and

seller of gourmet dates; and Wightman, Grand Rapids, an architecture firm that recently opened a location in Royal Oak. Websites: siren-pr.com, romi.gov/101/Downtown, bateelusa. com, gowightman.com

FINANCE

NONPROFITS

First National Bank in Howell

The Kresge Foundation

Carrie Newstead is now an Assistant Vice President and retains her role as the Branch Sales Manager at the downtown Howell branch office. In announcing this promotion, First National Bank President and CEO, Ron Long, stated, “This well-deserved promotion recognizes Carrie’s many contributions to our organization’s success, including her outstanding leadership and sustained high performance.”

Monica Valdes Lupi, JD, MPH brings more than 20 years of experience in public health to her new role as the managing director of The Kresge Foundation’s Health Program. She most recently served as a senior fellow at the de Beaumont Foundation and a senior advisor to the CDC Foundation.

Previously, she served as the executive director of the Boston Public Health Commission. She received her Juris Doctorate from the Dickinson School of Law and her Master of Public Health from Boston University.

NEW HIRE? PROMOTION? BOARD APPOINTMENT?

FINANCIAL SERVICES

Telemus Telemus, a Southfieldbased firm providing wealth advisory, investment management and asset management solutions for high net worth and ultra-high net worth individuals and institutional investors, is pleased to welcome Matt Heckler as Director of Corporate Executive Services. Matt is leading a new division of the firm that provides comprehensive financial planning and implementation for senior level management from income tax and estate planning to insurance, benefits, investments, and more.

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

Contact: Debora Stein at dstein@crain.com

WHAT’S YOUR COMPANY’S NEXT MOVE?

 EXPANSIONS  BLM Group USA Corp., Novi, a tube and sheet metal processor, formed BLM Group Financial Services, a new financing arm for customers investing in the company’s equipment.

Website: blmgroup.com  Chief Financial Credit Union, Rochester Hills, opened a branch at 189 West Merrill St., Birmingham.

Phone: (248) 253-7900. Website: chiefonline.com

Create your own headlines with Companies on the Move

SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 15

NONPROFITS

NONPROFITS

Pewabic Pottery adds solar panels

United Way lowers annual campaign, fundraising goals for year ahead

BY SHERRI WELCH

Detroit’s Pewabic Pottery, one of the oldest continuously operating pottery groups in the country, has added modern, cost-saving additions to its historic operation.

The idea is to help provide a sustainable way to ensure the pottery maker is around for another 100 years, while also reducing its carbon footprint, Executive Director Steve McBride said.

The $100,000 project, which added over six dozen solar panels to the roof of its education and tile studio addition behind its historic, Tudor-style building, had been in the works for a year and a half. But its McBride completion on Monday comes as Pewabic is looking to save money wherever it can to offset earned revenue losses during the pandemic, McBride said.

“One of the things the pandemic has really brought home is the importance of making investments in the organization to make us sustainable for the future,” he said.

The panels will save an estimated 16 percent or $5,000 or more in energy costs the first year, McBride said, but electric costs are going up. “To invest now is going to save us more and more each year,” he said.

Installed by North Carolina-based Powerhome Solar, the panels will provide partial power for lighting, HVAC units and electric kilns.

BY SHERRI WELCH

Pewabic Pottery added over six dozen solar panels to the roof of its education and tile studio addition behind its historic, Tudor-style building. | PEWABIC POTTERY

A National Historic Landmark, Pewabic Pottery has been making pottery and tile from its Detroit home on East Jefferson Avenue, east of the MacArthur Bridge, since 1903.

A $42,000 capital grant from the Michigan Council for Arts and Cultural Affairs funded just under half of the project, with the balance made up with individual donations.

The project follows the addition of a tile studio expansion last year and the education building in 2012. The recently added space has proved a boon right now, McBride said, since it enables social distancing for employees.

While its retail sales of Pewabic pieces and tiles are down about 50 percent year to date and it had to cancel fee-based group classes, the his-

toric operation has benefited from continued demand for architectural tiles, McBride said, from projects that were in the pipeline before the pandemic and new kitchen backsplash, fireplace and other home improvement projects that have come in during the pandemic. Earned revenue accounts for about three-quarters of its budget, which was $4 million at the beginning of the year but now is $3 million.

During the first two months of the pandemic, Pewabic furloughed about 45 of its 57 employees, McBride said.

It’s brought back all but 12 people so far to shape, stamp and glaze tiles for architectural orders and increasing online orders, which are double or triple what they were by this point last year.

United Way of Southeastern Michigan kicked off one of the region’s largest annual fundraising campaigns Tuesday, lowering its goal for the drive to $35 million.

The Detroit-based nonprofit, which raises money to support basic needs for people living in Wayne, Oakland and Macomb counties, said it is looking to raise $60 million for fiscal 2021 from all sources, including corporations and individuals whose giving is counted toward the annual campaign which runs through June 2021.

That’s down from $69 million in total revenue in fiscal 2020 ending June 30.

United Way met its annual campaign goal last year, raising $40 million with the inclusion of corporate contributions for COVID relief, said Chris Perry, chief marketing and engagement officer.

United Way raised roughly $35.4 million outside of COVID relief dollars, which totaled $33.6 million as of July.

While lowering the amount it hopes to raise from corporations and individuals this year, United Way has set a higher goal for volunteerism. It’s set a target to secure 43,000 hours of volunteerism for nonprofits in the region this year, up from its 40,000-hour goal last year.

Gary Johnson, head of global manufacturing at Ford Motor Co., is chair-

ing the virtual 2020-21 #StandUnited for Our Future annual campaign.

“During our previous campaign, we set aggressive financial goals, anticipating Hudson the new charitable giving laws and other factors impacting the nonprofit sector across the country,” said United Way President and CEO Darienne Hudson, in a release.

“This year, our goals are more conservative, while making sure the needs of people in our communities and their families are met.”

United Way said its tricounty volunteer and investment strategy is focused on serving the 44 percent of households who struggle to meet their basic needs.

Specifically, the funding it raises goes to support food, housing, health care, family finances and efforts to prepare young children to start school and high school graduates to succeed.

The launch of United Way’s annual campaign comes a day after the Southfield-based Salvation Army Eastern Michigan Division launched its annual Red Kettle campaign — two months earlier than it does during a typical year. The fundraising campaign typically begins in mid-November and runs through the start of the new year.

NONPROFITS

American Red Cross Michigan Region names new COO Jeffry Bauer chosen after national search

BY SHERRI WELCH

The American Red Cross Michigan Region has named Grosse Pointe attorney Jeffry Bauer as its new COO, following a national search.

He succeeds Robert Blumenfeld, who left the organization in April and now is a strategic management consultant at ProNexus LLC in West Bloomfield, according to his LinkedIn page.

In the new role, Bauer will report to Mary Lynn Foster, CEO of the American Red Cross Michigan Region.

Bauer has spent the past 37 years as a practicing attorney specializing in securities, commodities, commercial and communications law through his firm, Jeffry M. Bauer, JD PC. He has served as an arbitrator and negotiator for the Financial Industry Regulatory Authority since 1986 and an arbitrator for the National Futures Association since 1988, according to his LinkedIn page.

He’s been a volunteer with the Red Cross for more than 37 years, responding to disasters and community emergencies from local house fires to the Northwest Flight 255 crash at Detroit Metropolitan Airport in 1987 and Hurricane Andrew in 1992.

His current volunteer roles include 16 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

serving as national partner in information technology; regional manager of disaster services technology, regional lead in information planning and government Bauer operations liaison. He is a recipient of the American Red Cross Clara Barton National Award for Meritorious Leadership and the 2018 National IT Volunteer of the Year Award, among other accolades.

Bauer holds a bachelor’s degree in government/economics from Boston College and earned his JD from the University of Detroit School of Law. A veteran of the U.S. Navy, he is a certified communications unit leader for the U.S. Department of Homeland Security and the state of Michigan.

“Jeff certainly understands our mission as well as the importance of volunteer engagement, while his heart embodies the guiding principles of our Core Values,” Foster said in a release.

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

BLOOMBERG

VACCINE

From Page 3

“We have been given recognition for diversity of practice participants that we have participating in the Detroit area,” said Paul Kilgore, M.D., a Henry Ford researcher, adding there are multiple reasons why a test site is selected, including technical expertise, ability to follow subjects and a diverse patient population.

Kilgore said Henry Ford has been recruiting heavily among potential Black participants and other minorities. He declined to provide Crain’s with minority participation in its portion of the study, citing Moderna rules. Moderna said of the nearly 24,000 subjects enrolled nationally, 27 percent are members of minority groups.

N. Charles Anderson, CEO of the Urban League of Detroit and Southeast Michigan, said he hasn’t seen or heard much outreach or recruitment in the Black community for the coronavirus trials.

“If you are leaving no stone unturned, I would think an organization like ours might have been approached, but we weren’t,” said Anderson, who is a past director on the Henry Ford board.

While Anderson acknowledged he is not a health professional, he said he would be reluctant to advocate for participation in vaccine trials.

“The African American community is disproportionately affected by coronavirus. Just receiving the vaccine could cause further harm if you are involved in a trial. You don’t know just what the outcomes are going to be,” said Anderson, adding: “I got a flu shot two or three weeks ago, but I am nowhere ready to receive a (COVID-19) vaccine.”

Besides the historic problems with medical research, Anderson said a major problem causing further public confusion and distrust appears to be interference by political leaders in the COVID-19 response and vaccine research.

“It is not easy to trust what is coming out of the CDC when a medical professional (CDC Director Robert Redfield) tries his best to be even keel and at the same time someone who is trying to get re-elected (President Donald Trump) is playing a role in pushing the CDC and the FDA to approve a vaccine,” Anderson said.

Steven Katzman, D.O., lead researcher with Farmington Hillsbased Michigan Center for Medical

Research that is testing the Pfizer vaccine, said the drug company in late August authorized a trial expansion to recruit younger people and those more impacted Sullivan by the virus, especially Black, Hispanic and Asian people.

“We need more people of color to be part of the study, and Pfizer recognized that,” Katzman said.

One of the reasons experts are calling for more minority participation in the studies is that minorities are hospitalized for COVID-19 at four to five times the rate of non-Hispanic white people, according to the Centers for Disease Control and Prevention.

Black people have died of the virus at nearly 2.5 times the rate of white people, according to the COVID Racial Data Tracker.

Micah Foster, GRAAHI’s executive director, said vaccine development requires high participation for those populations hardest hit by COVID-19 so they feel trust in the vaccines’ safety when they are ultimately released.

“We don’t have as much problems with specific research in Michigan as we do for more global concerns to make sure we lower the socioeconomic barriers to participation as much as we can,” Foster said.

Polls show that Black people are less trusting of medical research than white or Hispanic people, including when it comes to vaccines.

A survey taken in May found that 54 percent of Black adults said they definitely or probably would get a COVID-19 vaccine, compared with 74 percent of white and Hispanic adults, said the Pew Research Center.

But the most recent survey by Pew found that only 32 percent of Black adults said they would definitely or probably would get the coronavirus vaccine compared with 52 percent of white adults. On average, about 55 percent of the population gets an annual flu shot.

Overall, Pew said 49 percent of Americans would refuse to get the coronavirus vaccine. The survey, taken on 10,093 American adults from Sept. 8 through Sept. 13, was a decline from 72 percent overall in a May survey, a 21 percentage point drop.

Of those surveyed by Pew, 78 percent believe the vaccine develop-

ment process has been too hasty.

National Institutes of Health data for 2019 shows that 30 percent of participants in federally funded research identified themselves as racial or ethnic minorities, including 16 percent Black, 9 percent Hispanic, 3 percent Asian, and 1 percent American Indian or Alaska Native.

Sullivan said another problem in recruiting African Americans is the low numbers of Black physicians practicing in the U.S. Personal physicians usually play a major role in recruiting people for clinical trials.

“Detroit has more access to African American doctors, so it will be a good place to recruit. People might be more comfortable when part of a larger group,” Sullivan said.

In the mid-1990s, Sullivan was involved in a research project involving Parkinson’s disease. “We agreed to do a trial and recruit African Americans because the drug affects Blacks differently. We got Muhammad Ali to endorse the concept of clinical trials, and it helped quite a bit,” he said.

Daniel Kaul, M.D., a vaccine researcher and infectious disease doctor with Michigan Medicine, said the Ann Arbor-based health system reached out to the minority population through social media and especially in the Ypsilanti community to participate in the AstraZeneca study.

“Everybody is concerned that the pool of people who get the vaccine look like the pool of people getting the vaccine,” Kaul said. “We need participation because we want to know if it works with age and race.

Minorities are clearly disproportionately affected” by COVID-19.

Besides distrust, barriers such as transportation, easy access to test sites and unpaid time off from work, sometimes affect minority participation in research, experts said.

Foster said he hopes COVID-19 research sites offer transportation and computer technology to allow for virtual visits.

“Whenever I have conversations with people (about volunteering in a clinical trial) I say it is important for us to be represented so these medicines are applicable to our community,” Foster said. “We need to get over these traumatic events that each one of us carries in our psyche, because there are built-in safeguards now to prevent abuses like have happened in the past.”

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GILBERT

totaled 3.3 million square feet, while build-to-suit projects under construction for specific users were just 1.8 million square feet. Hamburger said Bedrock is exploring both building types.

The region’s 400 million-squarefoot industrial and warehouse market is just 4.4 percent vacant and average asking rents ($5.97 per square foot per month) are creeping toward the $6-per-square-foot figure, according to a second-quarter report from New York City-based brokerage house Newmark Knight Frank.

In Detroit, there is 45.9 million square feet, with a 12 percent vacan-

cy rate on space that commands $5.03 per square foot per year on average.

But also in the city, there is a lack of contiguous large chunks of land for new development.

“The size of the acreage is probably the biggest thing, and its close proximity to the bridge, are I’m sure the driving forces behind the sale there,” said Alan Holt, an associate broker in CBRE’s Southfield office focusing on industrial space. “Some of the buildings can be salvaged and that is a bonus there, too. I’m not sure if he’s looking to do another industrial park, but the city is in high demand for quality industrial space.”

All that leads to Gilbert’s $38.5 million bet on the Sakthi property, which has about 10.4 acres of land for development, and 618,000 square feet of building space (not including the vacant Southwest High School, which Sakthi paid $1.6 million for in 2015 and was included in the deal).

Hamburger said the school is in “poor condition” but its future has not yet been determined.

“It’s a logical move,” said Daniel Labes, executive managing director specializing in industrial space in the Farmington Hills office of Newmark Knight Frank, said of Gilbert’s purchase. “They dominate the downtown office market and control much of the parking. They have hundreds of residential units. Industrial

neurs is that we need to do this in a on a much larger scale,” Cassin said.

“This was very needed; we can make a huge difference, we can add a lot of value to Detroit.”

The organization is at the start of the application process and expects to send in its materials for certification later this fall. MWF said it expects certification to take approximately 90 days

and it would be lending by shortly after the first of next year.

To help get the nascent CDFI off the ground, the nonprofit was able to look within its own organization to find an expert in the process. MWF has hired Alexis Dishman to be its chief lending officer.

Dishman, 42, is a member of MWF’s board of directors, a 2013 Crain’s 40

Dan Gilbert’s Detroit real estate portfolio

From Page 3

“We view this as a way to further diversify our portfolio in an area that has a lot of potential and also has significant economic development impacts along with job creation, bringing Fortune 500 companies to the market and satisfying demand,” Hamburger said, noting that Bedrock already has space it considers industrial at 1800 18th St. and the Quicken Loans Technology Center.

For years, industrial space has been at a premium as Detroit’s automakers rebounded from their nadirs last decade leading up to and during the Great Recession, causing an increase in space demand from suppliers and other users. Because much of the area’s post-war industrial building stock has aged into obsolescence as manufacturing technologies and requirements have changed, new buildings and retooled factories have sprouted up throughout the region.

Speculative building — virtually unheard of in the office sector these days — is common for industrial space.

According to a second-quarter report from the Southfield office of Los Angeles-based CBRE Inc., some 3.3 million square feet of speculative building — buildings under construction without a signed tenant —

CDFI

From Page 3

Cassin said the organization has been doing some community outreach in recent years and saw a clear and present need for an enhanced scale of lending. “(What) we heard from entrepre-

Industrial/warehouse: 748,052 square feet Office: 6.33 million square feet Retail: 476,000 square feet Apartments: 590, with another 3,500 planned Parking spots: 15,800 Hotel rooms: 389, with an unknown number more planned SOURCE: BEDROCK LLC

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Hamburger

Labes

is the next step and has been in demand for decades, but huge barriers to entry that have been discussed ad nauseum. The Big Three have all made major commitments to Detroit, and so has Bedrock. This space will lease very quickly.”

Real estate empire Gilbert, the head of Rocket Companies Inc. (NYSE: RKT), began about 10 years ago buying and renovating downtown Detroit real estate as Quicken Loans Inc., the Rocket Companies predecessor, brought 1,500 people to the central business district from the suburbs.

He has been on a buying spree in and around downtown ever since, laying claim to iconic office towers like the First National Building, Chase Tower, Chrysler House, 1001 Woodward, One Woodward Avenue and Ally Detroit Center, to name just a handful.

He has also developed and redeveloped multifamily and retail

“SO WHAT SETS MICHIGAN WOMEN FORWARD OUT IS WE ARE A STATEWIDE LOAN FUND THAT IS GOING TO FOCUS ON WOMEN THAT ARE IN THE LOW-TO-MODERATE OR DISADVANTAGED COMMUNITIES. ” — Alexis Dishman, chief lending officer, MWF

under 40 honoree and a veteran CDFI and banking executive. Most recently, Dishman was managing director of lending for Michigan and Ohio for IFF, a CDFI with an office in Detroit where she provided the lending team’s strategic direction.

Dishman said she sees a “spectrum of capital” available for would-be entrepreneurs in the city of Detroit and elsewhere. That spectrum ranges from angel investors to loan funds to banks.

“So do we have enough resources right now in the city? Likely no,” Dishman said. “So what sets Michigan Women Forward out is we are a statewide loan fund that is going to focus on women that are in the low-to-moderate or disadvantaged communities. So that’s going to set us apart because there’s really no one that has that focal point right now.”

MWF executives say that as they go about implementing their increased lending strategy and which types of businesses might be targets for investment, they’re taking some guidance from an initiative of the administration of Detroit Mayor Mike Duggan: 20-minute neighborhoods.

The idea is to create neighborhoods in the city that allow residents to obtain most basic services within a 20-minute walk or bike ride.

That’s going to mean loans for the smallest types of businesses.

“You know, there’s a reason why people ... haven’t already done this before. It’s the hardest thing to do,” Cassin said. “Businesses that have five or fewer employees are the ones most vulnerable to COVID, or any other disaster that can happen. And so we’re going to work hard to strengthen those women who make up a large proportion of Detroit entrepreneurs.”

Dishman and Cassin said that beyond just providing some capital, they’ll also be working closely with entrepreneurs to help with general business acumen and financial education.

Executives at MWF say that loans could reach up to $50,000 each. However, given the “risk” those deals often carry, the organization plans to do mostly much smaller loans, Cassin said.

“We want to make some $5,000, some $10,000, some $15,000 (loans).

We want to make a lot of those,” she said. “It’s hard work. That’s why nobody wants to do it.”

The CDFI Fund, administered by the U.S. Treasury Department, says that Michigan organizations have loaned out more than $550 million in CDFI loans.

Beyond loan funds for entrepreneurial activities like MWF, several CDFIs operate in other sectors, such as affordable housing.

As Michigan Women Forward gets ready to kick off its CDFI lending program, Dishman said when she looks down the road in three years, she’s hopeful that the organization will have helped contribute toward goals of a more equitable business community.

“So we have developed a more inclusive economy, that when we look around and we see women entrepreneurs, they’re across the city and they’re thriving, and their businesses are thriving,” Dishman said of her vision for the initiative. “And not only have they accessed our capital, but now they are in a position themselves to look for more traditional capital as they continue to grow their businesses on the spectrum.”

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

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space, bringing things like microapartments and luxury lofts to Capitol Park and the Woodward corridor, and attracted retail tenants like H&M, Nike, Lululemon and Under Armour to the first-floor retail space there.

Gilbert has also been building new, with major residential, hotel and office developments underway or nearing completion on the site of the former J.L. Hudson’s department store site as well as in Brush Park, plus elsewhere.

But the splash of shopping, apartments and glitzy office is a far cry from the industrial landscape, which laid the foundation for the city’s middle-class a century ago.

New developments

The vacant Southwest High School was included in the Sakthi deal. | CRAIN’S DETROIT BUSINESS

SHORTFALL

From Page 1

Detroit is one of 24 Michigan cities with its own income tax. Residents pay 2.4 percent while commuters pay 1.2 percent. That revenue is split approximately in half between residents and nonresidents, Chief Financial Officer Dave Massaron said.

The commuters’ tax does not apply to wages earned from a location outside Detroit, per the City Income Tax Act, as cited on the state of Michigan’s website. That’s an added issue for cash-strapped municipalities in a time when a quarter of employed Americans were teleworking as of August due to COVID-19 — down from 35 percent in May, per the U.S. Bureau of Labor Statistics. That’s way up from March 2019, when the BLS said 7 percent of U.S. workers had the option to work from another location including home.

Employers in Detroit or doing business in Detroit must withhold income taxes from employees' pay — unless those taxes don’t apply, due to remote work, according to the state. But it’s unclear how that will work in practice.

Companies do have the option of continuing to withhold taxes anyway, meaning a telecommuting nonresident looking to recoup taxes would need to take the initiative to file for a refund in their tax return, said Michael Bannasch, state and local tax senior manager for Troy-based accounting and business consulting firm Rehmann.

Detroit-based Blue Cross Blue Shield of Michigan, for example, has not changed its policy and continues to withhold income tax payments from its more than 5,500 employees who work in the city, Helen Stojic, director of corporate affairs for BCBSM, told Crain’s in an email. Detroit-based Henry Ford Health System plans to tell nonresidents working significant hours remotely to “consider” apportioning their 2020 earnings when they file their tax returns based on where they’re working, it said in an emailed

statement. But the health system’s payroll department is also “assessing if there are options available to adjust payroll withholding amounts for the balance of 2020,” the statement read.

It had nearly 12,000 employees working in Detroit as of early 2019, per Crain's data archives.

Detroit’s biggest employer, Rocket Companies Inc. with 17,000 employees in the city, declined to comment.

A third of revenue Income tax is no small slice of cities’ revenue, so decisions that states, businesses and employees make here have ramifications for cities’ bottom lines. For those that levy the tax, it averages 34 percent of what they take in annually, according to a Citizens Research Council of Michigan report.

Cities including Detroit, Flint, Grand Rapids and Ionia that get a substantial chunk more from income taxes than property taxes are likely to experiences those losses more deeply.

It’s possible that some cities may challenge the state’s view in court, arguing that taking work home doesn’t exempt one from taxes. But Michigan

Detroit has seen a spate of industrial developments and plans in recent years.

A joint venture between Detroit-based Sterling Group and Texas-based Hillwood Enterprises LP is working on a new development of a $400 million, 3.8 million-squarefoot shipping and distribution center for Amazon.com Inc., the proposed user, at the former Michigan state fairgrounds property at Eight Mile Road and Woodward Avenue.

The former Cadillac Stamping Plant is slated to be demolished and turned into a large speculative warehouse development totaling 682,000 collects and administers Detroit’s income taxes, so what the state says goes, Bannasch said.

How much less money cities will collect depends partly on what Massaron they’re willing to expend on enforcement, he said. Will they track down companies and employees looking to game the system?

The state says documentation of telecommuting wages isn’t required for tax returns. But it does say employees should keep records handy in case a city tax administrator asks for proof later — and employers should tell employees in a letter the dates they were instructed to work from home.

While some states have released emergency tax rules on telecommuting during the COVID-19 state of emergency, Michigan is continuing to uphold tax laws as written.

Detroit in April projected a $194 million revenue shortfall for fiscal

“THE SIZE OF THE ACREAGE IS PROBABLY THE BIGGEST THING, AND ITS CLOSE PROXIMITY TO THE BRIDGE, ARE I’M SURE THE DRIVING FORCES BEHIND THE SALE THERE.” — Alan Holt, CBRE

square feet by Riverside, Mo.-based NorthPoint Development LLC is anticipated to cost $47 million.

FCA US LLC is investing $2.5 billion on Detroit’s east side to convert its Mack Avenue engine plants into a new Jeep SUV assembly plant and modernize its Jefferson North Assembly plant. Hiring for the 4,950 jobs is under way and production is expected to start in the first quarter.

Those are just three of the more high-profile ones.

Hamburger said the exact amount of space the 10.4 developable acres can accommodate hasn’t been determined because the fate of the vacant school is not yet known.

The deal for the property, which is on West Fort Street south of I-75 and west of Livernois Avenue, was in the works as Gilbert was gearing up to take his Quicken Loans Inc. public.

His Fort Street Company LLC, incorporated with the state using a registered agent service to mask 2021, which started July 1. However, as of September, that estimate has widened by $62 million. That brings the total for 2020 and 2021 to $410 million, though Detroit balanced its budget for the two years with cuts to staff, capital improvements, recreation and more. The city expects to cover the additional $62 million with a larger-than-expected fiscal 2020 surplus, as well as possibly slowing Detroit employees’ return to work, Massaron said.

Officials attribute that additional loss to Detroit casinos being closed longer and reopening more gradually than expected, and giving out more income tax refunds to nonresidents working remotely for longer than expected, according to a presentation for the city’s September Revenue Estimating Conference.

“Detroit has been levying this (income) tax since 1961 and has a long history of relying on that, and this pandemic may upend that role and force them to rethink their tax structure,” said Eric Lupher, president of the Livonia-based Citizens Research Council of Michigan.

Income taxes made up nearly 30 percent of Detroit’s revenue in fiscal 2019, before the pandemic, at $361 million, per the city’s comprehensive annual financial report. That dropped to a projected $283 million last fiscal year (fiscal 2020, which ended June 30) and $227 this fiscal year, yearly declines of 22 percent and 20 percent, respectively, according to the conference presentation.

Meanwhile the city estimates its wagering tax haul has dropped from fiscal 2019’s $184 million to $132 million last fiscal year and $87 million this year. Both income sources are expected to rise nearer to normal levels in fiscal 2022.

‘Largest driving impacts’ Telework isn’t as worrying as the financial drain posed by the wider economic shutdown, Detroit CFO Massaron said.

“I don’t want to minimize the

who is behind it, submitted a May 24 bid — about six weeks before the Quicken IPO — of $38.5 million, beating out a stalking horse bidder that offered $37 million for the property, according to federal court documents in a lawsuit against Sakthi

by Huntington National Bank.

Since the property is in a federal Opportunity Zone, that means that if Gilbert bought it using capital gains, he can defer taxes on that through capital gains tax benefit folded into the 2017 Tax Cuts and Jobs Act. The zones are designated according to U.S. Census tracts where the poverty rate is at least 20 percent and the median household income is less than 80 percent of that in the surrounding areas.

Proceeds from the sale will be used to pay back a slew of creditors owed money by Sakthi, which came to the city with great fanfare — and public tax incentives, both at the local and state level — six years ago with the promise of hundreds of jobs for Detroit residents.

Perhaps that promise can be renewed, said Sean Cavanaugh, vice president in the Royal Oak office of JLL specializing in industrial space.

“The potential to redevelop the land on Fort Street into a large single-tenant building will be attractive to a number of users, I’m sure.”

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB issue associated with it for the longterm, but I think the largest driving impacts are the economic changes and behavioral changes that accompany the pandemic,” he said, such as casinos closing, canceled sporting events, concert venues shut and decreased restaurant activity. “That economic impact is far greater than remote work.”

And when it comes to income tax loss, remote work isn’t the only factor.

Businesses’ 2 percent tax on their own income could also prove troubling for Detroit, according to Bannasch, as it can be divvied up if they operate in several cities but less work occurred in Detroit this year.

“On the business side … this affects businesses much more when they go to file their tax returns in February, March, April or even later next year,” he said.

The city will also get less from residents, Lupher said. Detroit’s unemployment rate has skyrocketed during the pandemic, jumping to 48 percent in May and June, while dropping to 38 percent in July, a University of Michigan Detroit Metro Area Communities Study survey shows.

Twenty-two percent of residents were receiving unemployment benefits as of late July, according to the survey. And while unemployment insurance is taxable at the state and federal level, it’s not at the city level.

When it comes to the work from home conundrum writ large, enduring effects on tax revenue depend on when people return to office buildings.

“It’s sort of a question of duration now,” Lupher said. “People are starting to pop back into the office and work a day or two. How long is that going to go on? Are they going to return to normal?

I think the standard answer you get from people is, ‘Not until there’s a vaccine,’ and not until they know their employees will be safe working alongside their coworkers.”

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

SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 19

FCA PLANT

From Page 1

The extensive structural medication of the 24-year-old Mack Avenue engine plant was just one of several challenges FCA’s contractors have navigated over the past year in a race to piece together the first new vehicle assembly plant in the Motor City in nearly three decades.

“There was a lot of moving pieces to this chess game,” said Mike Haller, CEO of Detroit-based Walbridge Aldinger Co., which was one of three general construction contractors on the project.

The $1.6 billion industrial redevelopment project tied to the creation of 3,850 new jobs is nearing a completion on Detroit’s east side — a milestone achievement considering the complicated nature of the project, shortages in key skilled trade workers and the abrupt halting of construction for about six weeks this spring because of the coronavirus pandemic.

“Construction has marched along really well,” Mark Stewart, FCA’s chief operating officer for North America, said in an exclusive interview with Crain’s.

When Stewart announced FCA’s plans on Feb. 26, 2019, to convert the two engine plants on Mack Avenue into an assembly plant, the automaker laid out an ambitious goal of being in production of new Jeeps by October this fall.

The first major achievement that sealed the deal was the city of Detroit’s assemblage of some 215 acres of land around the Mack complex and neighboring Jefferson North Assembly Plant to accommodate the construction, parking and logistics of a new assembly plant.

FCA’s goal of having the plant in production by the fourth quarter of this year got pushed back by three months after Gov. Gretchen Whtimer halted most industrial construction from late March to early May to curb the spread of the virus.

Stewart said construction contractors bounced back quickly, adopting new safety protocols and not experiencing any coronavirus infections in the labor force building the plant.

“The team has really done a great job to get things on track as we were able to safely bring the construction folks as well as our launch team members back into the facility (in May),” Stewart said.

The teams behind the rebirth of an auto plant Over the past 16 months, construction companies working for Fiat Chrysler Automobiles have transformed the automaker’s Mack I and Mack II engine plants at Mack Avenue and St. Jean Street in Detroit into a new Jeep assembly plant. Detroit-based

Walbridge Aldinger Co. and Livonia-based Aristeo Construction Co. formed a partnership for the general construction management contract for turning Mack II along Warren Avenue into the body shop and reconfiguring the layout of Mack I for general assembly of Jeep Grand Cherokee SUVs. Auburn Hills-based Giffin Construction

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Commercial Contracting Corp.

Devon Industrial Group Ideal Contracting LLC Schreiber Corp.

Warren Livonia Ypsilanti Detroit New Hudson Warren Romulus Lapeer Madison Heights Detroit Toledo Livonia Auburn Hills Detroit Detroit Wixom

Earthwork & Site Utilities Steel Erection & General Trades Demolition Earthwork & Site Utilities Trestle Caissons Fencing Installation Landscape Installation Landscape Installation Cleaning Concrete Installation Floor Polishing & Epoxy Interior Renovations & Test Building Metrology Lab, Site Canopies and Trestles Construction Auxiliary Services Building Steel Erection Roofing General Assembly

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Ruby + Associates Bingham Farms Testing Engineers & Consultants Inc. Troy PEA Group Troy (formerly Professional Engineers Associates Inc.) SSOE Group Toldeo Carlson Design Group LLC Detroit Walbridge Technologies LLC Detroit Nordstrom-Samson & Associates Inc.

Farmington Hills

Duckworth & Associates Inc. GZA GeoEnvironmental Inc. Horizon Engineering Associates LLP Bergmann Associates Inc.

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Architectural Engineering Renovations Architectural Engineering Auxiliary Services Building information modeling (BIM) coordination and 3D Scanning Architectural Engineering Administration Offices Building & HVAC Studies Geotechnical Services Commissioning Vehicle Bridge Design

BODY SHOP

GENERAL ASSEMBLY

PAINT SHOP

‘Fast’ construction timeline FCA broke up the construction into two main general contracts:  A joint partnership between Walbridge and Livonia-based Aristeo Construction Co. to transform Mack I into a general assembly plant and renovate Mack II to become the plant’s body shop.  Auburn Hills-based Giffin Construction oversaw construction of a new 800,000-square-foot paint shop along Mack Avenue near the corner of what used to be St. Jean Street, which the city closed and handed over to FCA as part of the land deal.

The paint shop was a turnkey contract, meaning Giffin and its subcontractors had to install the equipment for painting the bodies of new Grand Cherokees as they constructed the building itself.

It took 12 months to construct the paint shop at FCA’s Sterling Heights Assembly Plant and another 12 months to build out the systems and install equipment, Monacelli said.

The Mack Avenue project had to be done in 16 months, said Rich Giffin, vice president of sales and marketing at Giffin Construction.

Paint shop Contractor

Headquarters

Construction work performed

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Construction work performed

Giffin, Inc. 3LK Construction LLC Barton Malow Center Line Electric Inc. Central Conveyor Co. Commerce Controls Inc. Commercial Contracting Corp.

Complete Automation Conti Corp.

WM Crook Fire Protection Co. Electrical Insights LLC Encore Automation LLC Environment Integrated Solutions Ltd.

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General Construction Management Cleaning services Building & Architectural Services Process Electrical Conveyance Systems Process Controls Structural Steel Services Paint Circulation Systems Facility & Process Electrical & Mechanical Process & Building Fire Protection Process Electrical Control Sealer Automation System Environmental Control System

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Fire Defense Equipment Co., Inc. GEM Electric Ghafari Associates, LLC Goyette Mechanical Inc. Hoyt Brumm & Link Inc. Indiana Bridge Inc. Indicon Corp.

Lake Erie Electric Madison Heights Glass Co. Niles Construction Services Inc. Outbound Technologies Inc.

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“That’s as fast as has ever been done in North America,” Giffin said.

Giffin Construction mapped out a just-in-time construction plan that required “precision planning and unbelievable communication” be-

20 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

tween the automaker and subcontractors that only got interrupted by the coronavirus shutdown in the spring, Giffin said.

The project was sequenced so that work on the concrete foundation,

AERIAL PHOTOGRAPH BY LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

steel walls and roof was followed by installation of the tanks, piping and machinery used to paint vehicles.

“We were literally, to stay within the 16-month window, pouring sections of this concrete floor and within

days of ... the three-to-four weeks that it has to cure, we’re setting tanks,” Giffin told Crain’s. “That was literally the only way — to go in there like a chess game and execute this construction accordingly.

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oversaw construction of a new 800,000-square-foot paint shop. The three sections of the plant were connected by trestles that will carry vehicle bodies from the body shop to the paint shop and onto the general assembly. A new indoor test track and waste water treatment plant also were constructed by Walbridge-Aristeo.

Contractor

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The Fred Christen & Sons Co. C.L. Rieckhoff Co. Inc. Boon Edam Inc. Seaway Painting LLC Eugenio Painting Co. Stenco Construction Co. Applied Handling Inc. L.S. Brinker Co. Indiana Bridge John E. Green Co. Motor City Electric Co. Madison Electric Co. WM Crook Fire Protection Co. Progressive Mechanical Inc. TMI Climate Solutions Inc. Johnson Controls Inc.

Toledo Taylor Lillington, N.C. Livonia Grosse Pointe Woods Livonia Dearborn Detroit Muncie, Ind. Highland Park Detroit Warren Royal Oak Ferndale Holly Auburn Hills

Roofing Body Shop Siding Installation Revolving Door Installation Painting Painting Carpentry and Interiors Overhead Doors Installation Out & Linker Buildings Steel Erection Mechanical Piping Electrical Installation LED Lighting Supply Fire Protection Mechanical Piping CMM Lab Air Handling Air Handling Supply & Repairs

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eeks ting was here this

ditional contractors and broaden the labor pool.

Walbridge assigned six of its inhouse designers to work the project.

“Normally, you’d have two, maybe, maybe three — a lot of time just one,” Haller said. “The speed of the design to support the accelerated construction was a challenge.”

Steel erection work was split between Aristeo, Ideal Contracting and Indiana Bridge Inc., a Muncie, Ind.based steel fabrication company that worked on Little Caesar’s Pizza’s downtown Detroit headquarters and the paint shop at FCA’s Sterling Heights assembly plant.

“We had two concrete contractors, we had three excavation contractors, we had two different roofers,” Haller said.

Schreiber Corp. in Warren rebuilt the roof on Mack I for the general assembly shop and Toledo-based Fred Christen & Sons Co. did roofing work on Mack II for the body shop.

“We did that so that enough craft labor and craft supervision was available to complete the job,” Haller said.

Skilled trade labor unions were given monthly projections of man-hours by trade to help union leaders plan and organize labor in a “superheated” construction labor market, Haller said.

The coronavirus shutdown in the spring required additional shifts and workers, particularly millwrights for the assembly of the tooling inside the new plant, said Mike Barnwell, president of the Michigan Regional Council of Carpenters and Millwrights.

“The timeline was extremely tight to begin and then with COVID thrown in it really didn’t change the end dates much, it just changed the amount of hours that our men and women had to work out there and the amount of people it took to do it,” Barnwell said.

Approximately 14 percent of the dollar value of contracts and subcontracts for the general assembly and body shops was awarded to minority-, veteran- or women-owned businesses, Haller said.

Greenfield vs. redevelopment

“And then the next piece (of concrete) gets poured and another section of a tank’s going in,” he added.

This project follows a trend in the automotive industry to build and retool plants in less and less time to respond to demands in the new vehicle market, Giffin said.

“There’s always a push for faster,” he said.

Online extra: Interview with FCA’s COO for North America ` Listen to the Detroit Rising podcast interview with FCA exec Mark Stewart, and find an accompanying transcript. crainsdetroit.com/ detroitrising

Managing labor shortages For construction of the paint shop, Giffin Construction had to hire sheet metal workers, iron workers and electricians from out of state, workers known as “travelers” in the building trades. The labor shortage added to the cost of construction, though Giffin could not quantify how much.

“We just noticed it reflected in the pricing for some of our contractors,” Giffin said. “And we’d clarify and say, ‘Man, what planet were you on when you pulled this pricing together? Are we living on the same planet?’”

“What it came down to, in many instances, was just a sh ortage of skilled trades,” he added.

Construction managers broke out the scope of work for several aspects of the project in order to bring in ad-

Most new auto assembly plants are designed to make the flow of parts seamless from the body shop to the paint shop and onto the general assembly line.

Because this redevelopment project entailed taking two separate engine plants and then building the paint shop in what used to be an employee parking lot, enclosed trestle bridges had to be constructed to connect the three buildings to move a Grand Cherokee body from the body shop to the paint shop and onto the assembly line.

About 75 percent of the steel trusses in Mack I had to be reinforced after being cut and modified to handle the weight loads of an overhead vehicle assembly line, Monacelli said.

The two trestle bridges connecting the three buildings and weighing a combined 1,400 tons were erected by Detroit-based Ideal Contracting LLC using 2,500 pieces of steel, according to Ideal Contracting.

Walbridge’s CEO said the cutting and reinforcing of trusses in the Mack I building was not unusual, but the magnitude of what had to be done was.

But it was a necessary adaptation for a building that otherwise may not have been reused, Haller said, “which would have been a travesty.”

“That’s what environmentalists and sustainability people should really be looking at as a grand slam,” Haller said.

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

FCA hiring a ‘proof point’ for residents-first job application strategy Jobs-for-Detroiters program could be model

BY ANNALISE FRANK

As FCA US LLC extends offers to more than a thousand Detroiters, employment agency Detroit at Work’s job pipeline model is getting put to the test.

The automaker committed to consider Detroit residents first for many of the nearly 5,000 jobs it plans to add at two east-side plants as part of its mandated community benefits agreement for $2.5 billion in investment.

As of the second week in September, 1,600 Detroiters had accepted job offers and 1,000 have started training in other plants in Southeast Michigan, FCA Chief Operating Officer Mark Stewart told Crain’s. Interviews are expected to continue through October.

The operation funneling pre-qualified Detroit candidates for Fiat Chrysler’s consideration has largely been handled by Detroit at Work. The agency created by Mayor Mike Duggan’s administration has said it plans to continue offering a similar service to push Detroiters’ job applications in front of other big incoming employers, like Amazon.com Inc. This means the FCA project is something of a proving ground for the strategy that’s targeted at at least eight other employers so far. It has also drawn criticism for not mandating employers hire a certain number or percentage of Detroiters, instead merely putting them first for consideration.

Detroit at Work got $5.8 million from the state and federal government to support its work helping recruit, screen and train job candidates. About 16,500 Detroiters got pre-qualified through Detroit at Work readiness events — a step required before they were able to apply. Of that total, 8,600 applied.

On July 13, FCA began interviewing 2,900 Detroiters for jobs at its new Jeep plant, Stewart said. That’s about 34 percent of applicants.

“We’ve only had one (job offer) decline,” he said, and 1,600 offers accepted so far. “So that’s not too bad of a (hiring) rate so far.”

FCA must fill 4,950 jobs total for its converted its Mack Avenue engine plants and retooled and modernized Jefferson North Assembly plant at Jefferson Avenue and Connor Street.

Hiring for 3,850 jobs at Mack, where FCA is building a new assembly plant for Jeep SUVs, comes first because that plant will start production first. Detroiters have gotten priority to apply after laidoff or temporary UAW employees.

FCA could not estimate how many UAW employees there would be.

The Mack facility will operate under the umbrella name of Detroit Assembly Complex along with the Jefferson North plant.

‘Promise of a process’ “There really wasn’t a specific agreement made about jobs for Detroiters,” said Linda Campbell, a member of the Equitable Detroit Coalition that fought for the Community Benefits Ordinance under which FCA must look at Detroiter applications first. “What Detroiters got, essentially,

was the promise of a process.”

Campbell said she wants to see more assurances for residents when the city negotiates economic d e v e l o p m e n t Sherard-Freeman deals, in which tax abatements can tend to funnel public money to large corporations without nearby communities seeing substantial benefits.

“We want to see more teeth in these agreements between the city and these private developers, particularly when there’s public investment made,” she said. “We’re not benefiting from these huge tax abatements. There may be some lucky residents who get jobs, but that’s what it turns out to be. It’s like the luck of the draw.”

Detroit City Council President Pro Tem Mary Sheffield also this summer expressed dissatisfaction with the idea of having employers that enter into agreements with the city consider Detroiters first for jobs, as opposed to mandating they hire a certain number. She spoke out when the Duggan administration suggested using that strategy for demolition contractors under its $250 million blight bond proposal.

Nicole Sherard-Freeman, Detroit’s executive director of workforce development, said she understands the concerns, but she believes it will work.

“I feel so strongly about Detroiters as an asset, as a ready and willing workforce, that I am not at all bothered by employers who come to ask for our help in filling their openings, but don’t guarantee a certain number of Detroiters,” she said.

Strategy on the rise Now Detroit at Work has built out a platform to get employers lists of candidates pre-qualified through partaking in city work readiness events. And it’s being replicated.

“We don’t have plans to deliver the extent of support that we delivered for FCA right now because ... that’s an expensive proposition,” Sherard-Freeman said. “But what we are able to do is leverage the infrastructure that we built to support FCA ... You spend the money to build a bridge initially, and then everybody who follows can walk across that bridge.”

However, Sherard-Freeman said, with more funding from the state or an individual company, it could replicate the more expensive portions of its deal with FCA, like providing dedicated staff resources including interviewers. Detroit at Work has amassed a job candidate database of 50,000, beyond the 37,000 who initially expressed interest in FCA jobs, the organization estimates.

Crain’s Senior Editor Chad Livengood contributed to this report.

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

SEPTEMBER 21, 2020 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

Deborah Joy Winans shines a light on beauty, talent of Detroit Actor and singer Deborah Joy Winans of the prominent Detroit gospel music family the Winans is the ambassador for the inaugural Detroit Black Film Festival. The online festival, which took place over the weekend, featured 30 films by Black filmmakers, as well as native Detroiters in the local and national film industry. Winans, a Los Angeles resident who grew up in Detroit, has starred in the Oprah Winfrey Network drama “Greenleaf.” A new film in which she stars, “Last Words,” premiered at the festival. | BY ANNALISE FRANK `CRAIN’S DETROIT BUSINESS: So, just to start, can you talk about what the Detroit Black Film Festival means to you and why you decided to take on the ambassador role in its first year?

Winans: Well, anything Detroit will always mean something to me. That’s my home. I think Detroit speaks to a lot of who I am. The resilience, the strength, the courage. Detroit bounces back time after time after time, and anything coming out of Detroit shows me that, No. 1, it’s been through the ringer, and it has survived and it is thriving and it is always worth the time and effort we can put into it. And so this being the film festival, me being an artist, an actor, an activist, it speaks to everything that I am. It is allowing us, particularly at a time when we, as people of color, feel a little bit insecure in the hope that we’ve had as people because of everything that’s happening in our communities and in this country. This is coming at a really, really great time to kind of lift that hope to put us in the forefront, to show us we still do amazing, incredible things, especially in the arts. `What’s been your involvement in Detroit’s film industry? And do you see more in the future?

I hope there’s more involvement in the future. I haven’t been able to do much there. Everything that I have shot or been a part of as an actor hasn’t filmed there, so I’m looking forward to being able to film there at some point because, you know, that’s home. But I hope that it continues to thrive there as an industry, of film, because that’s just a beautiful place. I feel like it just lends to creating really amazing art. `Then, of course, you’re part of the Winans family of singers and niece of Grammy-winning gospel singer CeCe Winans, but you grew up wanting to act. Can you talk about growing up in Detroit and pursuing that?

Yes, my dad is Carvin Winans. I’ve always

loved to be in the room or in the concert hall or church where they are constantly singing, that was a beautiful way to grow up. I just never loved singing myself. My parents always took my brothers and I to the movies, every weekend. We would do double features. I was just mesmerized by the screen. For some reason as a little girl I just knew I could do that. It wasn’t until I graduated from high school and was going to start at Wayne State (University) that I told my parents, “I’m going to major in theater.” And they were like, “What?” My brothers had started singing, everybody in my family sang. And it wasn’t my passion ... I did my first show at Wayne State.

It was in the Studio Theatre and it was called “Hospice” by Pearl Cleage.

It was a two-woman show, so you couldn’t help but see me.

When I came out afterwards ... (my family) said, “This is absolutely what you do.” I felt like I had a gift to do it, but then training to me was the way to make it excellent. We’ve always believed in excellence. I think that’s something not only my parents taught us, but Detroit taught us. You work your talent, you work your gift.

`What do you want people to take away from this film festival about the industry and the film work of Detroiters?

I want people to continue to recognize the beauty and the talent that lies in

Detroit. I want people, especially aspiring artists that are in Detroit, to know that you can make whatever you want to make wherever you are. Especially during this current time, during this pandemic, you can still find safe ways — it’s got to be safe — and creative ways to still do the art that’s inside you. A lot of times when we’re in — well, I’ve never been in a pandemic — but when we’re in, even, smaller situations that just kind of make us feel like, “I thought I could do this; maybe I can’t,” this will let people know: Now is still the time.

Now is the time to live your dream, to continue to be a voice where it feels like we need one. I think Detroit is always in that place of continuously trying to be a voice for us. And so I love the creators of this festival. They are continuously trying to be a voice for Detroit, a voice for the community, and it’s so lovely to me. `I’m wondering if anything specific has been on your mind about your hometown lately? I mean with the pandemic, and you have family still in the city.

Just that we need to hope again.

We need to be safe. I know at one point Michigan was really mad at the governor. But my thing is, I just want us to be safe. I want us to recognize that while it may be cumbersome to put on a mask ... think of the people that have lost their lives. I think we have to learn how to not be selfish. I think we have to learn that we are all a human family.

You know, my uncle was very much affected, he was in the hospital for a couple weeks. What this has shown me throughout this country is that we need more love.

`So you live in L.A. now?

I do. I moved here for grad school and I never left. I met my husband here. I just really kept trying to pursue this acting life ... You get a lot of no’s, and I think being from Detroit I was able to keep getting back up. I’m telling you, man, it’s something about Detroiters. `How did that decision-making go?

Did you always know you’d head elsewhere to pursue acting?

I’ve always wanted to leave, but I wanted to leave for my dreams. I love Detroit, it’s home, it’s where I’m from. But I’ve always known there was more to life. We were blessed to be able to travel when we were younger. I’ve always known the world was big and always wanted to explore it.

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

Deborah Joy Winans, actor, singer, ambassador for the Detroit Black Film Festival. | COURTESY OF J. BOLIN

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Detroit fashion and tech ‘hackathon’ returns with virtual format A GROUP OF CODERS, DESIGNERS, artists, entrepreneurs and more will gather virtually later this month for the third annual Detroit Fashion + Tech Hackathon.

The event, scheduled for Friday through Sunday, "brings together creativity and technology to develop solutions to the problems facing the fashion and retail industries," according to a news release.

The event is being co-hosted by Detroit-based digital consulting firm Whim-Detroit LLC and the Pure Michigan Business Connect initiative, part of the Michigan Economic Development Corp.

“While industries are still uncovering the full impact of COVID-19, the crisis is providing an opportunity for unique innovation and more

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sustainable practices in fashion,” Lori McColl, founder of DF+TH and Whim, said in news release. “Not everything will be successful; however, this is a good time to test things out and develop a blueprint for moving forward, one of the guiding princi-

22 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 21, 2020

ples of the DF+TH.” Officials with the MEDC say they're hopeful the 36-hour event will prove helpful in connecting the state's overall apparel, retail and high-tech sectors.

“The DF+TH is a unique plat-

form that has always brought creative minds together in Detroit and demonstrates how their talents and businesses could grow and thrive here in the state,” Tanya Markos-Vanno, development and operations manager, for the MEDC’s Pure Michigan Business Connect, said in the release. “Now this annual event is moving virtual, providing opportunities for participants across the world to connect, meet mentors, and develop innovative solutions, showcasing how Detroit and Michigan play an important role in the growing apparel, retail, and high-tech fields globally.”

Registration for the $19 event.

More information is available at detroitfashionhackathon.com.

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