Crain's Detroit Business, Sept. 28, 2020 issue by Crain's Detroit Business

THE CONVERSATION: Neil Hawkins, from Dow to the reins of the Erb Family Foundation. PAGE 26 DETROIT HOMECOMING: Watch videos of the annual expat event at DetroitHomecoming.com. And come back to Crain’s next week for a full report on ‘The D’s Next Decade.’

CRAINSDETROIT.COM I SEPTEMBER 28, 2020

DETROIT

QLine, TCF Center get subsidy from state

Reopening for streetcar system still unclear, ‘months’ away BY CHAD LIVENGOOD

The Michigan Legislature on Thursday authorized a new $5 million-a-year subsidy for the QLine street car in Detroit and $7 million in immediate aid for TCF Center to cover losses sustained this year from a collapse in convention business due to the coronavirus pandemic. Detroit’s struggling streetcar system, which has sat idle since late March, would get $5 million for the fiscal year ending Sept. 30 and then additional $5 million payments in the 2021 and 2022 fiscal years under House Bill 6119. A spokesman for M-1 Rail, the private nonprofit operator of the 3.3-mile-long streetcar on Woodward Avenue, said the $5 million in state aid will help restart and improve the QLine’s service. The QLine, which costs $8 million annually to operate, does not have a target date to resume service, but it’s “expected to take months due to requirements around assuring necessary qualified staffing levels,” M-1 Rail spokesman Dan Lijana said Friday. “Once passenger service resumes, funding will go toward operations of running the QLine such as staffing and maintenance,” Lijana said in an email to Crain’s. See SUBSIDY on Page 22

DEMOCRACY

READY. SET. COUNT. Official absentee vote ballots are poised and ready to mail at the Rochester Hills City Clerk’s office. NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

The coming election will be like no other in ALSO IN FORUM: Nancy Wang: Why Michigan. Much of that difference will come election reforms should from absentee votes that are expected to more make it easier to vote, and to count the votes. PAGE 16 than double any previous election. Those are Rep. Leslie Love: Give clerks creating a huge logistical challenge for the clerks enough time to pre-process Love ballots. PAGE 17 charged with getting them counted. This week’s Wang Crain Forum analyzes what they are facing — Clerks: One extra day is not enough time to count. PAGE 16 and demystifies the process. PAGE 15 Graphic: How Michigan absentee voting works. PAGE 19

REAL ESTATE

Squeezed hotels fall behind on debt, delay building projects NEWSPAPER

BY KIRK PINHO

Some of the region’s most prominent hotels are more than three months late with their lenders, no fewer than three major greater downtown Detroit hotel building projects are bumping their start dates back due to the COVID-19 pandemic and one has temporarily halted construction completely amid cost overruns.

That’s just some of the fallout the hospitality industry is facing locally, six months into a global health and economic crisis that halted travel and put the brakes on conventions and other business gatherings, dimming or muting revenue streams for the tens of thousands of hotel rooms across Metro Detroit. While hotels have been performing better in recent months, the damage

COVID-19 has wrought will continue to be long lasting on the $10 billion industry that employs 155,000 across 1,400 hotels, according to the Michigan Restaurant & Lodging Association. Of course, the effects go far beyond bricks and mortar and into peoples’ pocketbooks and financial livelihoods. See HOTELS on Page 24

NEED TO KNOW

POWERING UP

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  AUTO SHOW SHIFTS AGAIN, THIS TIME TO SEPTEMBER THE NEWS: The North American International Auto Show will move its indoor-outdoor show to fall 2021 after canceling the 2020 edition of the Detroit show because of the COVID-19 pandemic. The change came weeks after organizers for the Los Angeles auto show said they would move that 2020 show from November to May 2021, wedging it in between the New York and Detroit shows. WHY IT MATTERS: The move to September will mean that Detroit will have gone more than 2 1/2 years without one of its signature events, which organizers estimate has an economic impact of more than $400 million on the region. The January show typically drew more than 800,000 attendees.

 HOUSE MOVES FORWARD WITH LIABILITY PROTECTIONS THE NEWS: A divided Michigan House voted to shield health providers and businesses from coronavirus-related lawsuits filed by patients, employees or customers, advancing bills that majority Republicans said would give businesses more comfort to reopen and block frivolous complaints. Many Democrats voted against the business-backed legislation, which was sent to the Republican-led Senate for debate.

WHY IT MATTERS: Employers have been hesitant to return workers to offices and other work sites because of fear of liability. (See story, Page 10)

UNIVERSITIES GET FLAT FUNDING IN STATE BUDGET THE NEWS: State funding for Michigan’s public universities is likely to remain flat in fiscal year 2020-21, quelling higher education leaders’ fears of deep cuts due to the COVID-19 pandemic. Funding for Michigan’s 15 public universities totals $1.473 billion, nearly identical to the year prior, according to a $62 billion budget OK’d by legislators. WHY IT MATTERS: Public colleges had feared sharp cuts to state funding. Also in the budget was a partial restoration of funding for Pure Michigan tourism marketing and the Going Pro skilled-trades campaign.

BLUE CROSS MAKES BUYOUT OFFER TO WORKERS THE NEWS: Blue Cross Blue Shield of Michigan plans to make voluntary separation offers to its more than 10,500 employees as the Detroit-based health

insurer works to cut administrative costs. The state’s largest insurer extended the offer to 8,650 nonunion employees, according to a company statement. It is working to potentially make the same offer to another 2,060 workers represented by the UAW. WHY IT MATTERS: CEO Daniel Loepp said the state of the Blues’ business is “strong,” but there are “significant financial headwinds on the horizon.” While spending on medical care fell almost 8 percent, administrative costs for Blue Cross rose about 35 percent amid the COVID-19 pandemic.

THANKSGIVING PARADE WILL BE TV-ONLY THE NEWS: Detroit’s annual Thanksgiving Parade will shift to a televised-only event this year amid continued efforts to prevent COVID-19 spread. Media sponsor WDIV-TV, Channel 4, will broadcast the Nov. 26 parade. The Parade Co. is also transitioning the Strategic Staffing Solutions Turkey Trot fundraiser, which takes place on Thanksgiving morning, to a virtual race with a goal to attract more participants than any other run in the state this year. The Hob Nobble Gobble fundraiser gala is also canceled. WHY IT MATTERS: The Parade Co. is taking the measures to maintain some of metro Detroit’s most beloved traditions while accounting for COVID-19 pandemic safety.

DTE, Consumers collaborate on EV charging plan  DTE Energy in Detroit and Consumers Energy in Jackson have pledged to work together along with four other energy companies to collaborate on a network of fast charging stations from Michigan to Kansas, making it possible for electric vehicle owners to drive longer distances without worrying about their next charge. Lack of charging stations is one of the barriers experts say has been limiting EV sales, a phenomena known as range anxiety, or the fear of running out of electricity between charges. Another problem is the amount of time needed to charge up. According to the Edison Electric Institute, more than 1.4 million EVs are in use today, a number expected to grow to nearly 20 million by 2030. Companies joining DTE and Consumers in the charging network’s memorandum of cooperation include Ameren Missouri, Ameren Illinois, Oklahoma Gas and Energy, and Evergy. According to the Edison Electric Institute, more than 1.4 million EVs are in use today.

 CORRECTION  Walbridge Aldinger Co. and Aristeo Construction Co.’s joint partnership for the general construction contract for the general assembly and body shops at Fiat Chrysler Automobiles’ Mack Avenue plant in-

cluded 40 percent in contracts and subcontracts to minority-, veteranor women-owned businesses. An incorrect percentage was published in a Sept. 21 story about the plant’s construction.

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FOOD & DRINK

Big-name Beaumont donors cite ‘crisis’ Send letter asking to meet with board BY JAY GREENE

Kristin Jonna, owner of Vinotecca in Birmingham and Vinology in Ann Arbor, is not keen on the concept of winterizing patio space. | VINOTECCA

A PLAN FOR ALL SEASONS Metro Detroit restaurants plan their cold weather pivot

BY NINA IGNACZAK | SPECIAL TO CRAIN’S DETROIT BUSINESS

With cooler days and winter weather just around the corner, metro Detroit restaurants that enjoyed a reprieve from pandemic-induced losses during warmer months are bracing for the loss of their patio space and changes in customer behavior. The hospitality sector is among the hardest hit by the COVID-19 crisis. According to a report released by the Michigan Restaurant & Lodging Association earlier this month, 23 percent of Michigan restaurant operators say it’s unlikely they will be open in six months, and 74 percent don’t expect a return to pre-pandemic sales within that time frame. One in six restaurants have closed nationwide, according to data from the National Restaurant Association. Warmer weather and the oppor-

Detroit Fleat in Ferndale is increasing the number of outdoor igloos it will operate this year from four to six. | DETROIT FLEAT

tunity to claim outdoor space to compensate for the 50 percent capacity restriction imposed under Gov. Gretchen Whitmer’s executive order brought relief for many operators, who expanded outdoor dining on their properties and took advantage of local permit programs to allow for seating in

public rights of way. With the addition of an awning, picnic tables and planters, chef-owner James Rigato of Mabel Gray in Hazel Park was able to create a new seating area to compensate for nearly all of the venue’s indoor capacity loss under the order. In May, Rigato invested in

electrical work, outdoor heaters and secured a permanent outdoor liquor license. “None of this felt temporary,” Rigato said. Enclosed outdoor spaces, including tents, canopies and coverings are considered “indoors” under the executive order. They are subject to the same restrictions on capacity and gathering size as spaces inside buildings. Detroit Fleat in Ferndale is increasing the number of outdoor igloos it will operate this year from four to six; it also plans to reduce the number of patrons allowed per igloo from eight to six. The restaurant will invest about $15,000-$20,000 in igloos and additional safety measures for inside dining this winter, said Brooke Zadorsky, marketing manager with Detroit Fleat. See RESTAURANTS on Page 25

FINANCE

How United Wholesale Mortgage took the express route to the stock market and showed us just how rich Mat Ishbia is BY NICK MANES

The end result will be the same, but United Wholesale Mortgage has chosen a vastly different route to becoming a public company than lending rival Rocket Companies Inc. did just last month. The proposed deal, which will value the Pontiac-based wholesale mortgage lending company at about $16.1 billion, involves UWM, which operates under the brand name United Shore, merging with an already public shell company rather than the tradi-

tional initial public offering Rocket Companies undertook in August. It’s also expected to get UWM President and CEO Mat Ishbia firmly into the billionaires’ club Ishbia with a net worth of more than $11 billion, according to one estimate. The company in question — Gores Holdings IV Inc. — is a shell company

sponsored by Los Angeles-based private equity fund The Gores Group LLC, which raised $425 million in a January IPO. Upon closing the merger later this year, United Wholesale Mortgage, or United Shore as its often known, will be renamed UWM Corp. and be traded under the symbol UWMC on the Nasdaq stock exchange. Ishbia, along with other owners, will control 94 percent of the newly public company. See UNITED on Page 25

Michigan’s richest Michigan’s wealthiest residents and their net worth, according to figures compiled by Forbes and Bloomberg; estimates suggest UWM CEO Mat Ishbia would be a new No. 2: 1. Dan Gilbert: $32.4 billion 2. Marian Ilitch: $10.3 billion 3. Hank and Doug Meijer: $10.2 billion 4. Ronda Stryker: $6.12 billion

A growing “crisis” as described by a group of more than 20 powerful and high-profile donors to eight-hospital Beaumont Health has led them to sign and send a two-page letter to the Southfield system’s 16-member board. The letter, which was obtained by Crain’s, asks the board to immediately address and fully resolve problems related to physician and nurse dissatisfaction and a pending merger with a Chicago-based system. The letter referred to recent surveys by physicians and nurses that concluded they had lost confidence in Beaumont’s top management and asked for a meeting with the board to discuss solutions. Several sources, who are in contact with some of the well-known donors, tell Crain’s the crisis has to do with top doctors’ departures to competing hospitals and others who are admitting patients and conducting surgeries at rival facilities. The sources said the donors want immediate action by the board on a number of issues they say will be presented verbally when the meeting is held, which is expected this week.

“THE LOSS OF (MEDICAL) STAFF AS WELL AS RECENT SURVEYS, INCLUDING THOSE BY DOCTORS AND NURSES, DEMONSTRATE THAT SOMETHING IS SERIOUSLY AMISS.” — Letter signed by 20 donors

Some donors, say two sources, are prepared to withhold planned charitable donations to Beaumont until the board responds to their satisfaction. “The loss of doctors to other hospitals and the survey of nurses and doctors that was presented (previously to the board) show the crisis,” said one source familiar with the donors’ position. “The only request is hold on Advocate (Aurora Health) merger and meet with the donors. They say the board is not doing its job.” Signers to the letter include the Tom and Vicki Celani family, Susan Flint Cooper, Lauri and Tom Cunnington, Max and Debi Ernst, Nathan Forbes, Sidney Forbes, Charles Ghesquiere Jr. and his wife, Jim Grosfeld, the Kantgias family, Pete and Danialle Karmanos, Alan Jay and Sue Kaufman, the Joann Ministrelli family, the Moceri family, Warren Rose, the Schostak family, Mickey Shapiro, Howard and Perle Wolpin, and Walter and Marilyn Wolpin. Under the title of Community of Concerned Donors, Beaumont Health System, the letter contained the following statements: See BEAUMONT on Page 21 SEPTEMBER 28, 2020 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE INSIDER

Two vie for former Platform development target near Belle Isle A trio of development groups submitted proposals to redevelop a site near Belle Isle that Detroit-based The Platform LLC had targeted for more than two Kirk years. PINHO However, after this story was originally published online Tuesday afternoon, one of them sent a letter to the Detroit Land Bank Authority withdrawing its proposal for consideration. The developers range from wellknown names in Detroit commercial real estate circles to lesser-known groups, with plans that include either wiping the site of its existing buildings or repurposing them. Both of the remaining groups include plans for new housing for the site at East Jefferson Avenue and East Grand Boulevard. The following groups submitted plans to the Detroit Land Bank Authority, according to records obtained through the Freedom of Information Act: `Cecil Rochelle’s Southfield-based Stoss Real Estate LLC; Emmett Moten’s Detroit-based The Moten Group; and Ronald Jackson’s Detroit-based Executive Construction Management Co. submitted a plan that consisted of a new 58-unit apartment building that would require razing the existing buildings. However, Tuesday evening, Rochelle sent me an email with an at-

tachment that stated he was withdrawing his proposal from land bank consideration. `A development group that includes Paul Robertson’s Bloomfield Hillsbased Robertson Bros.; Carlo Liburdi’s Detroit-based TerraNovus Development; and Derric Scott’s Detroit-based East Jefferson Development Corp., a subsidiary of Jefferson East Inc., which plans 27 for-sale townhomes on vacant land and 10 for-sale condos within the existing Frederick Chambe Mansion as an adaptive reuse. Project cost: $8.5 million. Purchase price: $250,000. `A development group that includes Glenn Wilson’s Flint-based Communities First Inc. and the Rev. Barry Randolph’s and Richard Cannon Jr.’s Detroit-based Church of the Messiah Housing Corp. wants to do a 60-unit development with five four-plex buildings. Project cost: $18.1 million. Purchase price: $650,000. It’s the second bite at the apple for Jefferson East, which worked with Peter Cummings’ The Platform on its original plan, which Scott said faced hurdles from the city’s planning department during Maurice Cox’s tenure there. Scott said the department wanted higher density on the roughly 1.2 acre site than was financially viable. “A higher level of density unfortunately caused a lot of challenges with financing the deal, and we were unable to secure the support we needed to fill that financial gap,” Scott said. I emailed the city seeking comment. He also said that community mem-

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A pair of development groups are vying to turn this site at East Grand Boulevard and Jefferson Avenue into new housing. | KIRK PINHO/ CRAIN’S DETROIT BUSINESS

bers want both ownership and rental units available at an affordable rate, which is built into the plan. “That’s how we ended up teaming up with Robertson,” Scott said. “They bought into the vision that the community had for some for-sale housing that was consistent with the character of the community and also provided affordable for-sale units. We worked closely on a partnership that is allowing us to subsidize affordable for-sale units as low as 80 percent AMI (Area Median Income) for residents in the Islandview neighborhood, specifically targeting community members at risk of displacement and seniors who have a strong desire to stay in the neighborhood but may be downsizing.” Wilson said the Church of the Messiah, a community fixture for more than a century at East Grand Boulevard and East Lafayette, is an equity partner in the plan. “We want to make sure as an organization that we work with the communities,” Wilson said. “If we work on a development, we want to work with the people who have been there. There hasn’t been a lot of equitable development where people have engaged community members in the process early.” Marketing materials for the property owned by the Detroit Land Bank Authority say the site is 1.28 acres with four buildings, including the 19,000-square-foot 1898 Frederick Chambe Mansion/nursing home designed by architect Louis Kamper. Gustaf Andreasen, project manager of disposition for the land bank, said he anticipates the organization to select its chosen developer in the next two to four weeks. And Jano Hanna, the land bank’s director of disposition, said The Platform had the property formally under contract starting in January 2019 but previously had what are known as hold and maintain agreements — HMAs in Land Bank Lingo — with the company that required it to maintain the property and the land bank not offer it to anyone else. “The plan that The Platform and Jefferson East had, it kept changing, and

we kind of got to a point where we had been under contract for so long and we needed to move along,” Hanna said. “They were invited and welcome to apply again if they were inclined, but they did not.” The January 2019 development agreement said a joint venture between The Platform and East Jefferson Development would purchase the property from the land bank for $250,000 and build a 44-unit development on the site costing $14 million, with half of the units available to those making between 30 percent and 80 percent of AMI. The AMI includes suburban Detroit, and is $62,800 for a family of two and $78,500 for a four-person household,

“A HIGHER LEVEL OF DENSITY UNFORTUNATELY CAUSED A LOT OF CHALLENGES WITH FINANCING THE DEAL, AND WE WERE UNABLE TO SECURE THE SUPPORT WE NEEDED TO FILL THAT FINANCIAL GAP.” — Derric Scott, East Jefferson Development Corp.,

according to the state. That means that 30 percent of AMI is $18,840 and $23,550 for a two-person and four-person household, respectively, and 80 percent is $50,240 and $62,800. The use of AMI for determining what housing is affordable has been criticized because the suburban household incomes skew upward the city’s household income. “The Platform was approached by the Detroit Land Bank Authority about re-marketing a property in the Islandview neighborhood we had a previous agreement to purchase,” Cummings, executive chairman and CEO of The Platform, said in an emailed statement last month. “Our company believes strongly in working with the city to support positive development and revital-

ization and agreed that the parcels should be relisted for sale. Our commitment to strengthening Detroit’s neighborhoods remains unwavering, and we continue to invest in developments across the city.” James Bufalino, the owner of Detroit-based Premier Property Services LLC, is marketing the site with an $815,000 price tag. It was relisted for sale on June 1 with offers due by Aug. 1.

Sterling Group was Sakthi stalking horse bidder Dan Gilbert wasn’t the only big real estate name interested in the former Sakthi Automotive Group USA Inc. property in Southwest Detroit. Federal court records show that an entity tied to Detroit-based Sterling Group was the stalking horse bidder on the 37-acre property with 618,000 square feet of building space on it for $37 million. NC Associates LLC is listed as the proposed buyer; that entity is registered to Eli Halpern, general counsel for Sterling Group. A representative for the company did not respond to a message seeking comment. “Sterling was one of the early groups that got aggressive, but there were a handful of other groups that we were talking to,” said Jared Friedman, director of opportunities for Farmington Hills-based Friedman Real Estate, which worked on the sale. “There was a hedge fund out of New York. There was a large industrial developer out of the Midwest. There were about a half dozen groups we were talking to.” Gilbert, through an entity called Fort Street Company LLC, ultimately outbid the Sterling Group affiliate by $1.5 million and landed the property for $38.5 million. Sterling Group was founded by Gary Torgow, now executive chairman of the TCF Bank board of directors, although he currently has no financial relationship with the company, which is run by his adult children. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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REAL ESTATE

Sachse Construction, Broder & Sachse moving to Midtown Move from downtown location spurred by company growth, efficiency, company CEO says BY KIRK PINHO

A prominent construction firm and development company are moving from downtown Detroit to the city’s Midtown neighborhood. Detroit-based construction contractor Sachse Construction as well as Detroit-based developer Broder & Sachse Real Estate Services Inc. are taking 33,000 square feet in the Orchestra Place building an affiliate of Broder & Sachse owns at 3663 Woodward Ave. at Martin Luther King Jr. Boulevard. Sachse Construction CEO Todd Sachse said the move is spurred by efficiency and company growth, noting that the firm started looking for new space two years ago and is moving in Sept. 28. In their previous 25,000-squarefoot headquarters at the Dan Gilbert-owned building at 1528 Woodward Ave., the companies were spread across five floors, whereas in the new building, they take just one, Sachse said. “It’s going to be a very different environment,” Sachse said, adding that construction began in January and was paused for a couple of months due to the COVID-19 pandemic that halted most nonessential commercial real estate construction in Michigan. He declined to reveal the cost of the buildout, on which Sachse Construction was the contractor and Detroit-based Neumann/Smith Architecture was the project architect. Sachse Construction moved into

Detroit-based Sachse Construction and Detroit-based Broder & Sachse Real Estate Services Inc. are moving next week into the Orchestra Place building that a Broder & Sachse affiliate owns at 3663 Woodward Ave. | COSTAR GROUP INC.

1528 Woodward in the summer of 2013 when there were 55 employees in its office and another 45 at other locations; today that figure is about 115 in the office and another 85 employees elsewhere. Broder & Sachse affiliate 3663

Woodward Owner LLC purchased Orchestra Place in the summer of 2017 for $21 million from the Detroit Symphony Orchestra, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. That’s about $127.13 per

square foot. CoStar says the approximately 165,000-square-foot building leases for $20 per square foot per year.

“IT’S GOING TO BE A VERY DIFFERENT ENVIRONMENT.”

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

— Todd Sachse, CEO, Sachse Construction

COURTS

Quicken Loans sues Florida company, alleging failure to deliver PPE Detroit mortgage giant says ProBalance unable to fill order, but won’t return payment BY NICK MANES

Quicken Loans LLC has sued a Florida company, alleging that it did not supply promised personal protection equipment during the height of Michigan’s COVID-19 pandemic. The lawsuit was filed last week in the U.S. District Court for the Eastern District of Michigan and demands a jury trial. At the heart of the lawsuit is the Detroit mortgage giant alleging that it contracted with ProBalance Inc. to purchase 100,000 N95 masks that it would then supply to metro Detroit hospitals. However, Clearwater, Fla.based ProBalance — which manufactures a brand of protein waters — ultimately sent lower-quality masks and still owes Quicken Loans $192,500, according to the lawsuit. As Crain’s reported at the time, Quicken Loans and other companies tied to billionaire Dan Gilbert sought in early April to source the face coverings as part of a broader philanthropic initiative to combat the worsening pandemic that to date has infected more than 118,000 Michigan residents and killed nearly 6,700. The lawsuit says Quicken Loans “expressly made clear” to ProBalance executives that it sought to purchase 100,000 of the N95 masks that were at the time in great demand in hospi-

Quicken Loans LLC says in a lawsuit that a Florida company failed to deliver on promised personal protective equipment. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

tals. ProBalance said it could deliver on that order. The lawsuit says that on April 1 ProBalance released an invoice to Quicken Loans for $290,000 for 100,000 N95 masks. Photos sent to the mortgage company several days later showed that Quicken Loans would be receiving lower-grade KN95 masks, which have not been approved by U.S. regulators for medical use.

6 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

ProBalance had already removed the $290,000 payment from an escrow account and did not have the cash on hand to refund Quicken Loans, the lawsuit says. The mortgage company says it ultimately agreed to purchase 25,000 of the lower grade masks at the same unit price of $2.90 each and planned to donate them for nonhospital uses, where their use has become common.

Following that, ProBalance ultimately agreed to refund $217,500 to Quicken Loans, but sent only one payment of $25,000, the mortgage lender alleges. The lawsuit makes four specific allegations and requests: ` Nondelivery of goods and return of funds ` Breach of contract ` Conversion ` Unjust enrichment

“Once the COVID-19 pandemic hit and everyone was in urgent need of PPE, there were immediate supply constraints. As a result, companies with supply chain and manufacturing networks expanded their focus into leveraging those relationships to secure and sell PPE,” Aaron Walker, chief communications officer for the Quicken Loans-affiliated Rock Ventures, said in an emailed statement. “After going through our rigorous review process, Quicken Loans contracted with one such company, ProBalance, to secure PPE to donate to Detroit-area hospitals and frontline medical workers,” Walker continued. “Unfortunately, ProBalance was unable to fulfill the order — attempting to satisfy the requisition with an inferior, noncompliant product. Thereafter, ProBalance agreed to cancel and refund the remaining balance. As they have yet to do so, we were forced to file suit to obtain the agreed-upon refund.” A message left seeking comment from ProBalance was not returned. Quicken Loans is being represented in the action by attorneys in the Detroit office of Jones Day. Contact: nmanes@crain.com (313) 446-1626; @nickrmanes

CARING FOR KIDS SPONSORED CONTENT

Advocating for the health and wellness of children and families Host Larry Burns, President and CEO The Children’s Foundation

Advocating for the health & wellness of children and families

About this report: On this monthly radio program, The Children’s Foundation President and CEO Larry Burns talks to community, government and business leaders about issues related to children’s health and wellness. The hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired September 22nd; listen to the entire episode, and archived episodes, at yourchildrensfoundation.org/caring-for-kids.

Derek Aguirre, Executive Director, Racquet Up Detroit

Larry Burns: Tell us how Racquet Up Detroit got started. Derek Aguirre: I spent six years in Boston working on a program called SquashBusters. It was the first youth development organization in the country to use the sport of squash as a vehicle to engage kids. I did not know a thing about squash but I had a passion for supporting young people in educational pursuits. I quickly took to the sport and came to love the game. I was fortunate to work with the founder of the Boston program. He knew that I wanted to be back in Michigan and that I had a passion for Detroit. We reached out to the Detroit Athletic Club and the Birmingham Athletic Club to get it going. Burns: Tell us some of your success stories. Aguirre: I think one of the special aspects of our program is that the relationships last. We start with young people in fifth or sixth grade, but they can stay all the way through high school. When they graduate from high school, we’re still behind them, whatever their postsecondary educational pursuits might be. I’m happy to say that many of our initial 2010 class members are now juniors in college. One of those initial class members is a young man named Quran. He’s a junior at Hobart College—first in his family to go to college and he

plays on their varsity squash team. That doesn’t happen for every kid in our program, but what’s most important is his horizons have expanded significantly. He just joined our strategic planning committee and is helping us to chart out the next five to ten years for the organization. Burns: Tell us about the grant from The Children’s Foundation. Aguirre: We’ve engaged in our first grant with The Children’s Foundation to grow our staff and help expand our health programming. I really appreciate the approach that The Children’s Foundation takes in thinking about these as partnerships. It’s not simply a funding relationship. I look forward to growing that partnership. Burns: Tell us about the capital project that we’re helping fund in a small way. Aguirre: The other piece of the grant is a capital gift toward what has been the monumental challenge of our organization’s history— creating a dedicated education and youth development center specific to our program. Our home for the last ten years has been the Northwest Activities Center, an incredible community resource that has grown us from an idea to a full-fledged organization. But we’ve hit our ceiling. We want to be able to serve more young people and we want to think 50 years out. That has led us to building a 19,000 square-foot center that we’re calling the Neighborhood Portal to College and Career. It will be a health hub for the young people in our program—a place to exercise, study and be surrounded by caring adults. We’re well on our way to getting this done.

Mark Wallace, President and CEO, Detroit Riverfront Conservancy

Larry Burns: Tell us about the status of Robert C. Valade Park. Mark Wallace: Our newest addition to the Detroit riverfront has been supported by a number of community investors, including the Valade family, who wanted to have a place in memory of their father, an executive and owner at Carhartt. Valade Park is built around two main features: An enormous sandbox designed to feel like a day at the beach and a barge at the mouth of the inlet. The barge features adult beverages, music and two year-round restaurants, Geisha Girls Sushi and Smokey G’s BBQ. Burns: What kind of activity are you seeing during the pandemic? Wallace: We’ve always known that people come to the riverfront on good days. What we’ve realized in 2020 is the riverfront is also a place people come on difficult days. Based on our counters, riverfront attendance is up about 20 percent and at the Dequindre Cut it’s up about 50 percent. Burns: Tell us about the Dequindre Cut and the Dequindre Cut Freight Yard. Wallace: The Dequindre Cut goes from Eastern Market and Mack Avenue to the riverfront. It’s located on an old train line. We removed the trains and turned it into a beautiful pathway for biking, running and walking. The

Freight Yard is a food and music hub made of shipping containers. It’s just south of Eastern Market. Burns: Bring us up to speed on the new West Riverfront Park. Wallace: Delta Dental of Michigan made an incredible leadership investment of $5 million in the play garden at Ralph Wilson Park. The play garden’s features include slides, climbing features and a place where you can touch the water and interact with nature. It will have a major athletics and sports hub. There’s a beautiful pavilion designed by Sir David Adjaye that’s going to be an epic gathering place, comparable to similar spots in New York City or Chicago. We’re grateful for the Ralph Wilson Foundation’s support of it. Burns: The Children’s Foundation founder David Page was very instrumental in the development of the riverfront. Wallace: David was one of the visionaries behind this. He understood that a system of connected parks and greenways on the riverfront could change people’s lives. Burns: You have taken the lead on developing the western part of Downtown. Wallace: We’ve built a boardwalk behind Riverfront Towers and a connection in the old Joe Louis Arena VIP parking lot. We’re hoping to open those soon to connect directly to Ralph Wilson Park. Burns: Tell us how people can help and get involved. Wallace: We are a nonprofit organization. We encourage you to come down and enjoy the spaces, maybe bring somebody who’s a first-timer. If you’d like to support us financially, please check out detroitriverfront.org.

Ken Daniels, Co-founder, Jamie Daniels Foundation and Lead Announcer, The Detroit Red Wings

Larry Burns: Can you give us some of the highlights of the Jamie Daniels Foundation? Ken Daniels: The collegiate recovery program at Michigan State is off to a great start. I’m proud of how much we’ve written in grants, since COVID-19 hit and overall. Our new board member, Margaret Trimer, knows everyone and when she wants to get something done she gets it done. It’s just great to have her join us and have Delta Dental of Michigan step up and help us as presenting sponsor of our annual roast, especially in a tough year like this. Burns: This year it will be a virtual roast of Scotty Bowman. How can people help? Daniels: The main place people can go to help is JamieDanielsFoundation.org. The silent auction is live on our website and bidding ends October 15. The roast will air on FOX Sports Detroit on Wednesday, October 14 at 8:00 p.m. and again at 9:30 p.m. It’s 90 minutes long and you can bid throughout the show. Burns: You’ve got some great people lined up. We started reaching out to people like George Bowman, and then George reached out to Jeff Cumberworth at Ally Financial, who reached out to Jack Nicklaus’ team. Jack Nicklaus does a hilarious two-and-a-half-minute video about Scotty. Steven Page, the former lead singer of

the Barenaked Ladies, now with the Steven Page Trio, will perform a wonderful song called “Into the Light.” Hill Harper from “The Good Doctor” will open our show. We also have Michigan coach Red Berenson, Stu Grimson, Wayne Gretzky, JK Simmons, Jeff Daniels, Mitch Albom, Jim Leyland, Ken Dryden, Brendan Shanahan, Nick Lidstrom, Dominik Hašek, Doc Emrick, Glenn Hall, Jimmy Devellano, Dave Hodge, the longtime host of Hockey Night in Canada, and there’s still more to come. Burns: You’re just making the best of the situation and that is a credit to you, Lisa and the whole team. Daniels: We hope people will laugh lots during the show and give during the show. We hope they’ll also cry a little bit, because it tugs at the heartstrings. Burns: The long-term plan of the Jamie Daniels Foundation is to create safe, affordable housing for those in recovery. Daniels: We have land in Southeast Michigan. I wish I could give you more details. Michigan State Housing Development Authority has been terrific. We have all our filings in, so we’re just waiting for final approval. Once we get a shovel in the ground—hopefully next spring—we can get our facility built in a couple of years. We’re planning on 80 units for sober living. Of these, 50 units would be for drug court-mandated cases, as an alternative to incarceration. The other 30 units of housing will be for those who are not courtmandated. We are hoping to have a gymnasium, music therapy and art therapy. There will also be a job placement center within that housing facility.

COMMENTARY

Is the battle for in-person instruction worth it?

BLOOMBERG

BY PHILOMENA V. MANTELLA

EDITORIAL

More time for vote counting is justified In an election season defined by a pandemic and partisan chaos, one thing is clear: time — and patience — will be critical when it comes to counting ballots. As Crain’s senior editor Chad Livengood reports this week, a record number of Michigan residents are expected to vote by mail in the Nov. 3 election. That calls for bipartisan recognition that extra days will be needed to process the results. Legislation to add some of that time moved through the Legislature last week. At least 3 million Michigan voters will cast absentee ballots by mail, election officials estimate, through a network of new secured drop boxes or in person at their clerk’s office. That’s double the 1.6 million absent voter ballots cast in the Aug. 4 primary. The surge in mailin voting is due to LAWS NEED TO concerns about CHANGE TO COVID-19 safety, a new state law allowREFLECT THE anyone to vote abDRAMATIC SHIFT ing sentee and a decision by Secretary of State IN VOTING Jocelyn Benson to HABITS mail out 7.8 million ballot applications in WROUGHT BY advance of the elecCOVID AND tion. Worried about the OTHER FACTORS. onslaught, clerks from both political parties are pleading with the Republican-controlled Legislature to give them more time before Election Day to open the outer envelope each ballot is mailed in and prepare it to be counted. They’ve called for as many as seven days to pre-process AV ballots. In Detroit, Mayor Mike Duggan is so concerned about the need for a prompt count that he plans to shut down most of city gov-

ernment for two days to process ballots, according to the Michigan Advance. Lawmakers have so far been only willing to add one extra 10-hour day to the pre-election clock, however. The bill on its way to Gov. Gretchen Whitmer would let clerks cut open envelopes between 10 a.m. and 8 p.m. on the day before the election. That’s not enough time. It’s entirely reasonable to give clerks the week they are asking for. “Even if we open 15,000 (AV ballot envelopes), that’s 15,000 less things I need to do on Tuesday,” Rochester Hills clerk Tina Barton, a Republican, told Crain’s. Concerns about the integrity of the election already are at a fever pitch. It’s unlikely we’ll have final results on election night — and a backlog of ballot-counting nationwide will only add to voters’ lack of confidence in the system. Michigan is one of only 14 states in which election officials must wait until Election Day to open absentee ballots. That’s an outdated restriction. Laws need to change to reflect the dramatic shift in voting habits wrought by COVID and other factors. Reasonable minds can disagree on whether applications should be mass-mailed without a request, but now that they are in voters’ hands, it’s imperative that they be processed and counted with care. If we can’t give ballot counters more time for this election, we should in time for the next time around.

A month into many universities’ fall COVID journey, campuses are bruised by the fight to keep a level of in-person courses as a part of the portfolio of delivery options. The battle for safe face-to-face or hybrid delivery, while keeping this highly contagious Philomena V. virus on the downward Mantella is trend, involves repeated president of adjustments. This calibraGrand Valley State University. tion draws repeat fire from those who would like circumstances to be different and media in search of click-capturing headlines. The highly politicized discussion of allowing any in-person instruction during COVID has masked the question of why. Why fight to provide access to learners in every mode of delivery possible? Why fight to bring students back on campus? Why are we testing our university’s culture and capacities daily under extraordinary conditions? Why consider a course fraught with peril? Here’s why – we know the pain of the nearterm is worth the long-term fight for individual students, their future and ours. This is especially true for first-generation college students. Earlier this month, Grand Valley State University worked with officials at our county department of public health who issued a “Staying in Place” order. It requires our students living or studying at our main campus in Allendale to stay home other than to attend class, labs, internships, work or to get necessities. It is in effect from Sept. 17 through Oct. 1. No one likes further restricting an already limited student experience. But we have to accept the realities of COVID, while keeping learning opportunities as open as possible. The questions fly around if our work is actually all about money or simply the result of administrative naivety. The truth is maintaining a low-density face-to-face option, along with extensive online delivery, comes at the expense of new costs, daily complexities and an extensive communication effort to keep all stakeholders fully informed. The “why” is embedded firmly in education’s fundamental purpose: To provide opportunities and enable individuals to pursue lives of meaning and professions of purpose. Colleges and universities are challenged to fulfill this mission in an era of COVID and amidst a cultural reckoning of racial injustice. Higher education’s battle to maintain faceto-face learning, while following all public

SPONSORED CONTENT

$1.8 MILLION PARTNERSHIP DRIVES ENTREPRENEURSHIP, EQUITY, INCLUSION CANDICE MATTHEWS BRACKEEN

DELTA DENTAL AND LIGHTSHIP CAPITAL TEAM UP TO SUPPORT UNDERREPRESENTED ENTREPRENEURS

What attracted you to Detroit when deciding which cities in the Midwest would be a fit for your programming? When we started talking about installing programming in other Midwestern cities, Detroit was at the top of our list. There’s a vibrant tech ecosystem with great companies across HealthTech, eComm/CPG and AI, which are our primary areas of focus for investing—so for us, it was a clear fit. It also cannot be overlooked that Detroit is a ‘majority minority’ city where nearly 80% of the population includes citizens identifying as Black American. Programs offering underrepresented entrepreneurs access to mentorship, valuable networks, and really, organized guidance around scaling their businesses—are most necessary and likely to have a powerful economic impact here. People in Detroit are building great things and there’s a great community of Fortune 500 partners for them to leverage, as well. We see this entrepreneur ecosystem as a frontier, full of underrepresented talent and possibilities ready to be realized—and we are grateful to Delta Dental and the city of Detroit for so warmly and excitedly welcoming us and our work to the city.

General Partner Lightship Capital

What is Lightship Capital’s vision for contributing to Detroit’s underrepresented entrepreneur ecosystem? The overall mission is to empower, educate, fund and scale some great companies in this ecosystem. When founders have access to these resources, their chances of scaling and making real economic impact in the region increases exponentially— and when local businesses win, the community at large wins, too. Do you have any projects in the pipeline that you’d like to share with us? We have some interesting and exciting activations happening soon in Detroit. We’ve been cultivating partnerships with the local business community on projects ranging from pop-up restaurants and retail, to mobile dental care. These collaborations will include many of our existing portfolio companies, companies in our pipeline, and of course, Detroit based entrepreneurs – but more to come on all of that soon! Most importantly we’ll be hosting our entrepreneur education bootcamp series in Detroit, so that we can reach and teach as many local founders as possible. What will those experiences look like? The NewME Bootcamp is an immersive mentorship retreat for a cohort of 10 entrepreneurs building companies in various industries, including tech, health and ecommerce. They live together, share meals and have their business strategies critiqued and constructed in an intense schedule to take their business plans to the next level. The dates and cities for the NewME bootcamps have yet to be set. One bootcamp and accelerator will be in Detroit. The usual NewME living arrangements will be changed in consideration of COVID-19, but the energy and value of the program will remain robust.

MARGARET TRIMER

Vice President of Strategic Partnerships Delta Dental of Michigan, Ohio, and Indiana

Delta Dental of Michigan, Ohio, and Indiana is known for being involved in the community. Have the events of 2020 had an impact on your corporate citizenship? The pandemic and the social unrest across America this year have absolutely had an impact on our corporate giving. They have strengthened our resolve to be a force for good in the communities where we do business and reminded us that we must be reflective and inclusive of local diversity. This year we came face-to-face with serious racial and economic disparities in our nation. They took a toll on our friends, neighbors, colleagues and fellow citizens. The fix is multifaceted and includes civility, understanding and education as well as prosperity and equitable access to the tools, the training, the capital and a network of potential partners to build wealth. Delta Dental will focus on projects that provide opportunity and support to people who have been historically ignored or discriminated against.

How are you going to do that? Women, people of color, those who identify as LGBTQ+ and people with disabilities have long been underestimated and have struggled to secure funding, mentoring and technical support for their business startups. Delta Dental is entering a $1.8 million partnership with Lightship Capital, a new venture fund focused on underrepresented entrepreneurs in the Midwest. The Cincinnati-based fund doesn’t just invest in high potential startups. It surrounds them with support through two entrepreneurial education programs— Hillman, an accelerator, and NewME Bootcamp. The 4100 Group, a Delta Dental subsidiary formed to promote innovation and diversify Delta Dental’s book of business, invested $1 million in the fund. Delta Dental put in another $828,000 to fund bootcamps in several markets and an accelerator, which will be housed in Detroit early in 2021. Why are you investing in this? To borrow from a story we have all heard, Delta Dental believes building prosperity in underrepresented communities requires us to give entrepreneurs fish, teach them to fish and then give them access to boats so they can fish in the deep water—where the really big fish swim.

SEPTEMBER 28, 2020 | CRAIN’S DETROIT BUSINESS | 13

CRAIN'S LIST | INTELLECTUAL PROPERTY LAW FIRMS Ranked by number of IP lawyers

COMPANY ADDRESS PHONE; WEBSITE

TOP LOCAL EXECUTIVE(S)

LOCAL INTELLECTUAL PROPERTY LAWYERS JUNE 2020/ 2019

TOTAL NUMBER OF LOCAL LAWYERS JUNE 2020/ 2019

PRACTICE AREAS

1000 Town Center, 22nd Floor 222, Southfield 48075 248-358-4400;www.BrooksKushman.com

BROOKS KUSHMAN PC

Sangeeta Shah CEO Frank Angileri president

62 60

Patent prosecution, trademarks, intellectual property litigation, post-grant proceedings, open source compliance, cybersecurity, IP due diligence, trade secrets, licensing, copyrights, compliance and technical design consulting

HARNESS, DICKEY & PIERCE PLC

Executive committee

50 54

Patents, trademarks, copyrights, litigation, transactions/due diligence, anticounterfeiting, foreign rights, appellate litigation

DICKINSON WRIGHT PLLC

Michael Hammer CEO

175 177

Intellectual property, business technology, copyrights, patents, trademarks and trade secrets litigation

HONIGMAN LLP

David Foltyn chairman and CEO

240 233

Trademark and copyright, patent and intellectual property litigation practice groups

HOWARD & HOWARD ATTORNEYS PLLC

Mark Davis president and CEO

79 80

IP litigation, patents, trademarks, copyrights, licensing of IP rights, EDI, technology acquisition or sale, technology law audit, advertising, gaming

YOUNG BASILE HANLON & MACFARLANE PC

Andrew Basile Jr. president

23 1

26 1 26

Patent and trademark litigation, prosecution and counseling; technology-related transactions, including licensing, acquisitions and divestitures; representation of emerging growth companies; and commercial, employment litigation, and data privacy and security

CARLSON, GASKEY & OLDS PC

Theodore Olds III president and CEO

22 23

Patents, trademarks, copyrights and trade secrets worldwide; intellectual property and commercial litigation

QUINN IP LAW (QUINN LAW GROUP PLLC)

Christopher Quinn president and CEO

21 20

Patent, trademark, copyright and trade secret procurement and enforcement; licensing, IP due diligence; technology-related agreements and transactions; IP asset and portfolio management; strategic consulting

MILLER, CANFIELD, PADDOCK AND STONE PLC

Michael McGee CEO

135 134

Patents, trademark, copyright and trade secret prosecution, counseling and litigation

REISING ETHINGTON PC

Jim Stevens president

20 22

Patents, trademarks, copyrights, trade secrets, counseling, opinions, portfolio management, litigation

FISHMAN STEWART PLLC 2

Michael Stewart Michael Fishman founding partners

17 17

Trademark, copyright, patent, patent prosecution, trade secrets, social media, due diligence, litigation and dispute resolution, IP consulting, transactional and ecommerce services

DARROW MUSTAFA PC

Christopher Darrow president

16 14

Procurement and litigation of intellectual property rights

BODMAN PLC

Carrie Leahy 3 chair

122 124

Technology transfer, IP litigation, digital publishing, trademark selection, registration and licensing, economic espionage, entertainment, IP brand protection

WARNER NORCROSS + JUDD LLP

Linda Paullin-Hebden executive partner

44 44

Copyright law, intellectual property, IP enforcement and litigation, patent prosecution and portfolio management, technology and IP licensing, purchase and sale, trademark portfolio and brand management

THE DOBRUSIN LAW FIRM PC

Eric Dobrusin president and shareholder

10 10

Patent practice, trademark practice, IP strategy and counseling, patent opinions, IP due diligence, technology transfer, government contracts, customs enforcement

DINSMORE & SHOHL LLP

Mark Schneider office managing partner

14 10

Patent, trademark and copyrights

BUTZEL LONG PC

Justin Klimko president and CEO

129 118

BEJIN BIENEMAN PLC

Thomas Bejin Christopher Francis Charles Bieneman members

10 11

Patent prosecution, IP litigation, trademarks, licensing, due diligence

SECREST, WARDLE, LYNCH, HAMPTON, TRUEX AND MORLEY PC

Bruce Truex president, senior partner and comanaging partner Nathan Edmonds senior partner and co-managing partner

46 53

RMCK LAW GROUP PLC

Brian Hollis partner; Michael Schaldenbrand Thomas Jurecko Jason Benedict members

5 5

Patent application preparation and prosecution (United States and abroad), trademark application preparation and prosecution, legal opinions, IP due diligence, IP licensing

JAFFE RAITT HEUER & WEISS PC

Jeffrey Weiss CEO

109 111

IP rights, trademark and copyright registration, IP licensing, transactions involving technology and e-commerce, IP litigation, arbitration and appeals, employment and executive contracts, technology transfers

GARAN LUCOW MILLER PC

C. David Miller chairman of executive committee

67 59

Insurance defense and coverage analysis, appellate law, commercial banking and real estate, commercial transportation and logistics, municipal law, ERISA and employee benefits law, municipal law, intellectual property, no-fault and auto negligence and workers' compensation

CARRIER, BLACKMAN & ASSOCIATES PC

Joseph Carrier president

5 51

Patent for mechanical, chemical, electrical, computer; trademark; copyright; trade secret

8 10 11 12

20 20 20

5445 Corporate Drive, Suite 200, Troy 48098 248-641-1600;www.hdp.com

500 Woodward Ave., Suite 4000, Detroit 48226 313-223-3500;www.dickinsonwright.com

2290 First National Building, 660 Woodward Ave., Detroit 48226-3506 313-465-7000;www.honigman.com

450 W. Fourth St., Royal Oak 48067 248-645-1483;www.howardandhoward.com

3001 W. Big Beaver Road, Suite 624, Troy 48084 248-649-3333;www.youngbasile.com

400 W. Maple Road, Suite 350, Birmingham 48009 248-988-8360;www.cgolaw.com

21500 Haggerty Road, Suite 300, Northville 48167 248-380-9300;www.quinniplaw.com

150 W. Jefferson, Suite 2500, Detroit 48226 313-963-6420;https://www.millercanfield.com/

755 W. Big Beaver Road, Suite 1850, Troy 48084 248-689-3500;www.reising.com

800 Tower Drive, Suite 610, Troy 48098 248-594-0600;www.fishstewip.com

410 N. Center St., Suite 200, Northville 48167 248-864-5959;www.darrowmustafa.com

Sixth Floor at Ford Field, 1901 St. Antoine St., Detroit 48226 313-259-7777;www.bodmanlaw.com

2000 Town Center, Suite 2700, Southfield 48075-1318 248-784-5000;www.wnj.com

29 W. Lawrence St., Pontiac 48342-2813 248-292-2920;www.patentco.com

900 Wilshire Drive, Suite 300, Troy 48084 248-647-6000;www.dinsmore.com

150 W. Jefferson Ave., Suite 100, Detroit 48226 313-225-7000;www.butzel.com

2000 Town Center, Suite 800, Southfield 48075 313-528-4882;b2iplaw.com

2600 Troy Center Drive, P.O. Box 5025, Troy 48007-5025 248-851-9500;www.secrestwardle.com

4141 North Atlantic Blvd., Suite 2, Auburn Hills 48326 248-270-2885;www.rmcklaw.com

27777 Franklin Road, Suite 2500, Southfield 48034-8214 248-351-3000;www.jaffelaw.com

1155 Brewery Park Blvd., Suite 200, Detroit 48207 313-446-1530;www.garanlucow.com

43440 W. 10 Mile Road, Novi 48375 248-344-4422;www.carrier-blackman.com

Researched by Sonya D. Hill: shill@crain.com | This list is an approximate compilation of intellectual property firms in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the firms. Firms with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. NOTES: 1. Crain's estimate. 2. Relocated headquarters from Detroit to Troy in January. 3. Succeeded Larry Shulman as chair of the executive management committee effective in January.

Want the full Excel version of this list â&#x20AC;&#x201D; and every list? Become a Data Member: CrainsDetroit.com/data 14 | CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS | SEPTEMBER 28, 2020

INSIDE | VOICES FOR CHANGE Nancy Wang: Executive director of Voters Not Politicians on needed election reforms. PAGE 16 Rep. Leslie Love: Clerks need time to pre-process ballots. PAGE 17

DEMOCRACY

TIME CRUNCH DURING CRUNCH TIME ABSENTEE VOTING

Administrative Associate II Christine Wissbrun balances ballots at Rochester Hills City Clerk’s Office in Rochester Hills. | PHOTOGRAPHS BY NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Michigan’s surge in absentee voting to test capacity of election workers `BY CHAD LIVENGOOD

Election Source technical manager Amy Nyquist runs an accuracy test on a ballot tabulator Sept. 22 at the Rochester Hills city clerk’s office. Below, official absent voter ballots are ready to mail.

See CRUNCH TIME on Page 19

Why the urgency for absentee vote count reform

About Crain’s Forum Crain’s Senior Editor Chad Livengood is leading a monthly series of in-depth reports on major public policy issues and topics that relate heavily to the economy and quality of life in Southeast Michigan and the state as a whole. In addition to the monthly reports, Crain’s Forum will have periodic virtual and (eventually, we hope) live events focused on some of the topics. Crain’s has created an invitation-only Forum membership for companies and organizations

The 2000 presidential election was defined by dimpled, hanging and pregnant chads — tiny holes punched in paper ballots that became the focal point of the Florida recount that decided the presidency. The 2020 presidential election may be remembered for the time-consuming process of Michigan election workers having to open absentee ballot envelopes by hand or machine, following a multi-step routine of removing a ballot-tracking tab and unfolding and refolding the ballot before it can be fed into the vote-counting machine.

The speed of tabulating the presidential election results in this battleground state on the night of Nov. 3 may hinge on how quickly election workers can handle millions of absentee ballots in a period of 23 hours over two days. The logistics are daunting as the tabulation of an absentee ballot involves a lot more manpower than when voters go to the polls and feed their ballots into the tabulator on their own. Election officials are projecting at least 3 million voters will cast absentee ballots by mail, through a network of new secured drop boxes or in person at their clerk’s office — doubling the 1.6 million absent voter ballots cast in the Aug. 4 primary, which shattered the previous record of 1.27 million in the 2016 election. As of Sept. 21, nearly 2.4 million AV ballots had been requested by voters statewide, a four-fold increase from the same week in September 2016. Factors in the surge in popularity to skip a trip to the polls on Election Day include concerns about contracting or spreading the novel coronavirus, a 2018 voter-approved constitutional amendment allowing anyone to vote absentee and Secretary of State Jocelyn Benson’s decision to mail all 7.8 million registered voters an application to receive an AV ballot.

interested in supporting policy discussions. Forum members participate in planning events and editorial board meetings on a wide range of topics. Forum Members for 2020-21 include Consumers Energy Co., the Michigan Association of Health Plans and the Michigan State Medical Society and the Small Business Association of Michigan. For more information about Crain’s Forum membership, contact Group Publisher Mary Kramer at mkramer@crain.com.

A 2018 voter-approved constitutional amendment allowing no-reason absentee voting has caused Michigan to shift a system where early voting has become the majority of ballots cast. Election

Absentee

At the polls

Nov. 2008 Nov. 2012 Nov. 2016 Aug. 2020

1,282,594 1,275,493 1,270,569 1,638,617

3,756,486 3,505,208 3,604,050 866,588

Total turnout 5,039,080 4,780,701 4,874,619 2,505,205

Absentee % of total vote 25% 27% 26% 65%

SOURCE: MICHIGAN SECRETARY OF STATE’S OFFICE

SEPTEMBER 28, 2020 | CRAIN’S DETROIT BUSINESS | 15

DEMOCRACY COMMENTARY

COM

5 Republican clerks to Legislature: One more day to process absentee ballots is not enough

Editor’s note: A version of this letter was sent Sept. 15 to Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield before the Legislature's Sept. 24 passage of Senate Bill 757, which allows clerks in cities with more 25,000 people to pre-process absentee ballots the day before the Nov 3 election. As local and county election clerks from across the state of Michigan, our most important responsibility is ensuring that elections in our state are conducted in a safe, secure, and reliable manner. Our collective staff and poll workers labor tirelessly to achieve this goal because we know how important well-run elections are to the people of Michigan. But we fear that Michigan’s clerks risk being placed into a nearly impossible situation this November. The challenges are entirely foreseeable — a never-before-seen increase of absent voter ballots, which are enormously time-intensive to process; staffing and training challenges due to the continued prevalence of the coronavirus; and outdated restrictions that the Michigan Legislature places on the clerks of our state. While we’re grateful for the Legislature’s current reforms allowing for an additional day to start processing absent voter ballots before this election, it’s important that Michigan eventually work to be more in line with thirty-six other states that allow for some form of absent voter ballot pre-processing. Processing an absent voter ballot is far more time-intensive than recording an in-person vote. After comparing the signature on the return envelope to the voter’s signature on record, clerks then contact voters if necessary to confirm that a signature is theirs. Then, we must open the outer mailing envelope, then the inner secrecy sleeve, and take out, unfold, sort, and flatten the ballot found inside while removing the ballot stub. Only at that point can we begin to scan the ballots, often limited by machines that can process

Official absent voter ballots at the Rochester Hills City Clerk’s Office in Rochester Hills. | NIC ANTAYA FOR CRAIN’S

PROCESSING AN ABSENT VOTER BALLOT IS FAR MORE TIME-INTENSIVE THAN RECORDING AN IN-PERSON VOTE. only three or four ballots per minute. At each of these stages, important verification and safeguard processes improve the security and reliability of our system, but add still more to the workload. The data and results from the August primary election showed the time demands of processing absent voter ballots stretched many of Michigan’s clerks too thin.

Some of our jurisdictions were not able to finish counting absent voter ballots and submit results until well after midnight — or even into Wednesday morning. Mandating this state of affairs through statutory restrictions is not just cruel to the workers who dedicate their time to our most sacred democratic process — it is a threat to the public’s faith in the security and accuracy of our elections. Reports of fatigued poll workers working 18 straight hours or more at an absent voter counting board or precinct will not promote the public’s trust in our election process. This November promises to be even more ex-

treme. The challenges clerks faced this August occurred with 1.6 million absent voter ballots. Recent projections estimate that in November we will see double that number — well over 3 million absent voter ballots . Michigan is currently an outlier in blocking its clerks from pre-processing absent voter ballots before Election Day. Thirty-six out of 50 states lack the restriction found in Michigan law. Florida, whose handling of absentee ballots has been praised by everyone from President Donald Trump to the leader of Florida’s Democratic Party, allows local election officials to start processing absentee ballots 22 days before Election Day. Nearby Minnesota allows ballot envelopes to be opened seven days before Election Day. We are not asking to count and tally ballots before Election Day, simply to be allowed to complete the time-intensive steps before counting, like opening envelopes and sorting ballots. Legislative reform allowing clerks to take the time they need is an essential precondition for our elections to be as safe, secure and reliable as all of us want. While the reforms passed by the Senate and the House are a step in the right direction, further action is needed to give overwhelmed jurisdictions the ability to conduct the election in the most safe and secure manner possible. More than one extra day is needed to count the increased amount of absentee ballots — and giving clerks the time they need is not a partisan issue. It should not be a controversial proposition, just a matter of common sense. Jan Roncelli, Bloomfield Township clerk Tina Barton, Rochester Hills city clerk Justin Roebuck, Ottawa County clerk/register of deeds Ute O’Connor, Grosse Ile Township clerk Susan Nash, Livonia city clerk

COMMENTARY

Priorities should be making voting easier for all BY NANCY WANG

Voters Not Politicians and other citizen groups are doing our part by working with clerks in many comoters Not Politicians, the nonmunities to extend their office hours partisan, grassroots group that and open satellite locations on led the successful campaign to end nights and weekends so more voters partisan gerrymandering by politican vote early by absentee ballot at cians in our state, has continued the those locations. work to strengthen democracy by We are also educating voters on engaging people across Michigan in using and advocating for additional effective citizen action. Nancy Wang is secure drop-off boxes where voters Right now, strengthening democra- executive director can drop off their absentee ballots, cy means ensuring every voter can ex- of Voters Not to address concerns with the U.S. ercise their fundamental right to vote. Politicians. Postal Service. This November, for the first time But with time running out, our in a general election, every Michigan voter has the constitutional right to choose to state legislators have not done their part. Our vote by absentee ballot. Absentee voting is a VoteSafe campaign has engaged our volunteer army, which was so vital in passing the state safe, simple and convenient way to vote early. Despite the politically-driven rhetoric, ab- constitutional amendment that created the Insentee voting has a long track record of security dependent Citizens Redistricting Commission, and enjoys overwhelming support from Re- to urge lawmakers to take action on four key publican and Democratic voters alike in the common-sense bills: ` Senate Bill 756 to allow absentee counting states that have all-mail elections. During the COVID-19 pandemic, voting by board poll workers to work in shifts. absentee ballot is one of the best ways voters ` SB 757 to allow clerks to open the outer envecan safeguard their health and the health of lope of an absentee ballot the day before the election workers and the in-person voters who election to help speed up an accurate absentee ballot count. will be at polling places on Election Day. We applaud Secretary of State Jocelyn Ben- ` HB 5987 to allow ballots to be counted if they son’s actions to encourage absentee voting. No are postmarked on Election Day as long as they one should have to choose between their health are received by the clerk within 48 hours after the polls close. and their right to vote.

16 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

` HB 5991 to require clerks to notify a voter if there is an issue with their signature on the absentee ballot envelope so the voter has enough time to correct the issue. We need to see action on all of these to set up our 2020 election for success. Michigan saw a record-breaking 2.5 million voters who cast ballots in the August primary, up 13 percent from the August 2018 primary — attrib-

will be looking at additional actions to improve our democratic institutions in the months and years ahead. But voting is the bedrock of our democracy. For years, politicians in the United States have taken steps to deny the right to vote to many. It is only through citizen action, including marches, rallies and sit-ins, that we have expanded the vote to women and people of color. It took

VOTERS NOT POLITICIANS AND OTHER CITIZEN GROUPS ARE DOING OUR PART BY WORKING WITH CLERKS IN MANY COMMUNITIES TO EXTEND THEIR OFFICE HOURS AND OPEN SATELLITE LOCATIONS ON NIGHTS AND WEEKENDS SO MORE VOTERS CAN VOTE EARLY BY ABSENTEE BALLOT AT THOSE LOCATIONS. BUT WITH TIME RUNNING OUT, OUR STATE LEGISLATORS HAVE NOT DONE THEIR PART. utable in large part to the increase in absentee ballots. We’ve already seen historic numbers of absentee ballots requested across the state for the November election. Accurate but speedy vote counting is important to assure the public that our democracy is working. Voters Not Politicians has a broad, pro-democracy agenda. We are currently backing efforts to make politicians more accountable by including the executive office and lawmakers in the state’s Freedom of Information Act, and we

the citizen-initiated Proposal 3 in 2018 to extend no-excuse absentee voting for all in Michigan. We should all be able to agree that democracy works best when more eligible people vote. Voters Not Politicians will continue to fight to bring down barriers to voting. We urge all who support democracy to join us. Editor's note: The Legislature sent Gov. Gretchen Whitmer SB757 on Sept. 24 and it included an amendment allowing shifts for election workers.

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COMMENTARY

Update election infrastructure for shift to absentee voting BY LESLIE LOVE

n 2018, Michigan voters passed a voting rights amendment to the state Constitution that makes it easier for more people to vote. The measure, known as Proposal 3, allowed for any-reason absentee voting, same-day voter registration, straight-ticket voting and automatic voter registration. While the new changes provided more flexibility and options for voters, they also presented new challenges for local clerks who must implement the changes and ensure an accurate and timely processing of election results. State Rep. Leslie The August primary Love, D-Detroit, was the first statewide represents election held under the Michigan’s 10th new constitutional House District. amendment, and Michigan exceeded expectations in participation and use of absentee or mail-in ballots. As anticipated, it took longer to process and count them. We must update our elections’ infrastructure to meet the new demands these changes have presented. As we continue to battle this global pandemic, we have no time to waste addressing the challenges facing our elections. Health and safety concerns, new processes and increased projected turnout need to be addressed to

WHAT I SAW WAS A LEVEL OF DEDICATION TO CIVIC DUTY THAT I HOPE MORE OF US RISE TO. THESE MEN AND WOMEN WORK TIRELESSLY, MOTIVATED BY THE SAME COMMON GOAL — ENSURING THE INTEGRITY OF OUR DEMOCRATIC PROCESS. guarantee a honest and safe election this fall. That’s why we must empower our local clerks with the staff and resources to serve voters, accommodate election workers, and help them administer a safe, efficient and honest voting process in this unprecedented era. Michigan has already done a lot of work to make it easier to vote. However, we still must upgrade and improve our infrastructure to accommodate the higher volume of absentee ballots. Thankfully, we have the solution: new and up-

graded equipment and technology, an increase in personnel and compensation, the ability to start processing ballots the Monday before the election, allowing election workers to work in shifts and holding unemployment insurance benefits harmless for election workers. These simple changes will make a world of difference, and other states have been doing it for years. Earlier this year, I partnered with my colleagues, Reps. Kara Hope and Vanessa Guerra, to introduce a six-bill package to meet the

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needs of our election workers. As a result of my experience working the election, conversations with county and local clerks and elections workers, I developed House Bills 5447-5451 and 6104. During the presidential primary in March, I also served on my county’s absentee counting board. I wanted to learn as much as possible about the process and ensure the legislation we were proposing would help. What I saw was a level of dedication to civic duty that I hope more of us rise to. These men and women work tirelessly, motivated by the same common goal — ensuring the integrity of our democratic process. These unsung heroes are an integral part of our democratic system; without their hard work and dedication, it would be impossible to administer and uphold the integrity of an election. We owe it to them to ensure they are equipped to do so safely and efficiently. By allowing our clerks to begin processing ballots earlier and work in shifts, we can empower them to continue serving us without putting their health or safety at risk. No one should have to put their life on the line to vote or count ballots. There is no more time to delay. Failing to make these critical changes is a disservice to democracy. We have the tools, the talent and the plans. The only thing we lack is the will to act. For my part, I want every Michigander to be able to exercise their right to vote safely, and every election worker, both paid and volunteer, to be able to safely perform their duty.

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ion,

Trusting your state government with healthcare

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Alexander Hamilton wrote, in Federalist No. 17, “The people of each state would be apt to feel a stronger bias towards their local governments than towards the government of the union.” This line may not have made it into the musical, but it illustrates an area that requires some light—state government.

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since the HMP’s implementation. If these goals aren’t met, HMP is repealed; thus, the healthcare ecosystem and the state are motivated to manage this program well.

The HMP expanded eligibility for access to coverage to residents with annual incomes between 100 and 138 percent of the federal poverty level. In 2020, this means a working While the presidential race garners Jeff Romback, family of four with an annual television ads and social media Deputy Director, income of $35,500 can get quality Michigan posts, your local representatives coverage. Enrollees in the HMP Association of are working, without fanfare, on have consistently reported it helps Health Plans policies and programs that have a them perform better at work. Their profound impact on your daily life. improved work performance has Our state government has partnered with helped them increase their income and, Michigan health insurance providers to consequently, gain employer-based insurance deliver effective healthcare to Michiganders that enables them to leave the program. The through one such program. overwhelming majority—99 percent—of enrollees are satisfied with the program. The Healthy Michigan Plan (HMP) is providing insurance to almost 800,000 The Healthy Michigan Plan was a bipartisan Michiganders in the middle of a healthcare effort, a collaboration between Michigan and crisis. The HMP is, by law, evaluated annually the federal government to fund this program by the University of Michigan on six policy through the Affordable Care Act. Signed by goals: Uncompensated care; effect on the Governor Snyder and shepherded through a uninsured; improving health outcomes; majority Republican legislature, the HMP put provider and beneficiary input; and utilization Michigan ahead of the curve in caring for its by contribution requirement and MI Health working but vulnerable residents. While most Accounts. Each year since its implementation, of these legislators have moved on, key the Healthy Michigan Plan has met these thought leaders, dedicated to healthcare in policy goals. Notably, uncompensated care, a Michigan, remain at the forefront: Former cost driver for hospitals and premium rates, Michigan Senate Minority Leader Gretchen has reduced by over $500 million each year Whitmer—now Governor—and former

THIS GOVERNMENT BODY IS COMPOSED OF YOUR NEIGHBORS, DELIVERING ON THEIR PROMISES . . . DAY AFTER DAY Michigan State Representative Mike Shirkey, now Michigan Senate Majority Leader. These key stewards, relying on data-driven policy reviews, work across party lines to deliver high quality, valuable and cost-positive healthcare. The political grandstanding from presidential candidates will continue to dominate headlines in the weeks ahead. Meanwhile, your state government will continue to grind away for you—under the radar but with measurable impact. They work on policy and create programs like the Healthy Michigan Plan that benefit individual Michiganders and the state economy as a whole. This government body is composed of your

neighbors, delivering on their promises and meeting constituents at coffee hours, day after day. They view civic duty at the state level as their impact. And they’re right. State-level elected officials are in the vanguard of our democracy. We all benefit when they gather—as Hamilton’s contemporary and rival Aaron Burr puts it in the musical— “in the room where it happens.”

hen an kers. SEPTEMBER 28, 2020 | CRAIN’S DETROIT BUSINESS | 17

DEMOCRACY

CRUNCH TIME

From Page 15

Absentee voting by mail or secured municipal drop box is expected to surge to 3 million votes in the Nov. 3 election, shattering the previous record of 1.6 million. To handle the onslaught of ballots, municipal clerks are advocating for seven days to pre-process ballots before Election Day in Steps 9 and 10. tion

Applica

City Clerk

Jane Smith 7 Troy, MI 4800

STEP 1: Secretary of State’s office mails voters an application to get an absentee ballot.

US MAIL

STEP 3: Barcode labels get printed for a numbered absentee ballot and envelope. The barcode is used for tracking custody of the ballot.

STEP 2: Local municipal clerk receives the application and checks the voter’s signature with the signature on file in the state’s Qualified Voter File.

STEP 6: Voter either mails the ballot back to their clerk or drops it off at the clerk’s office or an official drop box.

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STEP 7: When the local clerk’s office receives the ballot, they first check the voter’s signature on the envelope with the signature on file in the state’s Qualified Voter File. If the signature does not match, they contact the voter. If it matches, they scan the envelope to make a record of its receipt in the Qualified Voter File.

STEP 8: Returned ballots are stored in a secured room in the clerk’s office and re-counted daily in batches of ten or more until Election Day.

STEP 9: Starting at 7 a.m. on Election Day, bipartisan election workers assigned to process and tabulate absentee ballots start by running stacks of envelopes through a high-speed letter-opening machine to slice the top of the envelope.

STEP 11: The ballot is then removed from the secrecy sleeve and checked for use of Wite-Out or stains, such as coffee spills, which cause trouble for the high-speed tabulating machines. If clear of blemishes, the ballot is run through the scanner.

STEP 10: Each ballot in a paper secrecy sleeve is removed and workers check the ballot number on the outer envelope with the number on a detachable tab on the ballot. If that the tab matches, it is removed.

SOURCE: CRAIN’S DETROIT BUSINESS RESEARCH

When can they be opened? Michigan is one of 14 states that allow election officials to open absentee ballots only during Election Day. Thirty-two other states allow election workers to begin processing ballots prior to the election, according to the National Conference of State Legislatures. The time for pre-processing absentee ballots varies greatly across the country. Florida election officials can begin

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12 STEP 12: Absentee ballot results are not printed until after the polls close at 8 p.m.

STEP 4: Absentee ballot is mailed to the voter.

STEP 5: Voter marks their decisions, puts the ballot into a secrecy sleeve and then inside an envelope, which they must sign.

Y REC SEC

“I think we’re going to see a real paradigm shift with how people vote,” said Ottawa County Clerk Justin Roebuck, a Republican. “And we need to make sure that we have that infrastructure in place to deal with the change.” The sheer volume of absentee ballots has election officials warning that the time it takes to process each AV ballot could stretch vote-counting into the day after Election Day. That could potentially delay the outcome of the presidential election if the vote count between President Donald Trump and former Vice President Joe Biden is as close as it was in 2016 when Trump narrowly won Michigan, by 10,704 votes. “Our clerks need more time prior to Election Day to simply prepare so that on Election Day clerks and their workers are simply tabulating ballots,” Secretary of State Jocelyn Benson said in an interview. The coming onslaught of absentee ballots has clerks from both political parties pleading with the Republican-controlled Legislature to give them more time before Election Day to open the outer envelope each ballot is mailed in and prepare it to be counted. Clerks from across the state have called for as many as seven days to pre-process AV ballots, though they’ll settle for one at this point. Lawmakers sent Gov. Gretchen Whitmer legislation last week that adds one extra 10-hour day to the clock; Senate Bill 757 would let clerks in cities or townships of at least 25,000 people cut open envelopes between 10 a.m. and 8 p.m. on the day before the election. “Even if we open 15,000 (AV ballot envelopes), that’s 15,000 less things I need to do on Tuesday,” said Rochester Hills clerk Tina Barton, a Republican. As of Sept. 22, more than 25,500 of the Rochester Hills’ 55,000 registered voters have already requested absentee ballots — triple the number of requests they had received by late September in the 2016 election, state data shows. Absentee ballots take longer to record than ballots voters cast at the polls because of ballot security measures put in place to keep each voter’s choices secret, move the ballot through the U.S. Postal Service and securely store completed ballots for up to 40 days before Election Day. Michigan’s form of early voting began last Thursday; absentee ballots will begin arriving in mailboxes this week. In lieu of more time to process and tabulate absentee ballots, some 20,000 new election workers have been recruited to work at the polls in Michigan or be sequestered in closed-door rooms where workers process and tabulate absentee ballots. “In many jurisdictions, we have doubled or significantly increased the number of ballot tabulators,” Benson said last week at an event in Ann Arbor, where the clerk has opened a new mobile office to handle increased absentee voting. “We’re trying to increase our efficiency, increase our capacity to the best way possible.” “But none of that is going to be a substitute for what other states are doing, which is giving our clerks more time on the front end to prepare those ballots on Election Day.”

How absentee voting by mail works

processing absentee ballots up to 22 days before Election Day. Minnesota and North Carolina each give local clerks a two-week head start. Ohio permits pre-processing before Election Day, but there’s no exact timing, according to NCSL. In Colorado, a state that has adopted almost universal mail-in voting, clerks can begin counting absentee ballots 15 days before the election in the largest municipalities. “We’ve been doing that for years in

CHRIS MORRIS FOR CRAIN’S DETROIT BUSINESS

Colorado — and it works,” said Wayne W. Williams, a former Republican secretary of state of Colorado. Having two weeks to open and count absentee votes helps election administrators in Colorado root out any problems in the processes of tabulating results and lowers the workload on Election Day itself, Williams said. “Our clerks who are doing a good job and plan ahead in the larger counties try to go in clean on Monday night — meaning they have processed all of the ballots that have

Administrative Coordinator of City Council Mary Fronczak, left, and Election Inspector Karen Mcpherson organize ballots at the Rochester Hills City Clerk’s Office in Rochester Hills. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

18 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

come in by Monday,” Williams told Crain’s. “That way, on Election Day, they’re only processing the ballots that came in on Election Day or maybe late Monday night.” Early processing and counting of ballots before Election Day cuts down on the number of hours election workers put in on Election Day itself, Williams said. “Asking them to work a 20-hour day just doesn’t make sense,” said Williams, an election law attorney in Colorado Springs and former El Paso, Colo., county clerk. “And people who are fresh make better decisions. So you get fewer errors if you do it over a number of days.” Polls in Michigan open at 7 a.m. and close at 8 p.m.; counting and processing absentee ballots can go on until midnight or later in Detroit and its large suburbs of Dearborn, Warren, Sterling Heights, Troy and Livonia. Having absentee ballots processed in advance ensures results are available the night of the election, Williams said. “One of the things that breeds concerns among voters are lengthy delays in announcing results because people are wondering, ‘What’s going on?’” he said. Former Michigan Secretary of State Ruth Johnson, who was Oakland County’s clerk from 2005 to 2011, said accuracy, not speed, should be the main focus in administering the upcoming election. “If people have to wait an extra day for some of the tallies in some of the larger communities and they’re accurate, I think that’s a good investment in time,” said Johnson, R-Holly. Johnson, who is now a state senator, is the sponsor of SB757, the bill headed to Whitmer's desk that allows pre-processing of absentee ballots the day before the election. Adding more days to the clock for clerks to process absentee ballots requires more training and procedures for 83 county clerks; 1,520 city, village and township clerks; and 30,000 precinct workers, Johnson said. “When you start adding on more days ... you lose integrity — it’s always a balance,” Johnson said. “Every time we make huge changes right before an election it’s more difficult than probably people think.”

Worker lockdown Johnson's bill also would allow more flexible shifts for election workers. Election workers who count absentee ballots — known as AV counting boards — are currently required to remain sequestered in the same building all day without access to a cell phone until they’re finished counting. Additional workers can come in, but they can’t relieve others until the work is complete. “They literally can’t go to the bathroom unless they have a group of people with them ... so they don’t wander off and communicate with the outside world,” Troy city clerk Aileen Dickson said. Barton, the Rochester Hills clerk, is not convinced that simply adding additional shifts will help guard against poll worker fatigue. “It all sounds great but finding people to start work in the middle of the night is going to be a real challenge,” she said. Dickson wants the ability to open absentee ballots on the Monday before the election, remove a voter identification mark on a tab th at detaches from the ballot and then secure the ballots in sealed bags so they’re ready to be tabulated on Tuesday.

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A 20-inch long ballot has to be folded three or four times in order to fit into an envelope. Election workers have to refold every ballot before it can be sent through the tabulating machine, Dickson said. â&#x20AC;&#x153;I would say 75 percent of the time in handling a ballot is all that pre-processing,â&#x20AC;? she said. Even if lawmakers grant clerks an extra day to pre-process absentee ballots, they wonâ&#x20AC;&#x2122;t all get handled on Nov. 2. During the August primary in Troy, between 5 p.m. Monday and 8 p.m. Tuesday when the polls closed, voters and the U.S. Postal Service delivered nearly 6,000 absentee ballots, nearly one-third of all AV ballots, Dickson said. As of Sept. 21, more than 27,500 voters in Troy had requested an absentee ballot for the November election â&#x20AC;&#x201D; a four-fold increase from the same week in 2016, according to state data. Dickson said she needs a minimum of two days to handle that kind of volume of votes by remote voting. â&#x20AC;&#x153;So we either choose to organize ourselves and have a logical, reasonable approach where we have a scheduled two days to do it,â&#x20AC;? she said. â&#x20AC;&#x153;Or you just stick with the law the way it is and you start at 7 a.m. and we just work for 48 hours straight and nobody gets to sleep until the ballots are counted, which is not organized and not responsible to make us have to work like that.â&#x20AC;? Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

Grand Rapids firm develops service for tracking ballots in the mail Companyâ&#x20AC;&#x2122;s technology attracts interest from clerks who run elections BY CHAD LIVENGOOD

A Grand Rapids mail service and printing company has developed a text message and email alert for voters in participating cities to get tracking updates when their absentee ballot is traveling through the U.S. Postal Service. Kent Communications Inc. launched its TrackMIBallot service during the Aug. 4 primary for the cities of Lansing and Walker, a suburb of Grand Rapids. KCI adds a barcode to each absentee ballot envelope and the return envelope that gets scanned at local post offices and the postal serviceâ&#x20AC;&#x2122;s mass mail-sorting facilities in Grand Rapids, Pontiac, Detroit or other parts of the country. Under an agreement with the postal service, KCI gets electronic access to the postal serviceâ&#x20AC;&#x2122;s real-time bar code scanning data through its Informed Visibility service, which tracks end-to-end movement of letter mail. Each time an envelope containing an absentee ballot is scanned in the USPS system, a text message and

email are sent to the voter updating them on where their ballot is, said Brian Quist, president and owner of Kent Communications Inc. Quist developed the product in the spring during the coronavirus lockdown after Wisconsinâ&#x20AC;&#x2122;s April 7 presidential primary was marred by 21,000 ballots that arrived late in the

Quist said cities using the service have found they can drop their postage on absentee ballots from 65-cents for first class mail to the 20cent not-for-profit rate. â&#x20AC;&#x153;That huge spread in savings way more than covers the cost of our services,â&#x20AC;? he said. The company contracted with

â&#x20AC;&#x153;IT CAME OUT OF ME SITTING AT HOME DURING THE PANDEMIC AND WATCHING THE DISASTER THAT WAS THE WISCONSIN PRIMARY.â&#x20AC;? â&#x20AC;&#x201D; Brian Quist, president and owner of Kent Communications Inc.

mail and werenâ&#x20AC;&#x2122;t counted. â&#x20AC;&#x153;It came out of me sitting at home during the pandemic and watching the disaster that was the Wisconsin primary,â&#x20AC;? he said. Separately, the Michigan Secretary of Stateâ&#x20AC;&#x2122;s office has a absent voter ballot tracker service that informs a voter when their ballot has been received by their local clerk and scanned into the electronic poll book, one of the steps taken to guard against fraud. KCI is selling its mail-tracking service to cities for about 25 cents per ballot.

Frederick, Md.-based SnailWorks to use its data management system to collect and organize the tracking data for municipalities, Quist said. Ten Michigan cities including Grand Rapids, Lansing, Troy and Huntington Woods are using the ballot tracking service in the Nov. 3 election for absentee ballots that start going out in the mail this week, Quist said. As a mail sorting firm thatâ&#x20AC;&#x2122;s been in business for 40 years, KCI also is sorting absentee ballots and other election mail for 20 municipalities this fall, Quist said.

Lansing was able to use the service to find August primary ballots that were lost in the mail and re-issue new ones to voters, city clerk Chris Swope said. Swopeâ&#x20AC;&#x2122;s success with the program convinced Troy city clerk Aileen Dickson to purchase the service for $7,000. Every election, Dickson said her office gets calls from â&#x20AC;&#x153;hundreds and hundredsâ&#x20AC;? of voters asking where their absentee ballot is. Statewide, there were 8,595 ballots in the Aug. 4 primary that werenâ&#x20AC;&#x2122;t counted because they arrived late in the mail; the city of Troy had 60 such late ballots, according to the Secretary of Stateâ&#x20AC;&#x2122;s office. â&#x20AC;&#x153;Now, instead of saying, â&#x20AC;&#x2DC;Oh, it must be lost in the mail,â&#x20AC;&#x2122; which has been our answer because we donâ&#x20AC;&#x2122;t have any other information, we can say, â&#x20AC;&#x2DC;Oh, we can look it up and say that ballot is in the Pontiac metroplex and it just got there yesterday so it should be exiting,â&#x20AC;&#x2122;â&#x20AC;? Dickson said. â&#x20AC;&#x153;... This is something that solves a lot of problems that we anticipate having before actually have them.â&#x20AC;? â&#x20AC;&#x153;So itâ&#x20AC;&#x2122;s worth every penny,â&#x20AC;? she added.

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Democracy in Action: Fighting for Patientâ&#x20AC;&#x2122;s Access to Health Care The beauty of democracy is that it provides ordinary people with the opportunity to effect extraordinary change. Thatâ&#x20AC;&#x2122;s exactly what has been playing out over the past several months at Michiganâ&#x20AC;&#x2122;s State House as patients, physicians, and patient advocacy groups have come together in the pursuit of a common goal: end dangerous delays in patientâ&#x20AC;&#x2122;s access to their health care. 2TWJ XUJHNâ&#x20AC;ŤÜŞâ&#x20AC;ŹHFQQ^ YMJ LWTZU KTWRFQQ^ PST\S FX YMJ -JFQYM (FSŃŁY <FNY HTFQNYNTS NX \TWPNSL YT WJKTWR YMJ UWNTW FZYMTWN_FYNTS FSI XYJU YMJWFU^ UWFHYNHJX NSXZWFSHJ HTRUFSNJX KWJVZJSYQ^ ZXJ YT XQT\Ń&#x;FSI XTRJYNRJX HTRUQJYJQ^ IJS^Ń&#x;HFWJ FSI YWJFYRJSY YT 2NHMNLFS UFYNJSYX

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S. BOBBY MUKKAMALA, MD

ŃŚ.YŃŁX FQQ FGTZY HTSYWTQQNSL HTXYX Ń§ XF^X 8 'TGG^ 2ZPPFRFQF 2) UWJXNIJSY TK YMJ 2NHMNLFS 8YFYJ 2JINHFQ 8THNJY^ â&#x20AC;&#x153;With too much regularity, insurance companies use prior authorization and step therapy to delayâ&#x20AC;&#x201D;and sometimes â&#x20AC;ŤÜŤâ&#x20AC;ŹFY TZY IJS^Ń&#x;UFYNJSYX KWTR accessing prescribed treatments. 9MJ RTWJ J]UJSXN[J F IWZL TW YWJFYRJSY NX YMJ RTWJ QNPJQ^ NY NX YT LJY HFZLMY ZU NS WJI YFUJ .YŃŁX F UWFHYNHJ YMFYŃŁX HTXYNSL TZW UFYNJSYX YMJNW MJFQYM VZFQNY^ TK QNKJ FSI XTRJYNRJX J[JS YMJNW QN[JX Ń§

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Âť Health canâ&#x20AC;&#x2122;t wait. Fix prior authorization and step therapy.

TRUDY ENDER

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Sponsored by:

120 West Saginaw Street East Lansing, Michigan 48823 Tel: (517) 337-1351 www.msms.org

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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 NONPROFIT ECONOMIC DEVELOPMENT

ENGINEERING / DESIGN

Metro Consulting Associates Metro Consulting Associates (MCA), a multi-faceted engineering, energy, land, and community development firm, promoted Damon Garrett, PE, to the role of President. As a founding member of MCA, Damon started as Director of Engineering in 2009 and most recently served as Vice President and Director of Operations where he was instrumental in solidifying MCA’s visionary goals and energizing its diverse and unique organizational culture that emphasizes employee empowerment to drive client success.

ENGINEERING / DESIGN

Metro Consulting Associates Metro Consulting Associates (MCA), a multi-faceted engineering, energy, land, and community development firm, Hoyle welcomes Kimberly Hoyle as Business Development Director and Andrea Eberle as Marketing Manager to jump-start growth plans as the firm heads into its next decade of Eberle operation. With 20 years of marketing, sales, and business growth leadership experience, Kim will lead MCA’s growth strategy for land development and municipal services, leveraging her prior experience with NORR and Hamilton Anderson Associates. Andrea brings 15 years of experience in branding, product development, communications, and operational leadership with high-growth startups and global corporations to transform MCA’s market position and outreach to drive growth.

Veteran Owned Business Roundtable The Veteran Owned Business Roundtable (VOBRT) today announced Kavy Lenon, senior supplier diversity manager for Herman Miller, as the new vice president of the VOBRT Corporate Advisory Board. “Kavy Lenon’s dedication and commitment to the growth of veteran owned businesses positions her as an excellent choice to help lead our corporate advisory board,” said Roderick Rickman, VOBRT President and CEO of Rickman Enterprise Group.

WHAT’S YOUR COMPANY’S NEXT MOVE?

For more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

PROMOTE. Why not?

PROMOTE.

Celebrate your Success with Reprints & Recognition Products!

September 2, 2019 | crainsdetroit.com

UNDER

Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools

October 30, 2017 | crainsdetroit.com PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

UBS to open downtown Detroit office By Annalise Frank

October 30, 2017 | crainsdetroit.com

• UBS plans to open wealth management office in Detroit in mid-2018 • Office to include 6,000-squareBy Annalise Frank foot space30,nonprofits and civic October 2017 | crainsdetroit.com groups • UBS plans to open wealthcan use free of charge • Bedrock-owned buildings office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018

UBS to open downtown Detroit office

September 2, 2019 | crainsdetroit.com

UNDER

Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools

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

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

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

Albert Berriz, CEO and managing member, McKinley Inc.

UBS to open downtown Detroit office

By Annalise Frank

October 30, 2017 | crainsdetroit.com

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

UBS to open downtown Detroit office By Annalise Frank

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

UBS to open downtown Detroit office

Bedrock LLC

October 30, 2017 | crainsdetroit.com

Albert Berriz talks workforce housing, Ann Arbor and Cuba

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

Laura Picariello

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Crain’s Detroit Business: Can you talk a little bit about how the McKinley portfolio began and where it’s at today? Berriz: McKinley started in 1968 in Ann Arbor, and it was founded by (former U.S.) Ambassador Ron Weiser. It started in the student housing business and eventually transitioned into more traditional multifamily housing, and in addition to that, office and retail, as well. Today, we’re primarily a workforce housing multifamily operator. We have essentially disposed of our retail and office assets in an effort to really focus on multifamily and also focus on an asset class that I think is more in line with our current goal, which is to have a generational multifamily real estate enterprise and a pool of assets that really are long term in nature.  Explain workforce housing versus affordable housing. We’re not in luxury housing. Our residents are working. They’re going to wake up tomorrow morning and go to work. Our average rents are, for example, in Washtenaw County, about $1,100 to $1,200 or in Orange County, or Seminole County, Florida, $1,400 or $1,500. So these are affordable rents. And the difference between us and affordable housing is our buildings are not subsidized. They’re all market rate, and they’re all privately owned. The owners are not receiving any form of subsidy, nor are the residents. However, if you wanted to sort of assess residents and low-income housing tax credit deals compared to ours, they’re probably not too dissimilar, the median incomes. The McKinley residents in, let’s say, Washtenaw County, when you look at the numbers are probably not going to be too much different than what you would see in a traditional LIHTC deal. But again, our buildings, the primary differences, our buildings are market rate and they’re not subsidized any way.

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

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

trajectory was to where you are today in terms of the head of McKinley. I left (Cuba) compliments of Fidel Castro in early 1959 because of the Cuban Revolution. We had to flee. It was survival to leave the country at the time and my parents relocated to Miami. We were fortunate for that. We’re fortunate to have left alive, fortunate to have resettled in what is without question the greatest country on the planet. I was not born here. I was born in Havana and I emigrated as a Cuban refugee just before I was 4 years old with my parents. What consumes your day outside of the office? My wife and I walk. We like to boat, so those are the two things. In our summers we live at Saugatuck, and it’s a great place to live. We’d live there year-round, but it’s a little too cold in the winter.

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

Albert Berriz, CEO and managing member, McKinley Inc.

Bedrock LLC

PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

Bedrock LLC

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

The Detroit Regional Chamber’s annual Mackinac Policy Conference is moving again because of the coronavirus pandemic’s continued disruption of large groups congregating indoors. The chamber announced last Thursday that it is moving the 2021 confab at Mackinac Island’s Grand Hotel from the first week in June to Sept. 20-23, 2021. Holding the annual gathering of 1,500 business, political, education and philanthropic leaders later in the year also may come after a COVID-19 vaccine is readily available, pending the outcome of ongoing clinical trials. This year’s Mackinac Policy Conference in late May was moved to mid-August and eventually canceled altogether because of the coronavirus pandemic and limitations on large gatherings. The date is right before the new dates for the 2021 North American International Auto Show, which is scheduled to begin Sept. 24. In addi-

Baruah

Lassiter

tion, the Michigan Republican Party has scheduled its biennial leadership conference at the Grand Hotel for Sept. 24-26, 2021. “After careful analysis, the chamber reached the conclusion that we could not be certain that public health conditions, including vaccine distribution, and corporate travel policies would make a traditional spring conference that lives up to our attendees’ expectations a reality. Our attendees and partners deserve greater clarity,” Sandy Baruah, president and CEO of the Detroit Regional Chamber, said in a statement Thursday. “In addition to greater certainty and protecting our attendees’ health, the one-year move to September in

2021 provides the conference an opportunity to explore different formats.” Henry Ford Health System CEO Wright Lassiter III, who is chair of the 2021 conference, said holding the event next fall should “ensure a strong comfort level among our attendees in gathering safely.” “That comfort is key to creating an impactful conference and attendee experience that we all value and enjoy,” Lassiter said in a statement. Under Gov. Gretchen Whitmer’s current executive orders, indoor events in northern Michigan are limited 250 people not from the same household. The Detroit chamber said Mackinac Island hotels will begin taking reservations for the September conference in March. Registration will begin in December. The chamber intends to return to the policy conference’s traditional spring schedule near Memorial Day in 2022, scheduled for May 31-June 3. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

DEALS&DETAILS  CONTRACTS  Near Perfect Media, Bloomfield Hills, a public relations firm, has been named the agency of record for Computer Aided Technology, Buffalo Grove, Ill., an engineering consultant; Hebrew School for America, Oak Park; Jeffrey King Interiors, Birmingham, an interior designer; The PLAY Project, Ann Arbor, an autism treatment program; and Yeshiva Beth Yehudah, Southfield, a school. Websites: nearperfectmedia.com, cati.com, hebrewschoolforamerica. com, jeffreykinginteriors.com, playproject.org, yby.org  Comscore, Reston, Va., media mea-

40 40

Dandridge Floyd, 37

20 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020 Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. | BY KIRK PINHO Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936

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

BY CHAD LIVENGOOD

Bedrock LLC

Albert Berriz talks workforce housing, Ann Arbor and Cuba

MCKINLEY INC.: Ann Arbor-based real estate company McKinley Inc. saw the writing on the wall for its retail portfolio a few years ago and cut bait, turning its focus primarily to its large crop of tens of thousands of workforce housing units across the country. One of the people at the helm of that decision was Albert Berriz, CEO and managing member, who came to America as a young boy fleeing Cuba and now steers a large company with a portfolio valued at more than $4 billion. I don’t think it’s overblown to use the word “crisis” for Ann Arbor’s affordable housing situation. Give us your perspective on how the city should go about addressing it. I think it’s a supply issue. The reality is that Ann Arbor has not really welcomed solutions from the private sector and has only sought solutions from the public housing side or the community nonprofit side. And both of those groups, while I think they’re very well intentioned, don’t have the capital and the expertise to resolve the problem at the scale it’s needed. To put it in perspective, you know, the Washtenaw County study that came out had a need of about 3,000 units. And if you look at the cost per unit today, and let’s say $250,000 or $300,000 per unit to build a brand new unit today, you know, it’s an $800 million to a $1 billion problem, so I don’t think that’s a problem that gets resolved on the public side or on the community nonprofit side. You know, they have to go to places to seek capital and there just isn’t enough capital, nor do they have enough resources or expertise to resolve the problems. So the city I think, by and large, has attempted to do this in those ways because they really haven’t welcomed the private side. And there is a lot of expertise and there’s a lot of capital that could do this, from the private side perspective. It just hasn’t been the way that Ann Arbor operates, so you see what has happened in Ann Arbor year over year, decade over decade is there’s a lot of conversations about affordable housing, but there’s no solutions.

Annual gathering postponed because of coronavirus pandemic

UBS to open downtown Detroit office

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

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Detroit chamber moves Mackinac Policy Conference to fall for 2021

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Dandridge Floyd, 37

Create your own business headlines with Companies on the Move

The Detroit Regional Chamber, which takes place annually at the Grand Hotel on Mackinac Island, was canceled this year because of the ongoing threat to public health. | DALE G. YOUNG FOR CRAIN’S DETROIT BUSINESS

surement and analytics company, renewed an agreement with Graham Media Group, Chicago, television broadcasting subsidiary of the Graham Holdings Company. Under the agreement, Comscore will provide local television and digital measurement for WDIV–Detroit, KPRC– Houston and WSLS–Roanoke (NBC); KSAT–San Antonio (ABC); WKMG– Orlando (CBS); WJXT–Jacksonville (IND) and WCWJ–Jacksonville (CW). Websites: comscore.com, grahammedia.com  Hercules Electric Vehicles, Detroit, an electric vehicle manufacturer, and Prieto Battery Inc., Fort Collins, Colo., a 3D Lithium Ion battery tech-

nology company, are forming a partnership for the development and commercialization of Prieto’s 3D Lithium-ion solid-state batteries for use in Hercules electric pickups, SUVs and other future vehicles starting in 2025. Websites: HerculesEV. com, prietobattery.com

 MOVES  Marsh & McLennan Agency LLC, an employee health and benefits practice, is moving from 3331 West Big Beaver Road, Troy, to 755 W. Big Beaver Road, Suite 2300, Troy, effective Sept. 28. The practice will occupy nearly two floors in the PNC Center. Website: marshmma.com

Beaumont Health is an eight-hospital health care system. | BEAUMONT HEALTH

BEAUMONT

From Page 3

“The loss of (medical) staff as well as recent surveys, including those by doctors and nurses, demonstrate that something is seriously amiss,” said the letter, which sources said was delivered to board members on Sept. 18. “This situation must be addressed and improved immediately and with an immediate sense of urgency. This must be your primary focus. Among other things, we believe this requires that the proposed transaction with Advocate Aurora Health should not divert your attention or even be considered unless and until the current crisis at Beaumont is fully addressed. “We cannot simply watch years of our commitments go for naught, resulting in untold potential loss to our communities and the people who require Beaumont’s services. “We expect you to meet your fiduciary obligations to assure that all that can be done to have Beaumont regain its past position of unquestioned excellence and again be a cohesive unit of highly skilled, valued and exceptional health care providers,” according to the letter. In a statement Tuesday morning, Beaumont told Crain’s the board has met with donors and will continue to meet with them. “We greatly appreciate our donors’ support over the years and we take their concerns seriously. We will continue to meet with as many donors as possible, as they have requested. Some meetings have already taken place and more are scheduled. “During these meetings, we discuss the COVID-19 crisis in detail and comment on our quality measures, finances and plans for the future. We also want to share objective data with our donors so they have a solid, fact-based framework for understanding our performance. We use this objective and validated data to evaluate organizational and management performance.” Beaumont also said the health care industry is rapidly changing and the COVID-19 pandemic will accelerate more change. Since March, Beaumont said, its board has met twice as often to review quality metrics and other issues. “Strategically, the board has an ob-

ligation to consider the effect of these environSeptember 28, 2020 mental and industry change trends and their potential effect on the ability of Beaumont to continue to proFox vide excellent patient care to our communities,” the statement said.

Drafting the letter Sources told Crain’s the donors debated several draft versions of the letter. Some donors wanted to send a strong letter that clearly stated they wanted the board to fire CEO John Fox and his top two lieutenants, replace them with an interim management team and put a halt to the planned merger with Advocate Aurora Health for at least 12 months. But several donors opposed signing such a letter, so a compromise was reached to ask a prominent attorney to review the letter and make changes. The attorney smoothed over the letter to avoid a direct confrontation with the board but at the same time get the point across that quick action is needed, Crain’s was told by two knowledgeable sources. Crain’s left messages with several donors seeking comment. One major donor, who spoke with Crain’s on the condition of anonymity, said Fox and Beaumont Chairman John Lewis are “tone deaf” to the problems and the lack of confidence expressed by doctors, nurses, donors and the community. “There (is a great amount) of dissension and cultural uprising” within the system over decisions being made by Beaumont management and the board, said the longtime donor. “They’re (Fox and Lewis) a little tone deaf as to the message that they’re receiving from the broader community.” Besides physician defections and nurse unrest, the donor said a large issue for many donors is the pending merger with 26-hospital Advocate Aurora, which has corporate offices in Downers Grove, Ill., and Milwaukee. “They (Fox and Lewis) are focusing on changing control of a community asset where we are selling a hospital

that has $2 billion in the bank and $5 billion in revenue, and giving it away for pennies. For what?” the donor said. “I am worried they are making the wrong decisions for the wrong reasons.” Over the past several weeks, physicians and nurses have expressed dissatisfaction with Fox, COO Carolyn Wilson and Chief Medical Officer David Wood over management decisions they say has led to low morale, inadequate staffing, lack of supplies, changes in anesthesia services and departures of top doctors and nurses. In separate surveys, 76 percent of 1,555 physicians said they have no confidence in corporate management and 70 percent expressed opposition to the merger with Advocate. A greater percentage of nurses expressed lack of confidence in management (96 percent) and opposition to the merger (87 percent). Nearly 700 nurses took the survey. The donors appear to be concerned about a decrease in the quality of the medical staff as more than a dozen top doctors have resigned, been fired or retired from Beaumont over the past year, said three sources, who are knowledgeable about the situation and asked for anonymity because of their involvement with Beaumont.

Top physician departures Over the past several years, many longtime Beaumont doctors have departed or retired for a variety of reasons. Three of the biggest names are Marc Sakwa, chair of thoracic surgery, and fellow surgeons Jeffrey Altshuler and Nicholas Tepe. Sakwa, a Detroit native whose father also was a surgeon at Beaumont, raised millions of dollars for Beaumont’s cardiovascular service line. Sakwa and Altshuler took top jobs at MemorialCare in Long Beach, Calif. Tepe retired. Two other top surgeons, Alan and Julie Koffron, announced they would leave Beaumont Hospital Royal Oak. Alan is Beaumont’s chief of transplant, liver, and pancreatic surgery and Julie also is a liver and pancreatic cancer surgeon. Other doctors include Brian Berman, chair of pediatrics, who is now at Detroit Medical Center; George

Hanzel, interventional cardiologist; Leslie Rocher, senior vice president and former chief medical officer at CRAIN ’S DETROIT BUSINESS Beaumont Hospital Royal Oak; David Walters, former senior vice president of Beaumont Health Physician Partners and an ER physician; Paul LaCasse, executive vice president of post-acute care and diversified business operations and former Botsford Hospital president; Matthew Zimmie, M.D., vice president and system chief medical informatics. More than a dozen top anesthesiologists also are leaving Beaumont Royal Oak, including Michael Faulkner, Rhonda Marvar and Mike Sikorsky. Beaumont decided not to renew the contract of 70 anesthesiologists employed by North American Physicians in Anesthesia. Instead, Beaumont has contracted with NorthStar Anesthesia, which will take over the contract for Beaumont’s northern hospitals on Jan. 1. Faulkner, Marvar and Sikorsky are with NAPA and decided to leave for other employers. On Oct. 1, NAPA anesthesiologists must decide whether to leave Beaumont or join NorthStar. In response to physician com-

plaints, the Beaumont board in early August agreed to postpone a vote on a proposed merger with Advocate Aurora until issues with the doctors can be worked out. Sources told Crain’s a majority of the board supports the merger and Fox’s management team, while there is a small but growing number of board members who support changes. “All they have to do is look at the facts,” the longtime donor told Crain’s. “The facts are that physician groups are defecting, and physicians and nurses are completely dissatisfied. The culture that exists in those hospitals is fear. It is a toxic environment. “The question is will (the board) act on those facts? Or will they continue to listen to positions that just support what the CEO and the board chair want them to hear? We have supported Beaumont for many years. This is not a personal vendetta by anybody. This is about what is right for our community and to keep our best physicians and provide the safest conditions, with the most up-todate equipment, for our patients.” Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

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NONPROFITS

ProsperUs to spin off from Southwest Solutions Move will position nonprofit to attract more funding, expand help for entrepreneurs of color BY SHERRI WELCH

Southwest Economic Solutions is spinning off ProsperUs, a nonprofit subsidiary launched eight years ago to provide support and microloans for entrepreneurs of color. The move will enable ProsperUs to expand its lending pool and the number of entrepreneurs it can support by giving it the ability to seek new sources of government, bank and foundation support. And that, in turn, will give it the ability to help more aspiring entrepreneurs of color in Detroit. Executive Director Chanell Scott Contreras is projecting the move will attract enough funding to expand the number of microloans ProsperUs makes now from an average of 15-20 per year to 50 next year and 100 in 2022. “Our spinoff is really connected to our need to grow, to meet market demand related to access to capital,” she said. “Today there is not enough microloan capital available to entrepreneurs of color in Detroit.” By separating from Southwest, ProsperUs will be able to strengthen its back-office administration, secure Community Development Finance Institution or CDFI certification, become a U.S. Small Business Association microlender and be positioned to attract program-related investments from foundations and Community Reinvestments Act investments from banks,

Contreras

Hernandez

Contreras said. Spinning off will also allow ProsperUs to enhance its loan product offerings, she said. “In other cities, you see this model more fully fleshed out, a model of a capital ladder with that very first step in the ladder being very small, credit-builder loans” that help entrepreneurs improve their credit with a goal of eventually securing a microloan, she said. “In Detroit … our ecosystem is just beginning to evolve to meet this need.” Launched in 2012 as a program of Southwest Economic Solutions — with a 501c3 status of its own to keep microloan funds separate — ProsperUs has trained over 1,200 entrepreneurs and approved over $2 million in microloans, averaging $19,000 per loan to entrepreneurs in Detroit, Hamtramck and Highland Park. It’s operating on a $1.2 million budget in 2021. And it currently has about a $1 million microloan fund, including loan capital and loan receivables, Contreras said.

With rising demand for support and microloans in the city, ProsperUs reached an inflection point, said Hector Hernandez, executive director of Southwest Economic Solutions, the economic development arm of Southwest Solutions for individuals, providing workforce development, foreclosure mitigation, financial literacy education and other support. “There’s a clamor for more, to scale this impact. The only way you scale this work and become more self-sustaining over time as a program model is to grow your lending pool.” ProsperUs will begin operating as a standalone nonprofit on Oct.1 from its new home at the Green Garage co-working space in Detroit’s Midtown area. It’s looking to become a CDFI, a mission-focused lending organization certified by the U.S. Department of Treasury so it can secure loan funds from community foundations and the federal CDFI Fund. With that certification, it will also be positioned to become an SBA lender, Contreras said. In order for ProsperUs to gain the CDFI and SBA lender certifications, it needs to have entrepreneurship support and lending as its primary service, Hernandez said. “You could not say that was its primary service if it was a program within Southwest Economic Solutions.” A local funders’ collaborative has shown interest in ProsperUs scaling up its operations and becoming a CDFI so

SUBSIDY

From Page 1

The new state assistance for the QLine’s operations will come from the state’s convention facility development fund, which is funded by hotel and liquor taxes and has traditionally been reserved for paying down bond debt for convention centers across the state and subsidizing the operations of TCF Center (formerly Cobo Center). The convention facility development fund has been running a $20 million to $25 million annual surplus, Lijana said. The legislation, which is headed to Gov. Gretchen Whitmer’s desk for a likely signature, changes how surplus hotel and liquor taxes are to be distributed, starting with a one-time $10 million transfer to the state’s general fund to help balance that budget for the fiscal year ending Sept. 30. The bill boosts state support for Detroit’s TCF Center — operated by the Detroit Regional Convention Facility Authority — by $26 million over six fiscal years to subsidizing operations. The bill caps early retirement of bond debt on TCF Center at $5 million in fiscal years 2021 and 2022 debt service payments, according to the bill. Under the bill, TCF Center would get $7 million for operations for the fiscal year ending Sept. 30 to cover losses the convention center has sustained during the coronavirus pandemic. That’s in addition to a $5 million operating subsidy it already received this fiscal year. The bill also appropriates $5 million toward paying down the Detroit Regional Convention Facility Authority’s capital debt on TCF Center this year, according to the nonpartisan Senate Fiscal Agency. TCF Center’s $5 million annual sub-

State assistance for the QLine’s operations will come from the state’s convention facility development fund, which is funded by hotel and liquor taxes. | CRAIN’S DETROIT BUSINESS

A bill boosts state support for Detroit’s TCF Center — operated by the Detroit Regional Convention Facility Authority — by $41 million over six fiscal years, $31 million of which would be dedicated to subsidizing operations. | CRAIN’S DETROIT BUSINESS

sidy would then increase to $8 million in the 2021 and 2022 fiscal years, be reduced to $7 million in 2023, fall to $6 million in 2024 and $5 million in 2025. Under a 2008 law, the Detroit con-

22 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

vention center’s state support was supposed to go away at the end of 2023. The legislation passed Thursday extends the state subsidy through 2025. Sen. Curtis Hertel Jr., D-East Lan-

it can accept not only grants, but possibly program-related investments from foundations, Hernandez said. Those investments would build on support from the New Economy Initiative and the W.K. Kellogg Foundation since ProsperUs’ inception in 2012. Banks are also looking for an organization that’s positioned to accept Community Reinvestment Act funds and other investments to be loaned out to the Black and Brown communities, Hernandez said. “We have full confidence ProsperUs will grow and soar,” Hernandez said. “There’s a greater good that’s being met by this separation.” Southwest Economic Solutions will continue to collaborate and work closely with ProsperUs and the entrepreneurs it serves, with programs including financial literacy, English as a second language education, homebuyers education and workforce development. Contreras, 37, who’s led ProsperUs for the past three years, said late last week that the nonprofit has secured its first CDFI Technical Assistance award of $125,000 from the U.S. Department of Treasury. She expects ProsperUs to obtain CDFI certification and possibly to secure new bank investments next year and SBA lender status in 2022. To support its growth, ProsperUs plans to increase its staff of six to eight or nine before the end of the year and to add at least another two to three em-

ployees as loan officers and technical assistance advisers next year as it expands loans and entrepreneur training, Contreras said. With increased loan pools, ProsperUs plans to launch credit-builder loans of $1,000 to support entrepreneurs in building their credit so they are positioned to take out larger loans in the future at lower cost, she said. That’s something that will help entrepreneurs finance their businesses at lower cost and help them access credit for non-business purposes, as well, like buying a vehicle or purchasing a home. “Through their focus and drive toward entrepreneurship, we’re able to leverage that to position them to succeed in many areas of life,” Contreras said. ProsperUs also plans to introduce a step-up loan of $1,000-$5,000 to help entrepreneurs prove business concepts and eventually qualify for microloans of $5,000-$50,000. “Our goal is to position people to move beyond ProsperUs and if needed, take on capital at larger CDFIs or commercial banks,” Contreras said. ProsperUs is the second nonprofit in the area to seek CDFI certification in less than a month. Two weeks ago, Michigan Women Forward said it would seek to become a CDFI, as well, to expand its loan pool for women entrepreneurs.

sing, was involved in negotiating the legislation. He said the additional state aid for the QLine and TCF Center is necessary to sustain them through the pandemic and save jobs. “Obviously we’re in unique times and the TCF Center needs some operating dollars because of COVID,” Hertel said Friday. “If these things go away, it would be a huge tragedy for these communities.” Given the convention industry’s experience after the 2001 terrorist attacks, it could take three to five years to recover from the pandemic after its safe for people to congregate in large groups again, said Patrick Bero, CEO and CFO for the Detroit Regional Convention Facility Authority. “There’s definitely a concern that it will take some time for us to dig out of this,” Bero told Crain’s. Bero pointed to the Detroit Regional Chamber’s decision this week to move its 2021 Mackinac Policy Conference — normally held the week after Memorial Day — to Sept. 20-23 next year, butting right up against the North American International Auto Show at TCF Center, which also has been moved to the fall.Both events were canceled this year. From March through Sept. 30, TCF Center expects net losses of $7 million, Bero said. TCF Center’s convention and meeting business has sustained a $9.6 million loss, while parking revenue at the convention hall is down $2.4 million, he said. The convention center earned $5 million from renting to the state of Michigan two main showrooms that the U.S. Army Corps of Engineers converted into a field hospital for COVID-19 patients that was lightly used in the spring before being mothballed, Bero said.

In Level B at TCF Center, a 600-bed field hospital remains set up in the event of a second deadly wave of the coronavirus. The Whitmer administration recently extended its lease for the space through December, Bero said. TCF Center has no meetings or events built into its budget for the next six months, resulting in another $6.6 million loss for the convention center to sit idle, Bero said. Bero said there are some clients that would like to hold meetings this winter, but that will depend on the threat of the coronavirus at the time and whether Whitmer loosens restrictions on indoor gatherings, which are currently capped at 10 people. “We’re not including that in the budget right now because there’s too much uncertainty, and I’d rather have a positive surprise than a negative one,” Bero told Crain’s. HB6119, sponsored by Rep. Cynthia Neeley, D-Flint, was originally introduced in August as a bill to transfer $10 million in surplus convention fund taxes to the state’s general fund. In the Senate, the legislation was significantly amended to include the new appropriations for the QLine, TCF Center, the Michigan Economic Development Corp., which will get $4 million in fiscal year 2021 to grant to convention centers with 10,000 square feet or more elsewhere in the state. The bill cleared the Senate on Thursday on a 35-2 vote with one senator not voting. The House approved the greatly altered bill 84-19 with six representatives not voting.

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

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

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FINALISTS NAMED FOR 2020 MICHIGANCIO ORBIE® AWARDS The Michigan CIO of the Year® ORBIE® Awards honors chief information officers (CIOs) who have demonstrated excellence in technology leadership. With support from Crain’s Content Studio, MichiganCIO will honor the CIOs who are driving innovation and transforming Michigan’s leading organizations. The CIO ORBIE Awards will take place virtually on December 11th. To learn more about the event visit michigancio.org/awards/details. The finalists are below:

SUPER GLOBAL | OVER $5 BILLION ANNUAL REVENUE & MULTI-NATIONAL OPERATIONS MAMATHA CHAMARTHI

MATT FAHNESTOCK

MICHELLE GREENE

STEVEN ZERBY

Fiat Chrysler Automobiles

Dana Incorporated

Masco Corporation

Owens Corning

GLOBAL | OVER $1 BILLION ANNUAL REVENUE & MULTI-NATIONAL OPERATIONS THOMAS FARRINGTON

JOHN HILL

RAMAN MEHTA

JAMES SEEVERS

Perrigo

Carhartt

Visteon Corporation

Toyoda Gosei North America

LARGE ENTERPRISE | OVER $3 BILLION ANNUAL REVENUE STEVEN AMBROSE

JASON BRESSLER

ANITA KLOPFENSTEIN

SANGY VATSA

DTE Energy

United Wholesale Mortgage

Little Caesars Enterprises

Comerica Bank

ENTERPRISE | OVER $500 MILLION ANNUAL REVENUE DAVID BEHEN

PAUL BLOWERS

JENNIFER CHARTERS

La-Z-Boy Incorporated

Plante Moran

Flagstar Bank

CORPORATE | UP TO $500 MILLION ANNUAL REVENUE STACY CARRON

ANDY FREY

ELIZABETH KLEE

MATT SPIVEY

Stout

OneMagnify

Urban Science

Mission Veterinary Partners

NONPROFIT/PUBLIC SECTOR | GOVERNMENT, EDUCATION & OTHER NONPROFIT ORGANIZATIONS WILLIAM FANDRICH Blue Cross Blue Shield of Michigan

LESLEY MA

BETH NIBLOCK

RAVI PENDSE

NSF International

City of Detroit

University of Michigan

HOTELS

From Page 1

The 150-room Townsend Hotel in downtown Birmingham is in special servicing after being more than three months late on a $35 million loan. | COSTAR GROUP INC.

A loan totaling $77 million for the Westin Book Cadillac in downtown Detroit is now in special servicing, looking for a path to debt resolution. | COSTAR GROUP INC.

Occupancy rates recovering, but slowly Detroit-area hotel stays plummeted in March as COVID-19 spread across Michigan and forced business shutdowns. Occupancy has been climbing for the last few months, but the industry is nowhere near pre-pandemic levels. 80 70

Mar 7: 62.1%

60 50 Weekly occupancy %

In a survey of its membership announced last week, the Washington, D.C.-based American Hotel & Lodging Association warned that half of hotel owners are in danger of mortgage foreclosure and nearly three-quarters would have to lay off more employees without additional federal government assistance. That comes as more than twothirds are at less than half of their full-time, pre-pandemic staff, according to the association, which also says that two-thirds report they can only last six more months on their current projected revenue and occupancies. All that spells bad news for the hotel market in Detroit and its suburbs. According to New York City-based Trepp LLC, which tracks commercial mortgage-backed securities, or CMBS, debt, there is $615.3 million in such loans out on hotel properties in the Detroit region. But of that, onethird, or $204.4 million, is more than 90 days past due. That includes a pair of loans totaling $77 million for the Westin Book Cadillac in downtown Detroit, which is now in special servicing, as well as $35 million for the Townsend Hotel in downtown Birmingham — also in special servicing. A special servicer tries to come up with a debt resolution. The loan could be modified or extended, or some other deal could be reached with existing owners. In addition, the revamped Trumbull and Porter Hotel in Detroit’s Corktown neighborhood is more than three months behind on its $12.9 million loan, and the Delta Hotels by Marriott at Detroit Metropolitan Airport is also 90-plus days late on its $20.3 million loan, according to Trepp data. Messages were left with the ownership and management groups of each of those four hotels; all four either declined to comment or didn’t respond to inquiries from Crain’s. As of the week of Sept. 19, the region’s hotel occupancy rate was 50.6 percent, still 18.5 percent below the 62.1 percent the week before the first COVID-19 cases were announced in Michigan, according to data provided by STR, a hotel-industry analytics firm with its North American headquarters in Tennessee. The Michigan Restaurant & Lodging Association says the profitability threshold for hotels is 50 percent occupancy; June 27-Aug. 22, hotels in Southeast Michigan were at or above 50 percent, according to STR. The average daily rate, or ADR, continues to climb, back to $82.82, but is still 16.7 percent off the $99.38 the week of March 7, and RevPAR — industry lingo for revenue per available room — is back to $41.94, but 32 percent lower than the $61.71 reported the week before the first cases. Yet all of those are vast improvements over the market lows in April. Occupancy was just 22.9 percent the week of April 4; the week of April 25, daily rates were $63.38 and RevPAR plunged to $14.88 the week of April 4. In spite of the abundance of worries in the short term about performance in the hotel market, David Di Rita, principal of Detroit-based developer The Roxbury Group, which has two downtown hotels open and a third in the pipeline, said there’s a reason there was a deluge of 2,000 or so rooms in the development hopper prior to the start of the pandemic. “We are not wondering whether or not Detroit needs more hotel rooms

Apr 4: 22.9%

40 30

Jun 6: 40.1%

May 2: 29.6%

Aug 1: 54.2%

Jul 4: 52.4%

Sep 5: 47.9%

20 10 0

Mar 7

Apr 4

May 02

Jun 06

Jul 04

SOURCE: STR

Aug 01

Sep 05

CRAIN’S DETROIT BUSINESS GRAPHIC

Pandemic hinders hotels’ pricing power

The average daily rate and revenue generated per available room for Detroit-area hotels fell precipitiously in the early days of COVID-19, but are beginning to show a slow recovery. Until the pandemic hit, local rates were fairly stable. Average daily rate Revenue per available room

Mar 7: $99.38 $61.71 $100 80

Apr 4: $65.01 $14.88

May 2: $64.41 $19.04

Apr 4

May 2

Jun 6: $74.15 $29.75

Jul 4: $85.97 $45.03

Aug 1: $86.37 $46.82

Sep 5: $82.22 $39.39

Aug 1

Sep 5

60 40 20 0

Mar 7

Jun 6

SOURCE: STR

at the other end of this. It will need more hotel rooms post-pandemic like it needed them pre-pandemic,” he said. “The market will change, we know that. We are fortunately in a good position to wait that out. Other projects in the pipeline might not be.”

Jul 4

CRAIN’S DETROIT BUSINESS GRAPHIC

Stalled construction Construction on no fewer than three hotels that are part of overall developments totaling at least $466 million have been slowed as a result of COVID. In addition, a $75 million

A proposed 228-room Thompson Hotel in the $377 million development known as The Mid has had its construction start date pushed back until at least June 2021. | CREDIT.

24 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

hotel has halted construction as it attempts to secure more financing. The biggest of them all, a proposed boutique 228-room Thompson Hotel in the $377 million development known as The Mid, has had its construction start date pushed back until at least June 2021, making the project about two years behind its initially announced schedule. Representatives of the developer for the Midtown site north of Detroit’s Whole Foods were not made available for an interview, but instead offered the following statement: “The Mid’s sponsor has been working on activating this site for the past two years with more than $27 million invested in the proposed development and we look forward to reengaging when we experience more market stability. We, too, are frustrated by the pause but remain bullish on Detroit and the commitments we have made and remain eager to break ground on this shovel-ready project in the spring/summer of 2021.” In addition, construction on the planned 227-room, $45 million The Godfrey hotel in Corktown has been bumped back about six months, said Randy Wertheimer, president and CEO of Farmington Hills-based Hunter Pasteur Homes, which is working on the seven-story planned building at 1401 Michigan Ave. with Chicago-based Oxford Capital Group. Wertheimer said construction was to begin by the end of the year, and while the design and entitlement process is expected to be done by then, construction is likely to begin this summer instead. “We have 40 percent equity in the bank,” Wertheimer said. “At the time, it was easy getting a loan for 60 percent of our cost. That was the easy part of the deal. But because of COVID, the lending market now longer exists for hospitality today. Once the vaccine exists, we feel we’ll be the only hotel in the country with 40 percent equity.” The $46 million AC Hotel by Marriott, which is being developed by Di Rita’s The Roxbury Group, is now expected to begin construction in the first half of next year, as opposed to the end of the year, as most recently planned, he said. “We are still moving forward,” Di Rita said. He declined to comment on the two hotels his company has up and running: The David Whitney Building’s Aloft Detroit and The Element at the Metropolitan Building, both downtown. “We do have to get to the other side of the current environment to move forward on that,” Di Rita said. Construction at the $75 million Temple Detroit hotel at 640 Temple St. halted for three months as a result of Gov. Gretchen Whitmer’s executive order pausing all nonessential commercial building, prompting cost overruns that require an additional layer of financing that is currently being finalized, according to a source familiar with the matter. Construction stopped while that financ-

ing is being secured but is expected to resume in a couple weeks. The project is being developed by Byzantine Holdings LLC, which includes Christos Moisides, executive member of Detroit-based 400 Monroe Associates LLC; Gretchen Valade, granddaughter of Hamilton Carhartt, who founded Dearborn-based workwear brand Carhartt Inc. in 1889; and David Sutherland, partner with the Wakefield, Sutherland & Lubera PLC law firm in Grosse Pointe Farms.

Behind on debt Less noticeable but no less important to the market, eight hotels in the region are more than three months late on their CMBS loans, representing about one-third of the total CMBS balance, according to Trepp. Damian Smoter, vice president on Bethesda, Md.-based special servicer CWCapital’s RealINSIGHT Marketplace team, said in an interview earlier this month that about 15 percent of the company’s auctions have been hotels (55 percent has been retail and 15 percent has been office, while the remaining 15 percent has been land, multifamily and industrial). Among those behind on payments, according to Trepp: the 150-room Townsend Hotel in downtown Birmingham, now in special servicing after being more than three months late on a $35 million loan; the 453-room Westin Book Cadillac in downtown Detroit, which is also in special servicing after falling more than three months behind on a pair of loans totaling $77 million; the 144-room Trumbull and Porter Hotel in Detroit’s Corktown neighborhood, which is more than three months late on $12.9 million in CMBS debt; and the 271-room Delta Hotels by Marriott — Detroit Metropolitan Airport hotel, which is more than three months behind on $20.3 million in CMBS debt. Financial numbers for the Townsend during the pandemic were not available, but in the 12 months leading up to it, it had $21.96 million in revenue between April 2019 and March. In the calendar year 2019, revenue was $23.37 million and in 2018, revenue was $24.74 million. The most recent valuation in August 2017 pegs the property at $67.9 million. Full annual financial data for the Westin Book Cadillac wasn’t available through Trepp, but the hotel lost $2 million between January and April, with $19.76 million in revenue and $21.78 million in expenses. It operated that period at a 43 percent occupancy rate. The hotel is valued at $136 million, according to an appraisal conducted in November, four months before the pandemic hit Michigan. The Trumbull and Porter hotel had $7.47 million in revenue and $5.64 million in expenses, for a net operating income of $1.83 million in the 12 months leading up to the COVID-19 pandemic’s arrival in Michigan, according to Trepp. Full calendar year financial data was not available for the hotel, which was appraised in January 2019 at $23.4 million. The Delta Hotels by Marriott also didn’t have full calendar year financial data available, but in the 12 months between April 2019 and March leading up to the pandemic, it was already operating at a thin profit margin, pulling in $7.31 million in revenue on expenses of $6.84 million, according to Trepp. But perhaps most telling number of all: In less than one year, the hotel lost one-third of its appraised value, falling from $33 million in October 2019 to $22 million in August. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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“We’re trying to figure out what is the best way to sanitize and clean the igloo between parties and how we can make this as safe as possible,” Zadorsky said. “We’re also talking through what our procedure is going to be to make sure that air has been circulated to the igloo.” Godwin Ihentuge, who owns YumVillage in the Milwaukee Junction neighborhood in Detroit, hopes to apply for a city permit for a heated outdoor space this winter, possibly involving the closure of Milwaukee Avenue. The city is working on renewing its Open Detroit program for outdoor restaurant seating in public rights of way that expires in November. “We are trying to come up with a safe program that might be used through the winter months,” Caitlin Malloy-Marcon, deputy director for Detroit’s Complete Streets, said in a recent online conversation hosted by Detroit City Council President Brenda Jones. A new program would need to be approved by Council and comply with state guidelines. Ihentuge had just secured a liquor license in February but had to pivot quickly when the pandemic hit, moving from a sit-down model to online transactions and curbside pickup. He’s now in the process of converting much of his existing indoor dining space into a marketplace. “As we are still uncertain with what will happen if there is going to be a second wave, we plan to just focus on converting our dining room into a boutique-style Afro Caribbean shopping experience,” Ihentuge said. Owners looking to winterize out-

Norma G’s owner Lester Gouvia is focused on making the interior experience as comfortable and safe as possible for guests rather than winterizing his outdoor patio space. | NORMA G’S

UNITED

From Page 3

The route chosen by UWM to becoming a public company — merging with a special purpose acquisition company (SPAC), or “blank check” company — has become increasingly popular, particularly in 2020. Jay Ritter, an IPO expert and finance professor at the Warrington College of Business at the University of Florida, said that while SPAC deals have gained in popularity, the size of the UWM deal — said to be the largest to date — stands out. “It’s unusual in terms of the SPAC shareholders getting such a small percentage of a pretty big company,” Ritter said. “$16 billion is merging with this shell company that has $425 million in cash as a back-door way of going public.” On Wednesday, the day the deal was announced, the Gores holding company lost nearly 8 percent of its value. To Ritter that indicates Ishbia likely negotiated an advantageous deal for his company. A message left with The Gores Group was not returned. UWM’s specific reasons for choosing the SPAC route to become a public company are unknown. Ishbia was not made available for an interview for this report. Ritter, however, notes there can be two key advantages to opting for the SPAC method: saving time to help take advantage of a bull market, and money saved by not having to pay commission fees to investment bankers. It’s unclear when UWM and The Gores Group executives began

door spaces have been greeted with tent and heater shortages and skyrocketing prices. Detroit Shipping Co. co-founder John Hartzell found that quotes for the same enclosed tent he installed last year for $45,000 are coming closer to $80,000 this year. Detroit Shipping Co. has been operating solely with open-air outdoor seating over the summer months at a capacity of about 220. Even with a tent, Hartzell anticipates capacity declining to 100 seats come winter. He’s also planning to convert to a full app ordering system, with staff running food and drink to tables so customers don’t have to stand in lines. Not every owner believes winterizing outdoor patio space is worth the cost or trouble. “This is not a ‘go to Home Depot, kind of fix this up myself’ thing. We’re talking many thousands of dollars,” said Norma G’s owner Lester Gouvia. “I have to be concerned that if that space isn’t heated well enough, that food is going to go cold very quickly, and that’s not the experience I want for our customer, and I don’t think a customer wants to pay for that experience.” Instead, Gouvia is focused on making the interior experience as comfortable and safe as possible for guests. He said patrons were slow to return when the restaurant first reopened in July, but he’s seen an uptick in recent weeks as customers’ comfort level increased. “As time went by, I think people got more comfortable when they saw what we’re doing to create separation with plexiglass shields on the tables, as well as demanding you wear the mask,” Gouvia said. Kristin Jonna, owner of Vinotecca in Birmingham and Vinology in Ann Arbor, is also not keen on the concept of winterizing patio space. “Once you tent

a space and then bring heaters in, you’re basically creating a COVID incubator,” Jonna said. “It’s an issue of public safety. I think it’s a very poor idea because there’s no ventilation in a tent like that. I just can’t do that in good faith.” Jonna has noticed a clear difference in clientele between her Birmingham and Ann Arbor locations, noting that Birmingham clients are “just a little looser. They dine in groups. They eat frequently at the restaurants, and they’re not afraid to come inside” while Ann Arbor patrons have been a bit more reticent to dine indoors. Bob Roberts, president of the Corktown Business Association and owner of McShane’s Irish Pub, is exploring a novel concept. He’s working with the Detroit Hispanic Development Corp. to convert large warehouse space on Trumbull Avenue into a sort of communal food hall where diners can go to order and consume food from Corktown restaurants, possibly serviced by a shared delivery system. He’s still exploring the idea but believes it’s feasible under current regulations and may be one way for area restaurants to survive what will undoubtedly be a challenging winter. “With the social distancing and the 50 percent capacity, some of our restaurants can only fit 10 or 12 people, and it’s really not worth them to be open for regular dine-in service, in particular, if we lose the outdoors areas also,” Roberts said. Ihentuge remains optimistic that YumVillage will survive through the winter, but he knows it won’t be easy. “It’s very stressful,” he said. “It’s definitely not the same industry that I grew up wanting to be a part of. But at the end of the day, I think there’s like a Drake song lyric where he says, ‘I still love it, but I used to love it more.’”

would amount to about 70 percent of the newly public company, would be worth around $11.3 billion, assuming a $10 share price at which the holding company was trading, making him the 51st-richest person in the U.S., according to an analysis by Bloomberg.

through a broker is the “cheaper, faster and easier” route for consumers. “We’re really big on how we use technology to make it faster, easier and get you talking to an expert who can walk you through the process and make it simple and easy, and a great rate,” the CEO told investors. As UWM prepares to join its rival as a public company, others in the region and industry are also paying attention. Home Point Financial Corp., an Ann Arbor-based wholesale mortgage lender, is also growing in the same broker sector that UWM dominates with its 33 percent market share. There’s no IPO on the agenda for Home Point at this time, said Phil Shoemaker, president of originations at the company that formed in 2014. But Shoemaker told Crain’s that mortgage companies were understandably seen as less-than-stellar investments coming out of the housing market crash more than a decade ago. That that is now changing speaks to a positive trend, he said. “I think that the trend you’re seeing with Quicken and UWM is incredibly positive,” Shoemaker said. “Because I do think that there are mortgage companies out there that are extremely well-run and understand how to build a company that can withstand the volatility and the cycles of mortgage and are worthy of that type of investment.” — Bloomberg contributed to this report.

Local rivals

United Wholesale Mortgage and its United Shore brand are headquartered in Pontiac. | KIRK PINHO/CRAN’S DETROIT BUSINESS

talking about taking the mortgage company public using the SPAC vehicle. In a January regulatory filing just ahead of the Gores holding company IPO, the company said it had no specific companies in mind. For his part, Ishbia sees the present market conditions and rapid rate of acceleration for his company as ideal reasons to head to the public markets. “The growth trajectory of our company for so many years has been going at this rapid pace,” Ishbia said Wednesday during a conference call with investors just hours after UWM announced it was going public. “However, now we believe that the extra resources, the opportunity to basically put us on a level playing field with a lot of our competition, will help take us to a whole other level, basically putting gasoline on a fire.”

Booming industry Driven largely by historically low interest rates, total mortgage loan originations are expected top $3.1 trillion in the United States this year, with more than half of that activity being refinancing, according to the Mortgage Bankers Association. Originations are expected to drop off in 2021 and 2022 to around $2 trillion, according to the industry trade group. Ishbia told investors that he expects the company to close about $200 billion worth of mortgages this year and end 2020 with around $2.9 billion in pre-tax earnings. Taking the company public should also catapult the 40-year-old Ishbia, who took over the family-owned business in 2013, into the ranks of the nation’s super rich. Ishbia’s stake in UWM, which he said

United Wholesale Mortgage’s move to the public markets comes just weeks after fellow metro Detroit mortgage lender Rocket Companies Inc. (NYSE: RKT) went public in an IPO deal that netted the company about $1.8 billion. The rivalry between the two companies — which have traditionally operated in separate corners of the mortgage industry — dates back years and has many facets. UWM has built its business on the mortgage broker model in which independent brokers from all over the country work with a number of lenders on behalf of their clients. Rocket Companies’ Quicken Loans, meanwhile built its business on a direct-to-consumer sales model, but has been steadily growing its wholesale broker model, which this week announced it would rebrand from Quicken Loans Mortgage Services to Rocket Pro TPO (third-party originator). “So the key here is this: We’re all in on the wholesale channel,” Ishbia said on the call with investors. “We believe it’s the best channel for consumers to get a mortgage. We feel very strongly about this, and this is why we went all in on the broker channels.” As reasons for that, Ishbia cites that because of technology, going

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

SEPTEMBER 28, 2020 | CRAIN’S DETROIT BUSINESS | 25

THE CONVERSATION

Neil Hawkins on the environment, arts and the Midland dam break FRED A. AND BARBARA M. ERB FAMILY FOUNDATION: Neil Hawkins, president and COO of the Fred A. and Barbara M. Erb Family Foundation, left the corporate life at Dow Chemical Co. — where he served as chief sustainability officer and corporate vice president for environment, health and safety — behind after a 31-year career early last year to join the foundation. A global sustainable business expert and social media influencer on the subject, Hawkins is looking to bring that same thought leadership | BY SHERRI WELCH to Erb and its focus areas. `Was it a big change to leave corporate life after 31 years to join a private foundation? Because I had been on the board of the Erb Family Foundation for five years, I was pretty familiar with it. But it was a change, going from 600 employees in my global group to less than 10. It was like going from a Fortune 40 corporation to a small business. You do everything here. There is no one else; you don’t call the IT department or other people to do stuff for you. `So what drew you to the Royal Oakbased foundation? A few different things. John Erb and I had been friends for more than a decade. We’d met at the University of Michigan, where we were both serving on the board of the Erb Institute. What appeals to me about the foundation is it really is a combination of all my interests. It’s got environment, Great Lakes, environmental justice and environmental health, the arts. And I liked that Erb was more metro Detroit-focused because I was very tired of all the travel. I have two daughters, one a social worker at UM Medical Center. The other, my youngest daughter, who is 28, has autism and other related things. She lives in the community and is a very positive, high-impact person. I wish I were as happy as she is. She has hundreds and hundreds of friends and people she positively impacts. We think of having a child with autism as being part of a club. When I think about the people in my life who I know because of my daughter’s situation, these are some of the kindest people, the best friends that I have. And it’s because of Deborah being in my life. I wouldn’t have it any other way. `You and your wife still have a home in Midland, and you were there when the dams broke in the spring? Yes, my wife and I are at our Midland home. Let me tell you, it was a scary night. We knew the dams were about to burst. We’re about 10 miles from Sanford Lake and about one mile from the river that the main water came through. The

`The foundation is also a big supporter of the arts and developing cultural district downtown? We want to make sure as they design the connectivity of the different institutions that they examine green stormwater infrastructure to control the rain water and prevent sewer overflows into the Detroit River. If you have green stormwater infrastructure with vegetation and the right design, it tends to be beautiful and parklike and can make a dramatic impact controlling water off streets and roads. We are an arts funder, but the reason why we’re there is because of the environmental aspect. We’ve also been working really hard to support the arts, especially during COVID because they’ve been hard-hit with lack of ticket sales and also fundraising.

Michigan State Police came to our door and told us we needed to evacuate immediately. We went to my younger daughter’s house, which was not in the zone of evacuation. Our place is on higher ground, about 10 feet higher than the neighbor below us. That was enough that it kept our house dry. Closer to the water, people lost their whole houses. If you imagine Cass Lake in Oakland County breaking through and pouring down Woodward, that’s what happened, more or less, in Midland. It was a lot of water that went down through the rivers and creeks, and everything rose like 30 feet above normal levels. A friend of mine is the head of the task force working on solutions to rebuild the dams. They’re estimating it will take five years to restore these dams and bring the water back up. `The foundation supports several efforts tied to water doesn’t it? And it launched a new area of focus over the past year? Erb Foundation doesn’t address the dam issue particularly. But we did do a new five-year strategic plan last year and reaffirmed our support in arts and culture in Metro Detroit, in Alzheimer’s disease and green stormwater infrastructure and the Great Lakes. We’re one of the largest funders of water quality in the Great Lakes. The new area we’re emphasizing is environmental health and justice in Detroit. In particular, we’re going to be working on lead exposure to children and asthma. Detroit is among the worst metro areas for those two issues in the country. We have grants oriented toward awareness, public policy and ways to get to more cost-effective abatement of lead. Most people think of lead paint inside the house and kids eating it. It’s really that over time the paint gets chalky and comes off on the outside of the house and on the inside. Then it becomes dust, gets into the soil and kids track it into their houses. There aren’t enough contractors certified to do the abatement. In January, we sponsored trainings for contractors so that they could be certified in lead abatement.

Neil Hawkins, president and COO, Fred A. and Barbara M. Erb Family Foundation

`What do you do in your spare time? I’m very interested in documentaries and nonfiction books dealing with important issues. Recently, I watched a documentary about the making of “The Dark Side of the Moon,” the Pink Floyd album. I just find it fascinating to learn about how a masterpiece album like that was created, and I don’t mean technically. They got into the culture and zeitgeist of the time in every song. And one of the songs came from a Miles Davis song. I like to learn the back story on how and why things happened. I think that’s how you truly appreciate art or help improve public policy. I recently read a book about the flu we had 100 years ago. When you go back and look through that, it’s amazing. Everyone is wearing masks. It’s essentially the same as it is today, but we had to go through and relearn again that that’s what we needed to do.

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RUMBLINGS

DMC hires top neurosurgeon; does it signal residency return? DETROIT MEDICAL CENTER may have taken another step toward reapplying for a neurosurgery residency program after hiring Sonia Eden, M.D., as chief of neurosurgery at DMC Harper University Hospital. Born in Detroit, Eden has spent the last 12 years at the Ascension Borgess Brain and Spine Institute in Kalamazoo. She specializes in minimally invasive spine surgery and has expertise in other areas of neurosurgery. “I’m thrilled to be returning to my hometown to lead the neurosurgery program at DMC Harper University Hospital,“ Eden said in a statement.

Eden

Earlier this year, DMC lost an appeal to reinstate its 14-doctor neurosurgery residency program, which closed June 30 after 60 years. At the time, DMC said it would reapply for

26 | CRAIN’S DETROIT BUSINESS | SEPTEMBER 28, 2020

accreditation. Why the Chicago-based Accreditation Council for Graduate Medical Education stripped DMC of its neurosurgery residency program has never been officially disclosed. However, sources previously told Crain’s it was a combination of factors, including loss of faculty affiliation with Wayne State University, lack of attention to core professional competencies and inadequate resident supervision. DMC didn’t respond to Crain’s for comment about plans to reapply for a neurosurgery residency program.

But Karima Bentounsi, CEO of DMC’s three adult hospitals in its downtown Detroit campus, said DMC is happy Eden has taken the job. “Dr. Eden is an innovative surgeon whose expertise will enhance our neurosurgery program and is someone committed to providing our patients with safe and high quality surgical care,” said Bentounsi. Eden received a bachelor’s degree in mechanical engineering from Yale University before going to medical school at the University of Michigan.

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