Crain's Detroit Business, Jan. 11, 2021, issue by Crain's Detroit Business

CRAINSDETROIT.COM I JANUARY 11, 2021

NEWSMAKER OF THE YEAR

COVID-19: The Newsmaker nobody wanted Each year, Crain’s Detroit Business recognizes the year’s Newsmakers — leaders who made headlines, for good or for ill, and made a difference in metro Detroit and Michigan. Most years, we select one as “Newsmaker of the Year.” 2020 was NOT most years. Michigan and its leaders played pivotal roles in how a divided nation responded in the battle with COVID-19. For that reason, Crain’s Detroit is naming the coronavirus itself, the economic upheaval it has caused — and Michigan leaders’ efforts to bring hope amid the gloom — Crain’s Newsmaker of the Year for 2020. Read more starting on Page 8.

NEWSMAKERS 2020 | PAGES 8-15

Mary Barra

Jay Farner

John Fox

Paul Glantz

ILLUSTRATION BY ANDREA LEVY FOR CRAIN’S DETROIT BUSINESS

Mat Ishbia

Joneigh Khaldun

Wright Lassiter III

Greg Lehmkuhl

Robert Taubman

Gretchen Whitmer

CRAIN’S WEBCAST EVENT: Hear from our top Newsmakers of 2020 about how they led through a tumultuous year, in a Crain’s webcast series in February. To sign up for the free event, go to Crainsdetroit.com/newsmaker2020. RETAIL

Will Loves Furniture’s brief story end in heartbreak? BY DUSTIN WALSH

NEWSPAPER

The probable short life of Loves Furniture is an exploration in opportunity gone awry. Since its founding in May last year, after acquiring assets and inventory from bankrupt Art Van Furniture, the retailer immediately encountered a squall of operational hardships that left it running from a mounting cadre of creditors. With five lawsuits filed by suppliers since Dec. 29, the Warren-based firm

succumbed to bankruptcy protection last week in an attempt to stave off an unceremonious end to its just eightmonth endeavor. The journey of Loves Furniture isn’t over, yet, but shackled with growing debt and creditors, its future is uncertain as it hopes to avoid Art Van’s fate of liquidation and limp out of bankruptcy with at least a fraction of the business it formed. Examining the lawsuits and Loves’ actions reveal a company that’s rich on plans but too cash poor to execute them.

“From the onset, they had a difficult needle to thread,” said Bill McLoughlin, editor-in-chief of Greensboro, N.C.-based industry magazine Furniture Today. “The environment in which they launched in the spring, at the onset of COVID, challenged many brick-and-mortar, and apparently without finances in order, proved to be nearly impossible market conditions.” See LOVES on Page 20

NEED TO KNOW

CHANGING OF THE GUARD

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` DEVOS RESIGNS AFTER PRO-TRUMP INSURRECTION THE NEWS: Education Secretary Betsy DeVos on Thursday became the second Cabinet secretary to resign a day after a pro-Trump insurrection at the U.S. Capitol.

` STATE SHIFTS GEARS ON VACCINE STRATEGY THE NEWS: Michigan’s health department told some county health departments to dedicate 75 percent of their weekly COVID-19 vaccine allotments to individuals over age 65 as public health agencies brace for an onslaught of vaccination requests amid concerns about shortages. Gov. Gretchen Whitmer announced Wednesday that the state would jump ahead of schedule to let any individual over age 65 get in line starting Monday to receive the first of two shots. WHY IT MATTERS: It’s a new wrinkle in the administration’s revised plan for prioritizing who gets the vaccine first as the coronavirus pandemic continues to infect an average of 3,500 individuals daily in Michigan. On Thursday, the seven-day average number of deaths attributed to COVID-19 jumped to about 109.

WHY IT MATTERS: In a letter addressed to President Donald Trump, DeVos squarely laid blame for the mayhem in Washington, D.C., at the feet of the president, who encouraged his supporters before they marched to Capitol Hill on Wednesday afternoon as both houses of Congress prepared to certify Joe Biden’s Electoral College victory. DeVos is former chairwoman of the Michigan Republican Party and wife of former Amway Inc. CEO Dick DeVos.

` MICHIGAN, ILLINOIS AGREE ON CARP PLAN THE NEWS: Michigan, Illinois and a federal agency have agreed on funding the next phase of an initiative to keep Asian carp out of the Great Lakes by strengthening defenses on a Chicago-area waterway, officials said Thursday. The two states and the U.S. Army Corps of Engineers will share pre-construction engineering and design costs for the $858 million project at Brandon Road Lock and Dam near Joliet, Ill. The structure on the Des Plaines River is a choke point between the Illinois River, which is infested with the invasive carp, and Lake Michigan.

Zoo CEO Ron Kagan to retire

WHY IT MATTERS: Government agencies, advocacy groups and others have long debated how to prevent the invasive fish from reaching the Great Lakes, where scientists say they could out-compete commercially valuable fish.

` The Detroit Zoo’s longtime Executive Director and CEO Ron Kagan is stepping down. Kagan, 69, will retire this summer, the zoo said in a news release Tuesday. The Detroit Zoological Society’s chairman, Tony Earley, has formed a search committee to identify a successor. During Kagan’s 28-year tenure, visitation doubled, and membership tripled, the zoo said. The education division grew to more than 20 people from two, and the zoo’s conservation programs now reach every continent, Earley said.

` LINEAGE ADDS RAILCAR FREEZER COMPANY THE NEWS: Novi-based cold-storage warehousing company Lineage Logistics LLC is branching into rail. Lineage announced last week it acquired Cryo-Trans, an owner of refrigerated and insulated railcars, to capture an additional leg of the food and beverage supply chain. The transaction values Reisterstown, Maryland-based Cryo-Trans at more than $500 million. WHY IT MATTERS: Already, roughly 90 percent of Cryo-Trans customers are part of Lineage’s network. Lineage will seek to partner with its existing customers so that, for example, railcars transporting frozen French fries from the Pacific Northwest to Southeastern states are packed with poultry for the return trip.

` LIPARI FOODS ACQUIRES FOOD IMPORTER TUT’S THE NEWS: Warren-based food distributor Lipari Foods has made another addition to its international specialty food division. Lipari on Dec. 31 closed on the acquisition of Middle Eastern

Ron Kagan

and Eastern European food importer Tut’s International. Tut’s, based in Dearborn, has been in business close to 50 years, importing more than 4,000 items from 80 countries. WHY IT MATTERS: The move expands Lipari’s product reach in its international specialty food division, established in 2018 after acquiring Dearborn-based Jerusalem Foods. Acquisitions have put Lipari, owned by private equity firm H.I.G. Capital, well over $1 billion in annual revenue.

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ENTREPRENEURSHIP

Revamped PPP for small businesses to restart Monday

BUILDING ON RETAIL ROOTS

BY NICK MANES

Marijuana retailer Quality Roots opened its first location in Battle Creek in the spring, just as the pandemic was taking hold in Michigan. | QUALITY ROOTS

Marijuana business banks on experience as it branches out BY JASON DAVIS

Aric Klar, 31, and his father and two brothers have established Quality Roots. | QUALITY ROOTS

If you don’t believe a cannabis business can be run similar to a toy store, don’t tell Aric Klar. Klar co-owns Quality Roots with his father, Mark, and brothers, John and Michael. They opened their first store in Battle Creek in the spring, just as the coronavirus was taking hold in Michigan. Now they are set to open their second location, in Hamtramck, on Monday and hope to open a third shop this spring in Berkley. Klar, 31, also aims to break ground on a 55,000-square-foot retail, cultivation and processing facility late this year in Westland.

Klar is leaning on his background in retail. He and his mother, Nori, established Toyology Toys in 2011, which now has locations in Royal Oak, Bloomfield Hills and West Bloomfield. A Rochester Hills location closed earlier this year due to the pandemic, Klar said. The Klar family also has a background in pharmacy. Mark and Nori Klar were part owners of Farmington-based Sav-Mor drugstores before selling them to Walgreens in 2014. “While (Quality Roots) is a recreational marijuana retailer, we’re still taking a medical approach focused on patient protection and service,” Aric Klar

said. “I grew up in the world of regulation and compliance. Tying that family history into this business will make a big difference.”

Real estate partner Assisting with the venture is Schostak Brothers & Co., one of the largest real estate development groups in metro Detroit that manages and leases a variety of properties. Its TEAM Schostak Family Restaurants’ portfolio includes more than 150 fast-casual restaurants including Applebee’s, Del Taco, MOD Pizza, Olga’s Kitchen and Wendy’s brands. See ROOTS on Page 20

The Paycheck Protection Program forgivable loan program for small businesses will be rebooted starting Monday morning. The portal will reopen for new borrowers and certain existing borrowers, the U.S. Small Business Administration and Department of Treasury announced Friday. For the first two days of the program’s relaunch only community banks will be able to make “first draw” loans and companies seeking a second loan will be able to do so starting Wednesday. The phased rollout aims to ensure greater access to the smallest businesses that have been most affected by the economic devastation associated with the COVID-19 pandemic, according to Treasury Secretary Steven Mnuchin, such as minority, underserved, veteran and women-owned businesses. “We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers,” Mnuchin said in a news release. The latest round of PPP will make available $284 billion for loans that can be forgiven provided borrowers keep employees on the payroll and follow other provisions. “The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” SBA Administrator Jovita Carranza said in the release. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.” See PPP on Page 19

NONPROFITS

Gleaners buys Taylor site, to move bulk distribution operations there BY SHERRI WELCH

Gleaners Community Food Bank of Southeastern Michigan has purchased a Taylor building that will more than double its space and capacity to distribute emergency food. Gleaners is investing $15 million to purchase and renovate the building and the nonprofit’s Detroit headquarters. The bulk of its inventory, fulfillment and distribution operations will move there from Detroit and Warren in July, once renovations of the former Dairy Fresh and Highland Appliance headquarters building are completed. With the new Gleaners site and another $12 million building food rescue Forgotten Harvest has underway, Southeast Michigan will have, for the first time, enough capacity to meet

Gleaners Community Food Bank of Southeastern Michigan has acquired the former Dairy Fresh headquarters in Taylor, a move that will enable it to double its distribution capacity. | SIGNATURE ASSOCIATES

the need for emergency food assistance in the counties the two organizations serve, Gleaners CEO Gerry Brisson said. “Creating a hunger-free community has to include building a safety net that is the right size as well as flexible as need in the community grows and

shrinks,” Brisson said. Both organizations were facing logistical and capacity challenges with existing sites even before the pandemic. And both had to lease properties to keep up with demand last year. Their facility expansions will ensure their distribution infrastructure will

not be a problem going forward, Brisson said. Assuming adequate emergency food is available for distribution, the two agencies will have capacity to distribute more food. And that will enable people and organizations to focus on solving the root causes of hunger. “When we can take hunger off the table for people in need, we enable them to have the energy and time to work on their next challenge — be that health, employment, or even just paying the rent,” Brisson said. Last June, as Gleaners was working to meet rising demand for emergency food assistance, the Taylor building near I-94 and Southfield Freeway went up for sale. The food bank had been in the market for a new site since 2018 when it first hit annual distribution

of 40 million pounds of food. But with nothing available, it shifted to plans to construct a new distribution center on its Detroit campus. It gained needed Brisson property through a land swap with the Solanus Casey Center and began fundraising for the project, which it projected would have cost $40 million, Brisson said. But it had to secure more space to meet need during the pandemic. Like Forgotten Harvest, Gleaners was forced to lease additional space last year to meet surging demand. See GLEANERS on Page 19 JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 3

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Dan Gilbert continues to buy real estate in Detroit, most recently the former Sakthi Automotive Group property for $38.5 million. But last FebruKirk ary, he also quietly PINHO bought something far less splashy: the Subway restaurant property on Gratiot Avenue downtown for an unknown price, giving him control of yet another hard corner of downtown real estate. There is nothing particularly remarkable about a standalone Subway restaurant in the grand scheme of things — but for the land it sits on at 1401 Beaubien St. immediately across from the planned Detroit Center for Innovation that Gilbert is working on with fellow billionaire developer Stephen Ross plus the University of Michigan. The development would bring a $300 million University of Michigan graduate school campus to the former site of the half-built Wayne County Consolidated Jail as well as mid-rise residential buildings for UM graduate students, incubator space for new tech businesses and a boutique hotel and conference center inside the former Detroit Police Department headquarters at 1300 Beaubien St. Gabrielle Poshadlo, vice president of communications for Gilbert’s Bedrock LLC real estate company, said in an email Tuesday that the Subway still has a lease that will be honored and the owner intends to reopen. They have temporarily closed recently due to the COVID-19 pandemic, Poshadlo said. What’s next? Eventually, more 6-inch and foot-long subs will flow out the door. But long term? The future is unknown, but my guess would be that eventually the building meets the wrecking ball and some other use is built on the site. The Subway building sits on 0.256 acres across the street from the DCI, but was not originally contemplated as part of it when the $740 million project was announced in October 2019.

Why Family Video’s owner isn’t going anywhere Nearly 60 Family Video locations in Michigan are closing next month as the suburban Chicago-based parent company shutters all of its video rental locations and liquidates.

The Family Video store on Coolidge Highway in Berkley is one of the 58 Michigan locations that are closing along with the remainder across the country. | COSTAR GROUP INC.

Yet the Hoogland family who owns the chain of more than 250 video and video game rental shops nationwide isn’t likely to leave in their wake a bunch of vacant storefronts peppered across the region and state. That’s because they still own — and probably will continue to own, at least for the time being — the real estate the stores were in. That strategy — owning its properties rather than leasing them — was one of the reasons the company told me two years ago that they were able to hold on for as long as they did in an industry that has been made all but extinct by streaming TV and movie services and other issues. It was preceded in death by the likes of Blockbuster, Hollywood Video and Movie Gallery. That also means that the Hooglands have a vested interest in making sure there aren’t a bunch of empty storefronts where Family Videos once were. After all, no tenant, no rent. Tjader Gerdom, principal of Northville-based Gerdom Realty & Investment, which worked with Family Video on a series of real estate deals over the years, said things like urgent cares and other uses would be strong contenders to fill the spaces once they are vacated. “He (Keith Hoogland) was always tough on us when it came to new stores because it was important to be on the corner and be available to the neighborhoods, usually corners with (traffic signals) and everything else,” Gerdom said. “I think they will backfill relatively easily.” In recent years, Family Video has been pivoting. You could mellow out and buy CBD there. They put Marco’s Pizza shops and Stay Fit 24 gyms — both of which were tied to the Hoogland family — in their buildings as the video stores’ footprints shrank. Even in the two years since I wrote about Family Video, the company has undergone a dramatic footprint reduc-

tion. At that time, it had 109 stores in the state, with 19 of them in Metro Detroit. As of yesterday, there were just 58, with 10 in Metro Detroit (see box). As of January 2019, its 109 Michigan stores totaled 511,270 square feet in real estate valued at $91 million. Its 138,057 square feet of real estate across 22 properties was valued at $22 million.

Shopping mall giants’ merger closes It’s official: The merger between Bloomfield Hills-based Taubman Centers Inc. and Indianapolis-based Simon Property Group is finalized. The two shopping mall and shopping center REITs closed the deal — which appeared on the ropes for awhile after Simon Property Group (NYSE: SPG) tried to back out — last week at $43 per share, down from $52.50 per share, the price at which the deal was originally announced in February. Robert Taubman, the chairman, president and CEO of Taubman Centers, was named a Crain’s Detroit Business 2020 Newsmaker for his role in the deal’s completion.

Cambria Hotel opens in Shelby Township The 98-room Cambria Hotel is now open at 50741 Corporate Drive near 23 Mile Road and Van Dyke in Shelby Township. It’s the second Cambria Hotel by Choice Hotels International Inc. in Michigan, following the one in Traverse City. There is also a downtown Detroit location that’s expected to open next year, according to a press release. The developer of both the Shelby Township and Detroit locations is Koucar Management. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

COMMENTARY

New year, new initiatives at Crain’s Detroit Business

EDITORIAL

A good first step on fixing vaccine rollout

rrogance? Inexperience? Analysis paralysis? Let’s chalk up Michigan’s sorry rollout of the long-awaited COVID-19 vaccines to a bit of all three. The Whitmer administration had plenty of time to finely tune the plan and execution of its vaccination rollout before vaccines started shipping Dec. 13. Instead, confusion reigned in Michigan, wasting precious days and weeks to reduce infection rates and open the state’s economy more quickly, earning the state one of the worst vaccination records in the country. Some non-essential workers were getting vaccinated while others — like teachers — CONFUSION weren’t prioritized. REIGNED IN And more than 500,000 vaccines dosMICHIGAN, es allocated to MichiWASTING gan were sitting in storage. That’s not a PRECIOUS DAYS situation that can AND WEEKS TO conveniently be blamed on Donald REDUCE Trump. INFECTION RATES Fortunately, the governor’s team pivAND OPEN THE oted a couple of times STATE’S ECONOMY to accelerate getting the most at-risk the MORE QUICKLY. critical shots-in-thearm. The Whitmer administration said Friday afternoon that it had asked the federal government for permission to tap pharmacy teams from private-sector players like Meijer

and Kroger to speed up vaccinations in Michigan nursing homes to supplement the federal government’s contract with CVS and Walgreens. That’s a great step. As Crain’s senior editor Chad Livengood reported, Meijer told state officials it could deploy 30 teams of 10 to administer up to 30,000 shots per day. But the events late last week don’t explain why Whitmer’s team has been so slow in getting the vaccine rolled out more broadly and strategically. Livengood nailed it in his commentary when he addressed state leaders: “You’ve had nine months to prepare for this generation’s invasion of Normandy. ... Why is a healthy medical biller working in an office building in Southfield — or maybe their basement — getting the vaccine before every teacher in Michigan who has to share a 1,000-square-foot classroom with 25 kids potentially carrying the coronavirus?” Great leaders know what they don’t know — and tap the folks who do. The governor’s team also played games with numbers, as Livengood noted, keeping doses earmarked for nursing homes and administered by private contractors off the state web site, implying the state hadn’t received enough doses from the feds. Yes, the vaccine challenge is unprecedented. But we believe the governor’s team lacked the experience and the maturity to ask for help early on. Sometimes — and this is one of those times — seeking “perfect” gets in the way of the expedient “pretty darn good.”

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 6 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

Kelley

ROOT

Executive Editor Most Read newsletter. If you don’t, sign up for it by clicking on “Newsletters” in the top right corner of crainsdetroit.com. ` A residential real estate newsletter, launching soon, that builds on Crain’s reputation as the leader in local commercial real estate reporting by highlighting hot trends and market activity in metro Detroit. More details on this to come. ` Small Business Spotlight, a new monthly feature from reporter Jason Davis that goes beyond typical profiles to offer insights and tips on issues common to emerging and midstage business. Look for the first installment, focusing on how businesses are turning to technology to survive the pandemic, on Jan. 25. ` Another full year of Crain’s Forum, an indepth monthly report coordinated by Crain’s senior editor Chad Livengood that drills down on important public policy issues — and gets results. After our December Forum report on the staffing crisis in home health care, the state Legislature voted to boost wages for direct-care workers by $2 an hour for two months. Look for upcoming Forum topics on issues such as Gov. Gretchen Whitmer’s legislative agenda; mental health in Michigan; and more. Look for these new features and more as we welcome a (hopefully) brighter 2021. To subscribe to Crain’s — and take advantage of a new monthly payment offer — visit crainsdetroit.com/membership. As always, we encourage your feedback and ideas as we go forward — contact me at Kelley.root@ crain.com. Thank you for reading.

MORE ON WJR ` Crain’s Executive Editor Kelley Root and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

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DANIEL SAAD

e successfully Zoomed our way through the turmoil of 2020. Now, I’m excited to share some of what Crain’s Detroit Business has on tap for the new year. Nine months after I started as executive editor — on the very same day the COVID crisis sent us all home — I remain inspired by a staff that rose to the occasion and loyal readers who appreciate our valuable niche journalism. In a media climate where rude interactions are the norm, Crain’s audience is a refreshing exception. Our reporters and editors have navigated the pandemic like pros. We’ve learned new and creative ways to seek out stories and sources. And we’ve pulled off some impressive online events on new platforms that we figured out on the fly. (“What if my connection drops?” “Can you hear me?” “Can ANYBODY hear me?”) Through it all, our goal is the same: to keep you connected to Michigan’s most comprehensive business coverage during a time when fact-based, unbiased reporting is more important than ever. We value the trust our readers put in us and we are committed to keeping it that way, in 2021 and beyond. To that end, some new initiatives for the new year: ` “Voices,” a periodic op-ed feature offering a broad range of informed analysis and opinion from select businesspeople and community leaders. The tumult of 2020 made it hard to hear through the virtual “noise.” We plan to cut through with thoughtful commentary from across the political spectrum on issues important to Crain’s readers, from public policy to manufacturing, workforce to the environment, health care to nonprofits. Look for the first essays in the coming weeks. Don’t agree with a viewpoint? Want to suggest a topic? Feel free to contact us at crainsdetroit@crain.com, or at my personal email below. ` “Saturday Extra,” a new narrative newsletter written by Crain’s special projects editor Amy Elliott Bragg. The Extra will highlight our most popular stories of the week with color and context, as well as look ahead at issues and trends we’ll be covering next. You’ll get the Extra automatically beginning Feb. 6 if you already receive our Saturday

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

OTHER VOICES

Good reason to be bullish on business attraction in 2021 BY MAUREEN DONOHUE KRAUSS

For everything the COVID-19 pandemic slowed or brought to a halt this year, interest from international and domestic companies and site selectors in the Detroit reMaureen Donohue Krauss gion is not one of them. There’s no is president and doubt that the CEO of the Detroit Regional pandemic forced re-evaluations, Partnership. delayed timetables and negated some deals, but that’s true everywhere, and that will persist throughout the coming year. But consider this: The Detroit region still attracted 34 projects involving new or expanded corporate real estate facilities in 2020. Those projects are expected to bring $3.7 billion in investment and 6,400 jobs resulting in about 6.2 million square feet of new construction or expansion across a multitude of industries. That’s according to the Conway Projects database which tracks projects of at least 20 jobs, 20,000 square feet and $1 million. That bodes well for 2021, particularly in the third and fourth quarters, when presumably vaccines will have allowed most operations and travel to resume. As our business development team at the Detroit Regional Partnership can attest — they were as busy as ever this year. Our organization focuses on business attraction and serves as a single point of contact for companies looking to explore and invest in the 11-county Detroit Region. The pandemic caused us to switch to a virtual outreach strategy. Between those efforts and site selectors proactively bringing forward projects and developers inquiring about buildings and property, interest in the region did not wane. While some deals could not move

forward without the in-person visits to terest in the region continues. vet and close a deal, it meant shifting to Excel Engineering’s new testing facilwork deals virtually. That allowed time ity brings a $3 million investment and to expand our marketing tools such as an estimated 28 jobs to Van Buren Township and reindustry cluster flects our standmaps, hiring re- THE DETROIT REGION STILL ing as a vibrant sources playR&D hub. books, and cus- ATTRACTED 34 PROJECTS C l e a r c o v e r ’s tom research and INVOLVING NEW OR new customer opdata about our region’s value prop- EXPANDED CORPORATE REAL erations center in the city of Detroit osition. It meant ESTATE FACILITIES IN 2020. plans to bring in advancing conversations that otherwise might have over 300 jobs reflecting how compawaited for travel schedules to align, nies value diverse workforces that look like the customers they serve. and many of which will bear fruit. Three of the deals our team played a Lordstown Motors R&D facility in direct role in this year validate how in- Farmington Hills is expected to gener-

ate a total private investment of $3.6 million while producing 141 jobs, and reflects how OEMs who don’t currently have a footprint in the region, understand that they need to be here to innovate in electrification and mobility. Clearly, high-tech industries and clusters such as smart manufacturing, next-generation mobility, and R&D will continue to be drivers of economic growth moving forward. Like following the Great Recession, this region’s assets that support these sectors — talent, manufacturing know-how, world-class research universities, access to the North American market — remain strong. That’s not to gloss over the econom-

ic pain felt in key industry segments like hospitality and tourism, and small businesses. Or to ignore question marks, like what the future holds for commercial office space. But it’s important to realize that our fundamental strengths for attracting economic development and outside business investment have proven time and again they will weather crisis. Given the interest the Detroit Regional Partnership and our partners throughout the region are receiving, we are bullish on 2021. Entering a year when we need to accelerate economic growth and recovery more than ever — that’s good news and something to celebrate.

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Notable Nonprofit Board Member nominations sought COVID-19 created unprecedented challenges for Michigan’s nonprofits. Organizations had to find creative ways to serve increased demand while navigating economic fallout and social distancing restrictions that cancelled major fundraisers and cultural events. Behind the scenes, board members delivered innovative programs, managed volunteers, raised crucial funds and steered the fiscal ship to find smooth waters after the pandemic. Crain’s seeks nominees for Michigan’s Notable Nonprofit Board Members. Any person currently serving on a nonprofit board in Michigan is eligible for nomination. Winners will be recognized in a special section of Crain’s on March 29. The deadline to nominate a candidate is Wednesday, Jan. 13. After being nominated, candidates will have until Wednesday, Jan. 20 to complete a separate application. There is no cost to nominate. To begin the nomination process, visit crainsdetroit.com/nominate. For questions about this program, contact special projects editor Amy Elliott Bragg: abragg@crain.com.

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NEWSMAKERS

2020

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ANDREA LEVY FOR CRAIN’S DETROIT BUSINESS

NEWSMAKER OF THE YEAR: COVID-19

BY K

The Newsmaker we didn’t want A virus brought chaos and disruption; Michigan leaders stepped up

 Gov. Gretchen Whitmer: Leading during deadly public crisis. PAGE 9

BY CHAD LIVENGOOD | In the last century, Michigan’s in-

 Robert Taubman: Retail juggernaut powers through major deal. PAGE 9

dustrial might put the world on wheels and helped defeat fascism with Detroit steel. In 2020, Michigan played a lead role in helping put the world on a path to defeat an insidious virus. The images of UPS and FedEx trucks leaving Pfizer Inc.’s sprawling pharmaceutical manufacturing complex near Kalamazoo on Dec. 13 were the 21st century version of Henry Ford sending planes and tanks to the Allies. Those trucks, normally packed with Christmas gifts, were part of an Arsenal of Health deploying Pfizer’s vaccine for COVID-19 to the frontline nurses and doctors in hospitals across Michigan and the country who waged a fight with the virus that has claimed more lives in 10 months than the U.S. lost in four years of World War II. 8 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

It was a hopeful moment in a year full of despair, seeing tiny vials of medicine manufactured on Michigan soil and packed into dry ice containers get whisked away by truck and plane to the hospitals and nursing homes that have faced their share of D-Days in 2020. Throughout this year, Michigan has been at the forefront of the battle with COVID-19, making the virus itself and the economic upheaval it has caused Crain’s Newsmaker of the Year for 2020. At different moments during the pandemic, Michigan and its leaders played pivotal roles in how a divided nation responded to this

virus in an extra-divisive election year. General Motors Co., led by CEO Mary Barra, along with crosstown rival Ford Motor Co. pivoted in the spring lockdowns to manufacturing ventilators to address a critical national shortage in breathing machines to keep COVID patients alive. Small manufacturers quickly pivoted into the business of sewing masks, assembling face shields and mixing hand sanitizer — anything to be deemed an “essential” business to keep their doors open and employees out of overwhelmed unemployment lines. See COVID-19 on Page 15

 Wright Lassiter III: Health care chief was voice of reason in 2 crises. PAGE 10  Greg Lehmkuhl: Lineage Logistics helps keep world fed. PAGE 10  Joneigh Khaldun: Top medical exec guides state’s response. PAGE 11  Paul Glantz: Emagine chairman spoke out against closures. PAGE 12  John Fox: Beaumont CEO juggles scuttled deals, pandemic. PAGE 12  Mat Ishbia: United Wholesale Mortgage goes public. PAGE 13  Mary Barra: Leads charge on EVs, ventilators, racial justice. PAGE 14  Jay Farner: Quicken Loans stays course on public plans. PAGE 14

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NEWSMAKERS 2020

Gretchen Whitmer Governor took unprecedented, controversial action of shutting down economy in virus fight BY CHAD LIVENGOOD

emocratic Gov. Gretchen Whitmer started 2020 by bypassing the Republican-controlled Legislature on long-term road funding and getting the state transportation commission to issue $3.5 billion in bonds to finance highway reconstruction projects. And then she spent the rest of the year bypassing lawmakers on management of a deadly public health crisis during a once-in-a-lifetime global pandemic. “I haven’t really had a lot of time to process the year of 2020 ... a lot’s happened,” Whitmer said Dec. 22 in a year-end interview with Capitol reporters. “A lot’s happened” is a bit of an understatement. To avoid watching Michigan — and in particular, Detroit — get overrun by the virus and become the next Italy or New York City, the second-year governor took the unprecedented action of shutting down vast swaths of the economy. With the stroke of a pen, she closed schools, colleges and businesses deemed not essential during a public health crisis that threatened to overtake Southeast Michigan hospitals and led to bodies piling up in morgues for several weeks in March and April. Auto plants ground to a halt. Construction projects were mothballed for six weeks. Whitmer used broad executive powers to write laws, tacking on six

MICHIGAN GOVERNOR’S OFFICE

weeks of additional unemployment that the Legislature had erased when she was in the state Senate’s Democratic minority. It was an unprecedented takeover of economic activity, prompting law-

suits and a still-raging war with the Republican-controlled Legislature over how to best manage the public health threat. Her actions prompted countless public protests and, authorities claim, were the motivation

behind a group of would-be domestic terrorists who plotted to kidnap and “try” the governor for treason. Whitmer has resisted calls from GOP lawmakers to lift all restrictions on businesses and personal activities and let individuals take their own precautions. “That just flies in the face of all of the science and all of the experiences playing out around the world,” Whitmer said. “If that were true ... Ohio would be in a much stronger position than Michigan. That’s not the case. Michigan is in a much stronger position because we have taken this pause.” Early on in the pandemic, Whitmer went on national television and sounded alarms about how the COVID-19 surge in late March was causing hospital workers to burn through personal protection equipment — or PPE, that acronym most C-suite executives had never heard of until the pandemic. These TV appearances garnered the attention of a targeted audience — the president of the United States of America. Donald Trump responded in kind during a Friday evening news conference, boasting that he instructed Vice President Mike Pence to not call “that woman from Michigan.” Instead of cutting her down, those four words from Trump’s mouth boosted her national profile. Suddenly, T-shirts popped up with her likeness under the title of “that woman from Michigan.”” Her approval rating in multiple statewide polls has hovered at or

slightly above 60 percent throughout the pandemic. The burst of attention thrust her into the mix for Joe Biden’s running mate, a vetting process Biden originally tapped her to help lead. “I thought I was going to be on the committee to help him vet a candidate, not that I would be someone going through the vetting,” Whitmer told Politico in early December. Though public health experts praised the governor for the spring shutdown pushing down the infection curve to fewer than 150 new cases per day by mid-June, her policies caused extreme controversy. Lawmakers scrutinized the Whitmer administration’s policy for congregate care facilities that led to COVID-positive senior citizens being discharged from hospitals into nursing homes, which have been hit hard by deaths of residents and employees alike. “If I could go back in time, we would not have followed the CDC guidance on nursing home policy in the beginning — and we would have done some things differently,” Whitmer said. “But considering the incredible speed with which we had to move, the knowledge and expertise that we were surrounded by, I look back and think we navigated this as well as anyone could.” “Was it perfect? No. But I’m proud of how we’ve navigated and how we’ve kept our focus on what really matters.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

Robert Taubman A retail juggernaut powers through a major deal despite pandemic BY KIRK PINHO

obert Taubman executed, then almost lost, then salvaged the most significant commercial real estate M&A deal of the year. Oh, and he pulled it off during a global pandemic that has obliterated once-proud retailers and dramatically altered the shopping landscape as online retail becomes not just a choice made because of convenience but also public health. The chairman, president and CEO of Bloomfield Hills-based shopping mall giant Taubman Centers Inc. (NYSE: TCO) spurred discussions with Indianapolis-based Simon Property Group’s (NYSE: SPG) CEO beginning in late October 2019, before the world knew about COVID-19 and the havoc it would cause. Within a few months, the two men and a host of advisers hashed out a $3.6 billion merger agreement that was announced in early February. It was a deal that Taubman saw as reducing its leverage, strengthening its balance sheet and mitigating its risk in a brick-and-mortar retail environment

ANDREW HARRER/BLOOMBERG

that had even pre-pandemic taken body blow after body blow with the emergence of online retail and major bankruptcies. Now a global pandemic has topsy-turvied shopping habits for many, at least for the time being. There was a deeply personal element to the deal as well.

The two companies have tangled in the past, especially during a yearlong hostile takeover bid by Simon Property Group and Westfield America Inc. in 2002-03 as Taubman’s father, A. Alfred Taubman, was in prison for his role in a price-fixing scheme. That created bad blood that took years to detoxify.

The merger was also highly confidential and sensitive. Advisers at Bermuda-based Lazard Frères & Co. LLC dubbed it Project Metal, with internal documents referring to Taubman as “Titanium” and Simon Property Group as “Silver.” A few months after Project Metal was made public, as COVID-19 tore a hole in the economy and people’s lives, Simon Property Group tried to back away from the merger, which at the time it was announced involved David Simon’s company paying $52.50 per share cash for all of Taubman Centers’ common stock and the Taubman family selling one-third of its ownership interest and remaining a 20 percent partner. Simon Property Group argued in court that the COVID-19 pandemic had “a uniquely material and disproportionate effect on Taubman compared with other participants and in the retail real estate industry.” It also argued that Taubman Centers failed to do things like cutting operating expenses and capital expenditures to stem the pandemic’s impact on its balance sheet.

Taubman Centers denied those claims in Oakland County Circuit Court, calling it a case of “buyer’s remorse.” In addition, some analysts told Bloomberg at the time that the cancellation could be a negotiating tactic to lower the price. By November, however, the deal had been rekindled, now at $43 per share with terms largely similar to the previous deal structure. It closed at the end of the year. Taubman was unavailable for an interview after the deal closed, and declined to be interviewed prior to that. But at the time the revised deal was finalized, he said in a statement: “David and I share a vision for optimizing TRG’s assets and a strong commitment to our shoppers, retail partners and communities. I am excited to work with the entire Simon team as we share ideas and implement best practices to enhance the operations and cash flow of our new joint venture.” Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 9

NEWSMAKERS 2020

Wright Lassiter III

Henry Ford Health System’s CEO was leading voice during dual social crises

BY JAY GREENE

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s one of the leading business voices of reason calling for more mask wearing and social distancing during the COVID-19 pandemic and also outspoken in his call for social justice and calm after the deaths of George Floyd in Minneapolis and Breonna Taylor in Louisville at the hands of police, CEO Wright Lassiter III of six-hospital Henry Ford Health System in Detroit was no wallflower during 2020. Last spring, Henry Ford treated 22 percent of all of Michigan’s COVID-19 patients, 2 percentage points less than Beaumont Health. Together, Henry Ford and Beaumont saw nearly half the coronavirus patients in the state. “We had no idea what we were in store for” when news of the virus began to spread in February, Lassiter said. “I have never experienced anything like this in my 30 years in health care.” On March 14, Henry Ford started to see its first sick patients. “We were seeing far more flu patients than coronavirus,” he said. But by April 9, Henry Ford had more than 900 COVID-19 patients in its hospitals. “The challenges of how to keep staff safe was paramount. We thought on a daily basis if we had enough PPE,” said Lassiter, who also worked with FEMA and the state to open a field hospital in early April at the TCF Center in Detroit. “It was surreal. My father was in the Army Reserves. He was a medical corpsman in Korea. I visited Army bases with him as a child. I never

HENRY FORD HEALTH SYSTEM

thought I would see cots and cots in a field hospital in Detroit. I’m thankful we didn’t need them,” he said. As CEO, Lassiter said he felt responsible for all patients under Henry Ford’s care and the system’s 32,000 employees. “Were we doing enough to protect our staff? Were we bringing things home to our families? Leaders understand we support people who do the work. Leaders should help staff to do their jobs better,” Lassiter said. “They saw a lot of strife and faced emotional distress. ERs don’t deal with as much

death as we saw on a regular basis. We had 600 people die under our care and it happened in a tight period of time. Nurses felt the brunt of that situation, especially when patients and relatives could not see each other.” In June, during a lull in COVID-19 cases, Henry Ford inked a letter of intent to affiliate with the Michigan State University medical school. The affiliation deal is expected to be finalized early this year. “We are always looking for ways to bolster the latest in science and research,” Lassiter said. “We previously

had conversations with Wayne State University and as that went by the wayside, we were committed to finding a partner. MSU does much of what we hoped for with the Wayne State partnership.” Under the affiliation agreement, the two health care organizations plan to share research and clinical care, build a joint research institute and create a regional MSU health campus in Detroit. “We are known well for tertiary and high end care and all our facilities are in urban areas,” Lassiter said.

“MSU is strong in primary and rural medicine, which is extremely complementary with us.” Lassiter also served on two CEO groups that were outspoken on two of the year’s biggest issues: the Michigan Economic Recovery Council, which helped the state with COVID-19 response planning; and a CEO group of top companies in Detroit that called for the rejection of all forms of racism, sexism and violence and committed to support reforms for a fairer criminal justice system in the wake of George Floyd’s death and subsequent civil uprisings. “It was pretty clear the problems we were facing” with COVID-19 “and we wanted to be the voices of reason,” he said. “(Some people) took science and medicine and corrupted it with political points of view. But that doesn’t change the facts. It was not hard for us to take a stand on mask wearing. It was the right thing to do.” But what was even more personal was Lassiter’s speaking out about social justice. Born in Tuskegee, Ala., in 1964, the son of a minister and college president, he understands racism in America. “It was a bit cathartic to call for us to do better,” he said. “As a leader of an organization that stands for diversity, equity and inclusion, and as one of a small number of African Americans leading a large organization, it was critical I speak out.” Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

Greg Lehmkuhl CEO of Lineage Logistics maintained focus on keeping the world fed as virus spread BY DUSTIN WALSH

rapped in four blankets in front of his living room fireplace in late February, Greg Lehmkuhl trembled as a fever spiked. The CEO of Novi-based cold storage warehousing giant Lineage Logistics had just returned from the company’s automated refrigerated warehouse in Amsterdam, the second-largest in the world, and was shivering his way through a call with the company’s board of directors. Lehmkuhl was battling a likely case of the deadly novel coronavirus that was just striking American shores and would solidify his company’s standing atop the food logistics supply chain. “I think at the time we knew we were going to be central to keeping the world fed as the virus spread,” Lehmkuhl said. “We realized early on we had to take it more seriously than anyone else because of the critical role we play in the food chain.” Roughly 90 percent of all calories consumed in the U.S. are refrigerated and one-third of that food passes through at least one of Lineage’s warehouses. And COVID-19 produced greater opportunity as consumers shift-

LINEAGE LOGISTICS

ed dining habits away from restaurants, buying almost all of their food from grocery stores. The bulk of Lineage’s business is distribution to markets. So while restaurant distributors like U.S. Foods suffered, Lineage thrived. Lehmkuhl ordered the company to build medical trailers outside its major plants across the globe to facili-

10 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

tate COVID-19 testing of its 17,000 employees and their families. Keeping the company’s warehouses operational was critical to its own survival but also to prevent vast food shortages across supermarkets that were blindsided by the rash of new spending during the pandemic. But Lineage hasn’t been immune.

As of Dec. 22, the company reported 1,572 positive COVID-19 cases among its employees and was dealing with outbreaks, Lehmkuhl said. An outbreak of 72 cases in the span of three days occurred at its facilities in Southern California earlier in December. “The threat (of the virus) hasn’t subsided at all, but we’ve worked hard to retain the trust of our team members,” Lehmkuhl said. “We’ve had to shut down some warehouses for short periods of time for deep cleansing, but I think our field management team has done a great job dealing with this crisis.” Lineage also partnered with nonprofit Feeding America and delivered 100 million meals to people in need during the crisis. All while expanding its reach and scope at a break-neck pace. During 2020, Lineage made 39 acquisitions to the tune of $3.6 billion — or a pace of one acquisition every nine days through the year. The acquisitions added 130 warehouses in 10 countries to the company’s portfolio and 5,000 new employees. In September, Lineage raised $1.6 billion from existing investors, including Oxford Properties Group, private

equity firm BentallGreenOak and Dan Sundheim’s D1 Capital Partners, valuing the company at more than $15 billion — making it one of Michigan’s largest privately held companies. Lehmkuhl said the firm is in the middle of another $400 million capital raise as its investors continue to push the company toward perpetual growth and more market share. Since 2019, the company’s earnings before interest, taxes, depreciation and amortization have grown by 70 percent. Lehmkuhl said the company projects revenue of more than $3 billion in 2021. This year, the company is expected to complete the many deals that remain in the pipeline, but Lehmkuhl said it’s unlikely to be as many as 2020. “Every day I worry about what can go wrong, I’ve certainly never been on a run like this in my career,” he said. “So far we haven’t stumbled and I think that’s due to the tremendous team we’ve built, so I expect we’ll see this continued rapid growth in 2021, 2022 and 2023.” Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

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NEWSMAKERS 2020

Joneigh Khaldun Michigan’s top medical chief stepped into spotlight to guide state’s response and the public BY ANNALISE FRANK

ichigan’s top medical chief, Joneigh Khaldun, M.D., declared youth vaping a public health emergency in September 2019. Then, just six months later, she was advising the governor through an entirely different deadly threat. Khaldun appeared on Michiganders’ laptop, phone and television screens countless times in 2020 as the face of medical expertise, urging them to take precautions to slow the spread of COVID-19 that have ranged from recommendations to bona fide legal mandates. “You know, I kind of see this as, this is the public health Olympics. I feel quite honored, frankly, to be in this role at this time,” Khaldun told Crain’s. “Totally not something anyone really expected, but it’s been certainly challenging, but I’m just quite proud right now as I look back over the year, proud of the team and how we’ve all stepped up and risen to the occasion.” Plus, she’s still practicing as an emergency doctor, two to three shifts a month at Henry Ford Hospital in Detroit.

CRAIN’S DETROIT BUSINESS FILE

Khaldun, the state’s chief medical executive and chief deputy director for health at the Michigan Department of Health and Human Services, was previously director and health officer for the Detroit Health Department. There, she led Detroit’s re-

sponse to the largest hepatitis A outbreak in modern history in 2016-2019, moving to the state government two years ago. . In her current role, Khaldun has also shone a light on a tragic underlying element of the pandemic: Its dis-

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

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eventually expand testing capacity and was able to bring down the caseload significantly between April and June. New positive tests maintained a seven-day average below 1,000 a day through early October, but then began spiking up to new highs as the virus surged again in late fall. Public health officials working to combat the virus have faced a politicized atmosphere, “but facts cannot be disputed,” said Khaldun, a former fellow in President Barack Obama’s Office of Health Reform. Khaldun said she is simply striving to produce the best data and public health evidence and guidance she can for the governor. “It’s unfortunate that public health has become so political, but I’ll tell you,” she said. “I’m a practicing ER doctor. I take care of people regardless of their political background, regardless of if they have insurance or not, I don’t really care from a medical perspective, I just look at the person in front of me and use my knowledge and skills to take care of them.”

Tenacity, Courage, Creativity

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proportionate impact on Black Americans and those in other underserved racial and ethnic communities. That included testifying to the U.S. Senate Health, Education, Labor, and Pensions Committee on June 23. There, the former Baltimore medical chief also bemoaned the federal government’s response to the pandemic, citing slow decision-making that resulted in “tragic consequences,” she said. She blasted President Donald Trump’s administration as pushing “inaccurate messaging” about the virus, as well. The state medical chief said she’ll always remember a call she got from a member of her team before the first COVID-19 case was recorded in Michigan March 10. “I will never forget when I was told that there was going to be very limited testing, only people who were severely ill or who were in the hospital were going to be able to get a test,” Khaldun said. “The fact that we could not test people with mild symptoms ... that’s when I knew, quite frankly, that this could be quite severe. And unfortunately that is exactly what we saw ...” But, she added, Michigan did

Thank you Don, Toby and LLamasoft team. We were happy to join you for the ride. – Your friends at MK Capital

JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 11

NEWSMAKERS 2020

Paul Glantz

Emagine Entertainment chairman fought closure orders, kept an eye on future

BY SHERRI WELCH

BY N

ike other business owners, Paul Glantz, co-founder and chairman of Emagine Entertainment Inc., had a sense of resignation about closing his theaters in March. But as the pandemic and business closures dragged on, and his operating reserves diminished, Glantz became a voice of opposition to Gov. Gretchen Whitmer’s ongoing business closures. With total annual revenue of almost $100 million and three consecutive years of record profits, the Troy-based theater company was optimistic. It had the balance sheet to weather closures, Glantz said in the early months of the pandemic. But as theaters remained dark, revenue losses began adding up and the closures threatened Emagine’s solvency. It laid off all but 125 managerial employees, diverting them to building cleaning and repairs during closures. “I absolutely misjudged the situation,” Glantz said in December. “I thought it would be six to eight weeks and we’d be back in business. We expended cash that I would have preserved with the benefit of hindsight.” By mid-May, Emagine had developed safety protocols it believed would allow it to safely reopen, Glantz said. He planned a week-long Juneteenth Film Festival at his Royal Oak theater in defiance of ongoing state-ordered closures. Criminal investigators from the Michigan attorney general’s office showed up at his door the day before the event to deliver a letter telling him he’d face criminal charges if he went ahead with those plans. Glantz postponed the festival and

EMAGINE ENTERTAINMENT INC.

responded with a lawsuit filed in U.S. District Court, challenging the closure of movie theaters in lower Michigan. A federal judge rejected that motion in July, maintaining the order closing theaters. The suit continued until after Labor Day when Glantz said he asked for its dismissal with prejudice, in hopes the state might lift theater restrictions. By September, Emagine had lost more than $40 million in revenue. Among other costs, it continued to fund health care for all of its employees.

It agreed to open its Royal Oak theater to Shrine Catholic Schools as a remote learning site that would give students space to social distance and the company a trickle of revenue. But it shut it down in early September after local authorities said it was not in compliance with state building codes. Things began to improve for Emagine by month’s end when it secured a $9 million loan through the Main Street Lending Program authorized under the CARES Act, Glantz said.

“We were very fortunate. That loan provided liquidity that prevented us from becoming insolvent.” After more than six months of closures, movie theaters were permitted to reopen, with capacity limits, on Oct. 9. Glantz was ecstatic, but limited releases from Hollywood and a new closure order from the state in November tempered his enthusiasm and led him to hint at yet another lawsuit. “If someone says we’re going to damage you financially on the basis

of pure conjecture, I find that wrongful,” he said. “When you revoke my constitutional right to earn a living, I think at minimum, you have a responsibility to show me why. That’s where our government, I think, has failed entrepreneurial businesses.” The state lifted closures of theaters and other entertainment venues once again by year’s end, allowing them allowed to reopen on Dec. 21, just in time for the holidays, but without food and beverage sales and at 20 percent of capacity. Glantz said he expected to lose money by reopening but needed to ensure he wasn’t driving patrons to his competitors and that Emagine plays its part in getting people back into the habit of going to the movies. Throughout it all, Glantz and his team were still betting on the future. After a failed attempt to buy Grand Rapids-based Goodrich Quality Theaters Inc. out of bankruptcy in the early months of the pandemic, Emagine went on to secure leases of four former Goodrich theaters and plans to reopen them in 2021. Blessings in his personal life, including the marriage of his youngest son, hearing this year that he’d beaten prostate cancer after a 2019 surgery and finding out he’s going to be a grandfather, have also given him a rosier view, said Glantz, 63. “I think it’s going to take time,” he said. “But once we come through that ramp-up period, I think there’s tremendous pent-up demand for people to participate in congregate activities.” Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

John Fox Beaumont CEO bookended the year with big, but scuttled, merger plans BY JAY GREENE

ohn Fox’s fifth year as president and CEO of Southfield-based Beaumont Health in 2020 started out by signing a merger agreement to absorb Ohio-based Summa Health and ended by explaining the backlash that came with an aborted deal to merge with 26-hospital Advocate Aurora Health of Illinois and Wisconsin. In between and expected to continue through 2021 is the COVID-19 pandemic, which hit eight-hospital Beaumont harder than any other health system in Michigan. Since mid-March, COVID-19 has claimed more than 1,430 lives at Beaumont while more than 35,265 have been hospitalized, accounting more than 86,000 patient days, or 32 percent of region two hospitals that includes Wayne, Oakland, Macomb, St. Clair, Washtenaw and Monroe counties. “It is truly not surprising that the potential partnerships did not come

CRAIN’S DETROIT BUSINESS FILE

12 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

to fruition during the pandemic, as health care merger and partnership discussions” declined by more than 90 percent in 2020, said Fox. The Summa deal collapsed in May, one month before Beaumont signed a letter-of-intent to merge with Advocate Aurora, which was also terminated in October for multi-factorial reasons. During 2020, multiyear efforts to cut costs — planned to complete the merger efficiency and productivity improvement goals that created Beaumont Health in 2014 — nearly stopped. But asset sales of non-core health businesses continued, as did employee outsourcing plans and the defeat of a budding nurses union at flagship Beaumont Hospital in Royal Oak. For example, Beaumont received state permission in November to sell its successful ambulance company for an unspecified amount to a for-profit Illinois-based company. In a controversial move that angered many doctors, nurses and do-

nors, Beaumont also changed anesthesia groups and outsourced more than 200 certified registered nurse anesthetists to Texas-based NorthStar Anesthesia. All throughout, Fox oversaw everything, the merger talks and coronavirus response efforts. He directed top executives, physicians and a 38,000-employee workforce as they coped with the changes brought on by COVID-19. “This has been a year none of us will ever forget,” Fox said. “The pandemic has changed our lives, and our nation’s health system, forever. I am so proud of the phenomenal care our Beaumont team provided this year under unprecedented and incredibly challenging circumstances. Our Beaumont team cared for more COVID-19 patients than any other health care system in our state.” See FOX on Page 15

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NEWSMAKERS 2020

Mat Ishbia United Wholesale Mortgage CEO pursued quick path to going public

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he year 2020 took on a distinctly Dickensian tone for Mat Ishbia. The CEO of United Shore Financial Services LLC, the Pontiac-based mortgage lender that does business as United Wholesale Mortgage has ridden the wave of a record year for mortgages and is set to list the company on the New York Stock Exchange on Jan. 22. The company’s sprawling headquarters with high-end amenities on site for employees has been well-documented. Ishbia said the inability to spend the year there — the best in company history, he said — has proven difficult. While UWM sent much of its workforce home for the year, it was among the companies cited for violating state orders pertaining to workplace safety. All told, 2020 was a year of peaks and valleys, said Ishbia. “It’s been the best of years in a lot of respects, and the worst of years,” said Ishbia, noting that keeping the “family company” aspect of UWM has been difficult this year. “To have

the best year in company history and not be able to celebrate with the holiday party. ... It’s just been kind of a weird year.” Ishbia said the company expected to close out the year with between 3,500 and 4,000 new hires, most since June, and expected to do nearly $200 billion in mortgage volume. UWM is taking the increasingly popular express route to public company status by merging with a special purpose acquisition company, or ‘blank check company,’ as they’re often called. The company will merge with a SPAC sponsored by California private equity firm The Gores Group in a deal that values UWM at over $16 billion. Given the uncertainty of the economy, ravaged by the pandemic, liquidity is the name of the game, according to Ishbia. “Cash is king, and if I’m not going to be a bank, then I have to have access to the public markets,” he said, adding that black swan events like the 2008 financial crisis and now a pandemic are becoming more common.

UNITED SHORE FINANCIAL SERVICES LLC

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

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“So we made that decision in April, May, that we’re going to go and (give) ourselves a fortress-tight balance sheet,” Ishbia said. “I know that the team with the most cash and access to liquidity will always win in the mortgage world.” The COVID-19 pandemic is making all companies — and in particular large office users — rethink how they use their real estate. While many have said that increased flexibility to allow employees to work from home will be a large part of the new normal, Ishbia said that whenever it comes time to return to the office, that’s what his employees will be doing. Indeed, the company bought a soccer stadium in Pontiac this year to further expand its headquarters. “Our culture and our team is so important ... And it’s so much more fun when we’re all here together working together as a team,” said Ishbia. “And so I don’t foresee a future where our people are working from home at UWM.”

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NEWSMAKERS 2020

Mary Barra General Motors CEO led the charge on EVs, ventilators and racial justice BY DUSTIN WALSH

or most of 2020, General Motors CEO Mary Barra captained the automaker through the year’s many political, social and even biological squalls. Only weeks after bringing GM production back online in China following the COVID-19 outbreak in January, the deadly novel coronavirus hit U.S. shores and idled production across the country. The Detroit automaker quickly assembled a task force to address the mounting ventilator shortage at hospitals around the country and made a deal with the U.S. government to produce the life-saving medical devices at its Kokomo, Ind., plant in partnership with Ventec Life Systems. The fanfare faded quickly as it was met with disdain from President Donald Trump, who accused the automaker of not committing to make enough ventilators and wanting too much money. “As usual with ‘this’ General Motors, things just never seem to work out,” Trump tweeted. “They said they were going to give us 40,000 much needed ventilators, ‘very quickly.’ Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B. Invoke ‘P’.” The P was an apparent reference to the Defense Production Act, a lever Trump pulled to order Barra and GM to deliver the ventilators they had promised to build anyway. GM delivered the last of the 30,000 ventilators to the U.S. government as part of the $489 million contract in September. The company also donated 2 million masks to high schools throughout the state. Following the death of George Floyd at the hands of Minneapolis

PATRICK T. FALLON/BLOOMBERG

police, racial justice quickly, and briefly, overtook headlines in early summer. Protests erupted across the U.S. and companies were faced with the decision to recognize the role they play in injustice or ignore it. In June, Barra penned a letter to all 180,000 GM employees.

“The recent deaths of George Floyd, Ahmaud Arbery and Breonna Taylor astonishingly add to the important and unconscionable list of black Americans who have lost their lives based on the color of their skin,” Barra wrote in the internal memo. “I am both impatient and disgusted by

the fact that as a nation, we seem to be placated by the passive discussion of ‘why.’ Why does this happen? Why can’t we get to a different place? Why is the response so visceral?” Barra then vowed to commission and chair an inclusion advisory board of internal and external lead-

ers to make GM “the most inclusive company in the world.” Under Barra, GM has become a more diverse company, becoming one of only two automakers on Diversity Inc.’s list of 1,800 companies that demonstrate a diverse workforce. GM ranked 30th in 2020 and Toyota ranked 10th. The automaker then reupped its commitment to electric vehicle production. In November, GM announced it will spend $27 billion on all-electric and autonomous vehicles through 2025, an increase of $7 billion, or 35 percent, from plans it rolled out only seven months earlier. The increased investment is part of its strategy to release 30 new EVs by 2025, with 20 of those in North America. As part of that strategy, GM renamed its Detroit-Hamtramck assembly plant to Factory Zero to become the automaker’s electric-vehicle hub, building the GMC Hummer pickup and Cruise Origin, a self-driving, electric shuttle developed by Cruise, GM’s self-driving subsidiary in San Francisco. GM said last year it would invest $2.2 billion to ready the factory for EV production. As the final goodbye to 2020 and its often contentious battles with the White House, in late November, Barra pulled GM’s backing of the Trump administration effort to bar California from setting its own vehicle emissions rules. The move was seen as a rejection of Trump as the automaker positioned itself to work with President-elect Joe Biden, who has quickly made boosting electric vehicles a top priority. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

From

Jay Farner Quicken Loans CEO took mortgage giant public as mortgage demand blasted off BY NICK MANES

s it did for most people, the first quarter of 2020 threw a major wrench into some well-laid plans by Jay Farner and his boss, Dan Gilbert. The CEO and chairman, respectively, of Rocket Companies Inc. began testing the waters in 2019 for taking the Detroit-based mortgage lender — the largest in the country — to the public markets. While those talks were pushed to the back burner in the spring once the COVID-19 pandemic took hold, by the summer they were back and running on parallel tracks with other corporate initiatives such as whether to hold the Rocket Mortgage Classic PGA golf tournament and finding ways to support Detroit’s efforts to tamp down the spread of the virus. Rocket, for instance, provided much of the tech-

Driv

ROCKET COMPANIES LLC

nology infrastructure to support Detroit’s drive-thru testing site. Ultimately, according to Farner,

14 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

the decision to take the company to Wall Street tied back to allowing Gilbert to do some estate planning while also freeing up cash for Rocket, Detroit’s largest employer, to tackle philanthropic issues important to the executives such as the digital divide in the city. “This was (Gilbert’s) primary driver was taking a bit of a bit of cash off the table, so to speak, for philanthropic efforts,” said Farner. “And I think the recognition was, wow, by being a public company, we can do even more than we’re doing today to support Cleveland, Detroit, of course, and our team members.” The mortgage lender (NYSE: RKT) ultimately went public on the morning of Aug. 6, netting $1.8 billion. Since that time, the stock hit a high of $34.42, and in late October briefly dropped below its IPO price of $18 per share. While Farner took Rocket to the

public markets amid the tumult of a health crisis resulting in an economic crisis, the CEO has also worked to be cognizant of 2020’s other largest news story: the structural racism that has been laid bare particularly with the death of George Floyd by police in late May. Farner was one of 10 the city’s major business leaders who came forward in early June, just after a weekend of significant protests, to call for “concrete, tangible change” around race relations in Detroit. As the largest employer in America’s largest predominantly Black city, Farner said Rocket has a responsibility to its employees and the broader community. “We have got to be out front leading. We thought it was the right thing to do,” said Farner. “And so we started listening to our team members, we started trying to understand not only how they were

feeling but what type of action they were looking for,” Farner quickly. “And very quickly, we were able to put together a six-point plan that we announced to the public, as well as our team members, and something that we follow up with continuously.” At the same time as taking the company public and seeking to address racial equity, both internally and externally, Farner also had to lead the company during a year where demand for mortgages, as well as refinancing, was through the roof. Farner said he’s most proud that the company is expected to double in size this year. “It was just 22,000 people working incredibly hard together,” Farner said. “So we were able to set more records, and also diversify our business.” Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

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NEWSMAKERS 2020

FOX

From Page 12

their existence; a lawsuit by Emagine Entertainment owner Paul Glantz against Whitmer’s emergency orders didn’t succeed, but he became one face of businesses looking for ways to make it to the far end of the pandemic. Dr. Mona Hanna-Attisha, the Flint pediatrician and scientist who helped expose the city’s lead-tainted water crisis in 2014, survived COVID-19 in the spring. She was an early proponent of shutting down bars, restaurants and movie theaters — any indoor business where the coronavirus could spread freely. In reflecting on a year like no other, Hanna-Attisha said the positive changes to life after 2020 can’t be overshadowed by the incalculable pain and anguish. “We witnessed the might of the global scientific community who in lightning speed and unparalleled collaboration worked to unravel and now conquer the virus, with mind-blowingly effective vaccines,” Hanna-Attisha said. “Perhaps most salient, and hopefully most long-lasting, COVID reminded us that we are all inextricably connected.”

When the Pfizer-BioNTech coronavirus vaccine became available on Dec. 14 in Michigan, Beaumont began vaccinating front-line health care workers the next day. “I’m thrilled we have reached our goal of beginning vaccinations before the end of the year. We were also able to vaccinate more than 100 front-line care workers the day we received our first doses and we plan to have more than 10,000 vaccinated the following week,” said Fox. Beaumont Chairman John Lewis has told fellow board directors and key doctors that Fox has performed up to his expectations with profit margins exceeding 3 percent except for the COVID-19 year of 2020. The system also has kept high quality ratings as evidenced by U.S. News and World Report rankings that have risen since 2015, when he was hired. Last month, Moody’s Investors Service affirmed Beaumont Health’s A1 credit rating with a stable outlook. Strong margins are expected in 2020, based on a “solid recovery through the third quarter, expense reductions and federal relief funding that will curtail the impact of the pandemic on fiscal 2020 operating performance,” Moody’s said. To the disappointment of Fox’s critics, Lewis and a majority of the board have rejected calls from groups of doctors, nurses and donors to replace Fox. “I am fortunate to have a supportive board that recognizes the extreme circumstances we have faced as an organization this year,” Fox said. “Despite all the challenges, we are moving forward, although we still have a long way to go. This pandemic is far from over. When it does end, the health care landscape will look very different, but our team’s commitment to delivering high-quality patient and family-centered care every day will remain as strong as ever.” Fox acknowledged the pandemic created significant financial problems for Beaumont and all health care organizations and those serving the public. “I was devastated when we had to eliminate jobs and temporarily furlough some staff last April,” he said. “However, I’m also proud that we were able to bring the vast majority of our furloughed staff back within a few months.” Fox said he was proud Beaumont could offer many health care workers a tax free $1,000 “Thank You at Thanksgiving” recognition payment. Beaumont also raised its minimum wage, freezing employee health care insurance costs for 2021 at 2020 levels and fully funding employee 403(b) match accounts.

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

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

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COVID-19

From Page 8

Gov. Gretchen Whitmer’s leadership during the crisis rocketed her into the national spotlight, a platform she used to play an influential role in prodding the White House into sending more personal protection equipment to Michigan’s frontline health care workers during the spring COVID surge. Whitmer’s approach to containing the virus through business closures to limit humans swapping air was the subject of much debate about the economic turmoil it created. Until the Michigan Supreme Court stepped in and ended Whitmer’s state of emergency declaration, Michigan had become a state governed by extraordinary war-like powers in executive orders that kept many attorneys gainfully employed in 2020. The minutia of what’s allowed and what’s not was relegated to FAQs that had neither the weight nor force of law. The governor’s actions earned her praise for flattening the infection curve and death threats for flattening pocketbooks. The FBI’s foiling of an alleged plot by a group of would-

be domestic terrorists to kidnap the governor and likely kill her was just one of the countless surreal days in 2020. Whitmer’s weekly press conferences became must-see streaming videos for individuals and business owners anxious for restrictions to be eased — and nervous that she’d re-impose another lockdown to mitigate spread of the virus after new outbreaks sprung across both peninsulas. At her side at every moment was Dr. Joneigh Khaldun, the Henry Ford Hospital emergency room physician who became Michigan’s Dr. Fauci. The state’s chief medical executive is a person almost no one could name before the pandemic. But now Dr. J — as Whitmer calls her — is that just-the-facts doctor whose scientific assessments are seen as unassailable, even by those who assail the governor’s business closure policies. Early on during the pandemic, Khaldun was one of the first national leaders to bring attention to the disproportionate number of Blacks contracting and dying from the virus — adding to the national conversation over racial disparities in 2020.

In early December, just as new cases of COVID-19 began declining and hospitals were less under siege, the data point that lags behind them all — deaths — started catching up. In December, more than 100 Michigan residents perished daily from the coronavirus. Amid the death and emotional and economic turmoil of quarantines, there were countless acts of heroism. Grocery store clerks joined doctors and nurses on the front lines of the pandemic, keeping the toilet paper restocked — even when there was no logical reason for people to buy so much. Postal workers kept the packages coming, a welcomed daily visitor at the doorstep for the work-fromhome masses longing for a distraction from the seemingly endless Zoom calls. And business overcame unprecedented obstacles to survive and succeed. Two Michigan mortgage giants moved forward with plans to list their companies on the stock market. Meanwhile, countless businesses struggled every day for survival. Some businesses fought back against lockdowns that threatened

JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 15

HEALTH CARE

Beaumont’s anesthesia model in place at northern hospitals Health system completes transfer of anesthesiology services to NorthStar at 7 of 8 hospitals BY JAY GREENE

Irving, Texas-based NorthStar Anesthesia has taken over anesthesia services at Beaumont Health’s three northern hospitals in Royal Oak, Troy and Grosse Pointe and associated ambulatory surgery centers and pain clinics, a move that angered some anesthesia nurses, surgeons and physicians when the contract was announced last summer. With the consolidated contract, which began Jan. 1, NorthStar now offers comprehensive anesthesia services to seven of Beaumont’s eight hospitals. Last August, NorthStar started managing anesthesia services at Beaumont’s Dearborn, Taylor, Trenton and Wayne hospitals and their associated ambulatory surgery centers and pain clinics. NorthStar replaced Anesthesia Associates of Ann Arbor for Beaumont’s four southern hospitals and North American Partners in Anesthesia for its three northern hospitals. Both anesthesia groups worked at Beaumont for many years and a number of long-serving anesthesiologists left to practice elsewhere over objections to the contract switch. “NorthStar is proud to serve Beaumont, a pillar of Michigan health care that is known for excellence and the highest standard of patient care,” said NorthStar CEO Adam Spiegel in a statement. “We are equally proud that the NorthStar team serving Beaumont will consist of so many fellowship-trained anesthesiologists and such a high percentage of the heroic

Beaumont Hospital in RoyaL Oak. | CRAIN’S DETROIT BUSINESS

(certified registered nurse anesthetists) who have been integral to Beaumont’s COVID response and top tier surgical practices.” After an internal review in 2019 and early 2020, Beaumont decided to outsource its CRNAs and have NorthStar manage CRNAs and anesthesiologists at seven of its hospitals. Beaumont’s eighth hospital in Farmington Hills, the old Botsford hospital, will continue to use employed Beaumont CRNAs and contract anesthesia team for the time being, Beaumont has said. “We look forward to each team member’s continued contributions to help us deliver compassionate, extraordinary care every day to the pa-

tients we serve,” said Nancy Susick, president of Beaumont Hospital, Royal Oak, in a statement. “From day one of the transition, NorthStar properly staffed these sites to meet patient needs and maintain our standard of care.” Beaumont and NorthStar said the national trend has been for hospitals to outsource CRNAs to work with anesthesiologists in the same company; however, few health systems in Southeast Michigan have outsourced the model to separate companies. Henry Ford Health System, McLaren Health Care and Michigan Medicine directly employ anesthesiologists and CRNAs. Some systems, including

Trinity Health Michigan, have mixed models where they outsource anesthesiologists and employ CRNAs. In Michigan, NorthStar contracts with Spectrum Gerber Hospital in Fremont and has been contracting with Detroit Medical Center since 2015 after NorthStar acquired longtime DMC partner Anesthesia Staffing Consultants PC in Bingham Farms. “We have been very pleased with NorthStar’s smooth transition to Beaumont’s South campuses since August,” said David Claeys, president of the Beaumont Dearborn and Farmington Hills hospitals, in a statement. “NorthStar has recruited high-quality, new anesthesiologists and CRNAs to

join our team and these have been great additions to join the incumbent staff at our facilities.” Several surgeons, who asked for anonymity, tell Crain’s a different story. They say NorthStar has been slow to hire anesthesiologists at several southern hospitals, leaving holes in surgery schedules and inconvenience to surgeons and patients. However, Beaumont and NorthStar said they have been working hard to increase the numbers of full-time anesthesiologists and CRNAs. They said most anesthesiologists and CRNAs who were already working at these facilities signed on with NorthStar. “The NorthStar anesthesia team at Beaumont will continue to provide the high level of patient care Beaumont and our communities expect,” said Dr. Romeo Kaddoum, a fellowship-trained cardiac anesthesiologist who serves as NorthStar’s regional chief medical officer over its Michigan markets and facilities. He will also practice at Beaumont. “Our team is grounded in Michigan and committed to serving our local communities. For example, the CRNA team has been vital to Beaumont’s efforts during COVID-19, going above and beyond to help cover shortstaffed shifts and provide ICU coverage during the surge. They are true heroes,” added Christina Stevens, NorthStar’s vice president of CRNA Services over its Michigan markets, in a statement. Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

HEALTH CARE

Former DMC doctors awarded $10.6 million in arbitration Cardiologists contended the health system improperly terminated their employment in 2018 BY JAY GREENE

Metro Detroit cardiologists Mahir Elder and Amir Kaki have won a $10.6 million arbitration judgment against for-profit Detroit Medical Center based on their contention the six-hospital health system improperly terminated their employment and medical staff privileges in October 2018. Elder and Kaki had internally reported numerous instances of poor quality care and management interference at DMC, some of which Crain’s reported going back to 2014. When firing Elder and Kaki and forcing out Heart Hospital President Dr. Ted Schreiber, DMC said Kaki and Elder were fired for unspecified “code of conduct” violations discovered after an internal investigation. “The arbitrator found the extensive investigation never occurred and DMC’s comments at the time (about Kaki and Elder’s behavior) were false,” said Deborah Gordon, an attorney in Bloomfield Hills representing Kaki and Elder. “At the moment the DMC is trying to force us to file the award under seal instead of on the federal court docket,” Gordon said. “There was a wealth of evidence finding that my clients were retaliated against for engaging in protected activity, such as making com-

Elder

Kaki

plaints about safety and quality.” In a statement, DMC said it will seek to vacate the arbitrator’s decision in federal court. “On behalf of our dedicated employees and medical staff, we stand behind the decision of our governing board to not renew the expired medical staff membership and clinical privileges of Drs. Kaki and Elder for another two-year term (their privileges expired in April 2019). “Medical staff membership is a privilege — not a right — and the DMC will continue to prioritize patient safety and the well-being of its staff when making these decisions, particularly when confronted with very serious physician behavioral concerns,” DMC said in an email to Crain’s. The arbitrator’s decision also reinstates Kaki and Elder’s medical staff privileges at DMC, starting Feb. 1, for

16 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

a period of one year “equivalent to the same privileges they enjoyed prior to the retaliation,” according to arbitrator Mary Beth Kelly in her decision. Gordon said former DMC CEO Joe Mullany testified in support of Kaki and Elder and told the arbitrator that the two cardiologists had stellar careers while he was at DMC from 2012 to 2017. “(Former DMC administrator) Scott Steiner (who testified) said he was instructed (by corporate management) to sign the letter in (October 2018) that terminated Kaki and Elder,” Gordon said.

What happened? On Oct. 1, 2018, Kaki and Elder were fired by DMC and later lost their medical staff privileges. Since 2014, they had been outspoken internally about concerns over quality of care problems at DMC. In March 2019, Kaki and Elder sued DMC and its parent, Tenet Healthcare Corp. of Dallas, and four executives for retaliation under state and federal false claims acts. Elder and Kaki had reported multiple problems to top management about dirty medical and surgical instruments, unnecessary procedures on patients performed by other doc-

tors, lack of nursing staff and cutbacks in critical lab and support services. In a 41-page lawsuit filed in U.S. District Court in Detroit, the two doctors also claimed top DMC and Tenet executives failed to investigate alleged incidents of Medicare and Medicaid fraud. The U.S. Department of Justice continues to investigate Medicare and Medicaid billing problems, alleged overpayments to on-call cardiologists, poor quality of care, lack of supervision that led to patient deaths and the improper use of employed nurse practitioners, Crain’s has reported. The investigation by the DOJ was disclosed in February 2018 by Tenet in a federal securities filing. The company has declined interviews on the subject. The firings, which alleged violation of Tenet’s code of conduct, followed an investigation of the doctors’ interactions with nurses and other doctors by Medicare compliance attorneys with Latham and Watkins LLC, a Los Angeles-based law firm. “After an extensive review of complaints received from physicians and team members, DMC has asked Dr. Mahir Elder, Dr. Amir Kaki and Dr. Tamam Mohamad to step down due to violations of our standards of conduct,” wrote Steiner, who at the time

was CEO of DMC Detroit Receiving, DMC Harper University and DMC Hutzel Women’s hospitals, in an email to 5,000 DMC employees and in a statement to the press. Elder now practices at Beaumont Hospital Dearborn, Taylor and Royal Oak. He is a two-time Crain’s Health Care Hero and was voted “Teacher of the Year” by cardiology fellows for 10 consecutive years. He also is a professor of medicine at Wayne State University and Michigan State University. At DMC, he trained Kaki and dozens of other interventional cardiology fellows for more than a decade and was director of cardiac care, ambulatory services and the endovascular medicine program at DMC Heart Hospital since 2008. Kaki, who was recruited in 2012 by now-Detroit Mayor Mike Duggan when he was CEO of DMC, is practicing at Ascension Providence Hospital in Southfield and Ascension St. John Hospital in Detroit, where he is director of complex higher-risk indicated patients. Kaki was hired in 2014 as director of cardiac catheterization services unit at DMC Heart Hospital, also known as DMC Cardiovascular Center. Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene

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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 October 30, 2017 | crainsdetroit.com 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.” October 30, 2017 | crainsdetroit.com In a county where over 7,000 children suffer from hunger, By Annalise Frank and only two in five eligible students access a school breakfast, • UBS plans to open wealth management office in Detroit Floyd said a common misperception is that “Oakland County in mid-2018 is rich.” • Office to include 6,000-squareBy Annalise Frank foot space30,nonprofits and civic “That makes this program all the more important, because if October 2017 | crainsdetroit.com groups • UBS plans to open wealthcan use free of charge that is the bias or the thought process people have about • Bedrock-owned buildings office in Detroit “I’m impacting lives now. management I know undergoing renovations Oakland County, then these kids would have never gotten help.” in mid-2018 6,000-squarethe effect food insecurity• Office had onto includeUBS In a groundbreaking public/nonprofit partnership between the Oakland plans to open an office in downfoot space nonprofits and civic town Detroit in mid-2018, the company County Board of Commissioners, Oakland Schools and United Way, Annalise Frank growing groups meByand my peers up, andcan useannounced free of charge Monday. • Bedrock-ownedUBS buildings Oakland County is Better with Breakfast was born. 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 “I’m impacting lives now,” Floyd said. “I know the effect food insecurity sey-based Wealth Management change I wish an adult UBScould plans to open an office UBS in downin that mid-2018 Bedrock starting aroundgrowing mid-2018 in two buildings: GrinAmericas, to lease 13,000 square UBS will lease 13,000 hadfeet onfrom me andLLCmy peers up, and the this was an opportunity to make a town 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. change that I wish an adult could have made for me.” 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. — Laura Cassar • Bedrock-owned buildings

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

Bedrock LLC

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40 40

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

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

Albert Berriz talks workforce housing, Ann Arbor and Cuba

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

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

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Greg Burnick, tax principal and leader in RSM’s tax practice, assumes a new role as the RSM Michigan market leader and Detroit office managing partner. Greg has more than 24 years of experience working with entrepreneurs, flow thru businesses, and large corporations. As the office leader, Greg will work to support the firm’s vision and strategy and continue to bring RSM’s culture and expertise throughout Michigan.

PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

Bart Huthwaite recently joined RSM as a Principal in the Strategy and Management Consulting practice. Bart will help grow the operations and supply chain practice nationally and consult more broadly in the Michigan market. Additionally, Bart will play an active role in expanding RSM’s automotive sector business. Bart has 20+ years of experience providing insights that drive quantifiable business value across the value chain with private and public companies within the industrials industry.

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Oakland Community Health Network Callana Ollie, J.D. is the new Chief Legal Officer for Oakland Community Health Network (OCHN). In this position, Ms. Ollie oversees OCHN’s legal activities and operations, functioning as an objective associate that manages all legal matters within the organization. Ms. Ollie’s background and experience reflects her ability to negotiate complex agreements, implement important legal strategies and approaches, as well as manage insurance portfolios and risk management endeavors.

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O Kee e s p eased o announce ha Marco Ead e has o ned he fi m as Manag ng D ec o o ead he new Co po a e F nance p ac ce M Ead e ocuses on ansac on adv so y se v ces nc ud ng me ge s acqu s ons buy and se s de adv so y deb ecap a za ons co po a e deve opmen es uc u ngs d ves u es and even d ven financ ng o bo h p va e and pub c y he d compan es M Ead e possesses mo e han 15 yea s o ansac ona expe ence ac oss a w de ange o ndus es

Albert Berriz talks workforce housing, Ann Arbor and Cuba

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

Albert Berriz, CEO and managing member, McKinley Inc.

18 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

Laura Picariello Laura Picariello

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Gleaners faced huge demand for its services in 2020 during the pandemic. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

GLEANERS

From Page 3

In 2020, it supplied more than 80 million pounds of food, much of it from government-funded programs, to pantries, soup kitchens and pickup locations for families, double the amount it provided in 2019. The former Dairy Fresh site, a 1960s building that originally served as the headquarters for Highland Appliance, fit Gleaners’ needs perfectly, Brisson said, and saved it $25 million. The food bank is funding the building purchase and renovations of it and its Detroit headquarters through a mix of reserves, debt and fundraising, Brisson said. Gleaners is operating on an annual budget for fiscal 2021 of $32.7 million, up from $21 million in 2020. When the Taylor building is ready in July, Gleaners plans to shift the bulk of its inventory and food distribution operations there from Detroit and leased space at the Salvation Army in Warren. At 180,896 square feet, the site is more than double the size of Gleaners’ Detroit building. It will also renovate portions of its Detroit headquarters where its administrative offices, pantry pickup operations, nutrition education and the bulk of its volunteer activities will remain, Brisson said. Other sites in Howell, Pontiac and Taylor will continue to serve as pickup sites for pantries and people needing food assistance, as well as some volunteers, for now, he said. “Eventually, we’ll start consolidating. Warren will be the first site we exit,” Brisson said. “In the next 12-18 months, we’ll start thinking about our footprint and what makes sense to keep and what makes sense to sell. If we grow, then some of our facilities may (later) be useful to us for food distribution” and partnerships with health care systems, for example, he said.

Rising need Before the pandemic, Gleaners and Forgotten Harvest together were distributing about 90 million total pounds of food per year, Brisson said. Based on estimates from Feeding America — the national association for food banks and rescues that uses

Alexander

Markel

government and demographic data to project need in communities around the January 11, country 2021 — the two agencies were meeting just 60 percent of the need in metro Detroit, he said. And the need for emergency food assistance in Southeast Michigan rose 18 percent in 2020, per the national group. Going forward, food insecurity is expected to continue to rise, Brisson said. “We know that unemployment by sectors will be a mixed bag,” with restaurants, banquets, stadiums and other places that serve food continuing to be hard-hit. Even if the pandemic went away tomorrow, that whole industry of people will take months or years to recover to anything like they were before, Brisson said, elevating the need that existed before the pandemic . The two agencies both serve Wayne, Oakland and Macomb counties; Gleaners also serves Livingston and Monroe counties. “Unless we have a major population change where half of the people who live here move away or we have a major economic boost where half of the people who live here in poverty improve their economic situation ... our community needs between 120 million and 140 million pounds of emergency food per year between Gleaners and Forgotten Harvest,” Brisson said. Even at that level, it works to provide about 200 pounds of food or 200 meals per person per year, he said. Forgotten Harvest in November broke ground on a $12 million building in Oak Park to give it the space it needs to consolidate its staff from three locations and shift from just-intime distribution of much of the food it rescues to bringing all of it back to its warehouse to be mixed before sending it back out in more balanced fashion. “Our new facility will give us the ability to make the necessary changes to our food distribution model to

maximize nutrition and impact to the community,” Marketing and Communications Director Christopher Ivey said in an email. “We will now have enough Noland space to combine our two rescue models: the bulk rescue from the distributors and farmers and the grocery rescue to create a more equitable and nutritious mix at every distribution point we serve.” “The growth of both Gleaners and Forgotten Harvest in recent years has been extraordinary, thanks to their ingenuity and strong support from across the community,” said Kate Levin Markel, president of the Detroit-based McGregor Fund, which provides support for both nonprofits. “But it had become clear that both organizations could do even more if freed of the size and operational constraints of their existing facilities.” The last year has shown the importance of the two hunger organizations being able to ramp up quickly, leveraging government and private dollars together at a massive scale to address the needs, said Mariam Noland, president of the Community Foundation for Southeast Michigan, which provided more than $232,000 in funding to help both pivot to mobile distribution and increase response during the pandemic. “It has made the case that they both need to consider larger spaces, as the spaces they have now were not efficient for the scale and need,” she said. More than 100 new families were going for food to the Ford Resource Engagement Centers in Detroit each week last year, said Pamela Alexander, director of community development for the Ford Motor Co. Fund. If there ever was a time where the need for these organizations to have increased capacity to serve the community was clear, it was this year, she said. “In the absence of Gleaners having the capacity, we would not have been able to feed those families, and it’s still going on.” Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

The first PPP formally ended Aug. 8 and the program distributed more than 5.2 million loans nationwide totaling just more than $525 billion. Demand for the loans had slowed greatly in the summer months and the program ceased with $133.9 million remaining in the pot. While there are some significant changes to the program this time around, the overall spirit of the first PPP remains the same. Some provisions in the revamped program should be of benefit to hard-hit businesses like restaurants. Under the relief act, restaurant owners can seek forgivable loans at 3.5 times their monthly payroll costs, whereas previously they could borrow at only 2.5 times their monthly payroll. Other updates to the program include: ` PPP borrowers can set their loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs ` PPP loans can cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures ` The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives and destination marketing organizations, among other types of organizations Another change is a mandate that businesses must show that they experienced a USINESS revenue deCRAIN ’S DETROIT B crease of at least 25 percent on a year-over-year basis from one quarter to another last year. When the PPP was first started last spring businesses had no requirement to prove economic damage. Additionally, the updated law provides for “simplified” forgiveness of loans — both new and from last spring — of less than $150,000. Businesses essentially just need to fill out a single form. However, Tom Shemanski, a principal with the Rehmann accounting firm based out of Jackson, warned that due to provisions requiring holding onto records for years in case of audit it could be easier for business own-

ers to simply go through the whole process on the front end. “I don’t know that it necessarily lightens the burden on companies that much because to be honest you might as well do the work now because if you wait two years and try to find (the documentation) you may be in tough shape,” Shemanski said. “So I think most people are just doing the work up front.” Accountants also note that the new PPP allows for employers to mix their loan with the Employee Retention Tax Credit, something that was not permitted during the first round of PPP under the CARES Act. James Lopiccolo, a managing member of Lake Orion-based accounting firm Capocore Professional Advisors, notes that borrowers now will be able to retroactively claim the credit from last year while also obtaining a loan. Lopiccolo said that while combining the tax credit and the loan could add some complications for borrowers, it should ultimately be of benefit to many business owners and inject some added cash flow. Given the forgiveness aspect and the ability to mix the tax credit and the loan, Lopiccolo said that overall the updated law is “very favorable to business.” At Oxford Bank, a community bank in northern Oakland County with branches in Genesee and Lapeer counties, loans will be made only to existing clients due to capacity issues, President and CEO Dave Lamb said. He added that last spring during the initial rollout the bank attempted to provide loans to businesses that were not clients but in need of help. Lamb said the biggest change this time around will be the difference in velocity and the overall state of the economy. “The optimistic part of this, there’s a K-recovery,” said Lamb referring to the uneven nature of the economy during the pandemic. “People aren’t where they were in April when (clients thought) ‘my business is going to go away without this money.’ It was pure panic. I don’t see that this time.” Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

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JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 19

TEC

LOVES

From Page 1

Mack Peters, CEO of Loves Furniture, did not respond to emailed questions about the company’s troubles or its plans moving forward.

It p sa ind

More for less Loves Furniture was formed in May last year with plans to acquire 27 stores and inventory out of bankruptcy and rebuild a new furniture empire in the void left by the defunct Art Van. The plan was orchestrated by Florida’s US Realty Acquisitions LLC, founded by investor Jeff Love, and the firm succeeded in acquiring the Art Van assets and leases of Art Van out of U.S. Bankruptcy Court in Delaware for a mere $6.9 million. The deal included 17 Michigan locations as well as Art Van and Art Van-owned Levin Furniture and Wolf Furniture locations in Pennsylvania (5), Illinois (2) and one each in Ohio, Virginia and Maryland. The new upstart retailer had big plans to reopen the former Art Van stores in only weeks and hire more than 1,000 employees, most of which were former Art Van workers. Loves was then led by new CEO Matthew Damiani, a former vice president of enterprise operations and customer experience for Art Van. “This is not Art Van 2.0,” Damiani told Crain’s in May. “This is a different company with a different style, a different selling strategy and marketing voice. Our goal is to reengage with the customers that stopped shopping at Art Van or Levin, the ones that left those brands because they didn’t feel a connection.” Damiani, who was hired by Art Van’s private equity owners Thomas H. Lee Partners LP in 2017, said the stores would be more modern in appearance and would abandon Art Van’s more aggressive sales tactics, relying heavily on marketing and sales leads driven through technology. He vowed Loves wouldn’t succumb to the financial pressures that destroyed Art Van. “The current situation is unique because we have an ownership team that acts like a family business instead of traditional private equity group,” Damiani said. “They are really supporting us and our recommendations on what we want to be able to bring to market. We’ve brought in a really talented, passionate group from the former Art Van and outside the company. We’re bringing something to market that we are all very proud of that’s rooted in the communities we serve.” But Damiani and company underestimated COVID’s impact. “The COVID-19 crisis clearly produces a lot of headwinds, but this presented a great opportunity to take advantage of the current market conditions,” Damiani said back in May. “The opportunity is not just in what we acquired, but in customer need. I’m referring to the hundreds of millions of sales they are vacating in this market. We believe if you go to market with the right approach, right products and fantastic service, we’ll earn the right to thrive for a long time.”

Big bills, small shipments By June, Loves was contracting suppliers for new signage to replace the old Art Van moniker donning its buildings, printers for mail advertising, millworkers to outfit its stores as well as placing orders for furniture. Stores began opening more broadly in July. But its new customer base

BY N

Loves Furniture’s Royal Oak store was one of the Art Van locations acquired by the company. | BETH REEBER VALONE/CRAIN’S DETROIT BUSINESS

was quickly unimpressed. Loves social media pages were beginning to flood with complaints of long delays for delivery and unresponsive customer service. “Not sure what I am supposed to do when my baby arrives any day now and my parents cant stay with us during a pandemic because the bed you sold to us eight weeks ago isn’t here?,” one customer wrote on Twitter. “I have been lied to at every turn ... ” Loves’ attorney in the bankruptcy, Max Newman, partner at Detroit-based Butzel Long PC, noted the customer service issue with Crain’s last week. “We had a lot of negative publicity from not getting customers’ orders,” Newman told Crain’s in an interview. “We wound up way under water pretty fast.” Peters, who was hired in December after Damiani departed the company, said supply chain issues crippled Loves’ success. Peters told Crain’s in an interview in early December that the pandemic slowed shipments as well as caused rising prices from distributors in Asia. Freight prices from Vietnam have doubled between summer and December, he said. Furniture makers have faced shortages of key materials, such as block foam and even chemicals, since the coronavirus exploded earlier this year. For example, chemical giant BASF declared force majeure in July at its toluene diisocyanate plant in Louisiana. The chemical is used in the production of polyurethane flexible foams used in upholstery, mattresses and automotive seats. Regular production didn’t restart at the plant until last month. In response, Loves dumped seven of its stores as part of a cost-savings plan. It transferred its five stores in Pennsylvania to Levin Furniture, which Art Van acquired in 2017, and said its stores at 8300 Wayne Road in Westland and 425 E. Eisenhower Parkway in Ann Arbor were to be taken over by an undisclosed regional chain. Later in December, Loves started liquidating inventory at 10 stores, including those in Waterford Township and Port Huron, and preparing them for permanent closure. McLoughlin said the materials shortages and increased orders from those remodeling homes during the pandemic has created a bottleneck for the entire industry — a problem

20 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

CEO MACK PETERS RECOGNIZED IN DECEMBER THAT THE COMPANY IS FACING INVENTORY PROBLEMS AS ONGOING ISSUE. “IT’S BEEN DIFFICULT TO MOVE FORWARD IN THE STORES AS THE SUPPLY CHAIN FOR GETTING FURNITURE REMAINS QUITE DIFFICULT,” PETERS SAID. “WE’RE HAVING PROBLEMS WITH VENDORS AND SUPPLIERS.” that’s exponentially worse for Loves. “Many orders that came in at the end of last year won’t be filled until the end of the first quarter of 2021,” McLoughlin said. “That’s a challenge for the entire furniture industry. There’s a real shortage of product. Because of this shortage of inventory, some manufacturers have had to allocate inventory and have chosen to supply their best customers first. A new organization like Loves would likely have lower priority than more well-established organizations.” Peters recognized in December that the company is facing inventory problems as an ongoing issue. “It’s been difficult to move forward in the stores as the supply chain for getting furniture remains quite difficult,” Peters said. “We’re having problems with vendors and suppliers.” The problem also appears to be Loves’ inability to pay its bills. Mississippi-based Southern Motion Inc. and Fusion Furniture Inc. filed a suit against Loves on Dec. 31 for breach of contract, alleging the retailer has failed to pay on a $1.8 million bill for merchandise. Detroit-based Fairmont Sign Co. alleges in a lawsuit filed in Oakland County on Jan. 5 that Loves owes more than $54,000 for sign work. Wixom-based Modern Millwork Inc. alleges in an Oakland County suit that Loves owes them more than $153,000. Roseville-based Graphics

East Inc. alleges in another Oakland County suit that Loves owes the firm nearly $342,000. All the suits allege a breach of contract by Loves.

Who controls the goods controls the future But it’s likely Loves’ quarrel with the $2 billion trucking and warehousing giant Penske Logistics, a subsidiary of Bloomfield Hills-based Penske Corp., that drove them to seek protection in bankruptcy court last week. Penske Logistics declined to discuss the ongoing case. Loves inked a deal with Penske Logistics in July last year for the firm to manage shipping from its Warren warehouse as well as manage the operations of the one-million-square foot operation at 6500 E. 14 Mile Road in Warren, according to a lawsuit filed by Penske Logistics in Oakland County Circuit Court on Jan. 5. Loves quickly fell behind on its payment obligations to Penske Logistics. As of Dec. 29, Penske Logistics alleges, Loves owes $1.6 million. In November, Penske Logistics notified Loves it intended to assert a warehouseman’s lien on the warehouse inventory, according to the suit. A warehouseman’s lien allows a warehouse operator to hold and sell goods in its possession to offset against any shipping, handling and storage fees owed.

“THIS IS NOT ART VAN 2.0,” FORMER LOVES CEO MATTHEW DAMIANI TOLD CRAIN’S IN MAY. “THIS IS A DIFFERENT COMPANY WITH A DIFFERENT STYLE, A DIFFERENT SELLING STRATEGY AND MARKETING VOICE. OUR GOAL IS TO REENGAGE WITH THE CUSTOMERS THAT STOPPED SHOPPING AT ART VAN OR LEVIN, THE ONES THAT LEFT THOSE BRANDS BECAUSE THEY DIDN’T FEEL A CONNECTION.”

Loves quickly made additional payments to stave off the lien, Penske Logistics alleges in the lawsuit, but not for long. On Dec. 29 last year, Penske Logistics issued another warning that it was exercising its lien on Loves’ inventory and would begin to sell goods on Jan. 23. Loves responded by revoking Penske Logistics’ employees access to the warehouse, the lawsuit alleges. The lawsuit also says Loves was working to move the inventory out of the warehouse during the legal dispute. With no cash reserves, the inventory is the only thing of value Loves holds. “In the last few days, Penske representatives have also observed truck traffic in and out of the facility, which likely indicates Loves beginning to unlawfully remove the goods from the warehouse,” the lawsuit alleges. “ ... Loves is of the belief that the lien will not be available to Penske once the goods are no longer in the warehouse.” The Chapter 11 bankruptcy filing by Loves came a day after Penske filed its lawsuit. Newman told Crain’s the company is restructuring its debt in hopes of maintaining up to 12 stores in Michigan. The company is also going to seek court approval for a contract with Planned Furniture Promotions, “which will make inventory available to customers at attractive prices at a time when most furniture stores are struggling to maintain inventory,” Newman said. Planned Furniture Promotions is an Enfield, Conn.-based events company that creates the “going out of business sale” marketing blitzes for companies to generate immediate cash flow. But even if Loves manages to rid itself of its debt obligations in bankruptcy, it would re-enter a market it couldn’t succeed in. The bankruptcy is merely a second chance at the same market. McLoughlin is skeptical the company will avoid Art Van’s fate — total liquidation. “(Loves) wanted to retain the credibility of Art Van ... to be a freestanding organization on the bones of Art Van,” McLoughlin said. “But if you look at the market conditions … the likelihood they will get inventory on a continual basis ... I think the most likely outcome is liquidation.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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TECHNOLOGY

Detroit IoT company Guardhat raises $18.5 million in Series B round It produces smart safety gear for industrial workers

“IT IS RARE THAT I GET TO BACK A COMPANY THAT LITERALLY SAVES LIVES. I LOOK FORWARD TO HELPING ESTABLISH GUARDHAT AS THE INDISPENSABLE SAFETY AND PROTECTION STANDARD FOR EVERY FACTORY.” —Bob Mylod, managing partner of Annox Capital

BY NICK MANES

Guardhat Inc., a Detroit-based software business for the industrial market, has $18.5 million in new venture capital funding as it continues its growth trajectory. Part of the umbrella of companies with backing from Detroit billionaire Dan Gilbert, Guardhat produces Internet of Things safety technology for workforces in the industrial sector. The Series B round, which follows a $20 million Series A round in 2018, was led jointly by Annox Capital of Bloomfield Hills as well as General Catalyst Partners and Durable Capital Partners LP out of Cambridge, Mass., and Chevy Chase, Md., respectively, according to a news release. Several other groups also joined the round, including Southfield-based construction company Barton Malow Co. As part of the deal, Bob Mylod, managing partner of Annox Capital, will join Guardhat’s board of directors. “Guardhat is truly a special investment for me and my firm,” Mylod

Guardhat’s tech-enabled hard hat, the HC1 Communicator, was named a best invention of 2020 by Time. GUARDHAT

Guardhat CEO Saikat Dey: “This past year was a testament from both the customer side and investor side that making frontline workers safer and more productive is foundational.” | CONTRIBUTED

said in the news release. “First, it is an opportunity to invest in one of the great mega-trends that I see unfolding: the founding and scaling of technology companies outside of Silicon Valley, most notably in the Midwest in general and Detroit in particular. More importantly, evaluating Guardhat during the peak of the pandemic

exposed the grave health risks that factory workers endure on a daily basis. ... It is rare that I get to back a company that literally saves lives. I look forward to helping establish Guardhat as the indispensable safety and protection standard for every factory.” The company said it has seen rev-

enue growth triple year-over-year and the added investment will allow for Guardhat to double its headcount from its current 42 employees by the end of the year, with hires planned in sales, product management, marketing, human resources, engineering and other roles. Through a spokesperson the company declined to disclose an annual revenue figure. “This past year was a testament from

ROOTS

An artist rendering shows what a Berkley Quality Roots location would look like. | QUALITY ROOTS

‘It just made sense’ After nearly a decade in the toy business, Klar found himself eager to get a spot in the marijuana space. As soon as it became a regulated market and Klar claimed his stake, he knew quality would be the focus of the business. “It just made sense,” he said. “Our experience with toys is built on trust, experience, curiosity and loyalty. We’re trying to do the same thing with Quality Roots. “We’ve been in the world of supply and demand, the world of trend management. We took the time needed to build ourselves up for Toyology to become a household name. We’re going to do the same thing here. We’re going to take our time and gain the customer’s loyalty. Yes, it’s a different product, but we’re the same people that customers can trust.” The company works with 35 ven-

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

A trusted name

From Page 3

Schostak Development President Jeffrey Schostak said his group is excited about the partnership, touting the Klars’ operational and regulatory retail business experience. “As is true with many brick-andmortar retail businesses, real estate plays a major role in growing the business. We believe through our 100 years of real estate development and acquisitions experience we are able to provide our people and expertise to a very critical part of the cannabis business,” Schostak said. “We look forward to building a long-term successful Michigan business and continuing to enhance the communities we serve.” Why team with Schostak? “Cannabis and real estate are tied together,” Klar said. The Schostak real estate group is working with Klar on choosing the right sites to set up shop and how to maintain employees.

both the customer side and investor side that making front-line workers safer and more productive is foundational,” Guardhat CEO Saikat Dey said in the release. “We are humbled by the caliber of partnerships we’ve forged and hope more will join us on this journey of defining what a connected worker solution should be.”

Quality Roots plans to open its second location, in Hamtramck, on Monday. | JASON DAVIS/ CRAIN’S DETROIT BUSINESS

dors across the state for everything from cannabis flower and concentrate to edibles and topicals, Klar said. “There are a lot more vendors, and supply chain has grown the last six months. We’re so honed in on quality,” said Klar, who is taking a step back from the day-to-day operations of Toyology, leaving that to his mother and longtime business partner Tracy Rowley. “We’re not bringing anything into our doors until it’s (perfect). We’re honed in on every fine detail — taste, smell, packaging — everything.”

So far, so good Klar said he was extremely excited about opening the Battle Creek location, which was set to open March 12. The pandemic put a wrench into those plans, though, as the first stayat-home order went into effect March 16. Klar and his staff didn’t want to wait to get started, so the group developed a delivery platform that would run from Battle Creek to metro Detroit. Quality Roots, with a focus on quality and safety, offered only the

delivery service for a few weeks. The store opened for curbside medical sales on April 6, began recreational curbside service on May 21 and launched in-store sales June 6. The Battle Creek location now sees $15,000-$30,000 a day in revenue. “At the time, a lot of people were fearful, so we set up procedures and took the time to develop things that would help us long term,” Klar said. “Nobody knew how long that state of the world would last.” Licensed medical and recreational cannabis businesses were deemed essential businesses early in the pandemic, saving Quality Roots from laying off any of its 16 employees. That was a relief to Klar, who said that group took a leap of faith to join the company, leaving other careers and trusting that the venture would work. The company starts its employees at $15 an hour, with the opportunity for advancement. Employees will begin to be offered benefits later this year, Klar said. Klar declined to disclose 2020 revenue or projections for 2021. Overall marijuana retail sales in the U.S. could reach up to $8.7 billion in 2021, according to a Statista report.

The new Hamtramck and Berkley locations will start with 15 and 20 employees, respectively, with an emphasis on hiring people local to those communities. With plans for more sites, the Klars are going all in. Certifications are handed out by the state and individual communities. The Klars received state certification in 2017. Ninety percent of the cities in Michigan have opted out of recreational marijuana, leading to increased competition for certifications in communities that do allow it. Quality Roots is one of three aspiring cannabis companies that got the green light in Berkley and in Westland. It is awaiting a decision on recreational marijuana in Pontiac and for Monroe to lift a moratorium. Applications for possible facilities in Royal Oak and Waterford are being worked out, Klar said. Most of its facilities will have recreational and medical sales, Klar said, depending on what the municipality allows. Adding cultivation and processing in Westland will give Quality Roots the ability to perfect its processes locally before potentially branching out to other states. “Fortunately for us, we’re a local name municipalities can trust,” Klar said. “We’re very community focused. People have built generational trust with us. We’re doing the same thing we’ve always done but with a different variable. “We’re looking to be a place where everybody can get comfortable very quickly — just like a toy store. If I can get a kid into our toy store, they’re smiling, they’ll be back. We want that same thing here. We want our customers to be a part of the Quality Roots family.” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

JANUARY 11, 2021 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

NYSE exec sees more Michigan companies going public in 2021 NEW YORK STOCK EXCHANGE GROUP: John Tuttle is witnessing first-hand the overall shift in companies making their way to the public markets. Tuttle is the vice chairman and chief commercial officer of the New York Stock Exchange Group, where he works on overall outreach and business development. The Milford native said he had some hometown pride watching Detroit-based Rocket Companies Inc. go public on the NYSE this past summer and expects to see more Michigan companies take a similar path in the coming months and years. | BY NICK MANES ` How would you characterize the overall year for the New York Stock Exchange, and more specifically, the year for Michigan companies that have found their stock market home there? I would say by all meaningful metrics, 2020 ... was a record year for IPOs, and for the public markets. And you certainly identified one of the largest and highest profile IPOs, coming from downtown Detroit, which was Rocket Mortgage. And (Pontiac-based United Wholesale Mortgage) has also announced its intention to list on the New York Stock Exchange. It’s exciting because there’s a lot of ... companies from the metro Detroit area that certainly contributed to the strong year in IPOs, but they’re going to continue to contribute even more going into 2021. ` What does this say to you about the region? It’s an interesting opportunity for metro Detroit to be prominently showcased in the public markets, meaning this is an opportunity to highlight the diverse range of entrepreneurs and companies coming from the Detroit area. We have the mortgage companies, obviously, but also, you’re going to see more emerging technologies, like those around like electric vehicles ... come to the public markets and continue to highlight Detroit as a home for innovation. ` Mortgage companies like Rocket and UWM are having record years and opted, for various reasons, to go public in 2020. What does that say to you about the appeal of the public markets? First of all, there’s a couple of trends that are taking place that are favorable to a lot of these companies. One is the demand for housing. Low interest rates as well creates a compelling value proposition for customers and those companies. But also the trends that are taking place in (electric) vehicles. Obviously, Detroit has always been a mobility hub. But a lot of these startups and companies that

pricing and liquidity — and brought them together. So we’re on the 2-yard line with the Securities and Exchange Commission to get that completed. And then this year we really saw SPACs become a meaningful part of the market. Roughly 50 percent of the IPO proceeds in 2020 came from SPACs.

John Tuttle, vice chairman and chief commercial officer of the New York Stock Exchange Group

have been focused on different parts of the EV ecosystem, given the increased attention by investors and consumers to the space, seem to be well positioned going forward. ` SPACs, or “blank check companies,” have become all the rage this year on Wall Street. It’s the route that UWM has chosen to take to the public markets. At the start of the year the vast majority of the general public likely did not know what a SPAC is (it’s a shell company that goes public and then merges or acquires with a private company to take it public). What’s driven this in your mind? So it’s clear that companies are looking

for various avenues to come to the public markets. The well-worn path of an IPO works for many companies. However, there are companies with different profiles and different objectives that are looking for different pathways. So that’s one of the reasons why we created the direct listing, which was used with Spotify, Slack, Palantir, Asana. Companies wanted the benefits of being a public company, but they didn’t necessarily need to raise capital at the time of their listing. So we worked on that. We’ve also advanced the idea of creating a direct listing with a capital raise. So taking the best of the IPO — the ability to raise capital, the best of the direct listing, which is efficiency of

` Why all the demand? A SPAC allows the company to identify a specific business partner, potentially bring on other investors as well through PIPEs — so private investment in a public equity — and it’s less like an IPO and more like an M&A transaction, or a last round financing transaction. And with it comes liquidity ... and the benefits of the public market. Potentially, more certainty of getting a transaction completed on a specific timeline, given that the ... IPO window can open and close based on broader macroeconomic conditions. So for companies that a). just want more certainty of execution with a specific partner, this is an option for them. Or b). for companies that are from a sector that traditionally had not tapped the public markets — think again, electric vehicles where there is perhaps no history of meaningful revenue. However, they’re able in a SPAC in their disclosure statements to provide forward-looking projections, which is different from what you’re allowed to do in your IPO filings. So, it’s a pathway preferred for some companies of this profile. ` It sounds like you’re saying there’s going to be a solid shift in the makeup of companies that go public? Absolutely. There’s been more innovation in the past two years than the preceding two decades when it comes to the capital markets. And so now companies have more options, and we’re continuing to develop more options. You know, we’re continuing to talk to companies and investors and other stakeholders to think of other pathways as well. I mean, more pathways to the public markets, and (they) can take a path that’s more tailored to meet their objectives.

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

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RUMBLINGS

Red Wings to wear United Wholesale Mortgage helmet decals United Wholesale Mortgage is putting its stamp on Detroit Red Wings helmets this season as well as inside Little Caesars Arena and on an adjacent parking garage. The Pontiac-based company signed a multiyear deal with the Ilitch-owned NHL franchise to be its first “exclusive mortgage partner,” according to a news release. The 2021 season marks the first time the NHL is allowing advertisements on uniforms. Professional sports leagues had long resisted corporate stickers and patches on player

Detroit Red Wings players will wear advertisements on their helmets this season for the first time. | DETROIT RED WINGS

uniforms, but as European soccer has shown, jerseys can be valuable

22 | CRAIN’S DETROIT BUSINESS | JANUARY 11, 2021

assets for sponsors. And franchises struggling with the financial fallout of the coronavirus pandemic are showing they are ready to make deals. Terms of the agreement were not disclosed. Per league rules, the helmet sponsorship is just for one season, to start. Chicago-based analytics firm Navigate estimated the stickers on NHL helmets are worth around $2.5 million for an average team. The mortgage company’s logo will appear on both sides of the team’s home, away and practice helmets

for the entire 2021 season, scheduled to begin Jan. 14 with no fans in attendance due to the coronavirus crisis. United Wholesale Mortgage will share ice and arena space with BetMGM, which expanded its sponsorship deal with the Red Wings this season as sports betting in Michigan reboots after pandemic interruptions, and online betting readies for launch. The gaming platform provider will have exposure throughout the arena and be involved with fan promotions throughout the year.

Crain Communications Inc. Chairman Keith E. Crain Vice Chairman Mary Kay Crain CEO KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except no issues on 1/4/21 nor 12/27/21, combined issues on 5/24/21 and 5/31/21, 8/30/21 and 9/6/21, 11/15/21 and 11/22/21, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2021 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

WE STRONGLY SUPPORT LINE 5 AND ITS CONTINUED OPERATION. We back Line 5, because Line 5 heats our homes, powers our worksites, and keeps energy affordable across Michigan. Line 5 means jobs. Tens-of-thousands of them. During Michigan’s recovery from COVID-19, those jobs are more important than ever. Union jobs. Manufacturing jobs. Chemistry jobs. Service industry jobs. Small business jobs. Make no mistake – shutting down Line 5 means shutting down Michigan businesses, higher energy prices and lower tax revenues that pay for our schools and roads. Instead, let’s build the Great Lakes Tunnel – a job-creating project that gets Line 5 out of the water and buries it safely, deep below the lakebed where the risk of a spill into the Straits is virtually zero. We’re standing together to protect Michigan’s energy supply. To protect Michigan’s environment. To protect Michigan jobs.

Join us.

greatlakesmichiganjobs.com/line5

Consumer Energy Alliance Detroit Regional Chamber Jay Dee Contractors Lake Superior Community Partnership Lansing Regional Chamber of Commerce LMS Liquid Meter Services, Inc Michigan Aggregates Association Michigan Association of Convenience Stores Michigan Building and Construction Trades Council Michigan Chamber of Commerce Michigan Chemistry Council Michigan Laborers District Council

Michigan Laborers-Employers Cooperation and Education Trust Michigan Manufacturers Association Michigan Oil and Gas Association Michigan Petroleum Association Michigan Pipe Trades Association Michigan Propane Gas Association Midland Business Alliance National Federation of Independent Business Operating Engineers 324 Pipeliners Union 798 – United Association Small Business Association of Michigan

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Exercise your body, mind and heart with the YMCA. To us, your health and wellness isn’t just a business—it’s been our mission for 168 years. Workout where your membership matters. Reserve lap or family pool time where swim lessons originated. Book time on the courts where basketball was invented. Yes, you could join any gym. But we are not asking you to join a gym. We are asking you to commit to our community, join the YMCA. Become a part of our mission— building healthy minds, bodies, and spirits for all. Visit our website to learn how our Ys maintained safe, sanitary spaces to benefit and welcome our communities throughout Covid-19.

GIVE

Throughout these complex times, our YMCAs have continued to help others. A gift of $50: feeds a child for a week; provides a day of essential childcare for working families; provides clean, comforting spaces for health-seekers to exercise; or supplies virtual counseling and learning support for all ages. While the YMCA fitness centers were closed—from March to September 2020— our mission continued. We served nearly 7,000 children in Metropolitan Detroit through Child Care, Y Day Camp, SportPort guided outdoor play, and Girls on the Run. We distributed over 190,000 meals to children and young adults with special needs; promoted census and voter registration; conducted a Red Cross blood drive; and more.

SERVE

Share your time and talent by joining the YMCA team. At the Y you can serve, earn, and learn— simultaneously! We’re looking for people who love to give back and help others in their community. Become a lifeguard to help save thousands of lives. If you can swim and are age 16, or older, we will train you as a YMCA lifeguard. Or, join us on the front line: Help make someone else’s day better every day—providing friendly, knowledgeable customer service in Child Care, Y Learning Centers, or branch Welcome Centers.

January

$0 Joiners Fee

Week 1

Week 2

75% off

First month membership Code Join75—Valid Jan.1-9

50% off

First month membership Code Join50—Valid Jan.10-16

Week 3

25% off

First month membership Code Join25—Valid Jan.17-23

YMCA OF METROPOLITAN DETROIT

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BIRMINGHAM FAMILY YMCA

CARLS FAMILY YMCA

FARMINGTON FAMILY YMCA

PLYMOUTH FAMILY YMCA

400 E. Lincoln St, Birmingham (248) 644-9036

300 Family Drive, Milford (248) 685-3020

28100 Farmington Rd, Farm. Hls (248) 553-4020

650 Church St, Plymouth (734) 453-2904

BOLL FAMILY YMCA

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10 North River Rd, Mt Clemens (586) 468-1411

1016 W. 11 Mile Road, Royal Oak (248) 547-0030