Crain's Detroit Business, Feb. 1, 2021 issue

Detroit native Roz Brewer becomes only Black woman CEO in Fortune 500

Goldfish Swim keeps spawning PAGE 3

PAGE 22

CRAINSDETROIT.COM I FEBRUARY 1, 2021

FINANCE

SMALL BUSINESS

MORTGAGE CITY

YOUR TABLE MAY BE READY

With 3 new public companies, Southeast Michigan solidified as industry hub

BY NICK MANES

The state’s revised health order takes effect Feb. 1 and runs through Feb. 21. After being halted for 75 days and over the normally busy holiday season, restaurants will be able to operate indoor service at 25 percent capacity, or a maximum of 100 patrons — whichever is less — and must adhere to a 10 p.m. curfew.

The curfew does not apply to outdoor dining.

Southeast Michigan’s claim to the name “Mortgage City” has become a little stronger.

With Home Point Capital Inc. making its debut on the public markets on Friday, the region has been solidified as a hub for mortgage lending, particularly for non-bank institutions.

The Ann Arbor-based mortgage originator and servicer is still significantly smaller than its neighbors and competitors in the region, Detroit-based Rocket Companies Inc. and Pontiac-based UWM Corp., among the largest non-bank lenders in the country. But what’s clear is that more and more mortgages nationwide are being originated in Wayne, Oakland and Washtenaw counties.

“This is definitely the center of the mortgage universe here in metro Detroit,” UWM President and CEO Mat Ishbia told Crain’s in an interview late last year. “We have a lot of great companies, a lot of great people.”

That sentiment is reinforced in a late January report by industry trade publication Inside Mortgage Finance. The report determined that in 2020 the top 50 mortgage lenders in the country combined did more than $4 trillion in mortgage volume last year. The three Southeast Michigan companies accounted for about 14 percent of that amount, or about $567.5 billion, according to the report.

See REOPEN on Page 21

See MORTGAGE on Page 19

A sign will welcome back customers to Testa Barra in Macomb Township when it reopens for indoor dining on Feb. 2. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

When the months-long ‘pause’ on indoor dining lifts Monday, some owners are taking a wait-and-see approach, while others are eager to reopen BY JASON DAVIS | When restaurants are able to reopen for

in-person dining starting Monday, Stage Deli in West Bloomfield won’t be among those welcoming customers back inside.

Owner Steve Goldberg told Crain’s that operating at 25 percent capacity, the threshold set by Gov. Gretchen Whitmer’s health department, would not allow the restaurant to serve customers how it prefers to. Stage Deli, with a seating capacity of 180, has relied on a reputation built over nearly 60 years to remain viable during the coronavirus pandemic, Goldberg said.

“For almost 60 years, we’ve been a restaurant where people would come to enjoy a certain level of energy, for a neighborhood-like feel, that I think would be difficult to provide based on the restrictions in place,” said Goldberg, whose father Jack started the deli in Oak Park in 1962. “We’re going to take care of 100 percent of our guests through carryout and curbside, and keep an open eye to see how things go.”

REAL ESTATE

Walbridge plans warehouse for big property

INSIDE | REAL ESTATE FOCUS: OAKLAND COUNTY

Lyon Township project adds to increase in activity in red-hot sector

BY KIRK PINHO

The Walbridge Group is developing new warehouse space on a massive chunk of Lyon Township land it has owned for more than 35 years.

The Detroit-based construction gi-

ant is putting up a 280,000-squarefoot speculative warehouse building on 21 acres off I-96 at Grand River Avenue and South Hill Road. Walbridge owns the 515-acre property encompassing the site.

Walbridge becomes the latest to

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take advantage of an eye-popping increase in development activity and plunging vacancy rates in the warehouse sector.

Marketing materials by Southfield-based Signature Associates Inc. say that the Lyon Distribution Center I building is expected to be completed in July and lease for $7.25 per square foot per year, not including utilities.

At that rate, rent payments for the whole building would be $169,167 per month.

A site plan for the project was approved in the summer, Hometown Life reported at the time.

See WALBRIDGE on Page 19

READING THE ROOM: An increase in tenants looking to sublease unused Oakland County office space may foreshadow the future of the market. PAGE 10 SPACED OUT: Pandemic causes companies to reconfigure their workspaces. PAGE 12

NEED TO KNOW

CRAIN’S AWARDS

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  AUTO SHOW EYES SEPT. 2022 RETURN TO DETROIT THE NEWS: The head of the North American International Auto Show is eyeing September 2022 for resurrecting a Detroit auto show that’s been sidelined by the coronavirus pandemic after being moved from its traditional January date on the international circuit. Rod Alberts, executive director of the Detroit Auto Dealers Association and NAIAS, told the governing board of TCF Center last week that this year’s show, originally planned for September, had to be canceled because of the financial risk of the virus upending another event like the June 2020 show that got canceled.

WHY IT MATTERS: The show hasn’t happened since January 2019 after a plan to move it to the summer was upended by the coronavirus pandemic. The most recent cancellation of next September’s show came as a surprise to TCF Center officials.

 REAL ESTATE EXEC CHARGED IN LOTTERY SCHEME THE NEWS: A former Detroit area commercial real estate executive has been charged with wire fraud and faces up to 20 years in prison for allegedly bilking no fewer than two dozen investors of $26.4 million to play the Michigan Lottery. Viktor Gjonaj, 43, the former head of Troy-

based Imperium Group LLC, allegedly ran a scheme between 2016 and 2019 in order to fuel his Michigan Lottery habit that, at times, totaled $1 million in spending per week on the Daily 3 and Daily 4 games, a press release from U.S. Attorney Matthew Schneider’s office says.

month that the deal, set to close in the second quarter of this year pending regulatory and shareholder approval, has led to the banks planning to close 198 branches. Included in that number are all 97 of Huntington’s locations in Meijer Inc. grocery stores.

WHY IT MATTERS: The Shelby Township resident’s alleged scheme is also the subject of multiple lawsuits in Oakland County Circuit Court claiming a total of $15.25 million in lost investor money, as well as at least $28 million in Daily 3 and Daily 4 winnings in less than a year.

WHY IT MATTERS: The bank plans to consolidate branches “very substantially” in Michigan, Steinour said.

“That will allow us to cycle out of the in-store branches that we have with Meijer, which we’ve explained to the company,” Steinour said. “It’s just excess distribution, with nearly 500 points of distribution in the state of Michigan as a consequence of the (TCF acquisition).”

Nominate a rising star for Crain’s 20 in their 20s  Time is running out to nominate metro Detroit’s most promising young talent for Crain’s 20 in their 20s.

We are looking for the region’s next wave of business and community leaders: people who have achieved beyond their years, rocketed through the ranks at their organizations, lead their own successful companies and are making significant contributions to their communities.

Winners will be recognized in a special issue of Crain’s Detroit Business on May 3.

The deadline to nominate is Feb. 10. To get started, visit crainsdetroit.com/nominate.

Questions? Contact Special Projects Editor Amy Bragg: abragg@ crain.com.

 JOBLESS CLAIMS EBB WITH VIRUS CASES

 HUNTINGTON BANK TO CUT 198 BRANCHES IN DEAL THE NEWS: The planned $22 billion acquisition of Detroit-based TCF Financial Corp. by Huntington Bancshares Inc. will likely result in the closure of nearly 200 bank branches, including several in a major regional grocery chain. Stephen Steinour, the chairman, president and CEO of the Columbus, Ohiobased Huntington told analysts last

THE NEWS: Michigan’s weekly new jobless claims continue to fall as new infections of the deadly coronavirus continue to subside across the state.

Last week, 16,679 in the state filed new unemployment claims, down from the revised up 21,830 for the week prior. However, last week’s figure remains well above normal levels prior to the pandemic.

WHY IT MATTERS: Despite nearly 44,000 coming off the state’s unemployment benefits program for the week ending Jan. 23, long-term unemployment remains a problem.

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 FORMER MASCO CABINET UNIT SAID TO BE UP FOR SALE THE NEWS: Private equity firm American Industrial Partners is considering a sale of Ann Arbor-based Cabinetworks Group that could value the building products company at about $3.5 billion, according to people familiar with the matter. New Yorkbased AIP is working with advisers

and honors the state’s top employers who show a dedication to their employees’ growth and quality of life. In addition to being a prestigious honor to be picked for the list, all participating companies will also receive the results of the employee survey, identifying the strengths and weaknesses of their workplace according to what their employees had to say. Don’t miss out – this is your opportunity to join the ranks of Michigan’s most outstanding companies!

Winning companies will be highlighted in a special section in Crain’s Detroit Business on August 23.

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WHY IT MATTERS: Cabinetworks, which makes brands including Merillat and KraftMaid, includes the former cabinet division of Livonia-based home improvement products maker Masco Corp., which it sold in 2019 in a $1 billion deal.

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on strategic options for Cabinetworks, including a potential sale, Bloomberg reported.

DEVELOPMENT

Detroit greenway trail set to start construction, but city in land dispute

BY ANNALISE FRANK

Todd Scott saw something unexpected while riding his bike to a Joe Louis Greenway informational meeting in southwest Detroit: construction equipment moving dirt.

The Detroit Greenways Coalition director’s sighting in 2019 has led to an ongoing legal battle the city has said will hold up progress in creating a 28-mile neighborhood-connecting loop around the city.

The pathway, envisioned in 2007 and named after legendary Detroit

boxer Joe Louis in 2017, is expected to start the first phase of its construction in May. The finished trail — previously estimated at $50 million but lacking a final cost — will stretch from the riverfront up to Hamtramck, Highland Park, along Livernois Avenue and connect to Dearborn.

Proponents hope it leads to new business and development alongside it. But moving the trail forward hasn’t come without roadblocks, including a physical one near Oakman Boulevard and Livernois Avenue in northwest Detroit.

Both the city and a commercial property owner claim they own 1.7 acres of land needed for the trail. So Detroit in March sued Dexter Doris LLC and the companies it leases to, Sun Valley Foods Co. and the Great Lakes Baking Co., over their encroachment on the land. The companies installed a gravel parking lot and barbed wire fencing on the property, cut trees there and piled contaminated soil and railroad ties 20-30 feet high, according to court documents.

See GREENWAY on Page 17

Former railway land in northwest Detroit at Dexter Avenue and Doris Street is under dispute as Detroit alleges private companies are trespassing on land the city bought for the Joe Louis Greenway project. Dexter Doris LLC says the land rightfully belongs to the company and its tenants, Sun Valley Foods and Great Lakes Baking Co. | ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

COMMERCE

NONPROFITS

Resettlement agencies look for possible refugee influx Plan to hire, re-engage with U.S. policy shift

BY SHERRI WELCH

er of the company with his wife Jenny. “Kids need it to survive.”

But lessons look a lot like regular lessons these days. The tropical vacation-like ambiance of before, which had differentiated Goldfish from competitors in the $5 billion swim school industry, has been traded for a more sterile, structured experience to comply with COVID-19 safety protocols. Face masks and face shields have become as common in the pool as water wings and goggles.

“We’ve just taken away a lot of the frills, which is disappointing but necessary,” McCuiston said.

“You come and learn to swim.”

For Rolly Bungala, an African refugee living in Southeast Michigan, a shift in federal policies to expand refugee resettlement in the U.S. can’t come soon enough.

A banker in his native Democratic Republic of Congo, Bungala was forced to flee on foot when longstanding violence — part of the socalled “African World War” — Bungala intensified and several of his family members were killed.

After hiding for months in the African wilderness, he found a refugee camp, where he lived for seven Dobner years. There he met the woman who would become his wife, and they had two sons.

In late 2018, Bungala learned he, alone, had been granted asylum in the U.S., since he had arrived at the camp alone and been processed as a single case.

He said a heartbreaking goodbye to his family and came to the U.S., praying they would soon follow.

While waiting for them to come here, Bungala, 40, applied for a green card and worked two jobs at a local hotel and restaurant before recently landing a higher-paying job as a forklift driver for a undisclosed Roseville company, said Kelli Dobner, chief advancement officer for Samaritas, the refugee resettlement agency assisting him.

See GOLDFISH on Page 20

See REFUGEE on Page 18

Since reopening Aug. 11 after being shut down due to COVID-19, Goldfish Swim School in Birmingham has implemented safety measures including face shields for instructors and plexiglass barriers around the pool. | GOLDFISH SWIM SCHOOL

IN THE SWIM, MASKS AND ALL

Goldfish Swim School lures franchisees to continue rapid growth

BY KURT NAGL

Goldfish Swim School locations lost millions of dollars in revenue when pools closed because of the pandemic, but the wave of franchise deals enabling the company’s rapid growth did not dry up.

The Troy-based franchisor, which began as a single location in Birmingham in 2006, set an ambitious goal a couple of years ago to hit 260 locations and $385 million in systemwide revenue by 2024.

Those expectations have not been reset.

“Parents are going to want their kids to learn how to swim forever,” said Goldfish CEO Chris McCuiston, who is co-founder and co-own-

Jenny and Chris McCuiston started Goldfish Swim School in Birmingham in 2006.| JOHN SOBCZAK / LORIEN STUDIO FOR CRAIN’S DETROIT BUSINESS

FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 3

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This rendering shows the vision for a new mixed-use development with 38 apartments and 6,000 square feet of commercial space on West McNichols near Livernois in Detroit. | INTERFACE STUDIO ARCHITECTS

$9.7 million residential, commercial development planned for McNichols A trio of Detroit developers is targeting a block on West McNichols for a new mixeduse development with 38 apartments and 6,000 square feet of Kirk commercial PINHO space.

The development, which is seeking about $1.1 million in brownfield reimbursements, is across three parcels totaling about 0.55 acres on the south side of West McNichols Road between Prairie and Monica streets three blocks west of Livernois Avenue.

Roderick Hardamon of Urge Development Group LLC, George N’Namdi of N’Namdi Holdings and Richard Hosey of Hosey Development LLC are spearheading the project, which is being referred to as 7303 W. McNichols.

Hardamon told me that the 38,000-square-foot building is expected to start construction in the third quarter and take about 15 months to complete.

“McNichols lacks new, fresh residential density,” he said. “If we were going to activate a commercial corridor, what better way than providing new residential density?”

The brownfield incentive application says that all 38 units are being targeted at those making between 60 percent and 80 percent of the federally designated Area Median Income. In the Detroit-Warren-Livonia metropolitan area, the AMI for a two-person household in 2020 is $62,800.

“Our target resident demographic includes university students and faculty from University of Detroit Mercy and professionals seeking viable options in a (Strategic Neighborhood Fund) area ... within a short commute of the city center and surrounding communities,” the brownfield application says.

The development team is also pursuing a 10-year property tax abatement, a Neighborhood Enterprise Zone property tax abatement and a Michigan Community Revitalization Program loan through the state. Federal New Markets Tax Credits are also expected to be used by one of the project’s lenders.

Hardamon and N’Namdi are also co-developers of the OSI Art Apartments @ West End on Grand River

Avenue, which broke ground in October in what is being branded as a new arts and culture district.

“We are going to incorporate art into this (McNichols) building, as we did on Grand River, and design of the building will pay homage to the homes in the neighborhood,” Hardamon said.

Philadelphia-based Interface Studio Architects is the project architect while Birmingham-based Lewand Construction LLC is the contractor.

Taubman CFO departing, will remain adviser Simon Leopold is leaving Taubman Co. LLC as its EVP and CFO following the Bloomfield Hills-based company’s merger with Indianapolis-based Simon Meeker Property Group.

“The responsibilities of a public REIT CFO are very different than they are for a private company,” a spokesperson said in an email. Benjamin Meeker is being promoted to senior vice president, CFO and treasurer from his current Taubman role of vice president, capital markets, and treasurer, according to a news release.

Leopold joined Taubman Centers in 2012.

SoMA project heads to planning commission The Detroit Planning Commission is to consider a zoning change for a proposed new apartment development at the southeast corner of Woodward and Mack avenues during a Feb. 4 meeting.

The proposed 350-unit apartment development by Farmington Hillsbased City Club Apartments, as currently envisioned, would have three buildings on the site generally referred to in development circles as South of Mack Avenue, or SoMA, which consists of about 7 acres owned by the Nyman family across Mack from the Midtown Whole Foods grocery store.

The project, dubbed City Club Apartments Midtown, would also include 41,500 square feet of restaurant, cafe, bank and retail space plus 186 underground parking spaces, according to a presentation to the Brush Park

Community Development Corp. I obtained this past summer.

It’s one of three projects that City Club Apartments is working on in town; the other two are downtown and in Elmwood Park.

Method Development buys Detroit properties The development company run by Rocky Lala and Amelia Patt Zamir has paid $3.5 million for a pair of properties in two separate deals in recent months.

First, Detroit-based Method Development LLC paid $2.5 million in November for the 18,000-square-foot building at 1315 Broadway St. downtown. That sale occurred in November.

Then earlier this year, the group paid $1 million for the 10,000-squarefoot Cass Community Social Services building at 3745 Cass Ave. Zamir said the company is focusing on five Detroit neighborhoods: Downtown, Midtown, Jefferson Chalmers, Milwaukee Junction and Brush Park.

“We have 12 projects amongst those, two actively under construction and some in the zoning process right now,” Zamir said.

The two under construction are the Erskine House in Brush Park, which is expected to have eight apartments at 304 Erskine St. in a $1.8 million project, and the Junction Lofts project at 2857 E. Grand Blvd.

The nonprofit Cass Community Social Services relocated to another location, the two developers said.

Hayman picks up suburban Chicago apartment complex Southfield-based landlord Hayman Co. has paid $86 million for a 464-unit apartment complex in suburban Chicago, or $185,345 per unit.

Andrew Hayman, president of the company, said The Aventine At Oakhurst North in Aurora, Ill., is 93 percent occupied.

According to CoStar Group Inc., a Washington, D.C.-based real estate information service, The Aventine at Oakhurst last sold in November 2016 for $68.25 million, or $147,090 per unit. The previous owner was JVM Realty Corp.

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

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HEALTH CARE

Michigan Medicine expands hospital at-home program Medicare patients to have option of recovering at home instead of being hospitalized

BY JAY GREENE

Medicare patients seeking emergency care at Michigan Medicine’s University Hospital in Ann Arbor will soon have the option of returning home instead of being hospitalized in a cutting-edge hospital at-home program.

Over the last year, doctors at Michigan Medicine have been developing programs and alternatives to hospitalization for patients with congestive heart failure, cellulitis, chronic obstructive pulmonary disease, pneumonia or urinary tract infections, said Dr. Grace Jenq, a geriatrics specialist and associate chief clinical officer for post-acute care at Michigan Medicine.

The five health conditions were selected based on the ability to treat at home and because of the high readmission rates for the conditions, Jenq said. The program is expected to improve patient outcomes, reduce readmissions and save money, she said.

“We are developing programs where we can take patients who come to the emergency departJenq ment acutely ill requiring medical attention and then provide that care — IV fluids, monitoring, nursing and physician care — in the comfort of the patient’s home,” Jenq said.

Earlier this year, Michigan Medicine was notified by the Centers for Medicare & Medicaid Services that they were approved to join the Acute Hospital Care at Home program for traditional Medicare participants. The first patients may be enrolled by spring.

It is believed to be the first such Medicare-approved program in Michigan, but one that many hospitals are expected to offer in the coming years as telemedicine programs and monitoring devices become more commonplace.

Two Michigan Medicine nurses demonstrate at-home monitoring devices and a special tablet that patients use to communicate remotely with providers | MICHIGAN MEDICINE

“The pandemic has driven the desire by patients to be at home whenever possible, and the need for hospitals to innovate in expanding our ability to care for patients with COVID-19 and those without,” said Jenq. “We take great care to ensure that each patient who receives care under these programs can do so safely, and with the help of our skilled team members and partners.”

It works like this. A patient is evaluated, treated and screened in the hospital emergency department for immediate care and also the hospital at-home program. If eligible, the patient will be offered remote care equipment and scheduled for home health, post-acute care visits.

Patients discharged to home are monitored by Michigan Medicine

physicians, nurse practitioners, nurses, paramedics, social workers and other team members.

Remote-monitoring equipment for patients includes for loan a special computer tablet for telemedicine conversations and a kit of Bluetooth tools that analyze blood pressure, blood-oxygen levels, weight, blood sugar, temperature and other vital signs.

Partners with Michigan Medicine include the Huron Valley Ambulance service of Emergent Health Partners, Health Recovery Solutions, TridentCare for mobile diagnostics and Advanced Medical Solutions Inc. for medical equipment.

The program also involves Michigan Medicine’s Home Care Services division, including Michigan Visiting Nurses, HouseCalls and the

HomeMed Infusion Pharmacy program.

After returning home, a patient would be seen and cared for by a nurse, a nurse practitioner or a physician. Laboratory tests would be drawn, their condition assessed and medication administered.

Based on the patient’s status, adjustments in therapy could be made by a doctor or nurse practitioner. If necessary, the patient could receive a second nursing visit later in the day and be supported by physical therapists and home health aides. Recovery time could be three to five days.

Jenq said recuperating at home is typically more restful than in the hospital. She said once patients experience care at home, they might refer friends and family, creating more demand for the model.

Steve Anderson, Blue Cross’ vice president of provider contracting and network administration, told Crain’s Blue Cross learned of this type of care model from a similar approach at Mount Sinai Hospital in New York.

Patients reported fewer readmissions, fewer emergency department visits and better experience, he said.

“It’s an innovative approach to meeting people where their needs are while being able to rest and recover in their own beds,” said Anderson in a previous interview.

If the model is successful, Anderson said Blue Cross is likely to expand it to other hospitals and possibly physician organizations that contract with hospitals.

Michigan Medicine already has three other smaller hospital at-home programs underway.

Last fall, Michigan Medicine began offering an at-home program for COVID-19 patients who have been hospitalized. Some 43 patients with COVID-19 have recovered at home with the university’s post-acute care team and another 35 are active in the program, Jenq said.

“In just our first months of using this program, we’ve had many saves where patients received needed adjustments to their medications, or scheduled for diagnostic tests,” Jenq

said.

Another pilot program funded by Blue Cross Blue Shield of Michigan offers Washtenaw County patients who qualify for an inpatient stay but can be transitioned directly to home participation in the at-home program. Eligible patients include those with some commercial and Medicare Advantage Blue Cross plans.

“We started the commercial program with Blue Cross back in July, but we actually struggled quite a bit because what we found is that the commercial patients are a younger population who don’t have these illnesses like congestive heart failure, skin infections, kidney injury, and urinary tract infections,” Jenq said. “It was actually quite difficult to find eligible patients for the program.”

Last December, Michigan Medicine and Blue Cross opened up the athome program to Medicare Advantage patients, Jenq said.

While not all Medicare patients will qualify, Jenq said some with multiple chronic conditions, who have probably had experiences in the hospital for a flareup of one of their illnesses, can be enrolled, Jenq said.

On average, Michigan Medicine admits eight to 10 Medicare patients from Washtenaw County every day.

“Of those eight to 10 patients, probably one or two are eligible for the program,” Jenq said. “That means that they have an acute illness, that we think that we can safely provide care in the home, meaning that all they really need is some IV fluids, IV medications like antibiotics or a diuretic to help get water off.”

Earlier in 2020, when the COVID-19 pandemic was just striking, Michigan Medicine began a telemedicine program called Patient Monitoring at Home, which has helped hundreds of patients with a wide range of conditions, officials said. It was funded by the Federal Communications Commission’s COVID-19 Telehealth Program. More than 100 patients are enrolled at any given time.

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

PEOPLE

Ira Jaffe retires from law firm he founded, starts business Consulting firm will work with clients on succession and estate planning, trust disputes

BY DUSTIN WALSH

Ira Jaffe pulls his golf club cart around the country club near his winter condo in Naples, Fla., a few days a week. It’s an exercise in boredom, but exercise nonetheless.

The 81-year-old attorney retired from Southfield-based Jaffe Raitt Heuer & Weiss, the law firm he founded in 1968, at the end of last year. A year earlier, he stepped down as the president and CEO of The Fisher Group, which handles the financial affairs of the Max Fisher family.

But retirement doesn’t agree with Jaffe.

“Since I started working 60 years ago, work always equaled fun,” Jaffe said. “It doesn’t have the connotation of negative for me, even now. I 6 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

Ira Jafffe, longtime metro Detroit attorney and founder of Jaffe Raitt Heuer & Weiss, has founded his own consulting firm at 81 years old. | IRA JAFFE CONSULTING

want to be busy using my energy in productive ways.”

Jaffe’s restlessness led to the founding of his own consulting firm, Ira Jaffe Consulting LLC, last month. The octogenarian said the consulting work is a carryover from the kind of work he was performing at his law firm as he aged.

“At my stage of the game, what I had been doing for years would be called consulting,” Jaffe said. “Almost 20 years ago, I was running everything at the firm. We had a consultant come in to talk about strategic planning and he sat me down and said ‘Ira, do you love this firm? Then you must stop being the managing partner and set up a true board of directors and have a plan for client succession.’ So that’s what I did. This is the culmination of that

plan. Now it’s my time to share what I’ve learned.”

Under his consulting firm, Jaffe will consult high-net worth clients on succession planning, business planning, estate planning, advice on family and trust disputes, family foundations and board membership.

Jaffe’s board membership has been prolific throughout his career, with stints on nearly a dozen family foundation and nonprofit boards, including: The Fred A. & Barbara M. Erb Family Foundation; Cranbrook Educational Community; Cranbrook Institute of Science; McGregor Fund; Beyond Basics; The Parade Company; Detroit Zoological Society; eLab Ventures; and Michigan Capital Advisors.

He’s also the current chairman of the board for commercial real estate

development firm Redico.

Jaffe said several clients of the law firm are using his new consulting services as he’s maintained several relationships for many years.

“Most of my clients don’t want to change counsel, but want a set of new eyes ... ,” Jaffe said. “They usually know the answers. They just need someone with the gray hair and the experience to say to them, ‘Don’t make these mistakes.’”

He already has a small business office in Naples and plans to establish one in metro Detroit in the coming months.

Jaffe plans to work from 7 a.m. to noon most days or as clients demand his assistance.

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

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Lead Arranger & Administrative Agent

$6,000,000,000

$982,100,000

$1,250,000,000

$128,000,000

$1,250,000,000

Senior Secured Notes Offering

Follow-On Offering

Floating Rate Notes Offering

Senior Credit Facilities

Senior Unsecured Notes Offering

Diversified Industries

Entertainment, Lodging & Leisure

Energy, Power & Utilities

Consumer & Retail

Energy, Power & Utilities

Joint Lead Arranger & Joint Bookrunner

Joint Lead Arranger & Joint Bookrunner

Administrative Agent, Joint Lead Arranger & Joint Bookrunner

Joint Book-Running Manager*

Joint Book-Running Manager*

$3,215,000,000

$625,000,000

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Joint Book-Running Manager*

Joint Book-Running Manager*

Senior Unsecured Notes

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$90,000,000

$450,000,000

$1,200,000,000

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Healthcare

Joint Book-Running Manager*

Healthcare

Technology, Media & Telecom

has been acquired by

sold a 294 MWDC utility-scale solar project to

$2,825,000,000

Diversified Industries

$625,000,000 Consumer & Retail

a portfolio company of

has been recapitalized by

has completed a recapitalization

has been acquired by

M&A Advisory*

M&A Advisory*

M&A Advisory*

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Tech-Enabled Business Services

Healthcare

a Leading Private Equity Buyer M&A Advisory*

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*Transaction completed by Fifth Third Securities.

Fifth Third Capital Markets is the marketing name under which Fifth Third Bank, National Association, and its subsidiary, Fifth Third Securities, Inc., provide certain securities and investment banking products and services. Fifth Third Capital Markets offers investment banking††, debt capital markets†, bond capital markets†, equity capital markets††, financial risk management†, and fixed income sales and trading††. Fifth Third Bank, National Association, provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Coker Capital Advisors is a division of Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA / SIPC, a registered broker-dealer and registered investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training.

Securities and investments offered through Fifth Third Securities, Inc.: Are Not FDIC Insured | Offer No Bank Guarantee | May Lose Value | Are not Insured by any Federal Government Agency | Are Not a Deposit †Services and activities offered through Fifth Third Bank, National Association. ††Services and activities offered through Fifth Third Securities, Inc. Deposit and credit products offered by Fifth Third Bank, National Association. Member FDIC. Equal Housing Lender.

Credit products are subject to credit approval and mutually acceptable documentation.

COMMENTARY

COMMENTARY

In the game of life, a GameStop moment “I

’m in the GME game now.”

Thus began my son’s introduction to the world of investing.

Let’s roll back the tape a little. Last Tuesday, my 18-year-old casually asked if I had seen what was happening with GameStop.

I asked if they had filed for bankruptcy.

He then introduced me to the tale that took over the financial world last week.

GameStop’s stock price had been driven skyhigh by traders organizing from the message board on Reddit known as r/wallstreetbets.

The crusading traders were looking to squeeze short sellers who had bet against the company. And make some money in the process.

At the time, “sky-high” meant the shares of the video-game seller had gone over $140 in a runup of a couple of weeks, up from around $18 before Christmas. They’d spiked especially hard that day.

“I should open a Robinhood account, I know that subreddit,” he said.

I told him that it was a fun story but might not be the greatest idea, and that day trading and market timing isn’t even possible, and it’s a sucker’s game to try. Nice, boring investment advice gleaned from years of experience in financial journalism.

I didn’t think much more about it. I followed the GameStop story the next day and was amazed the stock had continued its ascent and it became the talk of the nation.

And then, that afternoon, he texted me to announce his foray into the market.

“It’s a little late for that,” I responded, asking how what he bought and how much he paid.

Turns out he was in for two shares at $340 a share.

“I have failed,” I thought.

“But I’ve got a stop loss set so I can’t lose too much,” he texted. OK, then.

He’s one up on me in life experiences. I’ve never in my life owned stock in an individual company. For most of my career covering businesses, ethic AND THEN, THAT rules about stock and not AFTERNOON, HE ownership writing about assets you own precluded it.

TEXTED ME TO Index funds that I ANNOUNCE HIS never had to look at FORAY INTO THE were always my investment of choice.

MARKET. The psychology of the (mostly) young investors who drove this roller coaster is fascinating. It’s one part gambling, one part social justice, and one part tolerance for risk that is both inspiring and terrifying. Apparently when you’ve been stuck in your room for most of a year, you work up an appetite for something, anything, exciting.

I marvel at what that might mean as we hopefully enter the post-pandemic era.

The minute-by-minute play by play has been fun. It’s hard to convey on paper or a screen the exultation of a shouted “WE’RE ON THE WAY BACK UP!” and the intensity of theorizing that the stock started falling at

Michael

LEE

Managing Editor

Michigan’s Department of Health and Human Services offices in Lansing.

The case for Whitmer to break up MDHHS

G $420 because many investors wanted to sell at a price equal to the slang term for cannabis.

I’ve told him that if he gets back to breakeven, he should sell — and forever have a memory of a crazy two-day gamble of fun that he’ll probably never get a chance to repeat.

As of this writing, he’s still in the stock, riding it all the way down below $200 and now back up to about what he paid for it. We’re still in. I’m not sure I know why.

The GameStop soap opera has opened up all kinds of questions, about what constitutes market manipulation and who gets to do it.

What does it mean for markets in the future? I’ll be damned if I know. The power of the crowd has changed so many things: how politics are paid for, the tenor of public debate, and now it’s come for the world of finance.

Is driving up a stock in order to make a point about market manipulation itself manipulation? Are the true believers pumping and dumping?

I don’t know. In 20-some years of covering the business beat, I’ve never seen anything like this.

Two things I do know: It’s nice to have something to talk about with your teenager in the game of life. And if GME gets to $420, we’re selling. So says the newly minted investor.

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.

ov. Gretchen Whitmer’s promotion of Elizabeth Hertel as director of the Michigan Department of Health and Human Services offers an opportunity to break up the state’s largest agency and reshape how public health services are delivered after the coronavirus pandemic.

MDHHS is a behemoth, the result of former Gov. Rick Snyder merging the community health and human services departments like they were two homogeneous corporations in need of a marriage.

With 14,244 employees, a $25 billion operating budget and a customer base that’s easily one-third of the state’s 10 million residents, MDHHS on its own could be the state’s 15th-largest employer, between the U.S. Postal Service (18,000 employees) and Michigan State University (11,850), according to Crain’s company data.

The director of this state department that oversees the payment of billions in tax dollars to private insurance companies that manage the Medicaid insurance program for the poor is paid $182,070 a year to run it.

For some perspective, that’s 1.5 percent of the $12.1 million that not-for-profit Blue Cross Blue Shield of Michigan paid CEO Daniel Loepp in 2019 to lead one of the insurers that manages Medicaid program for the state.

Outgoing Detroit Zoo CEO Ron Kagan and

LIVENGOOD

four of the zoo’s top executives are paid more than the MDHHS director to manage a zoo with a $45 million annual budget.

The median base pay of CEOs at 59 Southeast Michigan nonprofit organizations in Crain’s annual survey last year was $390,088 — more than twice what Hertel will be paid this year.

The MDHHS director’s responsibilities are seemingly endless: You oversee child welfare and adoption, tracking communicable diseases, programs to help the homeless, managing food and cash assistance for the poor and so much more.

And as former MDHHS Director Nick Lyon and chief medical executive Dr. Eden Wells have found out in Flint’s water crisis, if you don’t pay close enough attention to one fire that you think the scientists in the bureaucracy have handled, you could get prosecuted for involuntary manslaughter.

See MDHHS on Page 20

LETTER TO THE EDITOR

The curious case of Flint’s criminal water charges TO THE EDITOR: Chad Livengood’s account of the indictment of former governor Rick Snyder (“Charges put executive decision making on trial,” Jan. 18) needs a supplement.

First, the indictment was returned by a Genesee County circuit judge, sitting as a one-man grand jury. Second, it is being prosecuted by the attorney general’s office.

Genesee County circuit judges are known for their parochial jurisprudence and are beholden to the residents of Genesee County for their position. The attorney general is beholden to the voters, many of whom are generally unfamiliar with her position, etc. Both are pol-

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.

8 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

Chad

iticians in a manner of speaking.

Why wasn’t a visiting judge chosen to preside and a special prosecutor appointed? This is customary in cases having a high political quality.

Also, at the press conference announcing the indictment reporters were told that evidence supporting probable cause was a grand jury confidential and could not be disclosed. This makes no sense. The first stage after a grand jury indictment is a preliminary examination in open court determining whether or not there is probable cause to support the charge.

Avern Cohn U.S. District Judge, retired

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

Politics will be judged, whether you stay silent or not

BY LYNNE GOLODNER

On Jan. 6th, I live-streamed CNN while trying to work. I grew distracted as rioters spidered up the Capitol walls.

I groped for words, wonderLynne Golodner ing how to make sense of what I is owner and was seeing. chief creative It felt far away officer of Your and yet very near.

People LLC As everything unfolded beyond the setting sun, words swirled in my head, barely forming sentences.

The next morning, I clicked back into gear and messaged a client.

“Would you like my help creating a statement about yesterday?”

The client took a while to respond, processing. Surely, they had to say something, but what? Were they speaking to their board? Customers?

Staff? Industry? The public? Should they respond immediately, or take time to marinate the message?

I reached out to other clients, posing the same question, tweaking the message for each unique industry and audience, assessing the people who turn to them for guidance. Each embraced the necessity of saying something, in their own way.

Every time something explodes on the national or global stage, I help people find the right words to address it. Last year, I helped clients write statements in response to the murder of George Floyd, Black Lives Matter marches in their communities, vitriolic election politics, the raging pandemic. I guide business and educational leaders on what to say — and whether to say anything at all.

Speaking out comes naturally to me because I did not set out to be an entrepreneur. I began my career as a writer, seeking to say things that needed saying. But then, venturing into business, I wondered — was it my place? Weren’t my personal politics private? Or did I have a responsibility to chime in when controversial or inaccurate things emerged?

You don’t have to lead a multimillion-dollar, multinational corporation to be an impactful leader. If you lead a company or community, people look to you for guidance. There is a responsibility that comes with leadership that we cannot ignore. Even when it’s uncomfortable, people in power must speak to truth.

People do business with people.

Businesses depend on people to grow and thrive and stay alive. And people are impacted by words, actions, and movements. We are relentlessly intertwined, whether we like it or not.

When the Sandy Hook Elementary School shooting happened in 2012, I was at work, nose deep in writing press releases and creating marketing strategies. My children were 6, 9 and 10. An employee with kids of similar ages came into my office, ashen-faced and wide-eyed. “Did you hear what happened?” she said.

We wept in the conference room, as mothers and as women. It was impossible to leave that at the door to our office. And I don’t think we should have.

We don’t move through life in segments. We are our thoughts, feelings and beliefs, all of the time. When ur-

gent issues burst forth — like sys- Express, Dow, Blue Cross Blue temic racism, violent insurrection, Shield, to name a few. And people or a global public health crisis are paying attention.

I teach people how to market with claiming the lives of nearly half a million Americans — people in YOU MAY NOT WANT TO MAKE A STATEMENT positions of power must ON CURRENT EVENTS, BUT IF YOU DON’T, speak.

In the wake of YOU WILL BE JUDGED ANYWAY. PEOPLE Jan. 6, big brands WILL PATRONIZE YOUR BUSINESS — OR made a collective statement by AVOID IT — REGARDLESS. withdrawing funding from politicians who sym- meaning. I urge them to ask “why” pathized with or encouraged the in- they do what they do, “why” their surrection. Marriott, Walmart, Hall- customers come to them. Business mark, MasterCard, American is a relationship between company

a 24/7 culture.

You may not want to make a statement on current events, but if you don’t, you will be judged anyway.

People will patronize your business — or avoid it — regardless.

So take a stand. Speak up and speak out. Be brave. Don’t shed your integrity at the office door. Be a force for a better tomorrow.

After all, we won’t be remembered by individual transactions, by which clients left and which clients stayed.

We will be remembered by the legacy we build, and the platform we champion, which comes from a lifetime of staying true to the values we lead with.

and clientele.

We build business by building relationships, by realizing that mutual benefit transcends transaction. To build a lasting business, you have to care about your customers.

People choose to engage with you not only because of what you offer, but also for what you represent. You don’t stop being you when you enter the office. The values that propel you to do work that matters also inform how you vote — and we don’t just vote in the polls.

Even off the clock, people are watching — especially if you post on social media, personal life alongside professional wins. We cannot hide in

K I C KO F F E V E N T

FEB.25 | 3:30 P.M. FEATURING

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Oakland County is home to 50 million square feet of office space — more than 60% of the total office space in metro Detroit. As many employers await a full return of their workforce to their physical office, hear from industry leaders about what to expect in 2021.

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FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 9

SPACED OUT Pandemic causes companies to reconfigure their workspaces.

REAL ESTATE: OAKLAND COUNTY

PAGE 12

READING THE ROOM Increase in tenants looking to sublease unused Oakland County office space may foreshadow future of market

Metro Detroit’s office market is 20.2 percent vacant, up 2.6 percentage points from Q4 2019.

BY KIRK PINHO

The amount of sublease office space in Oakland County has increased by more than 51 percent since the COVID-19 pandemic began.

Mundane as that may sound, it may actually become a big, hairy problem for landlords in the region’s largest office market because, brokers say, it’s unlikely that any of the tenants who have put their space up for sublease will reoccupy it before their leases expire.

That means we are getting a glimpse of what the future may portend.

Data provided by the Royal Oak office of Chicago-based brokerage house JLL (formerly Jones Lang LaSalle) shows that in Q1 last year there was 569,717 square feet of subleasable space in Oakland County, but by Q4 last year it jumped to 862,550 square feet.

10 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

“THE SHEDDING OF SPACE WAS NOT LIKE THIS BY ANY MEANS. THERE IS JUST SO MUCH SUBLEASE SPACE AND PEOPLE JUST AREN’T TAKING IT.” — Steve Morris, managing principal, Axis Advisors LLC

As a percentage of the total market size of nearly 39 million square feet, it went from 1.47 percent to 2.21 percent.

How does that compare to the region’s office market during the Great Recession?

“It was nothing like this,” said Steve Morris, managing principal of Farmington Hills-based brokerage firm Axis Advisors LLC, which specializes in tenant representation. “The shedding of space was not like this by any means. There is just so much sublease space and people just aren’t taking it.”

Overall, Metro Detroit’s office market is 20.2 percent vacant, up 2.6 percentage points from Q4 2019, according to JLL. The tenant is still responsible for paying rent to the landlord on the entirety of its leased space, but can sublease some or all of that space

to another tenant.

With many companies still allowing their employees to work from home during the COVID-19 pandemic, some are looking to offset some of their costs for unused space.

Among those not needing all of its leased space: Blue Cross Blue Shield of Michigan is looking for someone to pick up 118,000 of its square feet in the Omni Officentre at 26899 Northwestern Highway in Southfield. At $16.75 per square foot per year, that’s a monthly rent bill of $164,815 the health provider is trying to defray.

A spokesperson for BCBSM said they have moved from the Omni Officentre to the Blue Care Network Commons building which “supports placing resources adjacent to other company operations.”

See SPACE on Page 14

Th h

BY K

O ence ticip duri Con of S land com man floo crea spre “W muc

m t . s d e n t s e

d i k o

4

LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

e

The business of office reconfiguration has been worse than you think

BY KIRK PINHO

One local company didn’t experience nearly as much business as anticipated in rearranging office space during the COVID-19 pandemic.

Continuum, which is a business unit of Southfield-based developer and landlord Redico LLC, and its parent company said they didn’t have as many clients seek to reorganize their floorplans to accommodate for increased distancing to prevent the spread of the deadline virus.

“We thought that number would be much greater because we thought

people would want to socially distance in the office and put up barriers in the office space,” said Dale Watchowski, president, COO and CEO of Redico.

“Our expectation early on was that many of our tenants would be asking for it upon renewal, asking for us to reconfigure their suites, but we just haven’t seen that. While there are some of our tenants who have reconfigured their office space and added dividers, separated their desks, the vast majority have not made any decisions like that.”

Ted Spicer, Continuum’s COO, said there was a 35 percent decline in construction services.

“The office improvement market was essentially non-existent in 2020,” he said in an email. “We had focused on office dedensification to prepare occupiers for business postCOVID-19, but most occupiers are not ready to make decisions based on unpredictable conditions of the pandemic. Whether it was direct marketing or through our general contractor partners, office remodel hasn’t yet rematerialized. We are expecting 2021 construction services to be at 40 percent of 2019 levels.”

See RECONFIGURE on Page 12

FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 11

FOCUS | OAKLAND COUNTY REAL ESTATE

How HAP — and others — are rethinking workspaces COVID-19 pandemic causes companies to reconfigure seating, desk arrangements

BY KIRK PINHO

Sometimes you just need to start fresh.

So Health Alliance Plan, as the COVID-19 pandemic has caused companies across the country to rethink their workspaces, decided to do just that on one of its floors in the former United Wholesale Mortgage (then United Shore Financial Services LLC) headquarters on East Maple Road in Troy.

“We took one of the floors and we took all the cubicles out and, right now, trying to find a market for office furniture, good luck,” said Mike Treash, COO for HAP, which is a subsidiary of Detroit-based Henry Ford Health System and was founded in 1956 by the United Auto Workers.

HAP joins countless other companies in embarking on new ways of reconfiguring their space as the global health crisis continues to steamroll through 2021. Some have been more dramatic than others.

“People want to have something protecting them,” said Andy Gutman, president of Southfield-based brokerage firm and property manager Farbman Group. “We’ve done that with a lot of glass and moving partitions. ... If you walk into an office and cough, everyone is running to the other side of the office. There is a period of PTSD that people will have before they get comfortable again.”

Melissa Price, president of Southfield-based commercial interiors company AIREA Inc., said her firm’s clients haven’t undertaken vast remodeling during the pandemic but have done more thoughtful refreshing of space as many office employees continue to work from home.

“It hasn’t been wholesale overhaul,” she said.

As an example: “The seating arrangements are not a sofa anymore, it’s multiple individual chairs with a tablet on it,” Price said. “It gives the individual space and a little distance vs. sitting right next to each other.”

A collaboration space for stand-up meetings at Health Alliance Plan. | HEALTH ALLIANCE PLAN

More flexibility HAP leases 105,000 square feet from its parent company in the 150,000-square-foot building still owned by the now-publicly traded mortgage giant (NYSE: UWMC) based in Pontiac.

Among the “low-tech stuff” that is being done on the floor is creating temporary movable walls using curtains so the spaces can be scaled up or down. Audio/visual technology was installed. Plexiglass barriers

RECONFIGURE

From Page 11

Part of the reasoning for stagnation, Watchowski believes, is that many office workers continue to work remotely from their homes following a surge in positive cases this fall. To date, more than 602,000 confirmed and probable cases of the disease have been reported along with more than 15,000 confirmed and probable deaths.

Melissa Price, president of Southfield-based Airea Inc., which has an

A new office configuration at Health Alliance Plan. | HEALTH ALLIANCE PLAN

office in the Southfield Town Center office complex, said the building her company occupies is largely empty these days.

“There aren’t too many folks we Watchowski see on a day-today basis,” she said. “Where it’s office work, folks are working from home.”

In October, Gallup found that onethird of the workforce was “always” working remotely, while 25 percent

12 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

sometimes did and 41 percent never did. In April, 51 percent were “always” working remotely, according to Gallup.

Across the board, experts said a wholesale work-from-home future is not in store.

“We are at our most creative and effective when we interact,” said Andy Gutman, president of Southfield-based Farbman Group, a landlord and brokerage firm. “A lot of people, they are tired of being on the screen at home. They can’t get as much work done with the dog barking and kids screaming. Yes, there are

were installed. Desks were spaced out more.

HAP spent a couple hundred thousand dollars on the project, which was designed by Southfield-based Harley Ellis Devereaux Corp., with the full understanding that it may be a bust.

“The thing I asked was, man, we’ve got to make this flexible because, I don’t know, it may not work,” Treash said.

He noted that in the future, out of the 1,000 or so workspaces it had in the building before the pandemic started, it may only need 600-800 of those after it ends as it allows people to work from home permanently or on a part-time basis.

That, the company said, is going to be part of the human-resources equation for years to come.

“With many employees becoming

increasingly comfortable working from home, and knowing that most companies have the technology in place to support a work-from-home option, it’s become fairly standard for job seekers to ask whether we offer the opportunity to work remotely either full time or part time,” said Derick Adams, HAP’s vice president of human resources.

“We’ve found that this can be one of the differentiators when a job seeker is deciding on a company,” he continued. “At HAP, it has also expanded our ability to hire people who may not be geographically close to our building but who are the best fit for the job. So far, it’s been win-win for employer and employee.”

introverts out there that work better on their own, but I think we all work better and provide a better everything when there is collaboration and you feel a sense of community, and as a company you feel a part of that organization.”

But even though the space reconfiguration hasn’t been as robust as initially anticipated, it hasn’t all been a loss for Redico.

Another business unit, Aquis, which does things like refurbish and optimize mechanical air handling units and their components in commercial buildings, and optimization

of mechanical air handling units and their components, has seen a surge, Watchowski said.

“Their sales have been extraordinary because everybody is looking for clean air,” Watchowski said.

“Continuum Services has seen a substantial uptick in services related to indoor air quality including filtration upgrades, UV light systems and our AtmosAir bipolar ionization product,” Spicer said. “Sales in those product lines are at an all-time high.”

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

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

CARING FOR KIDS SPONSORED CONTENT

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

Advocating for the health & wellness of children and families

About this report: On this monthly radio program, The Children’s Foundation President and CEO Larry Burns talks to community, government and business leaders about issues related to children’s health and wellness. The hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired January 26th; listen to the entire episode, and archived episodes, at yourchildrensfoundation.org/caring-for-kids.

Matt Friedman, Co-Founder, Tanner Friedman; Chair, Board of Directors, The Children’s Foundation

Larry Burns: How has Tanner Friedman adjusted to the pandemic?

Matt Friedman: Change impacted everything and communicating change has become imperative. That’s what my colleagues and I have spent a disproportionate amount of our time doing.

It’s been a tremendous amount of work, and on one hand it’s been gratifying; on the other hand, it’s some of the best professional experience I never want to have again.

Burns: Can you give us a snapshot of how 2020 was for The Children’s Foundation?

Friedman: The Foundation granted about $500,000 in emergency funding to over 50 organizations last year. It became obvious to us in the first weeks of the pandemic that the children we serve were going to have different needs than we had forecasted and anticipated. At the same time, the needs that we were prepared to serve were not going to go away. We needed to put more money into the community. Our staff and board worked together very quickly to do that.

Burns: The Foundation

celebrated its 10th anniversary as an independent foundation on January 1. As chairman, what are some of your goals as we enter 2021?

Friedman: Looking to the future, we know that we have not yet met all kids’ health needs — the challenge is let’s do more with more. Let’s raise more money. Let’s have more partners. Let’s focus on more programs so we can help more kids.

Burns: We now have eight strategic initiatives, including mental health. Can you tell us about that?

Friedman: Mental health has been stigmatized and underfunded for far too long. As we’ve seen during the pandemic, kids suffer from mental health challenges just like adults do, but kids don’t always have the resources that adults do.

We see an opportunity as a foundation to fill those gaps and allow kids to get the mental health services that they need.

Burns: Our affiliates include the Jamie Daniels Foundation, Leaders for Kids, and most recently, First Tee – Greater Detroit. Why did The Foundation bring on these affiliates as part of our family?

Friedman: We have the infrastructure to be able to do more with them than they’d be able to do on their own. We also have reach in the community that would take years for any of these organizations to try to establish on their own.

Chris Lambert, Founder and CEO, Life Remodeled

Larry Burns: You started Life Remodeled in 2010, built houses for three years, and then you partnered with the Detroit Public Schools.

You’ve mobilized $35 million and nearly 70,000 volunteers over the last seven years to set the groundwork for sustainable change in four different Detroit neighborhoods. Tell us about that.

Chris Lambert: We started renovating high schools in Detroit: Cody Rouge in 2014, Osborn in 2015 and Denby in 2016.

Each of those were about $5 million investments in the school and the surrounding community.

They involved 10,000 volunteers every summer, beautifying four square miles around that school.

Then we purchased a vacant building — formerly home of Durfee Elementary-Middle School. We repurposed that into a one-stop shop of opportunity. We have filled this building with 34 of the best nonprofits and several for-profit entrepreneurs who are moving the needle collectively on education, jobs and human services.

Burns: The Children’s Foundation has several partners in your Durfee

location and we hope to expand our relationship.

Lambert: In 2017 we bought a church building, St. Clement Church, on the east side of Dearborn.

It has 20,000 square feet of space and allows us to increase the programs and reach more people.

Burns: You recently received a grant from The Children’s Foundation. Call you tell us about that?

Lambert: The Children’s Foundation and Life Remodeled have a lot in common. We’re both big believers in collaboration and in connecting nonprofits to one another. We both believe that no one nonprofit has all the solutions to society’s challenges.

Burns: What are some of the things that you’re working on in Durfee?

Lambert: We have 34 organizations serving 14,000 people: 5,000 kids with education, 5,000 adults with good sustainable jobs, and 4,000 children, youth, and adults with human services.

We’ve added some common spaces, turned a locker room into a free video game arcade for kids involved in afterschool programming.

We also put in a free laundromat. Kids are often truant from school in Detroit because they lack access to facilities to wash their clothes. We added an after-school tutoring space because the demand for tutoring and mentorship is so high.

Blythe Tyler, President and CEO and S. Eliot Weiner, Chair, Board of Directors, CARE House of Oakland County

Larry Burns: Eliot, why have you chosen to be so involved with CARE House of Oakland County?

S. Eliot Weiner: One in ten children will be sexually abused before they turn 18. CARE House is a big part of the solution, offering high quality services to families, treating victims of sexual abuse and working hard to prevent future abuse through educational programs.

Burns: How has the pandemic impacted the organization?

Blythe Tyler: Since we’re unique to Oakland County — we’re the only ones providing forensic interviews, working with law enforcement, as well as treating child sexual abuse victims — we had our doors open the entire time. We expect our numbers are going to rise as things start to open up, because 40 percent of suspected abuse reports come from schools. We see 125 clients every week in our therapy department. When the shelter-in-place order started, we were able to pivot to telehealth. We’re now operating about half in person and half via telehealth. Overall in 2020, our supporters,

including The Children’s Foundation, have stepped up to allow us to maintain all of our core services.

Burns: Tell us about the grant you recently received from The Children’s Foundation.

Weiner: The Children’s Foundation has been supporting CARE House for four years and the focus of the grants has been on our community education programs.

These programs focus on prevention — training parents and mandated reporters like teachers in how to identify and correctly report suspected abuse of children. With the support of The Children’s Foundation we’ve been able to train an additional 10,000 people. CARE House is the expert on treating child abuse victims but ideally we’d like to put ourselves out of business by preventing child abuse altogether.

Unfortunately, more than 60 percent of kids who are sexually abused will never tell anyone.

We want to change that. Today, mandated reporters are not required to take training and we want to change that too. That’s what we are working towards with leaders in Lansing.

LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

FOCUS | OAKLAND COUNTY REAL ESTATE

The region’s second-largest office complex at 2.2 million square feet, the Southfield Town Center, has more than 121,000 square feet across multiple leases that are actively being marketed for new tenants.

— AJ Weiner, office space expert, JLL

the first quarter last year, which made up 1.24 percent of the market.

Some real estate companies tabulate the size of the office market differently. For example, the Southfield office of Newmark (formerly New-

mark Knight Frank) says there is about 78.1 million square feet of office space, with more than 50 million in Oakland County.

Either way, the problem is a big one.

“We were already overbuilt for office space in Detroit heading into COVID and this only exacerbates the problem,” said AJ Weiner, an office space expert in the Royal Oak office of JLL, where he is managing director. “As an owner looks at rent rolls, that almost assures they won’t be renewing (for that sublease space) at the end of the term. Landlords say the tenant won’t be here long term and I’ll have an issue down the road.”

That’s putting some office landlords in a bind.

The bigger, multigenerational and well capitalized landlords of Oakland

Oakland County subleases In the first quarter last year, there was 569,717 square feet of subleasable space in Oakland County, but by the fourth quarter it jumped to 862,550 square feet.

1,000,000

2.21% 2.5%

800,000 600,000

1.37%

1.5

400,000

0

1.0 862,550 sq ft

200,000

SOURCE: JLL

14 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

2.0

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 YTD 2021

0.5 0

Percent available

The spokesperson said 70 were in the Omni Officentre building when they moved in December.

Delphi Technologies, which was acquired last year by BorgWarner Inc., is looking for someone to occupy all of its nearly 102,000-squarefoot owned building in Troy at 5825 Innovation Drive. With rents at $15.95 and $16.95 per square foot per year, Delphi’s bill is $139,555 per month.

The region’s second-largest office complex at 2.2 million square feet, the Southfield Town Center, has more than 121,000 square feet across multiple leases that are actively being marketed for new tenants, according to data Morris compiled from CoStar Group Inc., a Washington, D.C.based real estate information service.

Between those tenants, that’s approximately $188,000 per month in rent payments.

And the Travelers Towers office complex in Southfield, which clocks in at 810,000 square feet, has about 84,200 square feet up sublease across five leases bringing in nearly $128,000 per month.

And that’s just the start of it.

In Metro Detroit, JLL says there was 993,023 square feet of sublease space, accounting for 1.46 percent of the 68.2 million-square-foot office market, in the fourth quarter. But year to date so far, the sublease space available is nearly 1.2 million square feet, or 1.75 percent of the market.

That’s up from 837,580 square feet in

532,114 sq ft

From Page 10

“WE WERE ALREADY OVERBUILT FOR OFFICE SPACE IN DETROIT HEADING INTO COVID AND THIS ONLY EXACERBATES THE PROBLEM.”

Available square feet

SPACE

CRAIN’S DETROIT BUSINESS GRAPHIC

“IF A LARGER TENANT IN A BUILDING THAT’S HIGHLY LEVERAGED STOPS PAYING RENT OR FILES FOR BANKRUPTCY, THEY ARE GOING TO BE IN TROUBLE TRYING TO FILL THE SPACE.” — Greg Bockart, executive managing director in the Detroit office, Savills plc

County — Friedman Real Estate, Redico LLC, Hayman Co. for example — are likely to experience a little short term pain but will ultimately emerge from the pandemic.

“In 2020, a bomb was dropped,” said Andrew Hayman, president of the eponymous Southfield-based real estate ownership and management firm. “This year will be the assessment of the damage and 2022 is when you’ll be able to see the true effects.”

And Dale Watchowski, president, CEO and COO of Redico, said his firm hasn’t felt much pain on its balance sheet.

“Our portfolio continues to perform well. We are doing well both in Oakland County and in the city of Detroit. Our occupancy levels are in the high 90s.”

But smaller office landlords, those who are more highly leveraged, may

feel the pain more acutely, experts said.

“If a larger tenant in a building that’s highly leveraged stops paying rent or files for bankruptcy, they are going to be in trouble trying to fill the space,” said Greg Bockart, executive managing director in the Detroit office of London-based brokerage Savills plc (formerly Savills Studley Inc.).

His company notes a 25 percent increase in sublease space in the fourth quarter.

How the office space issue plays out in Oakland County could be a guessing game, depending on the firm.

“Some companies are going to look for more spacing, which would drive square footage (requirements) up, while other companies are utilizing a hybrid of hoteling with remote working, which would drive space requirements down,” said Erica Dunlap, senior associate for Southfield-based brokerage Signature Associates Inc. Hoteling involves staggering employee schedules so that two employees can use the same space through, for example, one working in the office on Mondays, Wednesdays and Fridays, and the other working in the office on Tuesdays and Thursdays.

Her colleague, Angela Thomas, an associate broker with Signature, said the decision comes down to company priorities.

“The company may think, ‘Why should I continue to have this overhead?’”

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

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Rising employment at unionized supermarket chains like Kroger and Meijer in the pandemic accounts for some of the growth in union membership in the past year. | MEIJER

Despite jobs purge in Michigan, union membership grew in 2020

Food retail sector, organizing of health care workers cause bump

BY DUSTIN WALSH

Despite Michigan employers shedding roughly 487,000 jobs in 2020, union membership grew slightly across the state, according to data released by the U.S. Bureau of Labor Statistics.

Union membership in Michigan grew to an estimated 604,000 in December 2020, up 2.5 percent from 589,000 in December 2019, according to federal data.

Union membership in Michigan last rose in 2017, but has generally followed a downward trajectory for decades. In 1989, more than 1 million Michigan workers were union members.

Michigan was one of 23 states that saw union membership increase in 2020 despite the COVID-19 pandemic’s hollowing out of the U.S. labor force. As of Jan. 2, nearly 16 million Americans were on some form of unemployment benefits and hundreds of thousands more left the workforce entirely in 2020.

Nationally, 14.3 million people in the U.S. belonged to a union in 2020, down by 321,000 or 2.2 percent from 2019.

The union growth in Michigan is particularly confounding given the state lost nearly 100,000 jobs in union-heavy sectors last year, including roughly 62,000 in manufacturing and 31,000 in the trade, transportation and utilities sector.

Those losses, however, may have been offset by union membership gains at grocery stores, such as Meijer and Kroger, which boosted employment throughout 2020 as consumers shifted away from restaurant dining during the pandemic, and health systems, as several hospitals and medical groups saw nurses unionize throughout the year.

SEIU Healthcare Michigan, the local division of the Service Employees International Union, gained roughly 1,000 new members in 2020,

Kevin Lingell, communications specialist for the union, told Crain’s in an email.

The union won elections to unionize nurses at Mercy Health in Muskegon, the emergency department technicians at Mercy Health and nursing home workers at Avista Nursing and Rehab in Saginaw.

The United Food and Commercial Workers Local 951, which represents workers at meat suppliers, food warehousers, distributors and Meijer stores throughout Michigan, added 3,500 members in 2020, said John Cakmakci, president of the local.

Cakmakci said meat packers like JBS in Plainwell, which struggled with finding workers as the COVID-19 pandemic crushed its workforce, picked up lots of laid-off workers from other industries, such as retail.

“The starting rate (at JBS) in Plainwell is $18 an hour and you can advance relatively quickly,” Cakmakci said. “There was an influx of people coming in who were laid off and are now seeing the benefits of a union job.”

Cakmakci said the other increases came from hiring pushes at Meijer and Kroger stores and at Rite-Aid pharmacies, which saw big spikes in demand as consumers shifted spending to grocers and as pharmacies served as COVID-19 testing locations.

The share of Michigan’s labor force that belongs to unions rose to 15.2 percent in 2020, up from 13.6 percent in 2019. But the rise is only partially due to the increase in union members and more relevant to heavier job cuts in sectors with less union representation.

Michigan’s leisure and hospitality sector, which typically sees less union representation, shed about 205,000 jobs in 2020, or almost 47.6 percent of the entire industry. Professional and business services also lost roughly 50,000 jobs last year.

Despite membership gains, there’s

little reason to think it will change the long-term trend of declining union membership, said Marick Masters, former director of Wayne State University’s labor relations department and current interim chair of the university’s department of finance and is a business professor.

Federal programs like the Paycheck Protection Program, which provided funding to employers to retain employees, and other job-saving programs during the pandemic likely offset larger declines in union membership throughout the year, Masters said.

“Basically, labor’s situation in Michigan shows a resiliency in that it held steady during very turbulent times, but it is important to note that considerable effort was made to cushion the impact of COVID-19, which avoided layoffs in certain industries and otherwise bolstered employment,” Masters said. “There is nothing in the data to suggest that there is looming turnaround or reversal in store for labor’s position in the workforce, which has shown decades of decline.”

In 1989, there were more than 1 union million workers in the state, representing 26 percent of all workers, a figure that has decreased more than 40 percent in the last 31 years.

Nationally, 14.3 million were union members in 2020, down by 321,000, or 2.2 percent, from 2019.

Despite a year of union growth in Michigan, Cakmakci readily admits 2021 is unlikely to be a banner year for unions.

“I don’t think we’ll be able to sustain the growth we did last year. We were able to capture so many people who came into this market from other industries, but those jobs have been taken now. So unless we start to organize more locations, I don’t think this year will look like last year.”

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

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A ende ng p esen ed n an Oc 29 commun y mee ng shows an off s ee segmen o De o s p anned Joe Lou s G eenway b ke and wa k a C O D RO COMMUN R N A ON

Th s s nowhere near he firs me a d spu e over proper y has s owed down an urban or even suburban ra pro ec as governmen s orge pa hs n popu a ed areas On De ro s near-eas s de a p anned ra - o- ra dubbed he Be ne Greenway has been s opped n s racks proper y owners changed he r m nd on se ng he r and “ s been pos poned un we can ge aho d o he and” Sco sa d o he ra rom De ro s s andv ew and V ages area o he r ver ron n ano her case much ar her nor h Sco sa d here was “ remendous pushback” rom ad acen andowners when came o he crea on o he 23 5-m e Macomb Orchard Tra ha fin shed cons ruc on n 2011 beween Roches er and R chmond “Th s s very common o ra deve opmen a over he coun ry” sa d Er c Oberg M dwes d rec or or he Washng on D C -based nonprofi Ra s- oTra s Conservancy ha ass s s commun es conver ng ra corr dors o pa hs Ra - o- ra convers ons are popuar here are more han 24 000 m es o hem across he U S accord ng o he conservancy Bu hey re a so r e w h proper y d spu es hough genera y no w h n en and no w hou a so u on “The oppor un y or d spu es around and on ra corr dors s us eas er han o her ypes o proper y because s been here or so ong s been used or one use or so ong and yp ca y he ac ve use s such a sma par o he ac ua and and ha s where m sunders and ng o where he and nes are makes easy o encroach on” Oberg sa d “ s no ke a regu ar bus ness or any pr va e person buy ng a p ece o proper y You re pu ng oge her 50- o 100- oo w de corr dors”

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po en a or new bus nesses a ong he ma or roads and we re us rea y exc ed o see he mpac rom h s sec on ” The crea on o a ramework p an unded hrough a $2 m on Ra ph C W son r ounda on gran has been de ayed was expec ed o fin sh n ear y 2020 bu s now expec ed o come ou n February De ro -based Sm hGroup was chosen n 2019 o or he work Sco sa d he coronav rus pandem c grea y s owed he pub c engagemen process Con ac a rank@cra n com (313) 446 0416 @anna se_ rank

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UNDER

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 tha

Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved.

Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD1134

MANUFACTUR NG

Fraser Tea Joe Fraser o ns F ase Tea a am y owned o gan c ea company oca ed n L von a M ch gan as he d ec o o ope a ons P ev ous y w h ZF Au omo ve Joe b ngs 34 yea s o eng nee ng expe ence n p oduc deve opmen and p og am managemen o h s new o e A g adua e o Law ence Techno og ca Un ve s y Joe w ocus n a e o s n efin ng ma e a s hand ng nven o y ean p ocess ng and qua y con o V s h m a h ps // ase ea com/

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40 40

Dandridge Floyd, 37

UNDER

Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools

T

hroughout Dandridge Floyd’s careers — whether as a social worker, attorney or assistant superintendent of Oakland Schools — making change has always been a center point.

When United Way pitched a framework to Oakland Schools for a countywide breakfast program to address poor nutrition as a way to improve academic achievement, Floyd — who experienced food insecurity growing up — knew firsthand the powerful impact it could have.

To secure the needed funds, Floyd led a team that earned support from all 28 local districts to finance the program — despite the fact that a majority of them would see no benefit.

“The local districts were phenomenal,” Floyd said. “The biggest surprise was how quickly it happened. Education is a democratic system and democracy can be very slow, but this happened in six to seven months. That showed how committed people were to making sure the students of Oakland County have everything they need to be successful.”

In a county where over 7,000 children suffer from hunger, and only two in five eligible students access a school breakfast, Floyd said a common misperception is that “Oakland County is rich.”

“That makes this program all the more important, because if that is the bias or the thought process people have about Oakland County, then these kids would have never gotten help.”

In a groundbreaking public/nonprofit partnership between the Oakland County Board of Commissioners, Oakland Schools and United Way, Oakland County is Better with Breakfast was born.

“I’m impacting lives now,” Floyd said. “I know the effect food insecurity had on me and my peers growing up, and this was an opportunity to make a change that I wish an adult could have made for me.”

— Laura Cassar

October 30, 2017 | crainsdetroit.com

UBS to open downtown Detroit office

By Annalise Frank

October 30, 2017 | crainsdetroit.com

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

UBS to open downtown Detroit office

By Annalise Frank

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

office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018 6,000-squarethe effect food insecurity• Office had onto includeUBS plans to open an office in downfoot space nonprofits and civic town Detroit in mid-2018, the company Annalise Frank growing groups meByand my peers up, andcan useannounced free of charge Monday.

• Bedrock-ownedUBS buildings Group AG’s U.S. and Canadian UBSan plans to open wealth this•was opportunity toundergoing make a renovations wealth management business, New Jermanagement office in Detroit sey-based Wealth Management change I wish an adult UBScould plans to open an office UBS in downin that mid-2018 Americas, to lease 13,000 square town Detroit in mid-2018, theplans company • Office to include 6,000-squarefeet on the connected sixth floors of have made for me.” announced Monday. foot space nonprofits and civic

UBS to open downtown Detroit office Bedrock LLC

Greenways face obstacles

The oe Lou s Greenway wou d run hrough five o he seven De ro C y Counc d s r c s w h 70 percen o he ra off-s ree n some areas connec s w h o her ex s ng pa hs such as he De ro R verWa k Dequ ndre Cu and ron Be e Tra The c y has $34 m on n pub c und ng so ar and expec s ph an hrop c and pr va e unds "As we work on he fina cons rucon documen a on we w have a s ronger cos es ma e o he u rou e " he c y sa d n a s a emen o Cra n s The c y expec s o break ground n n May on he firs phase o he greenway pend ng s a e env ronmen a approva and fin sh n a e 2021 Crews have a ready s ar ed c ear ng ou a pa hway or he firs eg a 2 8m e chunk o he ormer ra ne

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

buildings at 1515 Wood- Woodward Ave. Group AG’sneighboring U.S. and Canadian groups can use free UBS of charge ward Ave. and Fourteen metro Detroit employees don’t really have adequate resources wealth management business, New 1529 Jer- Woodward Ave. • Bedrock-owned buildings The twoManagement buildings built around 1900 are will move to the downtown office to or adequate office space to host dosey-based UBS Wealth undergoing renovations

by Detroit-based will lease LLC 13,000 feet from Bedrock LLC starting around mid-2018 buildings: Grin- meetings or things nor events the or board start, but the office has the capacity toin two Americas, plans toowned lease 13,000 square UBSBedrock nell Building (center at 1515 Woodward andnew the Sanders Buildingalong (centerthose right) at 1529 Bush said. and are undergoing said left) lines,” hold another six toAve. eight staff memon inthe connected sixth floors of renovations, Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All RightsUBS reserved. plans to open anfeet office downAve. for bers, Bush said. It will act as an extension John Bush, 60, WoodMichiganWoodward market head UBS’s investment in the new ofneighboring buildings at 1515 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD1134 town Detroit in mid-2018, the company UBS Wealth ManagementFourteen Americas.metro of fice will resources be “significant,” he said, as its the other wealth management offices. don’t really have adequate Detroit employees announced Monday. ward Ave. and 1529 Woodward Ave. “The real impetus open atonew The twoCanadian buildings built around 1900 arefor us “uniqueness Bush is based Birmingham office space to hostcomes do- at a price.” He said willto move the downtown office out to ofortheadequate UBS Group AG’s U.S. and office inBedrock Detroit is to support what’s owned by Detroit-based LLC he could or not yet provide an estimate but travels to to the will meetings norothers eventsand or board things start, but the goofficeoffice, has the capacity wealth management business, New Jering renovations, on in the city, ” saidhold Bush, a Detroit and are undergoing said on the be spending in thealong Detroit branch. those lines,” Bush said.cost of the build-out, as some another six to eight new stafftime memsey-based UBS Wealth Management nativemarket who grew City.

“We John Bush, 60, Michigan headup forin Garden have yet The location have atheless UBS’s investment in the new of- to be finalized. said. will act asDetroit an extension fromBush Bedrock LLCItstarting around mid-2018 in twowill buildings: Grin- contracts Americas, plans to lease 13,000 square UBS will lease 13,000 feetbers, UBS Wealth Management Americas. really felt like we wantedofto have a physfice will be “significant,” hecompany said, as its the other wealth management offices.

The plans to start its buildtraditional, more “urban” feelright) than 1515 Woodward Ave. and the Sanders Building (center atthe 1529 feet on the connected sixth floors of nell Building (center left) at “The real impetus for us to open new ical presence to reinforce “uniqueness comes at saidnext year, depending Bush is based outothers, of the he Birmingham outa price.” processHeearly said. New York-based architecAve. adowntown neighboring buildings office at 1515 Wood- toWoodward in Detroit is our support go-particular vision what’s for this areatravels and toture he will could not yet an estimate office, but the firm others and will Cale on when renovations on the buildings Verderame design the provide ward Ave. and 1529 ing Woodward don’t really have adequate resources Fourteen metro Detroit employees on in theAve. city,”tosaid Bush, a Detroit reinforce our on Barton the cost of the build-out, as some be spending time inspace; the Detroit branch. are complete.

Southfield-based Malow The two buildings builtnative around 1900 areup in adequate office space to have host dowill moveCity. to tothe officelocation to or will who grew Garden “Wedowntown commitment contracts finalized.

The Detroit have aon less based in Switzerland, employs Co. has signed as general contractor.yet to beUBS, owned by Detroit-based Bedrock nor events or board or things start, thea physoffice has the capacity really felt likeLLC we wanted tobut The company plans to startacross its buildtraditional, moreto“urban” than the outmeetings the city. ” have 60,000 54 countries. About 34 UBS feel plans to rent about half of the and are undergoing renovations, along those lines,” Bush said. early next year, depending hold six to eight new he staff memical presencesaid downtown toWealth reinforce others, said.

New office York-based architecUBS another — 6,000 square out feetprocess — at no cost percent of them work in the AmeriJohn Bush, 60, Michiganour market head UBS’s investment the renovations new of- on the buildings bers, said.

It will act an extension vision for for thisMparticular oninorganizations, when tureasfirm VerderametoCale will design theother a n aBush g e marea e n tand cas, according to a news release. UBS nonprofits and UBS Wealth Management will beMalow “significant,” he said, as its of the other also wealth management offices. ficeBarton to Americas. reinforce our Americas are be complete. space; Southfield-based Bush said. The space will called UBS Wealth Management Americas em“The real impetus for commitment us to open a new “uniqueness comes at a price.”

He said is based thehas Birmingham to has Bush based signed on as Woodward general contractor. metro De- out ofCo. ploys 280employs in Michigan, 225 of whom Gallery. Its UBS, design and in artSwitzerland, office in Detroit is to support what’s go- office, but travels to theUBS heabout couldhalf not an estimate others and the city. ” 60,000 across 54 countries.

34 Detroit. plans towill rent will out of yet the provide troit offices in are basedAbout in metro aim to showcase Detroit’s history ing on in the city,” said Bush, on the cost the build-out, asthem somework in the Amerispending Detroit branch.

UBS a Detroit Wealth B be percent office — 6,000 square at noofcost irm i n g h a time m , in the The wealth management business andfeet a— hub-and-spoke layout ofwill renative who grew up in Garden contracts have yet tocas, be finalized.

M a n a gCity. e m“We e n t Troy, The Detroit locationtowill have a and less other according to a news release.

UBS nonprofits organizations, Farmington recorded operating income of $2.13 flect the city’s road system. really felt like we wanted to have a physAmericas also Hills, The plans to startManagement its buildtraditional, more “urban” Wealth Americas em- quarter of 2017 — a Bushfeel said.than The the space will becompany called Plymouth in the third “Some of theUBS organizations that op- billion ical presence downtown reinforce has tometro De- others, he said. New York-based outdesign process early year,280 depending architecploys in Michigan, 225 of whom Woodward Gallery.

Its and art next John Bush erate and Dearborn. and provide services in the city 7 percent increase over last year. our vision for this particular area and troit offices in ture firm Verderame Cale when renovations the buildings the onDetroit’s in metro Detroit. will will aimdesign to showcase history areonbased to reinforce our B i r m i n g h a m , space; Southfield-based complete.

Malow arelayout The wealth management business andBarton a hub-and-spoke will reReprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. commitment to Troy, Farmington Co. has signed on as general UBS, basedis prohibited. in Switzerland, employs income recorded operating contractor. flectFurther the city’s road without system. duplication permission Visit www.crainsdetroit.com. #CD936of $2.13 Hills, Plymouth the city.” billion in About the third “Somehalf of the organizations that op60,000 across 54 countries.

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Americas also Wealth Management Americas emBush said.

The space will be Detroit calledBusiness.

UBS © 2019 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936 has metro DeWoodward Gallery. Its design and art ploys 280 in Michigan, 225 of whom troit offices in will aim to showcase Detroit’s history are based in metro Detroit.

Birmingham, The wealth management business and a hub-and-spoke layout will reCRAINSDETROIT.COM I MARCH 9, 2020 I Troy, Farmington recorded operating income of $2.13 flect the city’s road system.

THE CONVERSATION Hills, Plymouth “Some of the organizations that op- billion in the third quarter of 2017 — a John Bush erate and provide services in the city 7 percent increase over last year. and Dearborn.

Bedrock LLC

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Bedrock LLC

F om Page 3

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PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

GREENWAY

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 workf 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.

`II don’t don’ think it’s overblown to use the word “crisis” for Ann Arbor’s affordafford able 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.

Reprinted with permission from Crain’s Detroit Business. © 2020 Crain Communications Inc. All rights reserved.

Further duplication without permission is prohibited. #CD1156

Laura Picariello

Reprints Sales Manager Phone: (732) 723-0569 Fax (888) 299-2205 Email: lpicariello@crain.com

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PROMOTE. Why not?

Ce eb a e you Success w h Rep n s & Recogn on P oduc s FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 17 0 0

REFUGEE

Biden was expected to issue orders on asylum at the U.S.-Mexico border, expanded refugee resettlement and the reunification of migrant families last week, but the orders were pushed back with no indication of when they might be issued, Reuters reported.

The number of refugees coming to Southeast Michigan and the state as a whole has declined since 2017 when Trump issued orders limiting the number of refugees coming the February 1,to2021 U.S., especially from Middle Eastern and African countries that had been the mainstay of local resettlement efforts.

Last year, the number of refugees resettled in the U.S. totaled 11,814, just under 14 percent of the nearly 85,000 refugees resettled here in fiscal 2016, according to the U.S Department of State Bureau of Population, Refugees, and Migration.

From Page 3

He has secured a donated car and a place to live for his family, is immersing himself in the local community and volunteers for Samaritas, helping mentor newer refugees through the initial challenge of resettlement, Dobner said.

Bungala video chats through WhatsApp with his wife and sons, now ages 6 and 11, but it’s not the same as having them here, he said in an emailed statement translated by his caseworker.

News that U.S. President Joe Biden plans to expand refugee resettlement in the U.S. has given him hope that many refugees overseas will soon have a chance to reunite with their family members.

“I’m waiting eagerly for my wife and kids to join me here in the USA,” Bungala said.

“I have a new job, a car and a home. I’m happy with my work. I work more hours and it is not as tiring as my previous job. Therefore, I feel I will be able to support my family when we reunite one day here.”

Not having his family here has been difficult, Bungala said.

“I feel empty in my heart, and I cry sometimes even at work... I miss my family so much!’

“I’m simply not complete and happy with life. My heart is empty until they arrive, but I am hopeful.”

Many of the refugees Samaritas has assisted, like Bungala, have been separated from their families for three or more years, said Mihaela Mitrofan, who oversees the refugee resettlement program for Samaritas as director of New Americas.

“We’re thinking of his wife and kids in a refugee camp being vulnerable, where access to food, education, health care are very limited.”

Beyond the humanitarian aspect of enabling refugees to come to the U.S., there’s an economic rationale, she said. With employment and education support, 86 percent of the refugees in Samaritas programs are self-sufficient within 180 days of arrival.

In 2016, before former President

CRAIN’S DETROIT BUSINESS

Staffing back up

Rolly Bungala, an African refugee, was forced to leave his wife and sons at a refugee camp when he, alone, was offered asylum in the U.S. in late 2018. Now living in Southeast Michigan, he is hopeful they will soon be reunited with expected shifts in U.S. policy under the Biden administration. | SAMARITAS

Propson

Mitrofan

Donald Trump put drastic limits on the number of refugees coming to the U.S., refugees infused between $230 million and $295 million in new spending in Southeast Michigan and 1,798 jobs that year alone, according to a 2017 study led by Global Detroit and the University of Michigan Ford School of Public Policy and sponsored by Samaritas.

Similarly, a 2018 study led by the city of Grand Rapids, in partnership with Samaritas and the Grand Rapids

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Biden has pledged to raise the annual cap on refugees to 125,000. The shift would reverse a cap of 15,000 for this year put in place by the Trump administration in October, after a cap of 18,000 in 2020, the lowest since the 1980 Refugee Act took effect, according to a Washington Post report.

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The drop-off in refugees coming to the U.S. has taken a toll on local refugee resettlement agencies.

Catholic Charities of Southeast Michigan closed its small refugee resettlement program in 2018, after the U.S. Conference of Catholic Bishops pulled back on sending refugees to small programs with the national declines, said CEO Paul Propson.

It was able to retain its legal clinic for refugees already in the community, many of whom it had helped settle here before the changes by the Trump administration. A $30,000 grant from the Community Foundation last year has helped sustain the clinic to assist with family reunification and applications for citizenship.

“Our full team, aside from the legal clinic, has been scattered to the four winds. There’s nobody here that did that work,” Propson said. “(But) we just had a call with the U.S Conference of Catholic Bishops,” he said last week. “We are interested and are looking into what it would take to restart with them.”

Southeast Michigan’s three other resettlement agencies laid off most of their staff involved in those efforts after the loss of much of the approximately $4 million in federal funding they were collectively receiving before the new limits were put in place.

Samaritas, (formerly Lutheran Social Services of Michigan), for example, settled 137 refugees from Middle Eastern and African countries in southeast and west Michigan in 2020, less than 9 percent of the 1,588 refugees it helped resettle in 2016. It laid off three-quarters of its staff in the program or 12-14 people, Mitrofan said.

But Samaritas, Jewish Family Services of Washtenaw County and U.S. Committee for Refugees and Immigrants Detroit have each maintained two or three staff members to continue assisting the small number of refugees coming to the region over the past few years and those already here in the region, with grants from funders including the Community Foundation for Southeast Michigan, Troy-based Kresge Foundation and California-based Grantmakers Concerned with Immigrants and Refugees.

Based on guidance from their national affiliates, resettlement agencies in Southeast Michigan last week said they are planning for an increased number of refugees during the second half of the year and significant increases in 2022.

Samaritas is hearing somewhere around 25,000 refugees will be welcomed into the U.S. this year, Mitrofan said, and projecting it will see

about 200 of them.

As they seek to strengthen their capacity for the work once again, resettlement agencies are making plans to add staff, re-engaging with volunteers and lining up health care, education, housing and other assistance through partnerships with other groups in the community for the expected increase in refugees.

During the Obama administration, Jewish Family Services of Washtenaw County was resettling about 30 refugees per month, said Shrina Eadeh, director of resettlement services.

With decreases over the last four years, it’s seen fewer than five refugees per month and none at times.

The Ann Arbor-based organization in recent months has primarily received special immigrant visas or refugees who worked with U.S. armed forces in Afghanistan and Iraq, she said.

In preparation for an increased number of refugees this year, it’s working with peer agencies to ensure needs are met and reaching out to local schools to ensure adequate English as a Second Language instruction, and to health departments/ clinics to ensure refugees with special health needs get the care they need, Eadeh said.

“We do the initial finding a home, enrolling kids in schools, ensuring they have access to benefits. But really it’s about making sure our partners in the community have what they need to meet the needs, as well.”

Samaritas is re-engaging with local congregations it relies on for volunteer help with mentoring, tutoring and other assistance such as furnishing homes and helping teach refugees how to differentiate junk mail from important mail, as it works to reinstate resettlement capacity, Mitrofan said.

Given that funding follows the refugees, “We will need to re-engage with hundreds of volunteers and donors,” she said.

Before the restrictions on refugee activity, the U.S. Committee for Refugees and Immigrants Detroit was resettling 600-800 people per year in the region. Last year, it assisted 101 refugees, said Tawfik Alazem, director of the Dearborn office of the Arlington, Va.-based U.S. organization.

With the decreased activity and funding, it laid off 70-80 percent of its 15-20 employees. Like the other resettlement agencies, it’s making plans to add staff again, and Alazem is hopeful it will be able to rehire at least some of its former employees.

“We are very hopeful we can go back and offer people fleeing violence and war a new opportunity to live in peace and dignity again,” he said.

“We will be ready to deliver quality services to these new Americans.”

Pandemic impact While Biden has signaled his intention to expand the number of refugees coming to the U.S., it’s not clear what impact the pandemic could have on that policy.

Agencies say they already have COVID-19 safety protocols including mandatory, two-week quarantines for those arriving. And there is conversation about mandatory vaccination for refugees, they said.

“I don’t believe (COVID-19) would impact refugee activity unless there are countries where the airport is shut down,” Eadeh said.

“But we really can’t predict what will happen.”

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

MORTGAGE

From Page 1

Adding in Troy-based Flagstar Bank, also on the IMF list, boosts those figures to $615.8 billion, or 15.4 percent.

The report also shows the private equity-backed Home Point, a 5-yearold company and the smallest of the three non-bank lenders, to be the fastest-growing company by volume on the list. From 2019 to 2020, the company increased mortgage lending volume by 178.5 percent, according to IMF. By comparison, Rocket increased lending by 122.5 percent, while UWM increased by 69.4 percent. Flagstar boosted lending by 47.7 percent.

Those figures speak to the rush to the public markets that all three nonbank lenders have taken in the last six months, said Guy Cecala, IMF’s publisher and CEO, who noted that each have seen their rapid growth spurts coming during the upward economic years following the 2008 mortgage lending crisis.

“So I think what you’re seeing is these companies were positioned for rapid growth and they’re taking advantage of the volume, the profits and everything they did, to go public,” Cecala said. “It’s a good time to raise more money, broaden your capital base ... and that’s why you’re seeing a rush to do it. There’s a good story behind most of these lenders.

The test of course, is how do they hold up over time.”

The three public companies combined now employ approximately 25,000 people in the Southeast Michigan region — about 17,000 at Rocket, 8,000 at UWM and 500 at Home Point.

Cecala said it’s unclear to what extent the concentration of companies and employees in the region may im-

Ann Arbor-based Home Point netted $94.25 million in a slimmed-down offering. | HOME POINT

pact the broader industry, particularly in light of companies having employees work remotely due to the

tive industry as another reason that the mortgage sector has taken hold here.

“I THINK PEOPLE FORGET THAT IN THE MORTGAGE BUSINESS, SO MUCH OF WHAT WE DO LOOKS VERY MUCH LIKE AN ASSEMBLY LINE.” — Maria Fregosi, Home Point’s chief investment officer

COVID-19 pandemic.

Maria Fregosi, Home Point’s chief investment officer based in the South Florida region, touted the Southeast Michigan area’s roots in the automo-

“I think people forget that in the mortgage business, so much of what we do looks very much like an assembly line,” Fregosi said. “So you know, a mortgage has to go from one

step to the next step, and you have to complete the first step before you can do the second step.”

Stock performance mixed Rocket led the way on Southeast Michigan mortgage companies heading to the public markets as the next step for growth. The 35-year-old mortgage lender went public on the New York Stock Exchange in August, netting $1.8 billion in new capital.

UWM, which also dates back to the

mid-1980s, announced its plan to go public via a reverse merger with a blank check company shortly thereafter and completed that deal on Jan. 22, making its debut on the NYSE. Home Point followed exactly one week later, with trades commencing on the NASDAQ exchange.

The Rocket Companies stock has in recent weeks appeared to catch the attention of investors, accruing nearly 22 percent in value since late October.

It closed Friday at $21.36, up 0.23 percent, giving the company a total market capitalization of $42.4 billion.

The UWM stock (NYSE: UWMC), on the other hand, had lost about 12 percent of its value after one week of trading. It closed Friday at $9.91, down 0.5 percent with a market cap of $1 billion.

Home Point also saw a fairly cold reception upon its debut on the public market. The stock opened at $13 Friday, already down from the $19to-$21 range executives had been seeking, and closed at $11.32 — down 13 percent to a market cap of $1.57 billion.

The mixed reception seen by the two companies that went first was of little concern to Home Point’s Fregosi, she told Crain’s in an interview prior to the IPO, noting that the stocks appeared to have been properly priced.

“Let them report a few quarters of earnings, and we’ll see where the market ends up taking them,” Fregosi said. “But we were encouraged that as they came out to market, they held the price that they came out at for the most part.”

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

WALBRIDGE

From Page 1

Celebrating 35 years of unstoppable entrepreneurs A rendering shows a 280,000-square-foot speculative warehouse building on 21 acres off I-96 planned by Walbridge Group. | WALBRIDGE GROUP

“ULTIMATELY WE SAID THAT WE COULD MOST LIKELY CREATE MORE VALUE DEVELOPING IT OURSELVES THAN JUST UNLOADING IT FOR THE CURRENT MARKET PRICE.” — John Rakolta III, Walbridge Group’s president and chief administrative officer

up in the region.

According to the Southfield office of New York City-based brokerage firm Newmark, in the fourth quarter there was a 10-year high 5.72 million square feet of warehouse/distribution space under construction. Between the first quarter of 2010 and

the third quarter of 2014, there was no warehouse/distribution space being built. But every quarter since the fourth quarter 2016, there has been no less than 1.62 million square feet being built.

It comes as the warehouse/distribution center market is at a 10-year low for vacancy, sitting at just 1.3 percent in the fourth quarter, according to Newmark. The vacancy rate peaked in the third quarter of 2010, when the market was 28.3 percent empty.

“There’s hardly any availability out there,” said Peter Burton, principal of Bingham Farms-based developer Burton-Katzman LLC. “There is hardly any availability of logistical space almost anywhere in the market, so it seems like it would probably work.”

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Walbridge’s strategy for the site has shifted over the years since it acquired the property in 1984 when it bought a construction company. In 2013, the land was put up for sale for $33.5 million but it never traded hands. It was also listed in 2006.

“We realized we weren’t going to unload that really to anybody because industrial clients need more space,” said John Rakolta III, Walbridge Group’s president and chief administrative officer. “They have a more integrated supply chain.

They’ve got research and development. In today’s world, they’re producing their own fuel cells on their sites, so 500 acres isn’t going to cut it.

It wouldn’t give any room to expand.

Ultimately we said that we could most likely create more value developing it ourselves than just unloading it for the current market price.”

It is the latest speculative industrial/warehouse construction to crop up in the region.

Kansas City-based Flint Development is proposing 2.3 million of speculative space at the former Ford Motor Co. Wixom plant site as well as on about 45 acres in Pontiac on land owned by defense contractor Williams International Co. LLC. Another developer, Riverside, Mo.based NorthPoint Development LLC, is planning to tear down the former Cadillac Stamping Plant in Detroit and erect a 682,000-square-foot building in its place.

Those are just a handful of the new speculative developments cropping

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 19

Goldfish Swim School in Birmingham has been forced to turn away some customers on evenings and weekends due to a 25 percent capacity restriction because of COVID-19. | GOLDFISH SWIM SCHOOL

GOLDFISH

From Page 3

The swim school model is still centered on making parents feel comfortable enough to keep their kids enrolled in classes. Calming nerves has become a lot more challenging during the pandemic.

“The children’s industry is suffering because people generally are not excited to come back indoors again.

They’re nervous,” McCuiston said.

Fishing for investors Goldfish is still getting plenty of bites from investors, though. Since the onset of the pandemic, the company has signed deals to open 19 franchise locations around the country in the next five years. While the pandemic slowed construction on previous projects, McCuiston said he expects 16 new locations to open by the end of the year.

There are 112 locations open in 30 states, as well as two in Canada. The company’s main areas of growth are in southern markets and states out west. There are no new locations planned for Michigan.

“We’ve had locations move faster because they wanted to seize the op-

MDHHS

From Page 8

Who would want this job for $182,000?

Whitmer is aware of the limitations in recruiting and retaining executive talent to state posts that pay far less than C-suite gigs in both the private and nonprofit sectors.

During her 2018 transition, Whitmer studied breaking up MDHHS and told Crain’s at the time that a split would be “almost as hard as keeping it together and making it work … if not harder in some respects.”

But a lot has changed since December 2018.

Whitmer is in the throes of a oncein-a-lifetime global pandemic where the MDHHS director has had to focus almost solely on managing a health crisis that’s claimed more than 14,500

portunity,” he said.

Indeed, with great loss for some during the pandemic comes opportunity for others, said Mark Cory, a franchise placement specialist based in Grosse Pointe. Cory said interest in franchises has been above average since the pandemic started.

“Many are willing to take that leap for a variety of reasons,” he said.

“Maybe they have to because they lost a job. Maybe some of the competitors have been shrinking. Cheaper real estate, larger labor pool …”

Swim schools are still attractive investments because the industry is a case of a few big fish in a big pond.

Goldfish’s main competitors are Illinois-based Big Blue Swim School and Arizona-based Aqua-Tots Swim Schools. They’ve carved out a sort of luxury niche away from traditional lessons offered at YMCAs, public high schools and recreation centers.

Big Blue and Aqua-Tots are still growing, too. Aqua-Tots opened its 117th location in December. Around the same time, Big Blue announced a goal of opening 400 schools in the next five to eight years.

“For us, it’s all about creating an essential learning experience for kids and ultimate convenience for parents,” Scott Thompson, chief development officer for Big Blue, said in a lives in 10 months.

The governor said last week that her administration is again studying a breakup.

“We’re taking a look at it,” Whitmer told Capitol reporters. “To be very honest, that’s always been a conversation that we’ve been having. It’s an enormous department. It touches people’s lives in profound ways.”

Undoing Snyder’s 2015 merger of the community health and human services departments would “not be easily accomplished,” Whitmer said.

“Like any decision about the organization of state government, there are benefits and detriments to separating some things out,” she said. “But there is an ongoing conversation.”

Whitmer’s appointment of Hertel to lead MDHHS after the abrupt and still unexplained resignation of Robert Gordon would seem like a good time to reorganize this government agency — and reprioritize how it

20 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

news release last month.

The “essential” label saved Goldfish and other swim schools from the same fate as other indoor venues during lockdowns around the country. However, Goldfish’s 10 locations in Michigan, mostly in metro Detroit, were not cleared by the state to reopen until Aug. 11, well after locations in its other markets.

“It was ironic. We were the first school ever to open up in the Goldfish system and the last to reopen,” McCuiston said, adding that they received approval a day after he traveled to Lansing to speak in front of a bipartisan reopening task force.

At the McCuistons’ Birmingham school — the sole corporate-owned location — revenue in 2020 was down 95 percent compared to the year prior. Despite a 25 percent capacity limit that’s forced it to turn away customers on evenings and weekends, the company turned profitable again this month amid the seasonal dash for swim lessons before the summer.

Corporate support McCuiston declined to discuss financials. The millions of dollars in lost revenue across the system was at least partially offset by federal Pay-

“TO BE VERY HONEST, THAT’S ALWAYS BEEN A CONVERSATION THAT WE’VE BEEN HAVING. IT’S AN ENORMOUS DEPARTMENT. IT TOUCHES PEOPLE’S LIVES IN PROFOUND WAYS.” — Gov. Gretchen Whitmer

manages threats to public health.

Throughout the pandemic, we’ve seen firsthand how unprepared public health systems in this country were for a highly contagious airborne virus to sneak into our homes, stores, businesses and schools and wreak havoc on society.

The infrastructure for expedited testing of people for the virus was al-

check Protection Program loan assistance. The company helped its franchisees apply for the first round of funding, and it is in the process of doing the same for the second round.

The Birmingham location received $325,000 in PPP funding, according to federal records.

In addition to helping franchisees capitalize on financial assistance, the corporate office is helping them implement COVID-19 safety measures.

They include mandatory temperature checks for those who enter the building, sanitizing stations, plexiglass walls around the perimeter of the pool to separate kids, face shields for instructors and face masks when possible.

Corporate support is another reason why franchises have remained strong, Cory said.

“Being part of a franchise allows some of those uncertainties and interruptions to be mitigated because you have a franchise and R&D staff that is immediately mobilized to look at ways to help franchisees continue to operate,” he said.

Still, it hasn’t all been smooth sailing for Goldfish — McCuiston said it’s been impossible to adopt universal health and safety policies because the dynamics of each market are so different. “There are some markets

around the country where they’re not wearing a mask, and if you tell them to wear one, they’ll leave,” he said.

Some locations that were allowed to open sooner, primarily in the South, have seen business rebound close to pre-pandemic levels, McCuiston said.

He believes swim classes, with the signature frills and all, will return to normal this summer. “It’ll be the same as what it once was,” he said.

Many future franchisees are betting on it, and the potential return on investment is significant.

The average annual revenue of a swim school location is $1.7 million with an average yearly income of $709,379, according to a franchise disclosure document previously provided to Crain’s.

McCuiston said the initial investment to start a franchise was cut by around $300,000 to between $1 million and $3 million. The decision to lower the barrier for entry, made before the pandemic, proved helpful in maintaining deal flow and expanding in new markets.

“There aren’t a lot of players in this space,” McCuiston said. “ ... A worldwide pandemic is going to hurt any business.”

most nonexistent a year ago.

Few in state government even knew how to quickly acquire personal protective equipment.

And the state’s disease-tracking system, designed in the early 2000s, isn’t equipped to track COVID-19 outbreaks by settings, forcing public health officials to use a consumer-grade version of Survey Monkey to gather information that is critical in knowing where the virus is spread.

Michigan has a highly decentralized community public health system that doesn’t always work well with hospital systems or other government agencies.

This was on full display in the Flint water crisis when MDHHS bureaucrats got into a pissing match with Genesee County’s health department over how to investigate a Legionnaires’ outbreak in 2014-2015 that’s blamed in at least a dozen deaths.

The finger-pointing resulted in the

public and local doctors being left in the dark about a threat to public health.

Lyon and Wells could go to prison for the rest of their lives if they’re convicted of involuntary manslaughter in nine of those deaths.

Splitting the department will inevitably cost money and require the Democratic governor to make a case to the Republican-controlled Legislature that new investments in a standalone Department of Public Health are needed to prevent another deadly COVID-19 pandemic from ravaging life and livelihoods.

Lawmakers and the governor can quibble over the money.

But it’s hard to argue that the Michigan Department of Health and Human Services has been set up for success.

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

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

The terrace dining section at Testa Barra in Macomb Township includes partitions to separate diners in accordance with pandemic-related state orders. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

REOPEN

From Page 1

Restaurants must weigh a variety of factors in deciding to reopen, including health care concerns, costs of safety equipment, staffing, re-establishing orders with vendors and if limited sales will cover costs.

The popular Eastern Market spot Supino Pizzeria believes it has good reasons to stick with carryout service.

In addition to concern over the coronavirus, Supino is in the process of opening a second location in the New Center area. Operations Manager Anne St. Peter said adding reopening the Eastern Market location to that would create a lot of extra work, including finding staff.

“We’re a pizza joint. We have the luxury of having carryout service be a big part of our business,” St. Peter said. “We’re better off than a lot of restaurants in that way. We’re not doing anything as far as reopening any time soon.”

Still, most restaurants are eager to welcome back customers for indoor service. A study conducted in December by the Michigan Licensed Beverage Association found that about 67 percent of those surveyed would reopen with capacity limits set at 25 percent.

Mike Baldwin, chef at Testa Barra in Macomb Township, is elated to reopen. The restaurant, part of the three-establishment Baldwin Restaurant Group, will be able to seat 65 people under the current restrictions. Under normal operations, Testa Barra has a seating capacity of 250.

“Just being able to have people inside the restaurant is going to be great,” Baldwin said. “Our whole staff is a lot happier. It’s been really rough to be in this industry. Just to be able to do what we love and share it with

Supino Pizzeria in Eastern Market will stick with its carryout-only business for the time being even though it could reopen for indoor service on Monday. | ANNALISE FRANK/CRAIN’S

Stage Deli owner Steve Goldberg plans to stick with carryout and curbside delivery when restaurants can reopen for in-person dining on Monday. “When we see that things are getting better, we’ll obviously revisit reopening,” he said. | STEVE GOLDBERG

the community again will be great.”

Joe Vicari, owner of the Joe Vicari Restaurant Group, intends to reopen all of his more than 20 restaurants, but just for dinner.

Vicari had urged defiance over the order put in place in November but later backed down and had one of his establishments see its liquor license

suspended for being in violation during the pause. The owner of fine-dining restaurants including Andiamo and Joe Muer Seafood is happy to see restaurants reopen for in-person dining but he wishes the state would provide restaurateurs with a blueprint of how the process will go moving forward.

“If COVID cases don’t go up by Feb. 21, can we go up to 50 percent capacity? Then 30 days after that, can we go to 75 percent? That’s sort of what we’ve been looking for,” Vicari said. “They say they’re following cases, hospitalizations, etc. Things are down. Why didn’t we go to 50 percent? There’s no rhyme or reason.”

Vicari was unsure if all of his 700 employees on his payroll prior to the pandemic will return to work and believes some may have found employment elsewhere. His management team was working on staffing last week.

Goldberg said the last year has been challenging for Stage Deli.

While it has always offered carryout service, it’s seen a major uptick in online orders. Revenues are down, but better than expected, Goldberg said.

Stage Deli has kept all 45 of its employees on the payroll throughout the pandemic except those who did not want to continue working, Gold-

berg said. About 75 percent of the pre-pandemic staff is employed currently. The other 25 percent did not come back for various reasons, Goldberg said.

“We’re surviving. Some of our employees didn’t feel safe. Some had family issues, and some decided to get out of the business altogether,” he said. “Others are waiting to see if everything passes.”

Goldberg would love to open his doors to customers again.

“When we see that things are getting better, we’ll obviously revisit reopening,” he said. “We like having that community energy in here. But we’ve done OK. When (the pandemic) started, we thought the sky was going to fall. It turns out people still enjoy good food. That’s one of the few simple pleasures we’ve all been able to have during all of this.”

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

FEBRUARY 1, 2021 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

Khalil Rahal on how Wayne County is working to recover and rebuild

crainsdetroit.com

WAYNE COUNTY: Khalil Rahal, assistant Wayne County executive in charge of economic development, joined Wayne County Executive Warren Evans’ administration in 2015 after several years as a prosecutor working in the special victims unit. A graduate of Grand Valley State University and the University of Detroit Mercy School of Law, Rahal has been instrumental in a variety of development efforts as one of Evans’ trusted advisers, including the recent deal to lure Amazon.com Inc. to the former Pinnacle Race Course site in Huron Township and the disposition of the former McLouth Steel Products Corp. property in Trenton. | BY KIRK PINHO ` How does someone go from prosecuting sex offenders to moving into economic development?

It really had to deal with the county executive (Warren Evans) believing in his instincts and finding talent and trying to put square pegs in square holes. He’s very strategic like that. The art of economic development is very similar to learning how to connect the dots. The county executive was in law enforcement for many, many years, not just as a cop, not just as a sheriff or police chief, but also as a prosecutor, so some of the skills translated. Warren has always looked at economic development and saying he wants to see more people participate in the economy. The more people participate in the economy, the larger the economy is. And that means making sure that even the most vulnerable amongst us participate, and he’s always believed that the No. 1 way to reduce crime is to get a job. ` Not as many ghosts in economic development as there are in prosecuting sex crimes, I imagine.

Work’s very personal. As a prosecutor in that unit, there’s a lot to carry with you, even until this day, no doubt. I’m very, very passionate about my work and I still think about the deals that we lose, you know. The losses always feel harder than the victories do. ` Let’s talk a little bit about the economic development strategy at play now versus six or seven years ago when Warren Evans took office.

Before the county executive came in, you saw the philosophy of trying to travel the world and attract only foreign direct investment at high volume, and that’s not a terrible long-term strategy but that’s very, very expensive. And oftentimes, it’s a shiny coin and what that can do is sometimes neglect some of the best return on investment for economic development, which is your bread and butter right here at home.

He definitely came in and switched the philosophy, and we ran a much stronger community development program.

We ran a much stronger retention and

expansion program and we still did attraction. But, where the resources were put were sort of reversed.

Today it’s even more different, because we’re facing the pandemic and what (effect) it’s had on the global economy.

I think we’re very much in a phase of trying to sustain our economy. For the next few months, we’re going to be looking to recover in our economy. For months after that, then hopefully (we’ll) rebuild and diversify, so I think that’s sort of a strategy going forward. Right now, what you’ve seen is the county executive put in a lot of resources for small businesses. In any pandemic, the most vulnerable take the largest hit, and that’s no different in business as well. Small businesses have taken a lion’s share of the hit here, so you’ve seen us put a lot of resources in this space to help sustain that. Now we’re going to have to figure out ways to recover and rebuild. ` What does, what does the strategy look like going forward in terms of sustaining and promoting business in the wake of all this?

One thing that’s important to understand is that all major corporations and midlevel businesses can’t sustain themselves without having small businesses around.

Because the pandemic will hit the most vulnerable amongst us, we need to have an emphasis on small businesses at the moment. Half of all the jobs in America are small business jobs. If small businesses are taking the lion’s share of the hit right now, we have to figure out a way to help sustain them because once we lose a small business, once it shuts down, it is more than twice as hard to get it to reopen. So we’ve got to figure out a way to sustain that.

We’re doing that in four different ways.

No. 1, we are doing everything we can to keep the numbers down in terms of infection rate. That’s important because when the numbers go up, our economy will go down. There’s less consumer confidence, there’s the need for executive orders and reduced capacity, and small businesses didn’t have huge margins before the pandemic.

The second most important thing is technical support. We see the world changing, and we see it changing dramatically for small businesses and so small business, other businesses will have to change with it. So, we have been focusing on our website. You can go there and you’ll find 50 different pieces of technical advice and 70 different webinars.

The third way is community support. We are finding that small businesses need a dramatic amount of support from local communities, not just in grants and resources in that space, but oftentimes changing of local ordinances, permitting and those kinds of things. Last year we helped 21 municipalities in Wayne County change their local ordinances to allow for increased capacity for shutting down some streets on county roads, sidewalks, alleyways, parking lots, those kinds of things that allow businesses to increase capacity and maybe even create a Main Street atmosphere in some of those places.

This is the least important thing, but very, very important, is grants. There is no substitute for getting back to work.

Grants are needed. They’re wonderful, but they’re a one-time influx of cash.

They can help save a business, but they won’t sustain those businesses. We need things like keeping the numbers down, technical support, community support to help sustain their businesses, so we’re implementing a four-stage strategy to help small business.

Khalil Rahal, assistant Wayne County executive in charge of economic development

Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Executive Editor Kelley Root, (313) 446-0319 or kelley.root@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Digital Portfolio Manager Tim Simpson, (313) 446-6788 or tsimpson@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Bradbury, (313) 446-5800 or dbradbury@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Senior Editor Chad Livengood, (313) 446-1654 or clivengood@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687 TIP LINE (313) 446-6766 REPORTERS

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` I vaguely recall hearing that you played football in college.

Grand Valley State. Go Lakers. ... We’ve been very, very proud of the success and legacy. When I was there, I played for Brian Kelly and we won a couple national championships, and they won a couple national championships after I left. We’ve got to get back to the top of that hill though. We haven’t been there for a couple of years.

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RUMBLINGS

Detroit native becomes only Black woman CEO in Fortune 500 Walgreens Boots Alliance last week named Starbucks Corp.’s Chief operating officer Rosalind Brewer, a Detroit native, as its new CEO. Brewer becomes the only Black woman currently helming a Fortune 500 company.

Brewer will replace CEO Stefano Pessina, who announced in July that he would step down from the top spot.

Brewer is a graduate of Detroit’s Cass Technical High School. Brewer is routinely cited on lists from publications such as Fortune and Forbes

Brewer

as one of the most powerful women in the business world.

She spoke as part of last year’s Detroit Homecoming virtual event on

22 | CRAIN’S DETROIT BUSINESS | FEBRUARY 1, 2021

how corporations can make real progress on racial equity.

Brewer, also a director of Amazon. com Inc., joined Starbucks in 2017.

She’s joining a number of exclusive clubs: Only about 6 percent of S&P 500 companies are run by women. There hasn’t been a Black female CEO in the index since Ursula Burns left Xerox in 2016.

Brewer previously spent time at some of the biggest names across the industry. After more than two decades at Kimberly-Clark Corp., she joined Walmart, where she

eventually became CEO of the Sam’s Club warehouse store chain. She has spent time on the boards of Lockheed Martin Corp. and Molson Coors.

Brewer is “an extraordinarily well-qualified candidate,” said Lorraine Hariton, CEO of Catalyst, which advocates for more women in CEO jobs. “This does not have to do with her gender or her race, it has to do with her being highly qualified.

She has had the experiences that would put her in a position to lead in a role like this.”

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Taking care of teammates

In a year unlike any other, our company and teammates were called upon to address unprecedented challenges and headwinds in the broader environment, working in support of each other, our clients and the communities where we work and live.

In appreciation of these outstanding efforts, we are recognizing eligible employees with Delivering Together compensation awards. A cash bonus of $750 or additional stock award is the latest step our company has taken to invest in our employees during the health crisis.

We’ve also significantly invested in industry-leading solutions and resources. To help many of our teammates balancing family and work, we provided an enhanced benefit of up to $100 per day for in-home childcare — funding nearly 3 million days of support. And in 2020, we accelerated the move of our U.S. minimum hourly rate of pay to $20, more than a year earlier than originally planned.

Here in Detroit, my teammates and I are here to help. We’re proud of this community and remain committed to making it a better place for us all.

For the fourth time since 2017, Bank of America is recognizing teammates with a special award in cash or restricted stock.

This year, approximately 97% of teammates will receive a Delivering Together award.

These awards are in addition to any regular annual incentives that eligible employees may receive.

Matt Elliott Detroit Market President

To learn more, please visit bankofamerica.com/community Bank of America, N.A. Member FDIC. Equal Credit Opportunity Lender. © 2021 Bank of America Corporation. All rights reserved.

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