Crain's Detroit Business, Feb. 8, 2021, issue by Crain's Detroit Business

THE CONVERSATION

Q&A: Author, West Bloomfield native Adam Grant on building a learning culture. PAGE 3

Diversified Chemical’s CEO and chairman George Hill on finding the right chemistry. PAGE 22

CRAINSDETROIT.COM I FEBRUARY 8, 2021

$1M-plus home sales soared in Oakland County amid economic fallout BY KIRK PINHO | As a public health crisis roundly shattered the global

economy, last year Oakland County saw the most $1 million-plus home sales recorded within its borders in recent memory. To boot, the home to some of Michigan’s wealthiest communities set high water marks for monthly luxury home sale records this century — twice. There were 45 such home sales in July, besting the previous 20-year high of 42, a high mark that was topped by 51 in August and matched with

51 again in October, according to data compiled by Realcomp Ltd. II. Oakland County’s 382 home sales of $1 million or more last year far outpaced the other four counties in metro Detroit — Wayne, Macomb, Washtenaw and Livingston — but was illustrative of the pandemic’s disparate impact on the economy. Wayne, Macomb and Washtenaw $1 million-plus home sales held steady or slightly increased in 2020 as well, while Livingston County luxury home sales only mildly dipped.

Million-dollar market See HOMES on Page 19

Max Broock Realtors is listing this 18,000-squarefoot mansion in Northville Township for $6.9 million MAX BROOCK REALTORS

CRAIN’S MICHIGAN BUSINESS | BENTON HARBOR

M&A

Cash on the dash

Auto dealers leaving the family business behind in industry consolidation BY DUSTIN WALSH

The days of earworm jingles on local talk radio, tube men dancing in the wind next to busy thoroughfares and the names of local legends like Bob, Bill and Buff emblazoned next

to Chevrolet or Ford or Chrysler are fast disappearing. Changing technology, succession planning and an intense competitive market are driving smaller automotive dealer groups to exit the industry as growing mega-dealers sweep the

NEWSPAPER

nation, consuming family names and businesses. Fenton-based Serra Automotive Inc., one of the largest private dealership groups in the U.S., last week acquired Sterling Heights-based Buff Whelan Chevrolet, the highest-volume Chevy store in the country in 2020, in the latest deal. The store, Serra’s eighth Chevrolet dealer, has been rebranded Serra Whelan Chevrolet. Serra is the 22nd largest dealer group in the U.S., operating 49 dealers across seven states with revenue topping $2 billion in 2019, according to Automotive News’ Top 150 Dealership Groups list. See AUTO DEALERS on Page 18

Destination golf resort flourishes on the site of a radiation-contaminated Superfund site. PAGE 8 The town Whirlpool never outgrew. PAGE 9 Development work underway downtown shows how far Benton Harbor has come. PAGE 10

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NEED TO KNOW

REAL ESTATE

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  MAT ISHBIA DONATES $32 MILLION TO MSU THE NEWS: UWM Holdings Corp. President and CEO Mat Ishbia has committed $32 million to Michigan State University. The donation, announced Thursday, will go primarily toward the athletics department. The largest chunk of the donation, $20 million, will be used to renovate the Skandalaris Football Center. The gift also includes $2 million to be used at the discretion of men’s head basketball coach Tom Izzo, whom Ishbia called a mentor. WHY IT MATTERS: It’s the single largest gift in the university’s history. Ishbia now has a net worth of $13 billion after taking his mortgage company public last month.

 MICHIGAN BACKS AWAY FROM VACCINATION REDIRECT PLAN THE NEWS: The Michigan Department of Health and Human Services last week backed off a plan to send 70 percent of COVID-19 vaccines to local health departments after hospital systems decried the move. Last week, the state health department informed hospitals and county health agencies of its intent to decrease allocations of vaccine to hospitals from 40 percent to 30 percent of the state’s weekly supply. State health officials later reversed course and decided to stick with a 60 percent

distribution of vaccine doses to local health departments and 40 percent going to hospitals.

WHY IT MATTERS: The vaccine rollout continues to be a tricky business. The state’s shift to sending more vaccine doses to local health departments came after Macomb County Executive Mark Hackel and Wayne County Executive Warren Evans publicly complained about their respective county health departments getting too few vaccine doses on a weekly basis. But hospitals have complained that fewer shipments of vaccines means their lines are moving even more slowly, and a spokesperson for the Michigan Health & Hospital Association said he was “disappointed” at the state’s decision to send hospitals a smaller share of Michigan’s weekly vaccine supply.

 MILLER CANFIELD NAMES NEW CEO THE NEWS: Veteran labor attorney Megan Norris will become the CEO of Detroit law firm Miller, Canfield, Pad-

LANDMARK OFFICE CENTER

dock and Stone PLC at the end of the month. Norris will replace outgoing CEO Michael McGee, who will return to practicing law in the firm’s public finance group. WHY IT MATTERS: Norris will be the first woman CEO in the firm’s 169-year history. She said she plans to put more emphasis on the firm’s “human capital” by improving recruiting efforts and looking for ways to engage younger lawyers.

 CONTACT SPORTS OK’D TO RESUME THE NEWS: Michigan’s health department lifted a monthslong ban on contact sports that was ordered to help curb rising coronavirus cases, starting Monday — as long as masks are worn. A 250- to 500-spectator limit will remain in place, depending on the size of a stadium or arena. WHY IT MATTERS: The announcement from Democratic Gov. Gretchen Whitmer came a week after she had expressed optimism about a restart for sports, amid growing pressure from parents, athletes, school administrators and Republican lawmakers. The state let high schools resume face-toface classes on Dec. 21, when entertainment businesses also were allowed to reopen with capacity limits. Restaurants resumed indoor dining last week.

Midtown building to be renovated for ‘future grocer’  Farewell Union Street; hello Trader Joe’s? A Detroit area development group plans to renovate a building it owns in the city’s Midtown neighborhood for a “future grocer,” according to documents filed with the city. Mario Kiezi and Clark Pattah, the 50-50 owners of KP Detroit Holdings LLC, have filed a building permit application and Historic District Commission approval for the renovation of the two-story, 14,200-square-foot building at 4133-4161 Woodward Ave. at Willis Street. It most recently has been the home of the Union Street Detroit restaurant, Grace Harper Florist Inc. and the Midtown Liquor & Deli store. The florist moved out in 2018. Kiezi said he is in the process of buying out the restaurant and liquor store to make way for a future grocery store. The grocery tenant for the property has not yet been determined, Kiezi said, but among those who have scouted the Midtown market are Monrovia, Calif.-based Trader Joe’s, Westborn Market, which has four locations in Southeast Michigan, Minneapolis-based Target Corp. and Walker, Mich.-based Meijer Inc.

A Metro Detroit developer envisions turning this building at Woodward Avenue and Willis Street in the city’s Midtown neighborhood into a grocery store. | COSTAR GROUP INC.

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

NONPROFITS

TECHNOLOGY

Group targets economic growth in Pontiac Nonprofit, government leaders spur initiative BY SHERRI WELCH

See MILLENDO on Page 20

See PONTIAC on Page 20

CALLING IT QUITS

GETTY IMAGES/ISTOCKPHOTO

of the announced transition, Louis Arcudi, the company’s CFO, moved to the chief executive role previously held by Owens. In an interview with Crain’s, Owens noted that industrywide, just one-in-10 drugs that make it to a clinical trial actually succeeds. Over nearly a decade, Millendo did trials on a total of four drugs, none of which proved effective. “I think we’ve done an exceptionally good job at answering questions, and unfortunately in drug development, the odds are long,” said Owens. “Especially when you go after really challenging diseases like we have. Any bet you take is a high risk-high reward proposition.”

A cross-sector group of government and nonprofit leaders in Pontiac is working to finalize data-driven goals for the next five to 10 years to help spur economic growth and revitalization in the city. Convened by nine funders inc l u d i n g heavy-hitters the Ballmer Group, Ralph C. Wilson Jr. Foundation, General Motors Co. and Flagstar Brachman Bank, the group of more than two dozen local community, government and nonprofit leaders has been working to identify data-driven goals since spring. Members include Pontiac Mayor Deirdre Waterman and Oakland County representatives, leaders from the Pontiac Regional Chamber, Pontiac School District, Oakland University, Oakland Community College, nonprofits like Lighthouse, OLHSA, the Clarence E. Phillips Ascend Foundation and grassroots organizations. The funders’ collaborative provided an operating grant of just under $516,000 in the fall to Oakland University as fiduciary for the partnership, as part of a larger focus on coordinating support in Pontiac through 2022. “Our overall hope for this is there will be increased economic growth, prosperity, (and) revitalization,” said Lavea Brachman, vice president of programs at the Ralph C. Wilson Jr. Foundation and one of the co-chairs of the collaborative. That necessitates paying attention to a lot of different pieces, from the schools to growing small businesses, she said. “They are all components of economic growth.”

Once-hot drug developer’s potential treatments fail to achieve results BY NICK MANES

In January of 2016, Millendo Therapeutics Inc. netted what was at the time the largest venture capital haul in Michigan history. Flash forward five years later, and the Ann Arbor-based biomedical company is likely to no longer exist in the coming months, at least as it has since 2012. It’s a common ending in the highstakes, high-reward game of drug development. Since last April Millendo (NASDAQ: MLND) has said in federal securities filings and press releases that the two drugs it’s been working on have shown efficacy issues and further development should be halted. Millendo’s drugs have

“I THINK WE’VE DONE AN EXCEPTIONALLY GOOD JOB AT ANSWERING QUESTIONS, AND UNFORTUNATELY IN DRUG DEVELOPMENT, THE ODDS ARE LONG.” — Julia Owens, co-founder, Millendo

been developed to treat various endocrine diseases. The company said on Jan. 22 of this year that its board had approved a corporate restructuring plan that includes installing a new CEO and terminating 85 percent of the company’s staff by mid-April. As of Oct. 1, 2020, the company had 22 employees in the U.S. and two in France. Citing “limited expected financ-

ing options” after the decision to discontinue trials on a menopause drug, Millendo’s board said in a statement that it would begin exploring possible sale or merger opportunities. The pending dissolution of Millendo in its current form makes for a disappointing outcome for Julia Owens, the co-founder of the company and now board chair. As part

Q&A

Author, West Bloomfield native Adam Grant on a learning culture BY ADAM FINKEL | SPECIAL TO CRAIN’S DETROIT BUSINESS

A quarter-century ago, Crain’s Detroit Business ran a front page story: “Will Kmart Survive?” One of the core reasons for its failures is that its leading competitors had a culture to question assumptions, which enabled firms like Walmart and Target to create a more customer-focused and innovative business model. Rethinking assumptions is an imperative in today’s business climate — and in many aspects of life and society at large. Adam Grant, a professor at Wharton School of Business

West Bloomfield native and best-selling author Adam Grant.

and a West Bloomfield Township native, believes that the ability to rethink and relearn is one of the most important attributes, which he says can often matter more than sheer intelligence. Grant, the best-selling author of “Give and Take” and “Originals,” is also a co-founder of Ann Arbor-based Give and Take Inc. His latest book is “Think Again: The Power of Knowing What You Don’t Know,” which includes a mention of Grant’s uncle, Ira Jaffe, founding partner of Southfield-based Jaffe, Raitt, Heuer & Weiss P.C. It arrived in bookstores on Feb. 2.

Grant recently spoke with local investor Adam Finkel. The interview, lightly edited for clarity and brevity, is below:  What made it timely to write your latest book, Think Again, around “rethinking and unlearning”? Grant: 2020 forced us to do a lot of rethinking. Is it safe to go to a restaurant? Can kids learn online? If I’m in a Zoom meeting, can I still wear pajama pants? My hope is that 2021 will be the year of more deliberate, more intentional rethinking.  Are there any aspects of your

upbringing in Detroit that stand out as early examples of a flexible mindset? Going to diving camp at MSU (Michigan State University) motivated me to rethink my animosity toward the Spartans. Speaking of which: Can you help save the MSU swimming and diving team? It’s a travesty that they were cut without warning or a compelling reason.  How can entrepreneurs best be flexible with their thinking and business models as the nation works to get through its current economic challenges? See GRANT on Page 20 FEBRUARY 8, 2021 | CRAIN’S DETROIT BUSINESS | 3

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The former Lawyers Building in downtown Detroit, now renamed The Randolph, sits across the street from the former Old Wayne County Building, also briefly rebranded as The Randolph before a name change late last week. | COSTAR GROUP INC.

Order mercifully restored to the Ecosystem of Detroit Building Names Don’t cry because it’s over; smile because it happened. The team behind marketing the Old Wayne County Building building for sale or Kirk lease has scrapped PINHO the rebranded name it gave the building, The Randolph, about 48 hours after it was pointed out that the building directly across the street downtown is already named that. In a statement, the team called it a mix-up. “In developing marketing plans for this property, an oversight was made when assigning a name to the building,” the statement sent to me Thursday morning reads. “To avoid confusion and to preserve the property’s rich history, moving forward the property will be referred to as ‘600 Randolph Street.’” (Now that this building naming saga has come to a humane and peaceful end, what do you think the Hudson’s site building should be called?) Detroit developer Mike Ferlito owns the former Lawyers Building, now known as The Randolph, immediately across the street from the Old Wayne County Building/600 Randolph Street. He declined comment Thursday. The Old Wayne County Building/600 Randolph Street — dubbed that because, well, it’s where the Wayne County government once had its executive branch offices — has 236,000 square feet at 600 Randolph St. It was renovated in a $7 million effort that wrapped up in 2018 by Lansing-based The Christman Co., which has an office in Detroit, and Quinn Evans Architects Inc., which has offices in Detroit and Ann Arbor. The project began in 2016. The building is owned by 600 Randolph SN LLC, an investment group that paid $13.4 million for it and a 120-space surface parking lot in 2014. It was built in the late 19th and early

The Dixie Moon Saloon building in downtown Royal Oak has hit the market for sale for $1.29 million. | COSTAR GROUP INC.

“SINCE ACQUIRING THE PROPERTY IN 2013, THIS TROPHY ASSET HAS BEEN MAINTAINED AND RENOVATED TO AN INSTITUTIONAL STANDARD.” — Brendan George, CBRE senior vice president

20th centuries and has generally been considered most suited for a single occupant rather than multiple users because of its layout. The building has sat vacant since 2009 after the county moved its executive branch employees into the Guardian Building. It was vacated after the county purchased the high-rise at 500 Griswold St. from Detroit-based Sterling Group in 2008 as part of a $14.5 million deal. “Since acquiring the property in 2013, this trophy asset has been maintained and renovated to an institutional standard,” Brendan George, the CBRE senior vice president who is marketing the property with Jasper Hanifi, a CBRE associate, said in a statement. “While preserving and showcasing this building’s history is a top priority,

new occupants will also have an opportunity to modernize the building with standard technology and amenities,” George said.

Downtown Royal Oak bar property hits the market The Dixie Moon Saloon building in downtown Royal Oak has come on the market for sale. The listing price is $1.29 million for the building at 111 S. Main St. The bar has permanently closed but it’s not known precisely when. Kevin Jappaya, president of Farmington Hills-based KJ Commercial Real Estate Advisors, which has the listing, said the COVID-19 pandemic is “the No. 1 reason they shut down” but also said a parking shortage nearby in recent years was a contributing factor. But, he said, “now that they built the new parking deck and it’s open, they feel it’s poised for success.” “It’s an outstanding location and there is a lot of opportunity for somebody as we get out of this pandemic,” Jappaya said. Only the real estate is for sale, Jappaya said. The liquor license would have to be separately purchased. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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CRAIN’S VOICES

Pure Michigan program is expensive and ineffective

DANIEL SAAD

BY MICHAEL LAFAIVE

COMMENTARY

Extra, extra: Beyond the ordinary on Saturday mornings

omething extra is coming to your inbox on Saturdays. Beginning Feb. 13, Crain’s Detroit Business is launching “Saturday Extra,” a new narrative newsletter that builds on our current Most Read concept to add more depth and personality to our weekly summary of popular stories. If you already receive Most Read, you won’t have to do anything — the “new” newsletter will take its place weekly in your inbox. If you don’t, read on to find out more and how to sign up. The Extra will be written and compiled by Amy Elliott Bragg, Crain’s special projects editor, a role she has held since 2017. A talented writer with a love for Detroit history, Amy is uniquely qualified to take on this new offering for us. Amy leads enterprise special projects as well as awards programs including 20 in their 20s, 40 under 40 and Notables in Michigan. Before Elliott Bragg joining Crain’s, she was editorial director of a national network of local digital newsletters, including Model D, for Detroit-based Issue Media Group. She is a 2016 alum of the Online News Association-Poynter Leadership Academy for Women in Digital Media. A Detroit history lover of some minor acclaim, she also leads tours at Elmwood Cemetery and is former president of the board of directors of Preservation Detroit. “I’m interested in how CDB’s trusted business journalism can reach new and more diverse readers — and just be more fun,” Amy said. “With Crain’s Saturday Ex-

Kelley

ROOT

Executive Editor tra, I want to showcase the best of the week’s original reporting from our outstanding newsroom and bring you curious facts you might have missed, compelling byways of our reporting we had to cut for print, and stories from our archives that shed light on the news of the day. “I hope it will be informative, but also delightful, and I look forward to hearing from you along the way, bringing your ideas, questions and thoughts into the process.” The newsletter will include commentary on our biggest and best stories of the week, with context on why it matters, and thoughts from our newsroom on what to watch in the week ahead. Plus, a round-up of our mostread news of the week, striking photos, and no shortage of fun facts. If you don’t already receive our Saturday Most Read newsletter, sign up for the Saturday Extra at crainsdetroit.com/newsletters. While you’re there, you can sign up for other newsletters that might interest you, too. We are interested in your feedback. You can reach me at kelley.root@crain.com, and Amy at abragg@crain.com.

The state’s Pure Michigan program subsidizes a tourism industry by running expensive advertisements out of state in order to lure tourists to Michigan. Research shows the program is expensive and ineffective. It’s also unfair LaFaive and may be undermining attempts to control the COVID-19 pandemic. The program currently operates under a $15 million state appropriation, down from a pre-pandemic peak of $36 million. Officials should eliminate the program and redeploy the spending to higher priorities. The idea behind this spending is to lure tourists and their money here to help the Michigan economy and create jobs. State officials have crowed that every dollar spent on out-of-state advertisements creates huge returns to the state treasury. No independent study confirms that it does. Quite the contrary. In 2016, the Mackinac Center performed its own study of state tourism promotion, using publicly available data. We found that for every $1 million increase in state promotional spending, there was a corresponding revenue increase of just $20,000 for the entire accommodations industry, the best performing of the sectors in our study. In other words, the program is a huge net negative for our treasury. The parent company of the consultant the state hired offered us a rebuttal, but it was easy to refute. The state’s consultant has its own return-on-investment estimate for Pure Michigan, and its claims are credulity-straining. For 2019, the consultant reported, every dollar spent on advertising returned $8.79 in new tax revenue. But we have long questioned the consultant’s reports. Among other issues, state consultants have excluded about 50 percent of the costs associated with the program, such as for creating the commer-

Crain’s Voices is a series of occasional essays from a panel of contributors selected by Crain’s Detroit Business to offer thoughtful, informed commentary that spans the political and industry spectrums. Today’s contributor, Michael LaFaive, is the senior director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy.

cials. It’s easy to show a positive ROI when you ignore costs. In addition to being ineffective, the Pure Michigan program is expensive, with significant opportunity costs. Since 2006, the state has dedicated more than $381 million to it. Taxpayers would have gotten more bang for the buck by spending that on roads — it would have filled a lot of potholes. Remarkably, the state budgeted $15 million to spend on Pure Michigan advertisements this fiscal year. In other words, during a pandemic, the state is buying advertisements to entice people to come here. The OFFICIALS campaign began in December, after the SHOULD state ordered the clo- ELIMINATE THE sure of indoor restaurant dining and wa- PROGRAM AND terparks and just after REDEPLOY THE Gov. Gretchen Whitmer asked Michigan SPENDING TO citizens not to travel HIGHER for fear of spreading the novel coronavi- PRIORITIES. rus. Finally, the program is also unfair: Many taxpayers with no direct tourism interest are forced to pay for it. All of these examples make it clear that we should repeal the Pure Michigan program. It is ineffective, expensive and unfair.

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.

A Pure Michigan advertisement. | PURE MICHIGAN

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 6 | CRAIN’S DETROIT BUSINESS | FEBRUARY 8, 2021

About Crain’s Voices

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

Health, human services merger a success; don’t break it up BY MARIANNE UDOW-PHILLIPS AND H. LUKE SHAEFER

Chad Livengood’s Jan. 31 commentary advocating splitting up the Michigan Department of Health and Human Services misses how much good has been Marianne done by the comUdow-Phillips bined departwas director of ment. the Michigan Splitting up the Department of department Health and Human Services would do nothing to address the lefrom 2004 to gitimate issues 2007. Livengood raises. Instead, we believe such an approach would reduce the ability of the department to address the most critical public health issues of the day. If nothing else, University of COVID-19 has Michigan emphasized the professor H. importance of the Luke Shaefer integration of serves as a health and huspecial man services. counselor on Those who have economic suffered the most mobility for from COVID-19 the MDHHS. are those who also face the greatest challenges from social determinants of health. The Centers for Disease Control defines social determinants of health as the conditions in the places where people live, learn, work, and play that affect a wide range of health and quality-of-life risks and outcomes. The programs run by the human services side of the MDHHS are those that have the greatest impact on these conditions — cash assistance, food assistance, emergency relief, child care and the like. Over the past year, the Michigan Department of Health and Human Services has implemented myriad innovative programs focused at reducing poverty and improving living conditions for those most in need. From reforming eligibility criteria to make it easier for families in crisis to apply for help, to better supporting community college students with high rates of food insecurity, the department has been responsive to the needs of struggling Michiganders. Early in the COVID-19 crisis as unemployment spiked, federal legislation enabled states to deliver added food assistance to families struggling to make ends meet, especially those with school-aged children missing out on school meals. The New York Times reported that Michigan was the first state to run the gauntlet and get these extra dollars out to families. The state has surpassed $1 billion in added federal food benefits sent to struggling families since COVID struck. Families also were worried about utilities in the last year. MDHHS, the Michigan Public Service Commission, and the major utilities providers worked with the governor to ensure that no low-income family faced shutoff in the spring into summer. Since the moratoriums expired, MDHHS also worked to streamline its state-

those in need are connected to benewide energy assistance program. Using new federal funding, MDH- fits that can help with the health and HS worked with DTE, Consumers En- nutritional needs of babies (like WIC) ergy, SEMCO and UPPCO on an inno- but not connected with food assistance (Family Asvative direct Propayments proDON’T WE WANT TO MAKE sistance gram) or health gram, to 41,000 care (Healthy low-income fam- IT EASIER, NOT HARDER, Michigan) for the ilies facing shutrest of the family. offs across the FOR THESE PROGRAMS TO A major prioristate. Michigan’s WORK TOGETHER? ty of the departutility providers were active partners, agreeing to for- ment is to make sure families know give 25 percent of the past-due bal- what programs there are so they are ances, a total of $5 million in forgive- empowered. Splitting a department up almost never helps units within ness. A major priority for the department them communicate better. Don’t we now is cross-enrollment. Sometimes want to make it easier, not harder, for

these programs to work together? Having health and human services integrated in one department provides greater opportunities to better address race equity and social mobility, two goals essential to improving public health. The current structure of MDHHS has put clear leadership in place for health and for human services that have allowed these programs to thrive and improve outcomes for those most in need. Organizational change is disruptive, time-consuming and more resource-intensive than many realize. Reorganizing major state departments affects morale and focus, and can distract from pressing issues.

While there could be good reasons to make such an organizational change, doing so in the middle of a pandemic with a stressed work force would be a hardship on many with unclear impacts that would not address the issues of concern raised by Livengood in his column. We believe that MDHHS is working remarkably well with the current structure. We would be saddened to see the progress that has been made on recognizing the connections between health and human services reversed. It would be a shame to lose sight of all that has been accomplished along with the opportunity to accomplish even more.

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CRAIN’S MICHIGAN BUSINESS | BENTON HARBOR

DRAMATIC TRANSFORMATION

BY T

HARBOR SHORES

Destination golf resort flourishes on the site of radiation-contaminated Superfund land

A radioactive Superfund site was cleaned up (inset) and is now the site of the 14th hole at Harbor Shores golf course.

BY TOM HENDERSON Two views, 20-some years apart,

of a long stretch of acreage along the Paw Paw River tell you most of what you need about change for the better in Benton Harbor. Before: The late 1990s. Some of the 11 buildings and their three million square feet of space in the Graham Avenue Industrial Park have just been demolished. For decades, the buildings, including a sprawling steel foundry, had been home to manufacturers of a wide range of products that provided high-paying jobs and made Benton Harbor a thriving city. But an economic downturn in the 1980s killed 6,000 jobs and the businesses that employed them. Huge piles of twisted beams and rubble await removal and more will be stacked up soon. But it’s not just building debris that must be hauled off. Thousands of tons of contaminated land, both onshore and under the river, need to be dug up and removed. Toxic waste had leached into the river from the land or, during decades when this was commonplace, poured directly into the water from pipes carrying untreated sludge away from the factories.

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

In this section  Destination golf resort flourishes on the site of a radiation-contaminated Superfund site. THIS PAGE  The town Whirlpool never outgrew. PAGE 9  Development work underway downtown shows how far city has come . PAGE 10

 Harbert-based Fruitbelt makes tart and complex juice-based tonics from Michigan harvests. PAGE 12

 Colorado cannabis company puts down roots in Benton Harbor. PAGE 14  COVID-19 drives sales bump for furniture maker. PAGE 15

Worst of all? Aircraft Components Inc. sat on a 17-acre parcel along the river. At one edge was a bluff covered with discarded household appliances, tires and other refuse, after decades of unrestricted dumping. But there was worse, much worse, there. Aircraft Components was a mail-order airplane parts-supply business, specializing in World War II airplane gauges, repairing them, warehousing them and shipping them out of the five buildings and two Quonset huts on the site. The gauges glowed in the dark because of their luminescent paint, which got its shine from a critical component, radium-226. For decades, the paint emitted gamma radiation and radon-222, which leaked into the air and coated building surfaces, the lungs of workers, and trees, plants and ground on all 17 acres, including a large wetland, where contamination soon found its way into the river. The land was so contaminated, the U.S. Environmental Agency de-

clared it a Superfund site. What in the world could anyone make of that? Reclaim that mess for what purpose? It took over a decade to clean up and develop. In the end, more than 150,000 tons, or more than 100,000 cubic yards, of demolition debris, trash and contaminated soil and river bottom had been hauled off, enough to fill a football field to a height of 70 feet. Today: The rubble and radioactive gunk is long gone. The Aircraft Components site is now the 14th hole of one of the most spectacular resort golf courses in the country, the Harbor Shores Resort, a Jack Nicklaus-designed course that is host every other year to the Professional Golf Association’s senior national championship, one of the most prestigious golf events in the country. Adjacent to the hole are the North Pier Brewery, a craft beer operation, and the North Shore Inn Restaurant. See GOLF on Page 16

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FOCUS | CRAIN’S MICHIGAN BUSINESS | BENTON HARBOR

The town Whirlpool never outgrew The world’s largest home appliance company has global headquarters in Benton Harbor

HARBOR SHORES

BY TOM HENDERSON

Is there a smaller town in the world with a bigger company calling it home? Whirlpool Corp. (NYSE: WHR) is the world’s largest home appliance company, with $20 billion in annual sales, 77,000 employees and 59 manufacturing and research centers around the world. Its brands, including Whirlpool, KitchenAid, Maytag and Amana, are sold in nearly every country on earth. Despite that scale, both the company’s global and North American headquarters are based in Benton Harbor, a city in the far southwest corner of the state with a 2010 population of just 10,038. About 4,000 are employed in facilities in and around Benton Harbor and its smaller twin city of St. Joseph, which had a 2010 population of 8,365. They work in research and development, engineering, testing, design, marketing, finance and HR. The company owns or leases about 40 properties with a total of about 2.5 million square feet in the area. This includes office, tech/engineering centers, residential and warehousing. The company has nine manufacturing plants in the U.S. but none in Michigan. Once, the company’s scale just about matched its humble surroundings. In 1911, Lou Upton and his uncle Emory patented an electric motor-driven wringer washing machine and launched the Upton Machine Co. It got a major order almost immediately, for 100 washing machines. But a cast-iron gear in the transmission broke in every one of the machines. The company immediately replaced the defective parts with a new cut-steel gear, and the buyer was so impressed it doubled its order to 200 machines. In 1929, the company merged with the Nineteen Hundred Washer Co. of New York and became the Nineteen Hundred Corp., expanded its product line and grew steadily, even through the Great Depression, until World War II, when production of home appliances was replaced by production of components for P-40 Warhawk airplanes. The company resumed production of consumer goods in 1945, and post-war demand drove sales by 1949 to $48 million and profits to $3 million, achievements celebrated by a new name: Whirlpool. The company has since grown into a worldwide presence, but never got too big for Benton Harbor. The company is the major employer in the area and has been active in corporate philanthropy — it was a driving force, for example, behind a project 20 years ago that turned hundreds of acres of horribly contaminated former industrial land along the Paw Paw River into the Harbor Shores Resort, one of the leading golf resorts in the U.S. and home every other year to the Professional Golf Association’s national senior champi-

“OUR 15,000 PLANT EMPLOYEES IN OUR NINE PLANTS ACROSS THE U.S. HAVE BEEN WORKING TIRELESSLY AS WE HAVE MANAGED THROUGH COVID-19 AND OUR FACTORIES ARE DOING EVERYTHING THEY CAN TO MEET CONSUMER NEEDS.” — Whirlpool in a statement

Whirlpool headquarters in Benton Harbor. | WHIRLPOOL

The Upton Machine Company in Benton Harbor in the 1920s | WHIRLPOOL

onship. (See related story, Page 8.) When the COVID-19 pandemic hit the region and state hard last March, Whirlpool quickly focused on meeting the demand for supplies at Spectrum Health Lakeland, a health system in St. Joseph that serves southwest Michigan and northern Indiana. Over the next month, using its global supply chain and the manufacturing capabilities of its Whirlpool China business unit, the company delivered at no cost 10 shipments of masks, gloves, thermometers and hospital gowns — tens of thousands of items in all. It also supplied smaller volumes of equipment to the Berrien County Sheriff ’s Office. In all, the company shipped

hundreds of thousands of gloves and masks and tens of thousands of gowns, thermometers and other supplies, including bottles of hand sanitizer, hand soaps and bleach. One sadly ironic note is evident in a press release Whirlpool put out on April 17. “These donations are incredibly important as we continue to face this global pandemic,” said Loren Hamel, an M.D. and chief strategy officer for Spectrum Health. “With the help of Whirlpool, we’ll be better prepared to fight the spread of COVID-19 in Southwest Michigan, as the virus is expected to reach its peak in the U.S. in the next couple of weeks.” Little did anyone imagine how towering the peak would eventual-

ly get, and how many months away it would be. In May, as it became clear there would be a shortage of ventilators for those seriously ill from the effects of COVID, Whirlpool partnered with Dow and Reynolds Consumer Products to make and distribute ventilators. According to Eleanor Reece, Whirlpool’s senior director of global relations, Whirlpool engineers designed what are called PAPRs, or powered, air-purifying respirators, and the company built them and distributed them through WIN Health Labs LLC, a subsidiary Whirlpool formed to make supplies needed to fight the pandemic. Midland-based Dow provided the clear plastic face shields for the ventilators and Lake Forest, Ill.based Reynolds Consumer Products designed and made the units’ disposable hoods. The ventilators were made to be sold, but Reece said 4,000 were distributed free of charge to hospitals across Michigan and in Texas and Louisiana. As the Pfizer vaccine began to be distributed in December, one issue in getting large volumes shipped was the specialized equipment needed to keep the vaccine chilled to a minus 100 degrees Fahrenheit. Reece said that while making refrigerators is a Whirlpool specialty, there was no consideration of making and selling vaccine freezers. “Medical freezers are very specialized. There are existing companies best situated to make those,” said Reece. “We were glad to be able to help our country and do our fair share.”

Whirlpool has faced its own challenges during the pandemic, as Crain’s reported in November, as disrupted global supply chains led to parts shortages, and social distancing slowed down manufacturing lines worldwide. Consumers trying to replace their overworked dishwashers and washing machines sometimes faced weeks of shipping delays. In a statement provided to Crain’s, Whirlpool said it was working through those challenges. “Our 15,000 plant employees in our nine plants across the U.S. have been working tirelessly as we have managed through COVID-19 and our factories are doing everything they can to meet consumer needs. Our plants have experienced a few brief interruptions in production related to the pandemic, including component shortages, but as a whole have remained up and running throughout this challenging time,” the statement read. “... Implementing steps to make our plants COVID-safe can impact manufacturing lines and production rates. These adjustments, including social distancing, have impacted most manufacturers across many industries, including many of our suppliers and other appliance manufacturers. We are focused on overcoming these challenges and to provide for our consumers who need our appliances more than ever to clean, cook and provide proper food and medicine storage in their homes.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

FEBRUARY 8, 2021 | CRAIN’S DETROIT BUSINESS | 9

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Development work underway downtown shows how far city has come BY TOM HENDERSON

One street corner in downtown Benton Harbor is emblematic of the city’s resurgence. It also shows the success of an economic development organization called the Cornerstone Alliance, which targets projects throughout Berrien County, with a focus on Benton Harbor and its twin city of St. Joseph just to the west. It launched in 1989 — the same year Money magazine ranked Benton Harbor as the worst city to live in the U.S. of the 300 cities in its annual survey, down from 298 the year before. The corner is the southwest intersection of Main and Pipestone streets, just down Main from Cornerstone’s headquarters. Here is what is going on there: Pipestone Street is blocked off to traffic. Pipestone runs at a diagonal to the normal system of east/west, north/ south streets in Harbor, going from the heart of downtown to I-94. City residents approved an income tax in 2017, 1 percent for residents, half a percent for nonresidents working there, in order to fund badly needed infrastructure improvement. Pipestone is the most visible sign of current repair downtown. Right at the intersection, despite the winter cold and winds blowing in off nearby Lake Michigan, work is underway on a $3.6 million rehabilitation of the iconic Gray Building, which was built in 1882 but had fallen into such disrepair that demolition seemed the only option when Cornerstone bought it in 2017. Instead, after a massive interior demolition, two retail spaces are being built out on the ground floor and 16 new apartments are under construction in what is now called Benton Harbor Flats, with completion scheduled for May or June. Across the alley that runs to the south behind the former Gray Building is the Houndstooth restaurant, considered by many locals, including Cornerstone CEO Rob Cleveland, to be the most innovative, interesting restaurant in the city, on the site of a former tattoo parlor fallen on hard times. The restaurant opened in September 2019 with lines out the door and long waits for tables every night and has continued to do well even during COVID-19. Directly across the street from that intersection, where Pipestone becomes Water Street, is the city’s fivesquare-block Arts District of wonderfully rehabbed historic buildings, including the Hinkley Building, built in 1898 and one of the oldest structures in town. It houses a blown-glass studio and school called Water Street Glass. Throughout the district are a wide range of galleries, a musical-instruments and used-records store and the Citadel Dance and Music Center, a nonprofit academy. Many of the buildings were rehabbed through a combination of grants and investments from Cornerstone Alliance and the Michigan Council of the Arts.

Pipestone Street project Pipestone is shut down to traffic 10 | CRAIN’S DETROIT BUSINESS | FEBRUARY 8, 2021

downtown as it undergoes sewer and water-line replacement and street repaving for 3,200 feet, the latest phase of a projected $100 million, 20-year citywide infrastructure project begun in 2018. According to Christopher Cook, the president of Abonmarche, the Benton Harbor-based civil engineering and architectural firm doing much of the infrastructure work — which includes new sidewalks and planters downtown and in the Arts District — when residents voted on an income tax, a survey showed that 50 percent of city streets were rated poor and 50 were fair. None were good, a point reinforced in 2019 when a sinkhole half-swallowed a bus. Cook said infrastructure improvements have been funded in part by a revolving loan fund from the state backed by future income taxes generated and by grants from the U.S. Environmental Protection Agency to replace 100-year-old lead water lines throughout the city. He said funding for infrastructure will be reduced next year because of the impact of COVID-19. Many of the nonresidents who had been working in Benton Harbor and paying a tax of half a percent are now working from home and paying no tax. But work will continue.

“WE HAD TO DO EVERY KIND OF ENVIRONMENTAL REMEDIATION YOU CAN IMAGINE. AT SOME POINT WE BEGAN WONDERING WHAT IF ANYTHING WOULD BE LEFT.” — Josh Higginbotham, the architect and project manager on the former Gray Building rehab

The

Benton Harbor Flats The Gray Building, renamed the Harbor Center Building after a facelift in 1961, originally housed a Woolworth on the side of the building facing Main and the Olsen & Ebann jewelry store on the Pipestone side. When Cornerstone bought the building in 2017, it had sat empty for years. Cleveland met with a series of developers he couldn’t interest in a rehab development. “No one was willing to take a chance. I finally met with Chris Fielding, the CEO at Mishawaka, Ind.-based Cressy Commercial Real Estate, and if I couldn’t get him on board, we were going to take it down,” said Cleveland. He said he got a commitment that if Cornerstone could line up state and city support, Cressy would come on board as new owner and developer of the $3.6 million project. In September 2019, after the Michigan Strategic Fund approved a grant of $1.5 million and the Benton Harbor Brownfield Redevelopment Authority approved a grant of $130,000, work began. Cressy’s engineers thought it was worth trying to save the building, but it was a close call. Josh Higginbotham, the architect and project manager on the rehab, said the place stunk to high heaven from the rotting corpses of dead cats. Lichen and moss grew on every surface. There was a foot of standing water in the basement from the roof leaking for 10 years. Exposed insulation had sloughed off asbestos into the air for years. “We had to do every kind of environmental remediation you can imagine,” he said. “At some point we began wondering what if anything would be left.” Demolition took weeks and enough

Ken Ankli, in front of the door to his loft apartments. | KEN ANKLI

was hauled out of the building to fill 50 40-yard dumpsters. “It was depressing for the crew. You want to build something but day after day all you’re doing is tearing things out,” said Higginbotham. Enough of the building’s bones were still solid to let it stand, although 45 big, heavy red steel beams had to be installed to shore things up. With 20 workers in the building every day and completion approaching, Higginbotham said: “It’s really an exciting project, one of the coolest buildings I’ve ever had the pleasure to work in. As we got into demo, I thought the whole building might need to come down. I’m thrilled it didn’t.” Cressy will manage the property when it comes on the market. The building is two stories but as tall as a three-story building, which made for some interesting design options. There will be three apartments and two retail spaces, about 1,800 square feet and 3,500 square feet, on the ground floor and 13 apartments on the second floor. Ten are studio apartments and six are one bedroom, with the 16-foot-high ceilings on each floor leaving room for loft bedrooms to be built in, adding to the usable space. Higginbotham said apartment rentals are expected to range from $950 to $1,400 a month.

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Visit ey.com/us/eoy/mnwo for details. Application deadline is April 16, 2021. Josh Higginbotham, architect and project manager at the former Gray Building. | TOM HENDERSON FOR CRAIN’S

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The Houndstooth The Sheffield at City Center is one of downtown Benton Harbor’s oldest buildings, built in 1918 after a fire destroyed a city block and the original wood-frame drugstore there. It had fallen on hard times, but a complete rehab was finished in 2019 by local developer Ken Ankli. The building now has four loft apartments on the second and third floors and the Houndstooth on the ground floor. Ankli once owned the oldest business in town, Brammall Supply, founded in 1873 as a pipefitting and plumbing supply store. His family bought the business in 1940 and he sold it in 2016, with the new owners moving it to St. Joseph and leaving him the building. The ground floor is home to the Citadel Dance and Music Center and the 3 Pillars music store. Upstairs are seven lofts with exposed brick and high ceilings called the Quarternote Lofts. The next year, he bought the Sheffield. Over the years, the ground floor had been home to a drug store, a soup kitchen, a draft office when the U.S. was still drafting soldiers, a fish house and, most recently, a tattoo parlor. Ankli approached Cheyenne and James Galbraith, well known brother-and-sister chefs who had worked at a variety of restaurants in Benton Harbor and St. Joe, to see if they would be interested in owning a restaurant on the ground floor once renovation was done. Cheyenne had most recently been the executive chef at the Bistro on the Boulevard in St. Joseph, and James was sous chef at the Bread+Bar, another restaurant in St. Joseph. “I knew a good restaurant would be a great way to move the city forward,” said Ankli. “My daughter had worked for Cheyenne. Nearly everyone knows her, and when I heard she had left the Bistro, I contacted her through my daughter.” Cheyenne, who grew up in Berrien Springs, went to culinary school in North Carolina, then worked for five years in Albuquerque, N.M., with Jennifer James, a seven-time James Beard nominee for best chef in the south-

James and Cheyenne Galbraith, in the alley next to the Houndstooth restaurant. | KEN ANKLI

west, before returning to Michigan. James got his start in the business busing tables and washing dishes, beginning under the table, so to speak, at age 13. Over the years, when time and money would allow, he did a series of non-paid internships at some of the best restaurants in Chicago, including S.K.Y., Boka, Elske, Blackbird, Duck Duck Goat and Bellemore. “Both James and I wanted to be near the Arts District. This space was affordable and a good place to have a cutting-edge restaurant,” Cheyenne said. “I came in the back door, and it was rough, but I felt immediately like ‘This is the spot,’ called my brother and said ‘Let’s do it.’” After a near total teardown and rebuild — Ankli did manage to save a good portion of the original tin ceiling — the Houndstooth opened in September 2019. Space was tight, just 1,460 square feet, but they managed to fit in 48 seats. Before opening, they raised $53,000 in a Kickstarter campaign and put on a series of pop-up dinners at various locations around town to raise money and get the word out. They opened on Friday the 13th and were sold out all night. They were sold out Saturday, too, closed on Sunday and Monday and, to their surprise, when they opened on Tuesday, they had a line out the door and were

packed all night. “We had to tell people to go home,” said James. Six months to the day after opening, COVID shut them down. When they reopened, they had to restrict indoor seating to 24, but Cornerstone helped them convert part of a parking lot to outdoor seating to help offset the loss of seats inside. Shut down a second time this winter, doing takeout only, they temporarily cut staffing from 14 to 3 while awaiting approval from Gov. Gretchen Whitmer to start letting patrons in again. Fare on the current menu includes Nashville hot scallops with koji grits and pickled collards ($19); short rib tartare with egg york, black truffle and shoestring potatoes ($17); milkbraised pork with tarragon and mustard cream ($15); and Calabrian swordfish with spicy eggplant and bone broth ($27). The Houndstooth also prides itself on craft cocktails, with names like Snail Mail, Gentle Giant, New Friend and Picasso’s Potion. “The restaurant has become a destination for people who might never otherwise have come to Benton Harbor,” said Cleveland. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

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UNSWEETENED SUCCESS

Harbert-based Fruitbelt makes tart and complex juice-based tonics from Michigan harvests BY TOM HENDERSON

Michele Gazzolo and Beth Denton thought that the carbonated fruitjuice drinks on the market were far too sweet and way too boring. Instead of just griping about it, or swearing off carbonated fruit drinks, they invented their own formulations and are selling them under the brand name of Fruitbelt. No one will ever accuse their tonics of being too sweet or too boring. Their drinks come in three flavors — apple-dandelion, tart cherry-ginger and elderberry-elderflower — and they belt you with tartness and with flavor. Merchants who carry their drinks say customers particularly like them as tonics to be mixed with alcohol. They launched their company, based in the tiny village of Harbert in the far southwest corner of the state, south of Benton Harbor, in 2016, and slowly built a following, delivering cases to farm markets in Michigan and Indiana and slowly gaining a following that has grown to retailers in North Dakota, Minnesota, Wisconsin, Kentucky, Kansas, Wyoming, Missouri, Iowa and Idaho. A big early break came in Chicago in 2016 when the founders met Julie Blubaugh, a buyer for Whole Foods, at the Good Food Accelerator, a program that helps food-related entrepreneurs grow their businesses. Blubaugh said that Whole Foods seeks out locally sourced innovative food products and began carrying Fruitbelt tonics. Since then, Fruitbelt has expanded its presence to all 62 Whole Foods markets in the Midwest. “First of all, the product is delicious,” said Blubaugh. “Beyond that, Fruitbelt was a great fit as a local brand for Whole Foods as it is made with Michigan apples and cherries. We’ve seen customer interest in Fruitbelt, and we’re happy to share that we recently launched Fruitbelt’s new elderberry tonic flavor.” Last year, Fruitbelt made a big stride toward increasing sales and distribution when it picked up a statewide distributor, Imperial Beverage of Kalamazoo. Starting in December, they had ready access to stores across both peninsulas. Gazzolo and Denton hope the Whole Foods imprimatur and the backing of the sales team of a major distributor will help convince investors to join a round of financing of $500,000 to $1 million they want to raise later this year to ramp up production and increase the product line. Carolyn Cassin, the founder and general partner of the Detroit-based BELLE Michigan Impact Fund, an investment fund with 51 women partners who invest in women-owned businesses around the country, may end up as one of those investors. Cassin said she first came across Fruitbelt two years ago but didn’t think the company was ready for an investment yet. “They weren’t this far along, at all. They were carrying their own fourpacks around and going to farmer’s markets,” said Cassin. “And we had never invested in anything like this.” Cassin is scheduled to meet with

Beth Denton (left) and Michele Gazzolo at the Fruitbelt launch party in Baroda in 2016. At left, Fruitbelt drinks come in three flavors — apple-dandelion, tart cherry-ginger and elderberry-elderflower. | FRUITBELT

“WE AIM TO BRING FORGOTTEN FRUIT CROPS BACK TO MICHIGAN AND THE GREATER MIDWEST LANDSCAPE.” — Michele Gazzolo, Fruitbelt

Gazzolo and Denton in March to hear their pitch for investment capital. Cassin said the fact that they are in all those Whole Foods and have a statewide distributor are big validations. What’s more, she said, BELLE has since that first contact two years ago made an investment she very much likes in another beverage company, Cask & Kettle, a Battle Creek firm that offers a Keurig-like single-serve cocktails. The company sells its product in packs of five, each with one ounce of a distilled spirit, coffee and other flavors. You pop one into your coffee maker, add some water and you have a nearly instant hot cocktail. “We were almost the first money in the company two years ago, and now it’s in all the Meijers,” said Cassin. “We dipped our toes in the food and beverage battle and liked it.” Elissa Sangalli is president of Northern Initiatives, a Marquette-based nonprofit that provides

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

loans to small business owners and entrepreneurs who might have difficulty getting traditional bank loans. She said she is in the process of closing on a loan for Fruitbelt. “Fruitbelt is a new customer of Northern Initiatives,” she said. “We especially love that they are a woman-owned business, sourcing Michigan ingredients and turning them into value-added beverage products.” Tim Braun is brand manager at Imperial. He said Fruitbelt’s juices are the right product at the right time. He said customers in recent years have moved away from sweet drinks and mixes, the trend being toward less sugar and more tartness, and Fruitbelt checks both those boxes. “They reached out to us. They were self-distributing and trying to get their name out there, but they didn’t have the manpower,” he said. “We liked what we saw and decided to take it statewide.”

He said they had their first meeting early in the fall. By mid-December, Fruitbelt was in stores across the state. “We launched a marketing plan with our sales team, with volume goals for each region. It’s been a big focus for our sales team and our 85 account managers around the state,” he said. Imperial has offered case discounts to get stores to buy in volume and perhaps put up displays. “The feedback has been really positive. Fruitbelt has the advantage of being local and being really distinct,” he said. “People are really paying attention to what they are putting in their bodies and being healthier. Consumers want something drier and tarter. That’s a direction sales have been going the last two years. John Langham is grocery manager at Traverse City-based Oryana Community Co-op, a popular two-store co-op that began as a small buyers’ club in 1973 for those seeking local

and organic products. He started carrying Fruitbelt last summer. “I really liked it and thought it could do well. We put in a big display and had it on sale for a dollar off a case, and that kick-started it.” But delivery was sporadic. A driver would bring some up on occasion from Harbert, but Langham said he couldn’t always use enough cases to make the trip worth the driver’s time. “Customers asked for it. It created a following. The trend is for more nutritional foods, to get away from heavily-sugared drinks. And away from sodas to sparkling waters and teas,” he said. Those loyal followers can get Fruitbelt from the co-op regularly now that Imperial makes deliveries twice a week. “We’re happy to have bought in Fruitbelt and it’s doing well.” The apple drink is 25 percent fruit juice, made from Michigan heritage apples supplied by King Orchards in Central Lake, northeast of Traverse City. Other ingredients are organic honey, extracts of lime and caraway, and bitters, which include dandelion and chicory roots, propolis, aronis berries, quassia and cherry bark. The elderberry drink is 15 percent fruit juice, supplied by an elderberry farmer they found in Missouri, with elderflower extract and bitters. The cherry tonic is 20 percent fruit juice, from Montmorency tart cherries, also supplied by King Orchards, with ginger extract and bitters. Propolis is an aromatic, resinous substance produced by bees to cement their hives and is considered to have anti-inflammatory and anti-microbial properties. It is fitting the company uses both honey and propolis, given that Denton is a beekeeper. Gazzolo said she has been talking to Michigan farmers about supplying gooseberry and Saskatoon berries, which look like blueberries but aren’t as sweet, with a nutty almond flavor. Despite being in one of the best blueberries regions in the world, Gazzolo said they don’t have a blueberry drink because the berries are just too sweet to work. “We aim to bring forgotten fruit crops back to Michigan and the greater Midwest landscape,” said Gazzolo. “By working with farmers who are willing to grow them and fruit processors who are willing to convert the fruit in small batches, and by heralding the unique taste and benefits of these fruits, we hope to encourage the widespread revival of indigenous crops, enhancing biodiversity and restoring the soil.” She said she’d also like to add tonics made with black and red currants.

An idea from abroad Fruitbelt’s genesis was a trip Gazzolo made to the U.K. in 2012. She went into a grocery and bought a carbonated fruit drink that, to her surprise, was neither too sweet nor bland. “I jumped out of my skin,” she recounted. “I came home and thought, ‘We live in a fruitbelt. We’re surrounded by fruit.’ I wanted to make a drink I would like.” See FRUITBELT on Page 15

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BY T

“WE’LL EXPAND GROWING ONE WAY OR ANOTHER, EITHER HERE OR IN ANOTHER CITY.” — Bill Stohler, co-founder and head of business development for Nobo Michigan

TOM HENDERSON FOR CRAIN’S DETROIT BUSINESS

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Partner Bill Stohler, outside Nobo Michigan’s grow facility, a former aluminum recycling operation building.

Colorado cannabis company puts down roots in Benton Harbor Nobo Michigan spends $8M on grow facility, plans to open retail store downtown in May BY TOM HENDERSON

Nobo Michigan is a new Benton Harbor business turning brown into green — brown as in brownfield, green as in the color of marijuana. Nobo Michigan is a wholly owned subsidiary of Nobo Inc., a Boulder, Colo.-marijuana grower and seller that has just expanded into Michigan. The Michigan LLC was formed in 2018 and was licensed by the state in January to run a cultivation and processing facility outside of town. In May it plans to open a 2,800-squarefoot retail store in the Arts District in downtown Benton Harbor, at the corner of Water and Main streets, to sell both recreational and medical marijuana. That opening will be part of a string of 10 stores the company plans to open up around the state by the end of the year. Last week, it opened its first store in Edwardsburg, a small village near the Indiana border in far southwest Michigan. That will be followed by the opening of a store in Battle Creek in March and in Muskegon Township in April. Alan Bonsett, Nobo Inc.’s founder and CEO, declined to name the other locations, saying he is in the process of finishing various permitting processes. He said the goal is for Nobo Michigan to have revenue of $50 million next year. In January 2020, the Benton Harbor city commission granted permits for Nobo to both grow and cultivate marijuana. In return, the company agreed to pay $450,000 to the Berrien County Land Bank for an abandoned

One of the Nobo grow rooms, under LED light. | TOM HENDERSON FOR CRAIN’S DETROIT BUSINESS

11-acre site and three buildings that once housed Alreco Metals, a large smelter and recycler of aluminum. Rob Cleveland, the CEO of Cornerstone Alliance LLC, a nonprofit economic development organization in Benton Harbor, said once the city commission approved the permits, his organization worked with Nobo to find a suitable site. Bonsett told the commission at the time that the facility could eventually employ 300 after future expansions. Twenty-four locals had been hired and were working full time by the end of January, with another 20 or so scheduled to be hired. He said the company spent about $8 million for the land and buildings, to put on a new roof and siding and bring the

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

30,000-square-foot former maintenance building up to code, including $2 million alone for the HVAC system, as well as installing all the computerized cultivation equipment. Bill Stohler, the co-founder and head of business development for Nobo Michigan, said if the city approves, the company could begin an expansion this year. “We’ll expand growing one way or another, either here or in another city,” he said. He said if he gets city approval, he’d like to do an expansion of 10,000-15,000 square feet to the current growing facility, which would mean another 30 jobs. When the state granted its license, Nobo had just finished its first harvest, with marijuana hanging up and

drying in the hallways and a new crop underway. A crop can be harvested every 60 days. There are five 2,500-square-foot grow rooms, with 90 LED lights shining brightly in each. Nobo Inc. owns 56 percent of Boulder-based GrowRay Technologies Inc., which makes and sells patented LED lights specifically made for cannabis to growers around the country. The lights are used in the Benton Harbor operation. The company is also building a big growing facility on 70 acres of land near the Denver airport, an off-grid project that will use geothermal heat and which is expected to be operational by the end of the year. Bonsett said he has a license pending in Illinois and is in negotiations for joint ventures to grow and sell cannabis in Canada, South Africa, Turkey and Portugal. “We have big growth plans,” said Bonsett. “We want to partner with folks who get licenses in other states.” Nearly everything in Benton Harbor is automated, with computers monitoring the humidity in the air and the wetness of the soil, as well as administering the automatic feeding of various microbes and nutrients. There is an RFID tag on each plant to help monitor them. There are 127 cameras stationed throughout the building, as well as motion sensors, all operating around the clock. Nobo grows 31 strains of marijuana and will sell flower tops, joints, cigars and various edibles, among other things. Bonsett said prices in the retail stores would range from about $12 for a gram or so of bud to $100 for two grams of ultra powerful smoke

called caviar. One room in the Benton Harbor building contains trays of fine powder gathered from grown plants, with different smell and taste profiles that can be used in a variety of higher-end products and bearing such names as sugar rush, blueberry, apple fritter, King Louie and lemonge, which has a distinct lemon smell. Bonsett said Nobo stands for North Boulder County, where he learned to grow marijuana. “North Boulder tended to look the other way when it came to people growing pot,” he said. He said the person who taught him how to grow cannabis was an older guy from Flint who had headed west to avoid the draft during the Vietnam War. Bonsett said he founded his legal pot business in 2015. He is originally from Indiana, likes Michigan and decided to branch out here because of the way state regulations were set up. “There are a lot of requirements, which limits the competition,” he said. “Early on we saw the opportunity and wanted to plant our flag here.” In April 2018, he met Stohler, who had previously been part owner and CFO of a marine company, Pier Perfection Inc. of Cassopolis. Several months later they formed the Michigan LLC, with Stohler in charge of setting up meetings with various city officials around the state and overseeing the permitting and licensing process. Benton Harbor was just a few miles away from Cassopolis and was an obvious place to come calling. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

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NOT YOUR AVERAGE DESK JOB

COVID-19’s shift to home-based work drives sales bump for high-end furniture maker

TOM HENDERSON FOR CRAIN’S DETROIT BUSINESS

BY TOM HENDERSON

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FOCUS | CRAIN’S MICHIGAN BUSINESS | BENTON HARBOR

The nationwide move to working from home has been devastating to such makers of office furniture as Steelcase Corp. of Grand Rapids. It has been a boon, though, for Vincent Leman, the owner of a small furniture business in Benton Harbor. Sales jumped 60 percent last year, all of that increase coming after COVID hit, and he has closed on the purchase of a much bigger building to house his expanding workforce, tools and lumber for his high-end hardwood desk and cabinet business. To be closer to family, Leman moved his business, Dust & Ashes Productions, to Benton Harbor from Valparaiso in 2017. The name is a reference to a passage in the book of Genesis, Leman where Abraham said: “Behold, I have undertaken to speak to the Lord, I who am but dust and ashes.” “It’s a reminder for me not to get too carried away with the business and lose sight of higher values,” Leman said. He was already jammed in a 10,000square-foot factory before COVID and was building up a bigger and bigger backlog of orders because of limits to how many pieces of furniture he could make there. “I thought this place would last years and years,” he said. He thought wrong. On Jan. 29, he got the keys to a building he bought near his current building on the outskirts of town in December, a 32,400-square-foot space that will much more readily house his CNC machines, saws, stacks of hardwood and a growing workforce. He employs 13, now, up from three when he moved to Benton Harbor and 10 pre-COVID, with several more coming on soon. He makes his desks and cabinets of solid hardwood, no particle board need

FRUITBELT

From Page 12

Gazzolo has been a serial entrepreneur. In 2009 she founded Intelligent Generation, a clean-energy software company in Chicago, and helped it raise $1.5 million in startup funding and turn it into a revenue-producing company before leaving in 2012. In 1995, she founded Inhabit, a women’s retail clothing store in Union Pier, Mich., and was CEO until 2003. The company found emerging designers in central and eastern Europe, Japan and Korea for its lines of higher-end apparel. Since 2004, she has also been an organizer of a campaign called Friends4Ibrahim, named for Ibrahim Parlak, a Turkish Kurd who was granted asylum by the U.S. in 1991, based on his fear of religious persecution in his homeland. The popular owner of a Kurdish restaurant in Harbert named Cafe Gulistan, he became a cause celebre in 2004 when

Dust & Ashes Productions makes a variety of stand-up and treadmill desks. | DUST AND ASHES FURNITURE

“WORKING WITH VINCENT IS A MATCH MADE IN HEAVEN. HE IS ABSOLUTELY GREAT AT DESIGNING AND BUILDING FOR OUR MARKET.” — Ron Wiener, CEO, Thermogenesis Group Inc.

apply — quarter-sawn oak, red oak, walnut, hickory, cherry and maple. He began moving stuff into the new building last week and will keep making desks in the first building while transitioning slowly to the new one. If sales continue to grow, he said he may keep the old location up and running, too. Leman and his wife, Jessie, founded their business in 2006, renting 2,000 square feet of space from a local plumber. He had a mechanical engineering degree from Purdue University, “but I didn’t want to work in the corporate world.” Good with his hands and with an affinity for beautiful hardwood, he began making and selling what he called art furniture, then, and bills as whimsical, now. He built three- and four-shelf bookcases and cabinets, with twisting

curvy sides and shelves that more often than not weren’t level, with brightly-pained wood. They were fun to look at, like something you might see in Whoville, but practical, too. The bookcases with shelves at angles were tall and narrow and the sides kept everything in place. The Great Recession nearly put them out of business but they hung on, barely. With more time on his hands, he got a master’s degree in product design from Northwestern University. In 2015, the trend to standing desks sent sales climbing. Jessie is more of a stay-at-home mom, now, but as a graphic designer by training helps with brand management. “Vince is great. I love working with him,” said Sally DeBroux, director of merchandising for Artful Home LLC

the U.S. Department of Homeland Security claimed he had once been a member of a Kurdish terrorist organization and started deportation proceedings, which started a long court fight. He remains in Michigan. Back in Michigan from the U.K. and sure she wanted to start a company, Gazzolo enlisted close friend Denton as her partner. Gazzolo has the title of CEO and Denton the title of head soda muse. Why Denton? “Beth can do anything. She’s an Ohio country girl who can butcher a goat. She grows her own food. She can figure out anything.” In the 1990s, Denton managed a real estate firm in Illinois and then was a school teacher. In 2003, she started the Sunshine Farm in Galien, near Harbert, doing what is called community-supported agriculture, a farm where members receive weekly shares of food. Denton headed up the experimenting with various fruits, bitters and other ingredients before settling on drinks they both thought tart and

interesting enough. Their product launch was in 2016, with market acceptance coming grudgingly. They struggled with distribution. They also struggled to find a bottler. Michigan bottlers wanted minimum case runs that were far in excess of what they needed or could pay for, and they finally found a bottler in Pennsylvania. Once they had the formulations of ingredients to go with their fruit concentrates, they needed to find a commericial formulator, which they found in Wisconsin. King Orchards sends fruit to Pennsylvania and the formulator sends the magic mixtures that make the drinks pop. Their first run was of 3,500 cases, and it took them a year and a half to sell out. They had 6,000 cases bottled last year, a record, and it is nearly sold out. With Whole Foods and Imperial on board, now, it should be another record-breaking year, and time to raise some equity capital.

Vincent Leman builds colorful, curvy bookcases. | DUST AND ASHES FURNITURE

of Madison, Wis., which sells furniture, glassware, sculpture, jewelry and other works created by U.S. and Canadian artists. “In our furniture line, he’s one of our leading sellers. He’s in big demand. We get great feedback from customers. They love it.” Artful Home sells a wide range of Leman’s whimsical book cases, cabinets, tables and clocks, ranging in price from $98 for a small clock to $1,735 for a narrow, three-tiered bookcase to $4,900 for a four-shelf cabinet. She met Leman 10 years ago at an American Craft Council convention in Baltimore, where he was showing some of his pieces and offering them both at retail and wholesale pieces. “I had never seen anything like it. It was whimsical, colorful work,” she said, and she’s been selling it ever since. Leman acts as a drop-ship supplier, sending his wares directly to her customers. She recently asked him to design a stand-up desk with his characteristic bright colors and curves. The top will be traditional solid wood, with the low-

er drawers stained turquoise and curved. A motor will raise and lower the top. “We’ll bring it on line this month. I’m really looking forward to it.” ImovR, a furniture seller based in Bellevue, Wash., carries a variety of Leman’s stand-up and treadmill desks, ranging from $1,147 to $4,223, and cabinets of his ranging from $699 to $999. Leman has also recently been added to ImovR’s design team to work on other projects. “We’re very high end,” said Ron Wiener, the CEO of the Thermogenesis Group Inc., which sells all its products under the DBA of ImovR. Their products are all custom-made on demand in the U.S. Wiener said Leman reached out to him about a year and a half ago. “He’d been making tops for a Chinese competitor of ours. They were putting his tops on cheap bottoms and he was irritated by that. And they were grinding him on quality and price. They were his biggest customer but they had him on a cash treadmill, grinding his margins into the ground. I told him, ‘Look, we want a premium product. We’ll pay you twice as much and we think the market will bear it.’ Our market is underserved. ... Most standing desks (sell for) $300 or $400, and they’re all crap. We sell $6,000 desks all day long.” He said since COVID hit, more business owners, executives and upper management are working at home, and they want a beautiful desk and will happily pay for it. He said preCOVID, about 35 percent of his customers worked at home; about 95 percent do now. He expects that even after vaccines are widely administered, working at home will continue to be a dominant feature of the American labor market. Leman has a third major retailer for a customer, the Portland, Ore.-based furniture company Fully, which also focuses on stand-up desks. He also sells directly from his own website, dustfurniture.com, with desks selling in the general range of $1,500-$3,000. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

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FEBRUARY 8, 2021 | CRAIN’S DETROIT BUSINESS | 15

FOCUS | CRAIN’S MICHIGAN BUSINESS | BENTON HARBOR “I’VE BEEN FORTUNATE ENOUGH TO PLAY A LOT OF GOLF ALL OVER THE COUNTRY AND I’VE NEVER PLAYED A COURSE LIKE THIS. I’VE PLAYED A LOT OF NICKLAUS COURSES AND NEVER SEEN ONE LIKE THIS.”

HARBOR SHORES

— Joshua Doxtator, Harbor Shores general manager

Harbor Shores, a Jack Nicklaus-designed golf course in Benton Harbor built on a former Superfund cleanup site.

GOLF

From Page 8

Despite a slow start because of state-mandated lockdowns that delayed the start of the season, the course set its record last year with 15,500 rounds played, most of them at a fee of $175 per round. The course has a unique combination of terrains. It has holes along the river, where wetlands demand accurate shots, holes that meander through forests to the west of the river and dune holes atop the bluffs overlooking Lake Michigan. “I’ve been fortunate enough to play a lot of golf all over the country and I’ve never played a course like this. I’ve played a lot of Nicklaus courses and never seen one like this,” said Joshua Doxtator, who has been the course’s general manager for two years and a PGA professional for 16 years at courses in Green Bay and Phoenix. “It was far and above what I expected when I first came here to see it.” The golf course is run as a nonprofit and funnels its operating surpluses into maintaining the 12-mile public trail system in and around the course and the nearby Jean Klock Park Beach, providing free golf instruction to kids through the First Tee program in Benton Harbor, funding various job training and educational programs in the area, and making donations to the local Boys and Girls Clubs of America as well as all three local public school districts. It’s the centerpiece of what has become a sprawling center of economic development and commerce. “It all started with an idea,” said Rob Cleveland, the CEO of Cornerstone Alliance, an economic development organization that targets projects throughout Berrien County.

Joshua Doxtator, general manager, Harbor Shores. | CRAIN’S DETROIT BUSINESS

Cleveland credited executives at Whirlpool Corp. and the Whirlpool Foundation for being prime drivers of reclaiming and remaking all that damaged land, especially Whirlpool CEO Dave Whitham, at the start, and then his successor, Jeff Fettig. “It took decades to get there but it couldn’t have worked out any better.” Whirlpool makes the KitchenAid line of cooking equipment and earned the right for the resort to host the PGA’s senior tournament biannually — last year’s tourney was canceled because of COVID — by becoming the naming rights sponsor to what is now the KitchenAid PGA Senior Tour Championship. Whirlpool also hosts a charity golf tournament at the course each summer.

It took vision When Nicklaus visited Harbor Shores with his team in 2007, he was less than impressed by what he saw. Though much of the debris had been hauled off, there were still mounds of it scattered around. He was driven

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

through what would become the 15th hole on a path banked by mounds of refuse 15 feet high. The land was chewed up from all the heavy machinery, and there was so much overgrown brush, they couldn’t get through it to get to the river. “Where do you expect me to build this golf course?” Nicklaus asked his local guides. Reluctantly, thinking this might be one project where he was biting off more than he could chew, he agreed to take it on. As if turning one of the most contaminated brownfield sites in the country into a tourist-destination golf course wasn’t ambitious enough, the vision was for something grander than just 18 holes of golf. So far, total development costs, including demolition, land clearing, building the course and such amenities as restaurants and more than 200 units of housing has cost upward of $500 million. Tens of millions of that has come from a wide range of local, state and

federal grants, loans and tax credits, including an EPA revolving loan fund; Michigan Department of Environmental Quality and Department of Transportation grants; Renaissance Zone tax credits; new market tax credits; state brownfield tax credits; funding from the national EB-5 program, which grants green cards to foreign nationals who invest in American projects that lead to at least 10 new jobs; and community development block grants from the U.S. Department of Housing and Urban Development. Along the way, Cornerstone and Harbor Shores spent years assembling 170 separate parcels of land into 530 contiguous acres, compared to the 160 or so for a typical 18-hole golf course. By 2002, well before all the land had been bought and all the debris and contaminated dirt had been hauled off, there was already a detailed site plan drawn up for what would become the Harbor Shores golf course and various housing, restaurant and hotel projects. The course opened for play in 2010. Construction on other projects has continued apace at Harbor Shores Resort, with Evergreen Development Co. LLC overseeing the building of such projects as a hotel, townhouses, single-family homes and restaurants. From its headquarters in Benton Harbor, Evergreen has built and marketed golf resorts and mixed-use projects around the world, including Australia, Hawaii, the U.K., France, Ireland, Thailand, Brazil and Turkey. Tourist destination U.S. courses include the Sagamore Club in Noblesville, Ind., and Grand Cypress Resort in Orlando, Fla. Jeffery Gilbertsen is CFO and COO at Evergreen Development, who was recruited to the project in its early

stages, in 2008. He said his first reaction was similar to Nicklaus.’ “At the time, I thought I was insane for leaving a dream role of running international finance for a public real estate investment trust,” he jokes now. “Fortunately it seems to be working out.” According to Gilbertsen, development at Harbor Shores, in addition to the golf course, has included the Hideaway Cottages, 56 single-family homes along the Paw Paw River, overlooking the 18th hole, 55 of which have been sold; the Trailside Cottages, 19 units between the fifth and sixth holes, all of which have been sold; Fairways Signature homes, 27 homes adjacent to the third, fourth and fifth holes, 25 of which have sold; the Enclave, six lots for single-family homes along the sixth hole, of which three have been sold and built on; Champions Village, with seven lots adjacent to the clubhouse, with four lots sold and houses built, with capacity for another 30 houses; and Harbor Village, with 77 townhouse sites, 17 of which are sold, with 10 built and seven under construction, and 15 single-family lots sold, with five homes finished, four under constructipn and six pending construction. In all, he said 223 single- and multi-family units have been completed or are under development, with capacity for up to 300 more. In addition, nonresidential commercial development includes the large Renaissance Athletic Center workout facility next to the second hole; the North Pier Brewery and the North Shore Inn Restaurant; the Inn at Harbor Shores, a 92-unit hotel with 14 condominium units located in Harbor Village; and a 50-slip marina. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

3:30 p.m. | March 10 Join us as we dive into the nuances of the state’s largest mergers and acquisitions in a year like no other. Hear from Mina Sooch, the veteran biotech entrepreneur who led a reverse merger for her Ocuphire Pharma last year. The deal was one of several involving reverse mergers or SPACs during 2020. Learn from Lineage Logistics CEO Greg Lehmkuhl, who led his company through an aggressive growth strategy that included more than 50 acquisitions over the past five years. Also: M&A advisors Raj Kothari, Managing Director of Cascade Partners LLC and Laura Marcero, Managing Director of Huron Consulting Group, offer an outlook of the activity forecast for this coming year. FEATURING A LIVE Q&A WITH PANELISTS

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Senior reporter Crain’s Detroit Business

Greg Lehmkuhl CEO Lineage Logistics

Rajesh U. Kothari, CFA Managing Director Cascade Partners LLC

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Whitmer says lockdown saved lives; Glantz says it killed economy

“It’s capitalist Darwinism,” said Jeff LaBine, an M&A attorney and partner at Miller, Canfield, Paddock and Stone PLC in Ann Arbor. “Independent dealers, those with one to three stores, are just getting eaten up.”

Depreciation donnybrook Once viewed in Southeast Michigan as a way to “print money,” auto dealer profits have continued to sink over the past decade despite record car sales. The average operating profit margins for auto dealers in the U.S. sunk to 1.7 percent in the first half of 2018, down from 8.9 percent in 2015, according to data from a McKinsey & Co. report. So while revenue has generally risen, profits continue to shrink. “To some extent, everyone thought it was instant wealth to operate a dealer and it largely was,” said LaBine. “But that’s not quite the same anymore. The overall margins are just getting squeezed. That’s a factor of the automaker-driven incentives and fierce competition.”

Coming up are: Whitmer

Glantz

Feb. 9 Wright Lassiter III, President and CEO, Henry Ford Health System Joneigh Khaldun, Chief Medical Executive, State of Michigan

Feb. 16  Jay Farner, CEO, Rocket Companies Inc.  John Fox, President and CEO, Beaumont Health

Feb. 23  Mat Ishbia, CEO, United Shore/United Wholesale Mortgage  Greg Lehmkuhl, CEO, Lineage Logistics

nation.” Close to one million residents have been vaccinated. Whitmer said 70 percent of doses received by the state have been put into arms and 100 percent have been scheduled to be administered. That’s put Michigan on a path toward eventual 70 percent inoculation and the return to “real normalcy.” But first the state must get a handle on the spread of new COVID-19 variants that risk progress made against the disease, Whitmer said. That’s a big rea-

son why high school contact sports were suspended and restaurants can open only at 25 percent capacity — orders that have drawn criticism from all corners of the state. “I can’t tell you how much I wish I

never had had to use any of these powers,” Whitmer said. One of the loudest critics has been Emagine Entertainment Chairman Paul Glantz, also selected as a 2020 Newsmaker. In the second interview in the series

The rise of third-party online automotive sites, like Cars.com or TrueCar, cut into profits, according to the McKinsey study. These sites allow car buyers unprecedented transparency into car pricing and inventory and damped dealers’ ability to keep prices above MSRP. To fight against shrinking profits, dealer groups have chosen scale. Serra Automotive, founded by Al Serra in 1973 as a single Chevrolet store in Fenton, has made several acquisitions in the past 12 months. Last year, it acquired Brighton Honda, Brighton Mazda and Superior Collision Center in Michigan and Buick-GMC and Subaru stores in Savoy, Ill. In June, Serra president Joe Serra told Mergermarket that he reviews 15 acquisition opportunities a month. “You have to look at a ton just to get one,” Joe Serra told Mergermarket. Oregon-based Lithia Motors Inc., the third largest auto dealer group in the nation with $12.7 billion in revenue in 2019, is taking no chances. It’s reported that Lithia is poised to acquire Michigan’s largest dealer group and one of the country’s largest privately held groups, Troy-based Suburban Collection.

The Suburban Collection posted $2.7 billion in 2019 revenue with a concentration of Detroit 3, luxury and import stores. Longtime leader of the family enterprise, David Fischer Sr., recently stepped down as U.S. ambassador to Morocco with the change in White House administrations. The combined group would operate more than 230 stores across the U.S. With shrinking margins, small auto dealers are forced to rely more heavily on vehicle servicing and financing and insurance. Profits from financing and insurance alone grew from 45 percent of total dealer profits in 2015 to 53 percent by 2018, according to the McKinsey study. But with a small number of locations, and car sales shrinking, the runway on these profits is contingent on selling more product, not less. Buff Whelan generated revenue of $254.5 million in 2019 from its one dealer location, a 4.5 percent increase in sales over 2018, according to Crain’s data. The dealer does not reveal the amount of vehicles it sells annually, but based on dealers with similar sales, the dealer likely sells upward of 8,000 to 9,000 new and used vehicles per year. Comparatively, Serra Automotive sold 61,909 new and used cars in 2019,

according to Automotive News data. “This is a volume business,” LaBine said.

PEOPLE ON THE MOVE

Invest in an uncertain future Automakers are also forcing dealers to follow their lead in promoting and investing in their electric vehicle visions. Last fall, General Motors asked dealers to commit to upward of $200,000 in upgrades per store to support sales and service of upcoming EVs, Automotive News reported in September. The costly investments were met with disdain from dealers in parts of the U.S. where EVs don’t typically sell well. For instance, only a third of dealers in Virginia had signed the GM contract, the Virginia Automobile Dealers Association told Automotive News. “You’ve got some rural dealers where the demand is not going to be there for the time being,” Don Hall, the association’s president, said. “You can’t really expect them to want to spend with great enthusiasm a lot of money on something that hasn’t hit our marketplace yet.” GM plans to launch 30 EVs globally by 2025 and more than two-thirds of

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

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

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AlixPartners, the global consulting firm, is pleased to announce that Adam Hollerbach has been promoted to become a Managing Director (Partner) at the firm. Adam has nearly 20 years of experience supporting clients’ turnaround-specific and ongoing performance-improvement needs. He has worked with large and middle-market companies, both public and private. His industry experience spans automotive, retail, energy, healthcare, consumer products, packaging and manufacturing, among others.

Ann Marie Uetz, partner in the Detroit office of Foley & Lardner LLP, has been appointed Vice Chair of the firm’s Litigation Department. Uetz’s practice spans both business litigation and bankruptcy with a focus on the manufacturing industry where she advises automotive and defense suppliers on acquisitions, procurement and supply contracts and disputes that arise within the supply chain. Uetz is also the former Vice Chair of the Bankruptcy & Business Reorganizations Practice.

KLA Laboratories, Inc., a 92-year-old familyowned information technology integration firm, proudly announces that Nick Vettraino has been promoted to Executive Director of Operations, Planning and Strategy. Nick started his career at KLA Laboratories eleven years ago and is part of the 3rd generation of KLA’s ownership family. He will be responsible for the operational oversight at the company and act as a liaison between Directors and Chief Executives.

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

which will be sold in North America. Earlier this year, the automaker said it aspires to phase out gas-powered vehicles by 2035. “The capital expenditure piece is going to continue to be a huge driver of dealer M&A,” LaBine said. “Dealers have to constantly dump more money into stores and they can’t get away with the traditional 9-to-5 operation.” The dealership model is also changing. Mobile apps like Carvana are removing the dealership from the equation all together. The company buys used cars from owners largely sight unseen, picks them up and handles all the paperwork digitally. Car buyers, in turn, can buy cars directly from the site and get them delivered. Carvana bought more than 104,000 cars and trucks from consumers in 2019 versus about 31,000 the year before. During the third quarter, revenue rose 41 percent to $1.54 billion. “The larger these dealers can get, the more they can insulate against these new competitors,” LaBine said. “Pretty soon there is only going to be dealers as big as Serra and Lithia. ”

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UNDER

Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools

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

NOT 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-squareBy Annalise Frank foot space30,nonprofits and civic October 2017 | crainsdetroit.com groups • UBS plans to open wealthcan use free of charge • Bedrock-owned buildings office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018 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 UBS will lease 13,000 feet from Bedrock LLC starting around mid-2018 in two buildings: the Grintown Detroit in mid-2018, theplans company • Office to include 6,000-squarefeet on the connected sixth floors of nell Building (center left) at 1515 Woodward Ave. and the Sanders Building (center right) at 1529 have made for me.” announced Monday. foot space nonprofits and civic buildings at 1515 Wood- Woodward Ave. Group AG’sneighboring U.S. and Canadian groups can use free UBS of charge ward Ave. and Fourteen metro Detroit employees don’t really have adequate resources wealth management business, New 1529 Jer- Woodward Ave. • Bedrock-owned buildings The twoManagement buildings built around 1900 are will move to the downtown office to or adequate office space to host dosey-based UBS Wealth undergoing renovations by Detroit-based will lease LLC 13,000 feet from Bedrock LLC starting around mid-2018 buildings: Grin- meetings or things nor events the or board start, but the office has the capacity toin two Americas, plans toowned lease 13,000 square UBSBedrock nell Building (center at 1515 Woodward andnew the Sanders Buildingalong (centerthose right) at 1529 Bush said. and are undergoing said left) lines,” hold another six toAve. eight staff memfeet on the connected sixth floors of renovations, Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All RightsUBS reserved. plans to open an office in downAve. for bers, Bush said. It will act as an extension John Bush, 60, WoodMichiganWoodward market head UBS’s investment in the new ofneighboring buildings at 1515 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD1134 town Detroit in mid-2018, the company UBS Wealth ManagementFourteen Americas.metro of fice will resources be “significant,” he said, as its the other wealth management offices. don’t really have adequate Detroit employees announced Monday. ward Ave. and 1529 Woodward Ave. “The real impetus open atonew The twoCanadian buildings built around 1900 arefor us “uniqueness Bush is based theadequate Birmingham office space to hostcomes do- at a price.” He said willto move the downtown office out to ofor UBS Group AG’s U.S. and office inBedrock Detroit is to support what’s owned by Detroit-based LLC he could or not yet provide an estimate but travels to to the will meetings norothers eventsand or board things start, but the goofficeoffice, has the capacity wealth management business, New Jering renovations, on in the city, ” saidhold Bush, a Detroit and are undergoing said on the be spending in thealong Detroit branch. those lines,” Bush said.cost of the build-out, as some another six to eight new stafftime memsey-based UBS Wealth Management native who grew up in Garden City. “We John Bush, 60, Michigan market head for have yet The location have atheless UBS’s investment in the new of- to be finalized. bers, said. will act asDetroit an extension Bedrock LLCItstarting around mid-2018 in twowill buildings: Grin- contracts Americas, plans to lease 13,000 square UBS will lease 13,000 feet fromBush UBS Wealth Management Americas. really felt like we wantedofto have a physfice will be “significant,” hecompany said, as its the other wealth management offices. The plans to start its buildtraditional, more “urban” feelright) than 1515 Woodward Ave. and the Sanders Building (center atthe 1529 feet on the connected sixth floors of nell Building (center left) at “The real impetus for us to open adowntown new ical presence to reinforce “uniqueness comes at saidnext year, depending Bush is based outothers, of the he Birmingham outa price.” processHe early said. New York-based architecneighboring buildings at 1515 Wood- Woodward Ave. office in Detroit is our to support go-particular vision what’s for this areatravels and toture he will could not yet an estimate office, but the firm others and will Cale on when renovations on the buildings Verderame design the provide ward Ave. and 1529 ing Woodward don’t really have adequate resources Fourteen metro Detroit employees on in theAve. city,”tosaid Bush, a Detroit reinforce our on Barton the cost of the build-out, as some be spending time inspace; the Detroit branch. are complete. Southfield-based Malow The two buildings builtnative around 1900 areup in adequate office space to have host dowill moveCity. to tothe officelocation to or will who grew Garden “Wedowntown commitment contracts finalized. The Detroit have aon less based in Switzerland, employs Co. has signed as general contractor.yet to beUBS, owned by Detroit-based Bedrock nor events or board or things start, thea physoffice has the capacity really felt likeLLC we wanted tobut The company plans to startacross its buildtraditional, moreto“urban” than the outmeetings the city. ” have 60,000 54 countries. About 34 UBS feel plans to rent about half of the and are undergoing renovations, along those lines,” Bush said. early next year, depending hold six to eight new he staff memical presencesaid downtown toWealth reinforce others, said. New office York-based architecUBS another — 6,000 square out feetprocess — at no cost percent of them work in the AmeriJohn Bush, 60, Michiganour market head UBS’s investment the renovations new of- on the buildings bers, said. It will act an extension vision for for thisMparticular oninorganizations, when tureasfirm VerderametoCale will design theother a n aBush g e marea e n tand cas, according to a news release. UBS nonprofits and UBS Wealth Management will beMalow “significant,” he said, as its of the other also wealth management offices. ficeBarton to Americas. reinforce our Americas are be complete. space; Southfield-based Bush said. The space will called UBS Wealth Management Americas em“The real impetus for commitment us to open a new “uniqueness comes at a price.” He said is based thehas Birmingham to has Bush based signed on as Woodward general contractor. metro De- out ofCo. in Michigan, 225 of whom ploys 280employs 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 ofwill office — 6,000 square feet — at noofcost irm i n g h a time m , in the The wealth management business and a hub-and-spoke layout renative who grew up in Garden contracts have yet tocas, be finalized. M a n a gCity. e m“We e n t Troy, The Detroit locationtowill have a and less other according to a news release. UBS nonprofits organizations, Farmington recorded operating income of $2.13 flect the city’s road system. really felt like we wanted to have a physAmericas also Hills, The plans to startManagement its buildtraditional, more “urban” Wealth Americas em- quarter of 2017 — a Bushfeel said.than The the space will becompany called Plymouth in the third “Some of theUBS organizations that op- billion ical presence downtown reinforce has tometro De- others, he said. New York-based outdesign process early year,280 depending architecploys in Michigan, 225 of whom Woodward Gallery. Its and art next John Bush erate and Dearborn. and provide services in the city 7 percent increase over last year. our vision for this particular area and troit offices in ture firm Verderame Cale when renovations the buildings the onDetroit’s in metro Detroit. willwill aimdesign to showcase history areonbased to reinforce our B i r m i n g h a m , space; Southfield-based complete. Malow arelayout The wealth management business andBarton a hub-and-spoke will reReprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. commitment to Troy, Farmington Co. has signed on as general UBS, basedis prohibited. in Switzerland, employs income recorded operating contractor. flectFurther the city’s road without system. duplication permission Visit www.crainsdetroit.com. #CD936of $2.13 Hills, Plymouth the city.” billion in About the third “Somehalf of the organizations that op60,000 across 54 countries. 34quarter of 2017 — a UBS plans to rent out about of the John Bush and Dearborn. UBS Wealth 7 percent and provide city work percentinofthe them in theincrease Ameri-over last year. office — 6,000 squareerate feet — at no cost services Management to nonprofits and other organizations, cas, according to a news release. UBS Reprinted with permission from Crain’s Crain Communications Inc. All Rights reserved. Americas also Wealth Management Americas emBush said. The space will be Detroit calledBusiness. UBS © 2019 Further duplication without permission is prohibited. Visit www.crainsdetroit.com. #CD936 has metro DeWoodward Gallery. Its design and art ploys 280 in Michigan, 225 of whom troit offices in will aim to showcase Detroit’s history are based in metro Detroit. Birmingham, The wealth management business and a hub-and-spoke layout will reCRAINSDETROIT.COM I MARCH 9, 2020 I Troy, Farmington recorded operating income of $2.13 flect the city’s road system. THE CONVERSATION Hills, Plymouth “Some of the organizations that op- billion in the third quarter of 2017 — a John Bush erate and provide services in the city 7 percent increase over last year. and Dearborn.

UBS to open downtown Detroit office

Albert Berriz talks workforce housing, Ann Arbor and Cuba

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

MCKINLEY INC.: Ann Arbor-based real estate company McKinley Inc. saw the writing on the wall for its retail portfolio a few years ago and cut bait, turning its focus primarily to its large crop of tens of thousands of workforce housing units across the country. One of the people at the helm of that decision was Albert Berriz, CEO and managing member, who came to America as a young boy fleeing Cuba and now steers a large company with a portfolio valued at more than $4 billion. Crain’s Detroit Business: Can you talk a little bit about how the McKinley portfolio began and where it’s at today? Berriz: McKinley started in 1968 in Ann Arbor, and it was founded by (former U.S.) Ambassador Ron Weiser. It started in the student housing business and eventually transitioned into more traditional multifamily housing, and in addition to that, office and retail, as well. Today, we’re primarily a workforce housing multifamily operator. We have essentially disposed of our retail and office assets in an effort to really focus on multifamily and also focus on an asset class that I think is more in line with our current goal, which is to have a generational multifamily real estate enterprise and a pool of assets that really are long term in nature.  Explain workforce housing versus affordable housing. We’re not in luxury housing. Our residents are working. They’re going to wake up tomorrow morning and go to work. Our average rents are, for example, in Washtenaw County, about $1,100 to $1,200 or in Orange County, or Seminole County, Florida, $1,400 or $1,500. So these are affordable rents. And the difference between us and affordable housing is our buildings are not subsidized. They’re all market rate, and they’re all privately owned. The owners are not receiving any form of subsidy, nor are the residents. However, if you wanted to sort of assess residents and low-income housing tax credit deals compared to ours, they’re probably not too dissimilar, the median incomes. The McKinley residents in, let’s say, Washtenaw County, when you look at the numbers are probably not going to be too much different than what you would see in a traditional LIHTC deal. But again, our buildings, the primary differences, our buildings are market rate and they’re not subsidized any way.

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

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

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

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

Bedrock LLC

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Every Tuesday in February, Crain’s will feature webcast interviews with our selections for the top newsmakers of 2020, looking at the challenges the year presented and the road ahead. Sign up for future installments at crainsdetroit.com/events.

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As Michigan navigates hurdles in its COVID-19 vaccine distribution plan, Gov. Gretchen Whitmer said she has yet to fully process a year that brought a raging pandemic, threats to her life and unprecedented economic challenges. “We’re not out of the tunnel yet. We’re still very much in it,” Whitmer told Crain’s Detroit Business Executive Editor Kelley Root during a wide-ranging interview for Crain’s 2020 Newsmakers webcast series last week. Whitmer was recognized as one of 10 Newsmakers of the Year who made a big impact on Michigan during a year like no other. Despite a slow vaccine rollout and criticism over lockdowns that have crippled some businesses, Whitmer said her administration’s actions have put Michigan “in a stronger position than just about every other state in the

with KC Crain, publisher of Crain’s Detroit Business, Glantz said his business adopted a “grow or die” mentality during lockdown orders, which he said unjustly targeted th e indoor entertainment industry. “I don’t think these lockdowns have done anything except destroy our economy,” he said. Still, Glantz saw opportunity for his business amid the misfortune of other companies on less stable financial footing. Emagine acquired four locations last year from Goodrich Quality Theaters Inc. — “the pick of the litter” from the Grand Rapids-based company after filing for bankruptcy. It also announced Tuesday that it acquired the historic Birmingham 8. Glantz said the company has zeroed in on a place in Midtown it aims to open a “premier entertainment venue” in collaboration with local rapper Big Sean. He declined to offer more details.

PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S

BY KURT NAGL

From

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Albert Berriz, CEO and managing member, McKinley Inc.

Laura Picariello

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

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Luxury home sales in Metro Detroit

From Page 1

“It’s not evenly distributed,” Jonathan Silberman, a professor of economics and director of the Southeastern Michigan Economic Data Center at Oakland University, said of COVID-19’s impact on peoples’ economic well-being. “People who can work from home and people who have stock market investments, they have done fine or their income and wealth has increased, if not accelerated. It’s falling on people in the service industry with lower incomes. This is well known. The experience economy — going to a restaurant, going to a concert, travel and leisure, that’s where the brunt of the economic collapse is.” For example, accommodation and food services lost 173,400 jobs in Michigan paying an average weekly wage of $370 per week, while those in company management lost only 2,800 jobs paying an average of $2,434 per week, according to data from the University of New Hampshire Carsey School of Public Policy. “It is clear, however, that job loss

400 350

Oakland County’s 382 home sales of $1 million or more last year far outpaced the other four counties in metro Detroit — Wayne, Macomb, Washtenaw and Livingston — but illustrates the pandemic's disparate impact on the economy. Wayne, Macomb and Washtenaw $1 million-plus home sales held steady or slightly increased in 2020 as well, while Livingston County luxury home sales only mildly dipped.

Oakland County, 2020: 382

300 Wayne County

Home sales of $1 million or more

HOMES

250 200

Washtenaw County Oakland County Macomb County

150

Livingston County

100 50

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RAIN’S’17 C’16 DETROIT ’18 BUSINESS ’19 ’20

SOURCE: REALCOMP II LTD.

CRAIN’S DETROIT BUSINESS GRAPHIC

“BUYERS IN THIS NICHE OF THE MARKET HAVE LIKELY STAYED EMPLOYED THROUGHOUT THE PANDEMIC AND MAY HAVE HAD A VERY GOOD YEAR FROM A FINANCIAL STANDPOINT, ALSO ALLOWING THEM TO FEEL COMFORTABLE MAKING THIS PURCHASE.” — Jeanette Schneider, executive vice president for RE/MAX of Southeastern Michigan

has been significantly more acute in February 2021 low-wage8, jobs than high-wage jobs,” the study says. “Low-wage employees are obviously much more heavily impacted by job loss. They have less in savings, and those who had employer-provided health insurance are less likely to be able to afford continuing coverage.”

Rising sale prices For broker Cindy Kahn, the market has been a surprise. “It’s quite shocking and unexpected,” said the Realtor with Hall & Hunter Realtors in Birmingham, where she specializes in luxury home sales. “I’ve been selling homes for 18 years and I’ve never seen a market like this.” Real estate experts like Kahn and others cite a variety of reasons for why there was a surge in $1 million-plus home sales last year, including low interest rates, a desire for more space as many office employees remain working from home, and average housing prices overall going up over the years, pushing more

CRAIN’S DETROIT BUSINESS

This 8,500-square-foot Birmingham home sold for $3 million last year. | SIGNATURE SOTHEBY’S INTERNATIONAL REALTY

homes into seven digits. For example, last year alone, the median sale price in Oakland County rose 12.9 percent to $280,000, driven largely by a plunge in market supply. Livingston median home sale prices rose to $298,000, a rise of 10.8 percent, and Washtenaw increased to $300,000, a jump of 7.1 percent, according to Realcomp data. Inflation also needs to be considered; a $1 million house in 2000 is $1.5 million in today’s dollars. “Some of what is driving the increasing demand in luxury homes are buyers who are choosing to make money they have made in the stock market and cashing that out to buy a home with our current low interest rates,” said Jeanette Schneider, executive vice president for RE/MAX of Southeastern Michigan in Troy.

NOTABLE WOMEN IN LAW

Deadline extended for Notable Women in Law You have more time to tell us about a remarkable woman in law. We have extended the deadline to nomination a candidate for Notable Women in Law. Nominations are now due Feb. 10. Nominees will be invited to fill out a separate candidate application.

Honorees will be named in a special section in Crain’s on April 19. For more information or to nominate someone, visit crainsdetroit. com/nominate. Questions? Contact Special Projects Editor Amy Bragg: abragg@ crain.com.

“Additionally, these buyers are looking for homes that meet the demands most families now face of work-from-home space, schooling space as well as exercise and recreational space for multiple family members,” Schneider continued. “Buyers in this niche of the market have likely stayed employed throughout the pandemic and may have had a very good year from a financial standpoint, also allowing them to feel comfortable making this purchase.”

John Apap, a real estate agent with Signature Sotheby’s International Realty in Birmingham, said new construction costs have also pushed sale prices higher. The house that just a few years ago cost $250 a square foot to build is now $350 a square foot, not including the cost of land, he said. He and others also noted that many are paying cash for their homes, perhaps getting financing later. “I think there is a lot of family money we see that are buying these

CLASSIFIEDS

multimillion-dollar houses, successful business people that haven’t been affected are paying cash,” he said. “We are seeing quite a bit over $2 million. It’s been very surprising but a very strong market. We thought last year would be one of our slowest years, but once we opened on May 7, we had a record year after being shut down for two months.” J. Bradley Wolf, CEO of Hall & Hunter, noticed a similar bump after the state-mandated shutdown of in-person home showings in the spring. “The first and second quarter of the year, I think the luxury market lagged a little bit because they didn’t have to make that decision to sell, which created a pent-up demand in the third and fourth quarter,” he said. “All the people who were luxury buyers and sellers sat on their hands the first half of the year in 2020 and jumped in the market at the same time, so it turned into somewhat of a seller’s market at that point.” Austin Black II, head of Detroit-based brokerage City Living Detroit, sold a $1.5 million home in downtown Birmingham last year to a client who toured properties not only in the posh Oakland County suburb, but also Northville, Royal Oak and Plymouth. He said upper-income households have not only done well financially in the last year but also have saved considerable sums by not traveling or dining out. “They have saved a ton of money over the last nine to 10 months,” giving them more to invest in a new home, Black said. How the next year or so plays out — whether there is a pullback from the $1 million-plus home sales surge of 2020 — won’t be known for a while. Brokers generally are optimistic about the next few months, but beyond that is anyone’s guess. Page 1 Black, for instance, thinks some habits that people formed during the pandemic that drove them into larger, more expensive houses to begin with will stay long after things normalize. “I think here are going to be a lot of people, particularly the people who were not affected financially and health-wise, some of these habits that were formed in the pandemic will really carry on past the pandemic,” he said. Silberman, the Oakland University economist, wondered whether the growth was sustainable. “Will it reverse when the pandemic is over?” he asked. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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MILLENDO

From Page 3

Owens, a longtime figure in the Ann Arbor biotech sector, said she has yet to evaluate her next steps once Millendo winds down. “This is tough stuff. For every home run, there’s going to be some that won’t work out and that’s OK,” Chris Rizik, the CEO and fund manager of Renaissance Venture Capital in Ann Arbor, an early investor in the company, told Crain’s. “This was a great team working on really revolutionary stuff. But the batting average (for venture capital investors) is going to be well under 50 percent.”

Winding down

Downtown Pontiac | KIM KOZLOWSKI PHOTOGRAPHY

PONTIAC

From Page 3

The cross-sector group dubbed Pontiac Collective Impact Partnership is working with StriveTogether, a consultant that’s led similar efforts in 70 other cities. The collective impact model brings leaders together around common goals to solve complex community challenges by identifying shared outcomes, measuring change and using data to inform decisions. Last week, the partnership named Samino Scott II, a Pontiac native and former community affairs director at United Way for Southeastern Michigan, to lead the initiative as executive director, as it firms up the goals and launches efforts through action committees seated with partnership members to begin work on them. In the coming month or two, it expects to arrive at three or four data-driven goals and the long-term action it will take to make them a reality, Scott said. Broadly speaking, the outcomes or goals revolve around education, quality of life indicators and economic mobility opportunities, he said. “We hope to create something that is transformational within in the community, so we’re looking out 5-10 years into the future.”

Part of bigger focus on Pontiac The Pontiac Funders Collaborative and its nine members are focusing attention on Pontiac as part of a broader plan to strengthen nonprofits and public institutions in the city. The Community Foundation for Southeast Michigan convened the funders after they found a common interest in Pontiac and worked with them to build a plan to collaborate both as a way to learn together and as a way to make investments more strategically, said Katie Brisson, vice president, program at the Community Foundation, in an emailed statement. They have since pooled funds at the Community Foundation, which is administering the initiative, she said. Pontiac is “a disinvested city in a sea

Scott

Harris

The funders The Pontiac Funders Collaborative formed in 2019 when nine regional funders came together to support a community-driven process to identify citywide goals and provide funding for local leaders and organizations to achieve them: ` Ballmer Group ` Community Foundation for Southeast Michigan ` General Motors Co. ` Flagstar Bank ` New Economy Initiative ` Ralph C. Wilson Jr. Foundation ` Tauber Family Foundation ` Vera and Joseph Dresner Foundation ` William Davidson Foundation

of wealth, as it were, in Oakland County,” Brachman said. “Our interest is in lifting up Pontiac and also kind of knitting it together with the rest of the region in a way that really leverages regional resources to benefit Pontiac and vice versa: Pontiac has a lot of assets, too.” Brachman pointed to emerging local leadership in the business and nonprofit sectors, a strong faith-based community and new investments from companies including GM and Amazon. “There’s definitely some momentum we want to build on,” Brachman said. The collective impact model presents an opportunity for the community to come together, understand through data where there are opportunities for growth and then coalesce around priorities, Brachman said. As that process moves forward, the

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

Pontiac Funders Collaborative is already making strategic grants in five areas: `Key community institutions `Civic and community capacity building `The local entrepreneurial ecosystem `Workforce development `Public places “It’s like chess: you need to move all of your investments synergistically,” Brachman said. The collaborative was just gearing up to make targeted capacity-building grants when the pandemic hit. It made $350,000 in emergency relief grants to critical human services agencies and struggling small businesses in the city and hired Freyja Harris as project director. Working with consultants, Harris is on the ground in Pontiac building relationships and getting firsthand information about the needs that she can take back to foundations to direct their joint and individual grant making. Beyond emergency support, the collaborative has made capacity-building grants totaling $100,000 to the city of Pontiac, the Pontiac School District, Oakland University and Main Street Pontiac. Another $670,000 in grants went to: `Friends of the Clinton River Trail to help fund the Clinton River Maintenance Trail Project. `Pontiac Community Foundation to the Center for Pontiac Entrepreneurship to develop an economic development plan with current and future ecosystem partners and to develop programming and tools. `Oakland University/Oakland University Foundation to support the operations and administration of the Pontiac Collective Impact Partnership. The collaborative has invested $1.3 million since the beginning of 2020, Harris said. The funders in the collaborative plan a three-year initial investment, she said, with the aim of leveraging other public and private dollars going forward. “The goal is … to ensure there is some sustainable structure for the city to build on,” Harris said. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

In early 2016, Millendo Therapeutics made Michigan business history when it raised $62 million in what was, at the time, the largest venture capital haul seen in the state. The previous funding record for a VC-backed firm had been set in 2014 by then-Plymouth Township-based ProNAi Therapeutics, which eventually was rebranded as Sierra Oncology. Millendo’s work was initially started in 2012 by a University of Michigan spin-out company called Atterocor Inc., which had been researching drugs to treat adrenal cancer. The Millendo name was in part an homage to Millie Schembechler, the wife of former U-M football coach Bo Schembechler. The “endo” part of the company’s name came from the focus on endocrine diseases. In 2018 Millendo went public via a reverse merger with Massachusetts-based OvaScience, a company once valued at $1.8 billion. Millendo’s recent troubles appeared to commence last April, just as the coronavirus pandemic was taking hold. On April 6 of last year the company announced that a drug it had been testing to treat the genetic disorder Prader-Willi Syndrome had efficacy issues and “did not achieve statistically significant improvement” compared with a placebo. At the time CEO Owens said in a news release that the company would focus its efforts on drugs for menopausal vasomotor symptoms, which include hot flashes

GRANT

From Page 3

I’ve watched too many entrepreneurs think like preachers (“My idea is genius!”) and prosecutors (“All my naysayers are wrong!”). There might be a better alternative. In a recent experiment, new founders were taught to think like scientists — your strategy is a theory, your customer interviews help you develop hypotheses, and your minimum viable product is an experiment to test your hypotheses. The startups in the control group averaged under $300 in revenue. The startups in the scientific thinking group averaged over $12,000 in revenue. Why? They were more than twice as likely to pivot. Instead of getting attached to ideas that didn’t work, they learned from their experiments and thought more flexibly about their visions, strategies and products.

and night sweats. Then in early January of this year, the company announced that the data from tests showed that the drug, known as MLE-301, was well tolerated but still did not support moving forward with further testing. “We would like to acknowledge and thank all of our employees for their hard work in supporting Millendo’s mission of pursuing novel therapies to alleviate patient suffering due to endocrine diseases,” then-board Chair Carol Gallagher said in a statement at the time. “The Board has continued to support the Company’s ongoing plans and execution efforts; however, at this time the Board believes that it ` What is your advice to individuals with a flexible mindset who are within a society or culture that values rigidity? First, invite the people around you to reflect on times when they’ve changed their minds. Second, when you propose a change, highlight what will stay the same. Psychologists find that these steps can help people see flexibility as part of their identities and recognize that it doesn’t require them to abandon their values. ` You write that it’s important to be flexible and to communicate with confident humility. How can our political leadership embrace that view during a time where polarization is often prized? Two rigorous studies have shown that early COVID fatality rates were lower in countries with female leaders and states with female governors. Why? Women announced lockdowns earlier — and more successfully.

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DEALS&DETAILS `MERGERS & ACQUISITIONS `Tandem HR Inc., Westchester, Ill., a human resources services provider, acquired Best Employment Solutions Team LLC, Bloomfield Hills, a company that specializes in professional employer organizations and human resources solutions. Websites: TandemHR.com, bestpeo.com `O2 Investment Partners LLC, Bloomfield Hills, a private equity firm, invested in Flip Electronics LLC, Roswell, Ga., distributor of electronic components. Terms of the investment were not disclosed. Websites: o2investment.com, flipelectronics.com

GETTY IMAGES/ISTOCKPHOTO

` Dexter Axle Company, Elkhart, Ind., a wholly owned subsidiary of DexKo Global Inc., Novi, supplier of trailer running gear, chassis assemblies and related components, acquired 100 percent of the equity interests in Redneck Inc. and Redline Products LLC, Springfield, Mo., supplier of trailer axles and other trailer components. Financial terms of the transaction were not disclosed. Websites: dexteraxle.com, dexko.com

Millendo marked down a $29 million loss. The company listed total assets of $48.8 million and total liabilities of $9 million.

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is in the best interest of the Company and its shareholders to actively seek a broad range of strategic alternatives, including a sale or merger of the Company in order to maximize shareholder value.” Based on the company’s most recent earnings report, for the ninemonth period ending Sept. 30, 2020,

“I’VE WATCHED TOO MANY ENTREPRENEURS THINK LIKE PREACHERS (‘MY IDEA IS GENIUS!’) AND PROSECUTORS (‘ALL MY NAYSAYERS ARE WRONG!’).” — Adam Grant, author

They expressed more awareness of people’s fears and concern for their pain, and showed confidence in their plans while acknowledging all the uncertainty that remained. I don’t think women are inherently more humble and empathetic than men, but they’re generally socialized and expected to embody those qualities. We would be wise to study the decision-making habits and communication styles of leaders like Jacinda Ardern in New Zealand. ` It’s been about seven years since “Give & Take” was published. Are

The company plans to evaluate any options over the coming months that will bring about the maximum shareholder value. Owens said it’s too soon to pinpoint any one, but noted that acquiring new drug candidates or a liquidation could be on the table. Among the most likely outcomes, according to multiple experts in the biotech space, is that Millendo could be the vehicle by which an up-andcoming company goes public via a there any ways you’ve felt the need to reassess the core themes of the book? If I could rewrite the book, I’d do a chapter on all the evidence that men get more credit than women for being generous, while women are more likely to be penalized for seeming selfish. I’ve seen similar patterns for people of color, and it’s sad that in the 21st century, we’re still evaluating people based on stereotypes instead of contributions. ` With graduations a few months away, what is the best way you’d advise students to embrace a learning culture to “know what they don’t know”? Keep a running list of things you don’t know. It might help with maintaining humility and stoking curiosity, and it encourages you to remember that you can learn something from everyone you meet. ` How much more difficult do you believe it is to disagree respectfully and see outside of our blind spots in

reverse merger, the same way Millendo went to the public markets in 2018. With a relatively healthy balance sheet, the company’s public status is likely to prove attractive, according to Phil Torrence, a partner at the Honigman LLP law firm, with a focus on M&A work for both public and private companies. “The board of a public company is charged with maximizing shareholder value, and I’m sure they’ll do that here,” said Torrence, who has not represented Millendo. “At least in my experience — and we’ve been on both sides of these types of transactions — where you have a fallen angel that has a clean NASDAQ listing, there’s value there. I wouldn’t be sur-

prised if 30 to 40 companies express an interest in combining with them.” Rizik with Renaissance Venture Capital said that even if Millendo ceases to exist, its longtime presence as an Ann Arbor biotech company that had talented scientists and executives in its ranks only helps to further the narrative that such companies can thrive in the area. “Which is a necessary piece to be able to create successful companies,” said Rizik. “In that respect, Millendo has shown you can do that. That’s a good reason for companies in the future to be able to locate here rather on the coasts.”

the age of social media?

become a winning team. I might start with cultivating values of generosity, grit, and coachability. In great teams, players care as much about the team’s success as their own — and they’re as motivated to improve themselves as they are to prove themselves. It’s up to coaches and captains to define those behaviors, model them, and hold players accountable when they fall short.

It’s not getting easier — algorithms often reward preaching and prosecuting, and so do too many humans. One change we might all consider individually is to follow people because we’re intrigued by their thought process, even if we don’t agree with their conclusions. It’s a simple way of bursting our filter bubbles and hearing outside our echo chambers. ` As I read your book, the faltering Detroit sports teams came to mind. How would the advice you’d offer a sports team organization in your hometown differ from a more traditional business? Is it too late to coax Barry Sanders out of retirement? From the time I’ve spent advising NBA coaches and owners and NFL and NHL GMs over the past few years, one recommendation is to spend as much time on building culture as on developing skills. You can’t just recruit a few superstars and expect them to

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

` What are you working on next? We’re getting ready to launch season 4 of my TED podcast, “WorkLife.” Some of the episodes are about how to deal with insecurity, ways to pull the plug on bad decisions, and what fair pay looks like. We’re also expanding our footprint to feature more unscripted interviews — my first guests this winter are JJ Abrams, Brené Brown, Glennon Doyle, Malcolm Gladwell, Jane Goodall and Daniel Kahneman. Adam Finkel is a venture capital investor.

` The Boyd Group Inc., operating under the trade name Gerber Collision & Glass, Chicago, Ill., acquired a collision repair center in Wyandotte that previously operated as Eureka Body & Fender. Website: gerbercollision.com, boydgroup.com `Clarience Technologies LLC, Southfield, a commercial and recreational transportation company, acquired ECCO Safety Group, Boise, Idaho, provider of audible warning equipment and emergency lighting for commercial and emergency vehicles. Terms of the transaction have not been disclosed. Website: https: clariencetechnologies.com, eccosafetygroup.com

`NEW PRODUCTS ` Amesite Inc., Ann Arbor, an artificial intelligence software company, released Course Manager capability, that enables schools and businesses to upload courses for remote use without the need for technical assistance. Website: amesite.com ` GreenPath Financial Wellness, Farmington Hills, a financial counseling and debt management services nonprofit, and its affiliate Homeownership Preservation Foundation, launched the 995hope.org website which provides information to help renters and homeowners affected by the COVID-19 pandemic manage through financial challenges. Website: greenpath.org

`NEW SERVICES `Mopec, Madison Heights, provider of pathology, anatomy, mortuary and necropsy equipment and products, finalized distribution agreements in 14 countries and regions, including Chile, Colombia, Costa Rica, Ecuador, Hong Kong, Japan, Mexico, Panama, Paraguay, Puerto Rico, Peru, Russia, South Korea, Trinidad & Tobago and United Arab Emirates. Website: mopec.com

FEBRUARY 8, 2021 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

Diversified Chemical’s George Hill on finding the right chemistry DIVERSIFIED CHEMICAL TECHNOLOGIES INC.: George Hill, 80, CEO and chairman of the specialty chemical and adhesives manufacturer, founded it 50 years ago. Based just west of Highland Park in Detroit, Diversified Chemical Technologies contracts with Fortune 500 companies like Nestle and Clorox. It has deep roots in the automotive industry, with a General Motors Co. contract among its first big breaks, and has grown and contracted over the years while maintaining a home base in the city. | BY ANNALISE FRANK ` CRAIN’S DETROIT BUSINESS: You started the company in the back of your house, right, around 1970? How did that come about? GEORGE HILL: Well, this is one of those believe-it-or-not kind of situations. I was working at Chrysler Corp. at the time. The director of government affairs ... got ill and he was supposed to be representing Chrysler at a (Small Business Administration) conference and ... he called me up and said, ‘George, you’ve been around for a while ... I want you to stand in for me.’ This is a true story. So, I went to the conference. I wandered about and wandered into this one particular event and you had to sign in, not knowing that my signage was going to end up being a data point to the people who were in that group who were interested in contracts. A few weeks later I started getting these government bids in the mail. I went to this friend of mine who was kind of in that business, knew something about it. He said, ‘Look, why don’t we see if we can’t make some money on the side.’ We did it, and we got the bid. We got several more and he said, ‘See how easy it is to make money in this chemical business?’ That became kind of a side job ... and bingo. Here we are. ` So in 1968 you were on a CBS affiliate in Detroit hosting the show “Job Opportunity Line,” the first Black person on regularly scheduled TV in the area. Can you talk about how that came about? Well, what happened is that after the (’67 uprising) of course there was a great deal of interest, as there is now, in what’s going on in the Black community ... and everyone was trying to figure out what could be done to improve conditions in the community and to get a better peek into the world of African Americans. A friend of mine ... had been talking to CBS without my knowledge. He’d kind of thrown my hat into the ring. He called me and said, ‘George,

I’ve done this and I wonder if you’d take the time to talk to these folks.’ So I went out and talked to them and much to my surprise, they wanted me to do it. I was the interviewer, we talked about jobs, education, things in the community. I was interviewing people who had companies, I was interviewing university professors about training ... It was really odd. It came out on Sunday mornings — this is kind of funny. When I first started the business, you know, there was a period in which you’re gearing up to do your manufacturing and on one point in time I would be in people’s living rooms and bedrooms (doing interviews) and then on Monday I’d be out calling on small businesses and we’d be going in to (do cleaning work). They’d look at me and say, ‘Didn’t I see you on TV yesterday morning? ... Come on, come on to my office, we’ll talk.’ ... That might be the secret sauce to the beginnings of the company’s small successes. ` How did the company develop over time, then? We started off doing simple things. (Chemicals to) clean the floor, clean the toilets, that kind of stuff. We had a small plant up on Woodrow Wilson. We were selling things primarily in gallons and drums, that kind of stuff. As we grew and had our own chemists, we recognized the formulations that were being used to clean X would be the same basic formulations to clean Y. Then, in the manufacturing plants, once a part is machined, it has to be cleaned before it can be welded or assembled or anything else, and they’d been cleaning all these things with ... very high caustic solutions and high heat, and the energy costs were just enormous. Well, as we got more chemists and had more sophistication ... we started innovating in terms of the things we could do in our plants and laboratories here that would mimic and replicate what was going on in our customers’ plants. We

developed a variety of very innovative products that really saved a lot of money and did a great deal of cleaning without the dangers of the caustic being heated up. ` Can you give us an idea of the size of the company? In terms of revenue we’re in the $75 million-$100 million range. We will be in the neighborhood of $80 million probably in 2021. We have about 90 employees. ` You guys put emphasis on hiring Detroit residents, right? We always do. There was a lot more talent and confidence, particularly in the Black community, than people suspected. I mean this is an extraordinary city. We felt there was a lot here to tap into (as a Black middle class and education and homeownership grew with the automotive industry) ... so we really felt as though, given my personal philosophy that people really drive your success, people who are talented, committed, skilled, passionate ... so Detroit itself was just the perfect spot. We grew on a national basis and even built a plant in Germany and in South Korea at one time ... We’ve been a much bigger company, by the way, we’ve sold off divisions. In the downturn of the ’80s we sold off a $25 million-$30 million division. But the basis for all that (expansion) was the people who were

here and the educational base that was here and industries that were here. ` Anything new going on? We are licensed to manufacture, and the only licensee in the country, to manufacture a product called Envirocleanse, which is a water-based disinfectant that kills the virus that leads to COVID-19. (We got the license) within the last six-seven months.

REPORTERS

George Hill, CEO and chairman, Diversified Chemical Technologies.

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RUMBLINGS

Mat Ishbia offered $18 million to buy Forest Lake Country Club

United Wholesale Mortgage President and CEO Mat Ishbia offered $18 million to buy the Forest Lake Country Club in Bloomfield Township to build a personal residence and perhaps a handful of others. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

“I’m not trying to buy it, and then sell the land at a profit to anyone.” However, he considers it a dead

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

deal because he did not receive a response to the offer from Forest Lake Country Club last month.

Jason Davis, small and emerging businesses. (313) 446-1612 or Jason.davis@crain.com Annalise Frank, city of Detroit. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care and energy. (313) 446-0325 or jgreene@crain.com Nick Manes, finance and technology. (313) 446-1626 or nmanes@crain.com Kurt Nagl, higher education, business of sports. (313) 446-0337 or knagl@crain.com Kirk Pinho, senior reporter, real estate. (313) 446-0412 or kpinho@crain.com Dustin Walsh, senior reporter, economy and workforce, manufacturing, cannabis. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

MAT ISHBIA TRIED TO BUY Forest Lake Country Club for $18 million. The billionaire president and CEO of Pontiac-based United Wholesale Mortgage confirmed that he is behind FLCC Acquisition LLC, the entity that made the offer in December for the nearly century-old club that sits on 104 acres south of Square Lake Road and west of Franklin Road. Isbhia, whose net worth is north of $11 billion now that UWM (NYSE: UWMC) has gone public, said in a Monday morning interview that he would have built a new house on the property and potentially a handful of homes for others. “The concept was for personal use, not for a country club, not for business, and not for profit,” Ishbia said.

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The offer, which was made around the holiday season, was not brought to the club’s 100 or so equity members for a vote. In September, they voted by a 2-1 ratio to reject a sale of the club to Pennsylvania-based homebuilder Toll Bros. (NYSE: TOL) for an undisclosed price. The club’s board said in a statement: “Based on the strong reaction we received from our membership and the surrounding community to ‘Save FLCC,’ we have embarked on an extensive renovation plan and recruiting drive for our club. We are currently in the process of rolling out the plan to our members, who will be voting on whether to proceed with it later this month.”

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