THE CONVERSATION UM’s Kelly Sexton: Biotech industry continues to thrive, find new solutions. PAGE 22
Port Huron projects get moving PAGE 8
CRAINSDETROIT.COM I MARCH 8, 2021
ONE YEAR LATER, A SHOT OF HOPE
CORONAVIRUS
Hot spot: How Detroit got a handle on COVID-19 BY ANNALISE FRANK
Registered nurse Jeffrey Suhre administers a COVID-19 vaccine to Thelma Rudolph, 85, at the TCF Center in Detroit on Jan. 13, 2021. NIC ANTAYA/SPECIAL TO CRAIN’S DETROIT BUSINESS
The week when everything changed: How the business community lived it BY DUSTIN WALSH | The stark reality of the COVID-19 pandemic is now more than a year long. Some 520,000 Americans and nearly 16,000 Michiganders are dead. Businesses remain disrupted by the long tooth of the infectious disease that continues to prevent customers and workers from being in close contact without substantial safety protocols. COVID-19 landed in America in late January 2020, but didn’t reach Michigan’s borders, at least officially, until March 10. The weeks before but particularly the eight days that followed were among the most tenuous for the state’s lever pullers. The federal agencies hadn’t yet recommended masks. Groceries were being sprayed down
with sanitizers and kept in the garage for hours. Offices and factories remained open. Life as we know it had not changed much. A year later, that’s all changed. Many haven’t been to the office in a year. Others have played offense for many months, following rigid safety rules to avoid contracting the virus at retail, hospitality and manufacturing jobs. With three vaccines now being distributed across the state — more than 2.4 million doses have been administered as of last week — hope is on the horizon. The death and despair of 2020 is drifting.
Business, officials reflect on COVID-19 Rep. Debbie Dingell
Dr. Phillip Levy
Ron Hall Jr.
See IMPACT on Page 20
Jeff Styers, CEO of a Southfield-based staffing firm, got a call the evening of Sunday, March 15, last year that got his talent recruiters scrambling until 2 a.m. Arrow Strategies quickly gathered 15 nurses to do COVID-19 screenings at homeless shelters over the next two days for an organization with which it had no pre-existing relationship: the city of Detroit. Putting the right people in the right places at the right times was to be a key cog in a machine that has run at a breakneck pace over the past year, as the city faced down one of the nation’s earliest and worst COVID-19 outbreaks and fought back. Placing cones and tents along a drive-through path on one of Detroit’s largest and most well-known vacant properties while navigating a web of logistics created an early and widely used testing site at the old Michigan State Fairgrounds, which opened March 27. The city expanded operations to swab thousands of people from around the region. Volunteers and health department personnel swept through nursing homes testing 2,000 elderly residents vulnerable to the coronavirus. Now officials, communities and residents work to solve the vaccination equation in a city that presents some of the inoculation campaign’s biggest challenges. Layers of public-private coordination have shored up the response. Detroit, termed a coronavirus “hot spot” early in the pandemic, and Mayor Mike Duggan received national recognition for the efforts. Detroit brought down the city’s rate of infection from dangerous highs, with help from the state and regional hospital partners. See VIRUS on Page 20
FINANCE
UWM CEO Ishbia launches a Rocket attack. Will brokers rally around him? NEWSPAPER
VOL. 37, NO. 9 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
BY NICK MANES
Mat Ishbia’s metaphorical bomb was launched from Pontiac and targeted 30 miles south down Woodward Avenue. The impact, however, could be felt nationwide by mortgage brokers who have been dependent on Ishbia’s company, United Wholesale Mortgage Corp., and his chief rival, Detroit-based Rocket Mortgage, to close
deals. Both of the companies are juggernauts in the industry, and have helped to fuel a home-buying and refinancing surge for the last several years. Ishbia, the Ishbia 41-year-old president and CEO of Pontiac-based
UWM (NYSE: UWMC), sent a shock to the mortgage industry last Thursday when he announced that the thousands of independent brokers across the country who send potential mortgage deals to both his company, the nation’s second-largest lender, and Rocket (NYSE: RKT), the nation’s largest, must now choose one or the other. See UWM on Page 18
NEED TO KNOW
REAL ESTATE
THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT STATE LOOKS AT EXTENDING OFFICE-WORK RESTRICTIONS THE NEWS: State workplace safety regulators are planning to extend emergency rules that have effectively banned most office work if it can be done remotely beyond April 14, even as business groups lobby Gov. Gretchen Whitmer’s administration to loosen restrictions put in place during the fall surge in COVID-19 cases. The Michigan Occupational Safety and Health Administration will “very likely” extend emergency rules for up to six months, said Jason Moon, spokesman for the Michigan Department of Labor and Economic Opportunity. WHY IT MATTERS: The move comes as a new coalition of chambers of commerce launched Thursday with hopes of convincing the Whitmer of letting the emergency rules expires next month.
TEXAS STORMS MAY LEAD TO FOAM SHORTAGE THE NEWS: After the unprecedented winter storm in Texas and other states last month, automakers and suppliers could be slammed by yet another devastating parts shortage that could idle seating plants as early as next week. The blizzard halted the region’s critical petrochemical plants, which could lead to a shortage in automotive seating foam, industry sources say.
WHY IT MATTERS: Spikes in stock prices driven by traders tied to the Reddit forum r/WallStreetBets have gotten attention since January’s wild ride for video game retailer GameStop.
LEGISLATURE APPROVED $4.2B RELIEF PACKAGE
WHY IT MATTERS: The potential shortage comes as the supply-constrained industry navigates an unexpected rebound in consumer demand and an alarming microchip shortage that has halted production lines for a number of automakers.
WILD RIDE FOR ROCKET, UWM STOCKHOLDERS THE NEWS: Southeast Michigan’s two largest mortgage lenders saw a wild week on the stock market but mostly wound up the week where they started. Rocket Companies Inc. (NYSE: RKT) and UWM Holdings Corp. (NYSE: UWMC) saw big surges Tuesday as online day traders pumped up the stocks in their fight against seasoned short sellers. Rocket on Tuesday jumped more than 70 percent, while UWM gained about 20 percent in value. But by Friday, Rocket was selling for $25.09 a share, and UWM for $8.22, both figures just above where they started the week.
THE NEWS: Michigan’s Legislature on Wednesday approved a $4.2 billion coronavirus relief plan without a deal with Gov. Gretchen Whitmer, as majority Republicans pressed to curtail her administration’s pandemic powers and Democrats opposed a decision to not allocate all federal aid immediately. The Democratic governor could sign some of the package and nix other parts.
JLA parking deck gets new owner The recent buyer of the high-rise now known as 211 Tower has solved its parking problem by purchasing the Joe Louis Arena parking deck for an undisclosed price. Grosse Pointe-based Foster Financial Co. says on its website that it is the owner of the more than 3,000-space parking garage, which is located at 900 W. Jefferson Ave. across from the now-demolished former home of the Detroit Red Wings. It had been owned by 900 Associates LLC, an affiliate of Detroit-based real estate company The Sterling Group, which paid the city $14.1 million for it and the Joe Louis Arena property, according to Detroit land records and previous Crain’s reporting. The Foster Financial website says the company has millions of dollars in renovations planned for the garage, including new LED lighting, electric vehicle charging stations, a car wash facility, dry cleaning pickup and drop-off services plus a shuttle. The Joe Louis Arena parking deck at 900 W. Jefferson Ave. has sold to Foster Financial, which was part of a joint venture that in October bought the high-rise at 211 W. Fort St. |
WHY IT MATTERS: The package has been embroiled in a standoff between the governor and Republican-controlled Legislature, as businesses and individuals have pressed to get a package passed.
PISTONS START SELLING TICKETS AGAIN THE NEWS: For the first time since the coronavirus pandemic shut down the NBA a year ago, the Detroit Pistons have started selling tickets to games at Little Caesars Arena beginning with a March 17 contest against the Toronto Raptors. There is a limit of 750 fans per game in the “initial
COSTAR GROUP INC.
phase” of welcoming back fans to the arena, the Pistons said. WHY IT MATTERS: Tickets went on sale shortly after Michigan health offi-
cials announced loosened restrictions on indoor and outdoor entertainment venues as cases of COVID-19 decline and vaccine distribution increases.
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MERGERS & ACQUISITIONS
COVID-19
Deals surge for small and middle-market companies Aging owners look to exit businesses BY NICK MANES
Aging baby boomers have helped fuel growth in the mergers and acquisition space — particularly for small-to-middle market companies — for a decade or more. The lingering effects and realities brought about by the COVID-19 pandemic will likely add fuel to that trend, M&A advisers say. For that reason and more, 2021 appears likely to be among the busiest years in recent Kothari memory for M&A activity, according to a host of industry experts. “It’s unbelievable,” Rajesh Kothari, managing director at Southfield-based investment banking firm Cascade Partners LLC, said of the current deal flow he’s seeing. “We’ve never gone into a year with a stronger book of business as we’ve got right now.” That’s due in part to aging business owners who have yet to make their exit now facing new realities, according to Jeff LaBine, principal and corporate partner in the Ann Arbor and New York City offices of Miller Canfield Paddock Stone PLC. In the wake of the pandemic, businesses will be forced to upscale technology and a host of other processes to remain competitive, he said. Many aging owners will view the surging premiums that a financial or strategic buyer will pay as a preferred option to investing more money into operations. “It’s walk-away money,” LaBine said of the premiums being paid for well-run small and middle-market businesses. “Or you can stay, take less cash flow, pump it back into the business and then you still don’t know where your exit is. It starts influencing that decision. So I think it could accelerate those that are left.” Adding to that likely surge in dealmaking — which was already strong in 2020 despite a pause in the spring — is continued low interest rates and private equity funds having more than $1 trillion in capital, or dry powder, that needs to be put to use, according to Pitchbook, a financial data and software company.
‘Holes in business model’ LaBine said much of the dealmaking he’s seeing is being driven by companies “seeing holes in their business model” and that pandemic-induced lockdowns and halts to business operations “forced people to confront some things that maybe they wouldn’t have had to confront,” like ensuring that cash flow can remain steady and that services to customers can remain functional even if not done on-site. See DEALS on Page 19
Michael Schommer, 30, of Livonia, a middle school and high school special needs teacher, is given the Moderna vaccine at a recent vaccine clinic at the Suburban Collection Showplace in Novi. | SYLVIA JARRUS FOR CRAIN’S DETROIT BUSINESS
DIVVYING UP DOSES How Michigan’s race, income factors impact vaccine allotments across the state Vaccine calculations The Michigan Department of Health and Human Services’ use of the federal Social Vulnerability Index allocates fewer doses of COVID-19 vaccine to Oakland, Macomb and suburban Wayne counties. Detroit’s health department and hospitals received a net 4,835 more doses using the SVI. Table shows the number of vaccines added or subtracted in large Michigan counties by the Social Vulnerability Index compared with what they would get if the distribution were purely based on population: Detroit* Genesee Ingham Kalamazoo Kent Macomb Oakland Ottawa Saginaw Washtenaw Wayne
4835 1945 536 2 524 -687 -7950 -984 1127 -2465 -299
*NOTE: DETROIT IS SEPARATE FROM THE REST OF WAYNE COUNTY. SOURCE: MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES
BY CHAD LIVENGOOD AND JAY GREENE
Michigan’s 10 most populous counties collectively received about 3,400 fewer first doses of COVID-19 vaccine last week after the state applied a formula that factors in race, poverty, housing and other social vulnerabilities instead of allocating vaccine doses by share of population, state data show. But that only tells part of the story about how the Michigan Department of Health and Human Services’ use of the federal Social Vulnerability Index or SVI in an attempt to make vaccine availability more equitable across racial groups and socieconomic classes is shaking up the weekly allocations. Oakland County, the state’s most wealthy and second most populous county, received 7,950 fewer doses of vaccine last week than its hospitals and county health department would have if the allocations were based solely on population, a Crain’s analysis shows. Some of those vials of vaccine shifted south of Eight Mile Road.
“... THE PEOPLE WHO HAVE THE MOST RESOURCES AND CARS AND ABILITIES SHOULD NOT BE THE PEOPLE WHO HAVE THE EASIEST ACCESS TO A VACCINE — AND WE ARE VERY COMMITTED TO THAT.” — Dr. Joneigh Khaldun, Michigan’s chief medical executive
Detroit received 4,835 additional doses of vaccine last week when the SVI was factored into the allocation formula, according to allocation data Crain’s requested from MDHHS. Dr. Joneigh Khaldun, the state’s chief medical executive, said the SVI formula was designed to take into account that access to the vaccine is not universal across all communities in the state. The SVI formula contains a weighting factor that gives more doses to communities with a higher proportion of residents with disabilities or those living in closer quarters, less stable housing as well as those with barriers to transportation and language, such as those who don’t speak English. “Those things should not impede your ability to get a vaccine, which is why we’re focusing so much on equity,” Khaldun told Crain’s. “... The people who have the most resources and cars and abilities should not be the people who have the easiest access to a vaccine — and we are very committed to that.” See VACCINE on Page 19 MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 3
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4 | CRAIN’S DETROIT BUSINESS | MARCH 8, 2021
The site of the proposed Lafayette West development on Friday, Feb. 26.| KIRK PINHO/CRAIN’S DETROIT BUSINESS
Lead Lafayette West developer bows out of project, others take over I drive by the Lafayette West development site in Detroit multiple times a week, a generally hohum facet of my day. On Friday, Kirk however, I noPINHO ticed something out of the ordinary: The scrim that had been there for as long as I can remember screaming “LAFAYETTE WEST” wrapped around the property had been replaced by a plain black one. “That’s odd,” I thought. It turns out that the simple swapping out of a scrim meant something larger for the proposed mixed-use development: Its lead developer, Novi-based Ginosko Development Co. whose name adorned the scrim, has been bought out of the project. If Ginosko is no longer working on the development, the company’s name probably shouldn’t be on the banner wrapping around the site. A statement provided by the development team says that effective Feb. 12 an entity, GDC-PEV LLC, which is registered to Ginosko President and CEO Amin Irving, “voluntarily resigned as manager” of an entity called Lafayette Class A Partners LLC, which lists Anthony Paesano, partner with Bloomfield Hills-based law firm Paesano Akkashian Apkarian PC, as a registered agent. That entity is now being managed by LDA LLC, which is registered to Norman Pappas, president and CEO of Farmington Hills-based Pappas Financial, and the Mark J. Bennett Trust, which is run by its namesake, who is managing director of Farmington Hills-based MJBennett PLLC. Bennett said in a statement: “The development, which is under the control of Lafayette Acquisition Partners LLC, is proceeding at an accelerated pace and we look forward to it becoming a valuable housing option for Detroit residents.” Additional details were not released. In an email, Irving declined to elaborate on why his company, as he put it, “withdrew from the project.” He said Ginosko “has recently purchased assets in the city of Detroit
The site of the proposed Lafayette West development in Detroit on April 16, 2019. | KIRK PINHO/CRAIN’S DETROIT BUSINESS
and has an existing portfolio equipped for development. We maintain an active pipeline of projects to further our commitment to the city of Detroit and its residents.” The details of Lafayette West, which has been scaled back in the last year or so, were first revealed during a large community meeting in May 2018 during which it and four other mixed-use development plans were discussed. It was originally envisioned as a $111 million development with 322 apartments and 51 condominiums, although a year ago, it was revealed that it has been downsized to 245 apartments and 80 condos at $113 million. Let’s check in on how those five projects, which at the time would have totaled more than 1,200 residential units in and around Lafayette Park, have fared in the last three years, shall we? Lafayette West: See above. Pullman Parc: Similar to the above, one of the key developers bowed out. Farmington Hills-based Hunter Pasteur Homes sold its ownership interest in a chunk of Elmwood Park neighborhood land that it was going to develop as condominiums to Bloomfield Hills-based residential developer Robertson Bros. Co. Construction has not yet started. It’s also been revealed that Dan Gilbert was a silent investor in the condominium component of the project, although not the multifamily component. The Joe Muer site: Detroit-based The Platform LLC bought the more than 4-acre site of the former Joe Muer
seafood restaurant in 2017 for $2.7 million with plans for a mixed-use development with between 160 and 180 residential units plus 25,000 to 30,000 square feet of retail. As of today, however, no construction has started. The Platform’s website says the project is in the design phase. A spokesperson for The Platform said there is a new vision in the works for the site but declined to provide more details. Eastern Market Gateway/The Hive: Develop Detroit Inc., run by Sonya Mays, has been working on the site near Gratiot Avenue and Russell Street for several years, originally with a vision for 253 apartments, 25,000 to 30,000 square feet of retail and 331 parking spaces. It’s been tinkered with over the years and the plan is now for 212 apartments and 206 parking spaces, plus the retail space. Mays told me last week that financing on the retail component has been difficult during the COVID-19 pandemic. She said she is working with Lansing-based Cinnaire Solutions on the affordable housing component, which is currently vying for nine-percent low-income housing tax credits. The East Jefferson Meijer Inc. store/apartments: Hallelujah, construction has started on this! But alas, the plan for 213 apartments on top of the 43,000-square-foot or so small-format Meijer grocery store has been torpedoed. In short, not one of the 1,200 apartments or condos has been built. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
SPONSORED CONTENT
Adversity powers dental entrepreneur to give back, expand to Detroit A Louisville dentist is expanding his mobile dental service to help provide oral health access across Corktown and Mexicantown Dr. Kwane Watson is a Louisville dentist and a serial entrepreneur who built a door-to-door oral health licensing model, Kare Mobile Dental. Through a partnership with Delta Dental of Michigan, Ohio, and Indiana, and Ford Motor Co. Fund, Watson will give one of these licenses this year to a minority dental professional in Detroit. It’s a project designed by Delta Dental to help improve public health and build community wealth in Corktown and Mexicantown. Margaret Trimer ABOUT GRIT “Grit” is a monthly forum for stories about people who possess uncommon work ethic, drive and passion. The content is produced by Crain’s Content Studio, the marketingstorytelling arm of Crain’s Detroit Business, and sponsored by Delta Dental of Michigan. Subscribe to the Grit podcast on iTunes and Spotify.
As the first guest of her new webcast series, “Grit,” Margaret Trimer, Vice President of Strategic Partnerships for Delta Dental, talked with Watson about his vision for the mobile dentist project, the racial barriers he has broken through and the violent and unimaginable losses he and his family have recently suffered. Read an excerpt of the interview here; watch the webcast and listen to the full discussion at crainsdetroit.com/Grit. TRIMER:Can you talk about Kare Mobile and why you’re bringing it to Detroit? WATSON: I started Kare Mobile to provide access to oral health care for people from around Kentucky. Kare Mobile provides comprehensive, concierge mobile dental service where you need it. We are privileged and honored to provide this opportunity to license this model to other dentists or hygienists around the country. And we are bringing this to Detroit so we can help provide access that is desperately needed in some areas of the city. Only 4 percent of the nation’s dentists are black, and there were probably even fewer when you decided to pursue that path back in the 1990s at the University of Kentucky. You’re a 1999 University of Kentucky College of Dentistry graduate. Tell us about a couple hurdles you faced along the way. Graduating from UK dental school, being one of six African-American students in the entire school, only having one black faculty member that looked like me, and not having that true camaraderie or feeling a part of things all the time was a challenge. When I purchased my first commercial building at 27 or 28 years old I had to go to 7, 8, 9 different banks before one gave me the opportunity to actually live that dream. Those are challenges that you have to go through because people make decisions based on commonalities. So if you look different, you get that side eye. It might make you have a bit of a chip on your shoulder. But I’m one of those people that it doesn’t matter what you throw in my way, I’m gonna knock down that wall. So it kind of sounds like the more hurdles, the more motivated you get to tackle them.
point, what kind of legacy do I want those 20 years to be? The service aspect of what I’m trying to do is what I want to be my legacy. The experience that your son had is unimaginable — going to the store with his grandfather to buy school supplies and his grandfather being gunned down in a racially motivated murder. How do you help your young son recover from that and move forward in a positive way? Exactly. It pushes me to go harder. Did any of it surprise you? Growing up, I heard stories about different challenges that my parents had to face, or even really, my grandparents. Those stories you hear as a youngster let you know that these obstacles that were around back then they still exist today. And it’s unfortunate, but I think as a black person you kind of expect it. And you actually are more surprised when you get opportunities like the one we are getting with Delta Dental to do good. In the last couple of years, you’ve experienced tremendous, tragic and truly violent loss. What have you learned from it and how have you turned loss into something positive? In the last three years I’ve lost my father, my son was almost murdered along with his grandfather, who was murdered in a grocery store in Louisville, and I lost both my grandparents last year. Losing that many people I would have thought would have just destroyed me, honestly. But I’ve learned a lot. And I take those things that I’ve learned to make me stronger. Those challenges have become opportunities for me. I look at my father, whom I lost at 68, and realize that if I only have 20 more years of life at this
Counseling, family and God. It’s a combination of those three things. We keep our family really close. And my son is very strong, spiritually, and he has a great family. And so that’s how we do it. I think you’ve got grit. Do you think you’ve got grit? And if so, how do you define grit? Well, Margaret, I’m the grittiest. I am a person of few words. I prefer to be the person that is executing. I feel like that’s key to having grit—not being one of those people that talk the talk, but don’t walk the walk. I really focus on action—creating things and being willing to sacrifice. Kare has been a three-year journey for me. I made a lot of sacrifices. I’ve worked a lot of hours without getting compensated for it. And I continued to move forward because I believed in what I was doing. So, you dig in and you get it done. Yes, that’s what grit is: it doesn’t matter what you put in my way, it’s not going to stop me.
MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 5
MICHIGAN OFFICE OF THE GOVERNOR
CRAIN’S VOICES
Gov. Gretchen Whitmer
COMMENTARY
Don’t like it being called ‘hush money’? Bring in some sunshine
S
unshine Week is looking awfully cloudy for the Whitmer administration and government transparency in Michigan. The annual week dedicated to improving access to public information will be “celebrated” March 14-21 this year. The timing could not be more relevant as the governor fights off accusations of secret payoffs to staffers. Gov. Gretchen Whitmer has not appreciated suggestions that separation agreements for former health department Director Robert Gordon and two other employees amount to “hush money.” But her administration’s response to requests for information from Crain’s Detroit Business and other media organizations speaks volumes. Details of taxpayer-funded payouts to any state employee are a matter of public record and, ideally, would be handed over upon request without the need to force disclosure via the Freedom of Information Act. But ironiEVERY YEAR, cally, the dysfunction JOURNALISTS of Michigan’s FOIA law allows public bodAND ies to buy time, obfusGOVERNMENT cate and hide behind the very tool designed ACCESSIBILITY to shed light on their ADVOCATES CALL decisions. It’s clear the law FOR CHANGE. needs to change. The Department of Health and Human Services shakeup is Exhibit A. Multiple reporters, including Crain’s Senior Editor Chad Livengood, filed FOIA requests in the wake of Gordon’s departure, since Whitmer refused to answer questions about it. And they are critical questions. Any disruption in the public health department in the middle of a pandemic deserves full and forthright explanation. That didn’t happen. FOIAs filed at essentially the same time were granted selectively. The Detroit News was first to break the payout story; others, including Crain’s, followed as the FOIA logjam suddenly burst after the department coughed up Gordon’s separation agreement. Inexplicably, a FOIA request Livengood filed after Gordon’s resignation still hasn’t been fulfilled — five weeks after the fact. The revelations of Gordon’s six-figure exit package prompted Livengood and other journalists to inquire about whether other top officials who have left the Whitmer administra-
Kelley
ROOT
Executive Editor tion got similar payouts as a condition of their voluntary departures. Livengood noted on Twitter how FOIA can be used as a shield to slow the disclosure of public information. On Tuesday, he emailed a labor department spokesman at 11:08 a.m, asking about a separation agreement for former Unemployment Insurance Agency Director Steve Gray, who abruptly resigned Nov. 5. He was told a response was forthcoming. At 2:48 p.m, the spokesman told Livengood to file a FOIA, which he did about 45 minutes later. At 5:43 p.m., the spokesman confirmed the separation agreement existed — and said the FOIA was being processed. At 7:59 p.m., the FOIA request was granted and Gray’s 4-month-old separation agreement was made public. Is that good-faith use of public records law? Of course it’s not. It’s not news that Michigan ranks at the bottom of the pack for public accountability. It’s one of only two states that exempt the governor’s office from FOIA, and one of eight that specifically exempt lawmakers. Every year, journalists and government accessibility advocates call for change, even as lawmakers pledge hand to heart that they support transparency. The truth is that most do not: Legislation to expand and toughen FOIA — sponsored by state Sen. Jeremy Moss, D-Southfield — remains stalled in the Senate. This year may be different. Progress Michigan, a liberal advocacy group, is seeking to collect signatures for a ballot initiative in 2022 that would allow voters to decide whether the governor and lawmakers should be subject to open-meetings laws. Could a statewide vote finally end the cycle of go-nowhere legislation? It’s certainly an encouraging development. This is not a partisan issue. During the pandemic, when elected officials are making literal life-and-death decisions, scrutiny is coming from all sides — as it should. Maybe voters will have the appetite for accountability that lawmakers themselves do not.
Police reform starts at community level BY BARBARA MCQUADE
P
ublic safety improves when police officers have the trust of the communities they serve. No one knows that better than law enforcement agencies themselves. Politically charged debate about defunding police McQuade versus preserving “law and order” distract from the important work that needs to be done to reform policing to improve public confidence. In metro Detroit, police chiefs recently showed that they are eager to embrace change to enhance those relationships. The death of George Floyd in police custody reminded all of us who have worked in law enforcement of the gaps in community trust that widen whenever an incident like that occurs. Technology has amplified the impact of such incidents because bystanders are able to record them on cell phones and share them on social media. What was once a local issue becomes a national or international issue because it resonates with our own experiences. It brings to light the disparities that exist in a criminal justice system where police kill unarmed Black people at five times the rate of unarmed white people. And it is no surprise that we have seen a nationwide increase in crime alongside this fraying community trust. When the enforcers of the law lose legitimacy, residents become less likely to comply. That’s why police leaders in metro Detroit are eager to embrace reform efforts. In fact, the biggest obstacle for achieving reform is not the will, but the resources. When two local foundations launched a grant program last month to address police reform in Southeast Michigan, more than 70 police chiefs and designees attended an online informational webinar. The Hudson-Webber Foundation and Community Foundation for Southeast Michigan are providing support for police departments in Southeast Michigan to partner with their communities to address issues in police practices, systems and services. Applicants may choose their own focus area from a menu of options including use of force, accountability, disparate treatment and enforcement, re-imagining public safety and reconciliation. Awardees receive technical assistance to develop action plans and provide guidance throughout the project. The most pro-police thing we can be doing at this moment is supporting reform efforts. When I served as U.S. Attorney in Detroit, we focused on reducing violent crime and enforcing civil rights because the two go hand in hand. We worked through a consent judgment with the Detroit Police Department that acknowledged a history of unconstitutional policing, including use of excessive force, substandard conditions of confinement and arrests of material witnesses without probable cause.
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 | MARCH 8, 2021
About Crain’s Voices 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, Barbara McQuade, serves on the boards of the Hudson-Webber Foundation and the Community Foundation for Southeast Michigan. She is a professor from practice at the University of Michigan Law School, a former U.S. Attorney for the Eastern District of Michigan and co-host of the #SistersInLaw podcast.
Detroit Police Chief James Craig and Mayors Dave Bing and Mike Duggan inherited these problems and committed to ending these unconstitutional practices. They welcomed the assistance of outside policing experts to help implement change. Through a rigorous process of collaborative review, recommendations, audit and oversight, the department reached compliance with the consent judgment in 2014. While DPD is far from perfect, it is a stronger and more effective department today because of its reforms. Maintaining high standards requires constant vigilance. Camden, N.J., is a bright example of successful reform. A city that was once one of the most violent in America also saw fre- THE MOST PROquent complaints about use of exces- POLICE THING sive force. It has expe- WE CAN BE rienced substantial reductions in crime DOING AT THIS following the trans- MOMENT IS formation of its police department. The key SUPPORTING to its success was in- REFORM tegrating officers into the fabric of the com- EFFORTS. munity. While the foundations’ pilot program offers reform opportunities more modest than those that occurred in Camden, the hope is that participating departments will serve as pilot projects to identify best practices. To admit that there is a history of racism in policing is not to say that police officers are racist. Most police officers I know chose their profession because they wanted to help people — to protect and serve. With rare exception, police officers do their jobs professionally and treat residents without regard to race. But it is not enough that we refrain from overt discrimination. In a system where almost six times as many Black people are incarcerated as white people, we need to take a hard look at our assumptions about crime, punishment and tactics. When it comes to policing, there can be no us vs. them. In a government of, by and for the people, we are the police, and the police are us.
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.
COMMENTARY
Why Duggan’s rejection of J&J vaccine sent wrong message
M
ike Dugg a n , whose lifeblood is strategic political calculus, really miscalculated this time. The Detroit mayor’s rejection Chad Johnson & LIVENGOOD of Johnson’s vaccine for COVID-19 was both confounding and dangerous for Michigan’s fight against the insidious virus that has consumed our lives for the past 12 months. Duggan, who put Detroit assembly line know-how to work designing mass COVID-19 testing and vaccination facilities, inexplicably turned away 6,200 doses of J&J’s vaccine because it may not be as effective in preventing moderate cases of virus. “Johnson & Johnson is a very good vaccine. Moderna and Pfizer are the best,” Duggan said Thursday at a news conference. “And I am going to do everything I can to make sure that residents of the city of Detroit get the best.” But the former CEO of the Detroit Medical Center seems to be missing the point of this single-shot vaccine in pursuit of “the best” vaccines for his voters in an election year: to prevent more deaths. Studies have shown the J&J vaccine is just as effective as Pfizer and Moderna’s vaccines in preventing severe hospitalizations and deaths, which ought to be the goal for a mayor whose city has lost 1,858 residents to this plague. Duggan has given the J&J vaccine short shrift, labeling it as not good enough for Detroiters because it was found to be 72 percent effective in U.S. trials in preventing moderate to severe cases of COVID-19. But Duggan said it’s quite all right for rural outstate folks, publicly undermining confidence in the effectiveness of the vaccine and adding to the already tenuous urban and rural divide that he has tried to quell over the years in fighting for Detroit’s interests in Lansing. His words, in this case, were misleading. “Johnson & Johnson is a good vaccine,” Duggan said. “70 percent of the time if you get it, you won’t get COVID and if you’re in the 30 percent that do, there’s a very good chance it’s mild and you won’t be hospitalized. If you get two shots at Moderna and Pfizer, there’s a 95 percent chance you won’t get it and the 5 percent who do, there’s a very good chance it’s mild.” Duggan was incorrectly explaining the math behind the effectiveness of the J&J, Pfizer and Moderna vaccines. The percentages refer to how much they reduce the incidence of mild-to-moderate cases of COVID-19, not what percentage of people actually contract the disease. The 95 percent efficacy in Moderna’s vaccines does not mean there’s a 95 percent chance you won’t contract the coronavirus. In one study, none of the recipients of the J&J vaccine were hospitalized or died — a 100 percent prevention rate. Experts also have cautioned against comparing these percentages of effectiveness because the U.S. trials were conducted at different stages during the pandemic, with different mutations in the virus running through our bodies. “The Johnson and Johnson vaccine was studied in a more recent time period with more easily transmitted vari-
ants, so I would not recommend com- “all of the vaccines are safe and effecparing the studies with Pfizer and tive and I recommend that all vaccines Moderna directly to the studies on be offered in all communities.” Paul Offit, a vaccine researcher at Johnson and Johnson,” Dr. Joneigh Khaldun, the state’s chief medical ex- Children’s Hospital of Philadelphia, had a more ecutive, said in a blunt analysis in statement in reDUGGAN GAVE THE J&J an interview sponse to Duggan’s with NBC News: rejection of the J&J VACCINE SHORT SHRIFT, The Johnson & vaccine. Johnson vaccine In other words, LABELING IT AS NOT GOOD “will definitely the mayor who lives ENOUGH FOR DETROITERS. keep you out of and breathes data the hospital, keep you out of the ICU was not comparing apples to apples. Khaldun, a Henry Ford Hospital and will keep you out of the morgue.” Keeping Michigan residents out of emergency physician who has emerged as Michigan’s Dr. Fauci the morgue should be every politiduring the pandemic, reiterated that cian’s No. 1 priority right now.
On Friday, Duggan walked back his comments, saying "we are not declining the Johnson & Johnson vaccines." But the damage of Duggan's vaccine misinformation from earlier in the week was already done. Duggan turned away J&J vaccine at a time when outstate Republicans who control the Legislature are fighting with Gov. Gretchen Whitmer’s administration over how vaccines are distributed. It’s a good bet that the governor’s office is not happy with Duggan shunning — at least temporarily — the J&J vaccine when Whitmer is taking arrows from Republicans for diverting more vaccine doses to Detroit from af-
fluent suburban enclaves. The Democratic governor has made a conscious decision to get more vaccines into cities like Detroit with residents of color who are older and have more underlying health conditions that make them the most vulnerable to infection. State data shows Detroit and its hospitals received 4,835 more doses of vaccine this week using a formula that takes into account race, income and other social vulnerabilities. Oakland County’s health department and health systems received 7,950 fewer doses of vaccine using the See LIVENGOOD on Page 18
MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 7
ST. CLAIR COUNTY/PORT HURON
IN THE MARKET
The view of the Country Style Marketplace front from Huron Avenue in downtown Port Huron.
Plans finally coming together for Port Huron's first downtown grocery store in 50 years BY TOM HENDERSON If you had told Steve Fernandez
and Michele Jones in 2012 that they were going to retire to Port Huron, then spend most of their retirement savings on becoming grocers, they’d have thought you’d been eating funny mushrooms. In 2012, he was working in Alaska as the Anchorage terminal manager for Koch Industries. Michele, his wife, was the safety program team leader for British Petroleum’s North Slope operations. He was asked by his bosses at Koch to take a two-year assignment in Marysville to turn around a poorly run polypropylene plant. It was the last thing he wanted to do, work in Michigan, far away from Michele, but his extensive military background had taught him to be a good soldier, so he took the assignment.
8 | CRAIN’S DETROIT BUSINESS | MARCH 8, 2021
IN THIS SECTION Plans finally coming together for Port Huron’s first downtown grocery store in 50 years. THIS PAGE
On pause during COVID-19, work on several big Port Huron developments is underway again. PAGE 9 Entrepreneurs have a solution for COVID-era grocery drop-offs. PAGE 10
New Magna plant in St. Clair could one day include workforce training. PAGE 15 Steve Fernandez and Michele Jones in their Ft. Gratiot store. They are opening another grocery in the former Woolworth building in downtown Port Huron. | TOM HENDERSON/ CRAIN’S DETROIT BUSINESS
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WRIGLEY CENTER Development to include farmer’s market, arcade, rock climbing and more PAGE 12
GETTING BACK INTO GEAR On pause during COVID-19, work on several big Port Huron developments is underway again
STEVE FERNANDEZ
BY TOM HENDERSON
But a funny thing happened before he returned to running the Anchorage terminal in 2014. “I really fell in love with St. Clair County. And I drove up north and saw all the beauty Michigan has to offer. I was just enamored with the state,” he said. “I was in downtown Port Huron over the holidays, and it was like that opening scene from the movie Christmas Story. You know, the one with the families downtown and a Christmas parade? I called Michele. I was all choked up. I loved the people. I loved the old buildings. It was idyllic.” On Michele’s several visits during Steve’s tour of duty, she found herself becoming enamored, too. “Port Huron reminds me of the town I grew up in, Pueblo, Colorado. I just love this town. We fell in love with it,” she said. They first met in Arizona in 2004, where she was the first woman ever
Two of the highest-profile redevelopment projects in the history of St. Clair County, both of which were put on pause because of COVID-19, are back on track. One is the $40 million renovation and expansion of the historic and iconic St. Clair Inn in St. Clair, which hopes to reopen for some bookings in April, provided the state lifts restrictions on capacity for indoor eating, drinking and events. The other is the $16 million to $18 million conversion of the Michigan National Bank building in downtown Port Huron into a boutique hotel and event center called the CityFlats Hotel. Another high-profile renovation, of the Harrington Hotel in Port Huron, which was placed on the National Register of Historic Places in 1982, was also put on pause because of the pandemic and will remain on hold for the time being. Sherman Oaks, Calif.-based J.D. Market Acquisitions, a real-estate broker, developer and property manager that owns or operates a variety of retail and residential housing in California and Utah, owns both the Harrington and the St. Clair Inn. Company President Jeff Katofsky said he wants to focus on finishing the St. Clair Inn by the end of this year before resuming work on the Harrington, which is budgeted at $12 million. “Financially, for me to spend another $4 million on that property today doesn’t make sense,” said Katofsky. The St. Clair Inn is operated as a Tribute by Marriott brand. The historic south wing and some of the
“WE’RE AN EVENT BUSINESS THAT COULDN’T DO EVENTS.” —Jeff Katofsky, president, J.D. Market Acquisitions
inn’s restaurants and bars and event facilities had opened in December 2019. When the Harrington and its 82 rooms open, they will operate under the Best Western Premier brand. At the CityFlats hotel, the firstfloor ballroom and second-floor bridal suite were opened for business in May 2019 and were booked solid for weddings for more than a year before they were shut down in March. An outdoor bar on the Black River had opened in time for the 2019 summer season and it, too, was closed for the 2020 season. Demolition had been completed on the third and fourth floors but construction hadn’t begun there when everything shut down in March. Construction resumed in mid-February. Chuck Reid, a serial entrepreneur from the Holland/Grand Rapids area, says that in one way he got lucky with the timing of the pandemic. Since none of the renovation on those floors had begun by last March, Reid was saved from having to pay the construction bill for that work while no revenue was coming in. “The timing was a blessing in disguise,” he said.
The St. Clair Inn The inn was built in 1926, after the St. Clair Rotary Club decided the city should have a grand hotel befitting
the area’s status as the center of the boating world and did a public offering of $180,000 to build the 60room hotel. When it opened on Sept. 22, 1926, it was the first U.S. hotel with air conditioning. It was added to the National Register of Historic Places in 1995. In 2014, after a long decline under a series of owners, the inn closed. Katofsky bought it for $4.1 million in January 2016 and announced a $40 million renovation and expansion to take the hotel to 109 rooms and three stand-alone cottages on the south side of the inn, on a bluff overlooking the St. Clair River. The 43 rooms in the historic south wing had been remodeled and were being booked, while construction on the new north wing was still underway when the pandemic hit. The hotel had been booked solid for weddings and other special events for 2020. After Gov. Gretchen Whitmer issued her first set of restrictions for businesses, the hotel tried to stay open without holding events. The restaurants briefly did carryout on weekends, but that was unprofitable, as was renting out the rooms without operating revenue from the inn’s restaurants, bars and bookings. Katofsky made the decision to go dark. “We’re an event business that couldn’t do events,” he said. Some construction work in the north wing resumed in mid-summer. “It was on a limited basis. It was socially distanced. You couldn’t have plumbers and electricians in the same bathroom,” said Katofsky. He said work on the north wing is 70-80 percent done. See PROJECTS on Page 14
to run a Morton Salt plant and he was plant manager at an AmeriGas Propane Inc. facility that rented land from Morton. They got married in 2007. After they moved to Alaska, they planned to retire in Arizona and bought a retirement home on a golf course in Arizona in 2014. Yet, when they retired in 2017, it was an easy decision to rent out their retirement home and move to Port Huron. There, they immediately put on their entrepreneurial hats. They invested with a partner in three area restaurants, a partnership that dissolved last February, just before COVID-19 shut all restaurants down. In February 2018, they purchased an iconic building on Huron Avenue in downtown Port Huron, a former Woolworth’s building that had sat empty for eight years and had long been for sale. See MARKET on Page 14
Construction at the St. Clair Inn. | TOM HENDERSON/CRAIN’S DETROIT BUSINESS
MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 9
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Other than vaccines, masks and protective PPE, has there been a better product to help fight one of the scourges of COVID-19 than the Receptor? The Receptor? That’s what Mike Janas and Missie Nordrum call the patent-pending drop box made by their startup company, China Township-based Drop Box Unlimited LLC, which does business as DB Delivery Solutions. The metal boxes are 30 inches by 36 inches by 19 inches and are installed on the side of a house or garage to provide contactless, thief-proof delivery of packages. COVID and its lockdowns and social distancing created a huge surge in online shopping and home deliveries — and a surge in porch piracy, with thieves spotting packages left on porches, grabbing them and racing off. According to C&R Research of Chicago, the percentage of respondents who report having a delivered package stolen rose from 36 percent in 2019 to 43 percent in 2020. Of that 43 percent, 64 percent say they’ve been a victim of package theft more than once. Though based in China Township, DB Delivery Solutions is being incubated in the Underground incubator in downtown Port Huron, and is its star tenant, according to Dan Casey, the CEO of the Economic Development Alliance of St. Clair County. Of the incubator’s 44 clients last September, DB Solutions was the one that Casey recommended to be honored at
an annual awards event the state holds for the top company at each of 15 incubators around the state. The company will get the award at a date to be determined, but the in-person event has been canceled because of COVID. “Their business came along at the right time,” said Casey. “They first approached us two years ago. The Community Foundation (of St. Clair County) gave them $2,500 from its pre-seed fund and helped them create a oneyear work plan, and we helped them get $5,000 from the state’s business accelerator fund to help get prototypes built and to build a website. “We helped them launch, and now they have customers and are generating revenue, so we can turn them over to our local angel investors, the Community Capital Club, for possible followup investing. A lot of entrepreneurs are tinkerers. These two are focused on building a business, not just tinkering.” What COVID gave them — the right product at the right time — it also took away. They had a local fabricating company make metal components that Janas assembled for their first run of 12 drop boxes, which they planned to show at various home-building and contractor shows around the country last year, all of which were canceled. Their target market is new housing, and they hope to make those inroads as trade shows start up in a post-vaccine world. For now they are marketing to existing home owners, with Janas doing installations. They have sold six so far at $2,500 each.
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Origins of a concept Janas, the company president, has owned a remodeling company, Mike’s Home Improvement, now based in China Township, since 1990. Nordrum, the company vice president, was a former customer of his. She spent more than 30 years as a teacher, counselor, assistant principal and director of secondary education for the Rochester Community Schools before retiring, and is now the office manager at an acupuncture clinic in downtown Rochester. A year before COVID exacerbated the problem, Janas and Nordrum were talking about how some people were doing more online shopping, and some other people were stealing their stuff. He had done some remodeling work on her house, and they had become partners on a project to buy and renovate a house in China Township, then sell it. “It was while we were working on the house that Mike got this idea,” she said. And it was on that house that they installed their first box as a proof of concept. “There was a problem there that
needed to be addressed,” he said. He had installed hundreds of doors and windows in his career and it was easy for him to design a secure drop box that could be installed on a house or garage. A delivery person with access to the entry code opens the outside box door and deposits the package. The recipient later, from inside the house, opens the interior door and retrieves it. It is also insulated to keep groceries cool. They formally launched their company in May 2019. That September, they pitched their company to an advisory group of the Economic Development Alliance and joined the Underground. The EDA then awarded them the grant of $2,500 and helped get them a business-accelerator grant of $5,000 from the Michigan Economic Development Corp. In December 2019 they built their first prototype. Last September, they filed for a nonprovisional patent, which is pending, got $5,000 in COVID-relief funding through Flint and Genesee counties, with the help of the EDA, and got a grant of $200 from a group called Blue Water Startups and Entrepreneurs. See DELIVERY on Page 13
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Failed retiree takes on development project in downtown Port Huron $14.4 million Wrigley Center development to include farmer's market, arcade, rock climbing and more BY TOM HENDERSON
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Port Huron has Larry Jones’ miserable failure at retirement to thank for turning a hulking eyesore in the middle of downtown into what will be a mixed-use, $14.4 million development, with 36 loft apartments on the top three floors and a 50,000-squarefoot ground floor that will include a farmer’s market, an old-school arcade with Skee-ball and Pop-a-Shot basketball, rock climbing, restaurants, retail stores, a bakery and wood and pottery shops. The project is called the Wrigley Center. Financing closed on Dec. 23, and interior demolition began three days later. The buildout is expected to take about 18 months, with the lofts expected to rent in the range of $1,200 to $1,400 a month. Vince Cataldo and his Detroit- and St. Clair-based firm of Infuz Ltd. are the architects on the project. The building, a block to the river side of Huron Avenue, Port Huron’s main street, was once a Wrigley’s grocery store, which was closed about 50 years ago. Most recently it had been an Art Van showroom but has sat empty for a decade. St. Clair County bought it in 2014 for $560,000, and after several failed attempts to get it back on the tax rolls, with various projects falling through, local economic development officials planned on eventually tearing it down. Until Jones had a better idea. In December, the Michigan Economic Development Corp. announced that the Michigan Strategic Fund had approved a $1.5 million Michigan Community Revitalization Program grant for the project, which is expected to create 45 full-time equivalent jobs. The Port Huron Brownfield Redevelopment Authority also got approval from the Michigan Strategic Fund for $689,143 in state tax capture for brownfield remediation.
years and was a project that became “PORT HURON WAS a regional priority,” said Dan Casey, the CEO of the Economic DevelopSUFFERING FROM MALLS ment Alliance of St. Clair County. SUCKING THE LIFE OUT OF “We wanted to create an outdoor amphitheater there, but in the end that OUR DOWNTOWN. OUR didn’t seem possible. Then we PLAN WAS TO HELP CREATE thought maybe we could convert it to farmer’s market and a grocery. But THE ENERGY THAT WOULD athat didn’t seem viable, so we were BRING BUSINESSES AND planning to tear it down. “Larry’s vision for that property exPEOPLE BACK TO MAKE ceeded any of our expectations,” said DOWNTOWN LIKE IT HAD Casey. BEEN HISTORICALLY.” ‘Unretiring’ — Larry Jones
Other local support included the city of Port Huron’s commitment of almost $1 million in funding and a 10year Obsolete Property Rehabilitation Act tax abatement of $2.7 million. The county agreed to sell the property for $350,000, less than market value. The Community Foundation of St. Clair County then made a loan of $350,000 that will be forgiven if certain milestones are met over the next seven years. “As people have heard in almost all of my speeches, this would’ve never happened if the community didn’t want it to happen. There’s been so much help and support from the Blue Water Young Professionals, the city, the Downtown Development Authority, the Economic Development Alliance (of St. Clair County), the Community Foundation, Blue Meets Green and the state,” said Jones. Blue Meets Green is a community group that holds monthly meetings of 100 or so to discuss and prioritize future development projects. Originally, the site was a junkyard, and before it became a Wrigley’s store, the building housed an auto dealership and gas station, among other things. “It had been off the tax rolls for
In 2008, Jones shut down his large construction company, Laingsburg-based Carpenters Build America Construction, which at one point employed 80 carpenters and did framing for large housing construction projects around the state and country. He also sold his nearby 1,200-acre farm, which grew wheat and corn and raised beef cattle. Jones says he had never been to Port Huron but wanted to live on the water, and when he visited the city, he didn’t think there was a much prettier sight than the vivid blue water flowing past downtown Port Huron into the St. Clair River. Living on his 35-foot Mariner Carver yacht in the marina there, he thought, would be a great place to while away his days. Jones thought he was making a life change, then, but a trip late that year to Orlando, Fla., almost immediately led him down another path: a new career as a building and loft developer in Port Huron. In Orlando, Jones met a Calgary, Alberta, businessman named Brent Marsall, the owner of World of Spas, a company with four retail stores selling hot tubs, spas, gazebos, tanning bads and patio furniture in Alberta and Saskatchewan.
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FOCUS | ST. CLAIR COUNTY/PORT HURON
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Tracy and Larry Jones in their own loft apartment near the Wrigley project. They have developed dozens of loft apartments and own 12 buildings in downtown Port Huron. | TOM HENDERSON/CRAIN’S DETROIT BUSINESS
“We became friends and created dreams over the next year,” said Jones. The Great Recession was in full swing. Port Huron’s downtown real estate market had been suffering for a long time pre-recession, with forsale and for-lease signs in groundfloor windows throughout downtown. Stores had long been shuttered because of competition from nearby malls. The recession elsewhere was a depression in the city. “Downtown was dead,” said Jones. Jones thought the old buildings downtown had fine bones and the depressed prices owners were willing to sell them for, combined with his background in construction, made it time to unretire. “Prices were so low. I said to myself, ‘If I’m serious about this, I gotta buy as many buildings as I can.’ I thought, ‘I’m not local. People here need to take me seriously,’ and buying a bunch of buildings did that.” The contrast between sky-high real-estate prices in Calgary and the firesale prices in Port Huron helped Marsall decide to be his partner in buying and rehabbing properties. “Larry’s excitement in the community of Port Huron certainly rubbed off on me,” said Marsall. “He invited me to come to Port Huron for few days to get a feel for the community and look at some properties that were for sale. Larry set up a meeting with the Blue Water Young Profes-
sionals, and the energy and excitement of this group along with Larry’s excitement made it easy for me to start investing in the city. I’ve always had an interest in old historic buildings, the look and the feel. All of these beautiful old buildings in the downtown sitting empty had so much potential.” “Port Huron was suffering from malls sucking the life out of our downtown. Our plan was to help create the energy that would bring businesses and people back to make downtown like it had been historically,” said Jones. In 2009 and 2010 they purchased a handful of buildings, including the former JC Penney, Winkelman’s and Arden’s. A flurry of development and new businesses followed. They first opened up the Everything Classic Antiques, an antique mall on Huron Avenue, with 17 student lofts on the second floor. “The easy part is buying buildings. Then you gotta fix them up,” said Jones. His wife, Tracy, manages the antique mall but has other talents, as well, including taking a turn at machinery during demolition if needed. She runs, says her husband, a mean scissors lift. “Tracy is a rock star, too,” said Jeff Bohm, chairman of the St. Clair County board of commissioners, a resident of the area since 1972 and a member of the board for 17 years.
Today, the Joneses and Marsall own 12 buildings downtown. They have 12 lofts under construction in another building on Huron Avenue and when those and the Wrigley lofts are done, they will own a total of 93 lofts. Retail businesses that occupy ground-floor space in their buildings include a Jimmy John’s sub shop, Martina’s Grill restaurant, a shoe store, two women’s clothing stores, a candy store, a fitness club, a juice bar and a restaurant. Larry estimates those businesses employ 70 or more. “I was on some of the early tours with Larry. He had big visions even in the midst of the 2008 downturn. He was talking about what he was going to do. He was new to the area and he was going to do X, Y and Z. I thought, ‘Is this guy for real?’” said Bohm. “I’ve doubted him 10 times, and he’s proved me wrong nine, if not all 10. “I told him I should get smarter and stop doubting him. He’s a ball of energy, an asskicker at everything he does. I was skeptical at the beginning. But there’s zero question about his ability and vision, now.” One of those lofts, on the second floor of the former Ballentine Building at 208 Huron Ave., is the Joneses’ home, an eye-catcher of exposed brick and ductwork, a tin ceiling gleaming as if it were new, and period pieces of furniture. After moving in two years ago, every morning while drinking coffee in his front room, he would look out the window and down at the roof of the former Art Van building across the back street. “Every day I sat here and looked at that ugly building,” he said. Until one day he decided to unugly it. “I called Jeff and said, ‘How much will you sell it to me for?’ Jeff said, ‘We’re going to tear it down and
DELIVERY
make it a parking lot.’ I said, ‘Does Port Huron really need another parking lot?’” At first he thought he and Tracy would turn it into a destination kids’ museum, until he started looking into how much money kids’ museums in Ann Arbor and Lansing lost each year. “The Lansing museum cost $1.7 million a year to run and brought in $1 million in revenue. They had to go out to the community and beg for $700,000 each year,” he said. “That changed my plans. We’ll put residents in the upper floors to make the money, so we won’t have to charge the ground-floor retailers that much.” “It’s funny. A good majority of the developers in our area are people who weren’t born and raised here. I can’t tell you how fortunate we are to have people like Larry and Steve Fernandez here, people from elsewhere who believe in the community. A lot of time, we don’t believe in ourselves,” said Bohm, mentioning Fernandez in regard to a new full-line grocery story being built downtown. (See related story, Page 8.) “I mean, look at all the lofts. We never had lofts in downtown Port Huron. And outside developers came in and now we have 150-200. We have more want than capacity,” he said. There is a countywide boom in new housing, either finished and on the market, in construction or planned. According to the EDA, there are 15 loft, condo, apartment or housing projects in various stages of development, with about 750 units in all, in Port Huron, Fort Gratiot, St. Clair, Marysville, Clay Township, Ira Township and Marine City.
Nordrum said they want to hold off on any angel funding for now. As sales ramp up, the ideal path would be to fund growth out of revenue. If equity capital is needed, waiting till they have more sales will get them better terms. With warmer weather coming, they plan to build a 60- by 100-foot pole barn in China Township to store components and do final assembly. The exterior doors on the boxes come in different colors to match the exterior of the house, and the boxes come with a threeyear warranty. They also offer optional heating and cooling units. Robbie Sigler, who lives in rural Upper Sandusky, Ohio, was one of the first customers, getting her box installed last June. She said she is a longtime friend of Missie’s, and that what they were selling was just what she needed. She recently had a package ruined that had been dropped off by FedEx on her roofless front porch during a storm, but more than that, she wanted a way to have contactless delivery. “I thought, I better have one of those things. In the time of COVID, the benefit isn’t just secure delivery, it’s contactless delivery. Contactless moved to the top of my list. I didn’t want to have any contact with the delivery person,” she said. Her box was installed and since then she’s been getting pizza, groceries, Amazon and L.L. Bean deliveries. “Oh, my goodness, I’m a happy customer, indeed.”
Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
From Page 10
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810.982.9511 | www.edascc.com MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 13
FOCUS | ST. CLAIR COUNTY/PORT HURON
N
MARKET
From Page 8
The exterior of the bank building being converted into boutique CityFlats hotel. | TOM HENDERSON/CRAIN’S DETROIT BUSINESS
PROJECTS
From Page 9
The inn is such an iconic destination that “most of our bookings from last year converted to this year. We had very few cancellations,” said Katofsky. “People put off their weddings and their events so they could have them at the St. Clair Inn. We’ve got bookings every week from April on, two or three events a weekend, but we can take a lot more. We’re not sold out by any means. But with the inn closed to business for now, Katofsky said: “We’re losing $250,000 to $300,000 just paying the bills.” Katofsky also bought the vacant three-story former St. Clair Middle School, just a few blocks from the inn, to be converted into 72 small apartments targeted at millennials and employees of the Harrington and the St. Clair Inn. The school has a 600-seat auditorium that was to be rented out for corporate and other events and a large kitchen that was going to be used for supplying food to the St. Clair Inn and the Harrington. Katofsky said work continues on the kitchen and the buildout of offices to support the inn. The apartments are back-burnered.
“This is all so frustrating. We have great community support. People want to go there, but I can’t open,” said Katofsky in mid-February. “There is a light at the end of the tunnel. I do think the inn will get opened in the next two months.”
The Harrington Port Huron attorney Charles Harrington built the five-story Harrington Hotel in 1896 on Military Street in the heart of downtown as a tribute to himself. It was a red brick building combining elements of Richardsonian Romanesque and Classical Revival styles It was the center of the city’s political and social life for decades. But by the early 1980s, the hotel had fallen on hard times and many of its rooms were rented on a weekly or monthly basis. By then, granite floors had been covered by cheap carpet and quarter-sawn oak details hidden behind drywall and cheap painted wood. The hotel was converted into an assisted living center for seniors, then closed in 2017. While in town overseeing early work at the St. Clair Inn, Rick Barreca, Katofsky’s partner and chief operating officer, saw the Harrington, found out it was for sale for cheap and bought it. He and Katofsky had been worried
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about having enough space at the St. Clair Inn to house all the back-office operations and the washers and dryers, as well as where to put the overflow of guests coming to town for weddings or special occasions. The Harrington has a huge basement, with plenty of room for banks of commercial dryers and washers, offices for accountants and other back-office support in addition to its 82 hotel rooms.
The CityFlats Hotel Reid’s first CityFlats hotel was built in Holland in 2007. A second CityFlats hotel opened in Grand Rapids in 2011 in another former Michigan National Bank building. Reid said he hopes to have the 18 rooms on the third floor upper floors done and being booked this summer, with six to eight suites finished on the fourth floor next year. The Port Huron bank was built in 1929 as the First National Trust and Savings Bank and became a Michigan National Bank in 1940. Reid’s first foray into Port Huron real estate was converting the iconic and long vacant Sperry’s department store downtown into a 12-screen boutique movie theater, with small-capacity theaters ranging in capacity from 27 to 42, all with plush, reclining seats and customers having the option of ordering fresh-made dinners ahead of time from the theater’s onsite restaurant to be delivered to their seats. The theaters shut down last March, reopening for two weeks at Christmas as a gift to the community. With the 25-percent-capacity and no-food restrictions in place, it was strictly a money loser but a way to remind the community the theater was there. “We’re looking at the April, May, June timeframe for being able to at least have enough capacity to cover our costs,” he said, referring to the state easing restrictions. “Obviously, we understand the situation. I’m optimistic the vaccine rollout will be sooner rather than later and we can be back to normal by summer,” he said. While movie lovers have got into the habit of streaming, Reid isn’t worried. Post-vaccination, “We’ll have blockbuster after blockbuster. We’re going to make it. It’s going to be exciting.” Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
The price, $275,000, struck them as a bargain, and they began asking economic development folks and downtown workers and residents what was most needed. “Everyone said a grocery store, that this was a food desert,” said Fernandez. And had been for decades. A Wrigley’s store downtown closed some 50 years ago and an A&P shut its doors 40 years ago. With a flurry of loft developments, condos and apartment projects in and around downtown in recent years, the consensus was that a full-line grocery store was needed. They sent letters out to 10 grocery story companies asking if anyone was interested in partnering with them in the Woolworth building. No one was. “So, we took it on ourselves,” said Fernandez. The building needed a total rehab, and that would take more financing than they were capable of. Using their own money, they did some badly needed roof repair and took off the aluminum cladding that had been installed on the exterior of the building long ago. Then, to prove that their vision of an upscale grocery along the lines of the Westborn and Holiday markets would work in St. Clair County, they bought a grocery store in Fort Gratiot in October 2018 for $400,000 and rechristened it the Country Style Marketplace. That same fall, they gave a five-minute presentation on their plans for the downtown building, to be called the Port Huron Country Style Marketplace, to a meeting of Blue Meets Green, a St. Clair County collaboration of public, private and nonprofit sectors that coordinates economic development projects. “We got rousing applause and support,” said Fernandez. “A grocery store downtown was really a big deal to everyone.” In fact, six years earlier, the group had identified a downtown grocer as one of its development targets. Jeff Bohm, chairman of the St. Clair County Board of Commissioners, said over the years he had talks with major grocery chains, including Kroger, about opening a store in downtown Port Huron, but there was little interest. “What I like about Steve and Michele is they aren’t grocery-store people, they are best-practices people. She was a salt-mine manager. He was a manager for the Koch brothers,” he said. “They are phenomenal business owners. They are going to be successful whatever they do.” Or, as she says: “We didn’t know anything about grocery stores, but processes are processes.”
A complicated deal A feasibility study by Michigan State University showed the store made fiscal sense, but it took nearly a year, until last October, to put together $3.7 million financing package. “It took time to come together. It was a tough project,” said Ian Wiesner, director of business development for Capital Impact Partners. Capital Impact, through its partnership with members of the Michigan Good Food Fund, a $30 million public-private loan fund that provides financing to food enterprises that benefit underserved communities,
BY T
Interior modifications of the building underway at 310 Huron Ave. This building once housed the Woolworth Company operations. | STEVE HERNANDEZ
financed $3.4 million in construction and other financing. The Michigan Economic Development Corp. will reimburse $630,000 of that or 25 percent of the total cost of construction, whichever is less, through a grant when construction is completed, and Croswell-based Eastern Michigan Bank provided an equipment loan of $300,000. Demo work began in earnest in November and construction should be completed this fall.
Their grocery visions Steve and Michele spent $125,000 on a complete makeover of the 11,000-square-foot Ft. Gratiot store, with new overhead lighting and wider aisles that brought more of the store into view — a large wine selection in one corner, and an upscale deli along one wall with a wide variety of hot foods and grab-and-go salads. “We’ve gone full-speed ahead with the grocery stores,” said Fernandez. “We cashed out our retirement and did exactly what a financial adviser would have said (not to) do. We’ve invested 90 percent of our personal wealth here.” They have 20 employees in the Fort Gratiot store. They plan on having about 45 downtown, which will be a much bigger store at 24,000 square feet, half on the ground floor and half in the basement, where there will be a wine cellar, a beer cellar and general merchandise like soap, brooms and mops. They currently live in another loft in downtown Port Huron. “The entire loft is smaller than the front room of our Arizona house,” said Fernandez. Loft living has given them a feel for what shoppers will need. The market will have rolls of paper towels and toilet paper, but in small quantities. Loft dwellers don’t have storage space for Costco-size packages. And with no on-site parking, most customers will be on foot, walking over from where they work or from their loft, wanting to walk out with one or two bags. “Our goal is that just-in-time groceries will become the norm,” he said. Much of the year, the store will also have tables on the sidewalk outside to offer those buying food to go a place to sit down and eat. Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
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FOCUS | ST. CLAIR COUNTY/PORT HURON
New Magna plant in St. Clair could include workforce training BY TOM HENDERSON
A long-delayed project is getting back on track in St. Clair County, bringing relief, a sense of optimism and, more importantly, hundreds of jobs to an area that has been hard hit by the pandemic recession. According to the Michigan Department of Technology, Management & Budget, the county had an unemployment rate of 9.8 percent in December, the fifth worst rate of the state’s 83 counties. On Feb. 23, the Michigan Economic Development Corp. approved a grant of $1.5 million over five years for construction of a new $70.1 million plant for Magna Electric Vehicle Structures-Michigan Inc., an entity of Troy-based Magna International Inc. It will go on 65 acres of a 100-acre site the city bought 20 years ago and put in roads, water and sewer lines for an industrial park that never materialized. There is another potentially big project that could result from the Magna deal. It wasn’t mentioned in press releases put out by Magna, the MEDC or the governor’s office, but Magna executives and county and city officials have had preliminary talks about forming a public-private venture to build a training academy on the 24 acres of land adjacent to the new Magna plant, modeled after a training academy Magna Interna-
Hrasky
Hinman
tional launched in 2015 in Liberty, Mo. to start training high school students for the highly skilled workforce required by modern factories. The KC Tech Academy is a partnership between the Kearney and Liberty school districts, Metropolitan Community College and Magna Cosma, a unit of Magna International. Under the free two-year program, students get on-the-job training, a high school diploma, college credit and certification in manufacturing technologies. “We hope to have something like that here, but there are no firm plans, yet,” said Andy Hrasky, group general manager of the five plants in Michigan in Magna’s body and chassis group. “The local colleges, city and county have been very helpful, and we hope to have something similar here to the Kansas City academy.” He said if an academy is built in St. Clair, the goal would be to involve other local manufacturers, too. He
said that if Magna decides to build an academy in Michigan, it would consider other sites, as well, “but this community has been very proactive. It’s been very vested in getting this plant. They did a great job and continue to do so.” The city of St. Clair has agreed to a property tax abatement for the new plant and St. Clair Community College will provide some free training through the Michigan New Jobs Training Program. The St. Clair plant is expected to create at least 304 jobs. Chris Hinman, who will be the plant manager, told Crain’s that he expects the plant to employ more than 100 by the end of the year to start fulfilling an eightyear contract to make complex structural battery enclosures made of steel, aluminum and composites for General Motors’ 2022 GMC Hummer electric vehicle. The steel, aluminum and composite enclosures are designed to protect the batteries. If the plant hits that job number, it will hit the first two milestones of the MEDC grant. The first is $250,000 for the creation of 50 jobs, and the second is another $250,000 for the next 50 jobs. The third milestone is $500,000 for the next 100 jobs with milestone four of $500,000 for the final 104 jobs. “Our job is to bring investment here, to create a tax base here and to create jobs here, and this will do all of
that,” said Dan Casey, CEO of the Economic Development Alliance of St. Clair County. “We want to attract jobs that have higher wages, and this will do that.” Production of the Hummer EV is scheduled to begin at GM’s Factory Zero plant in Detroit and Hamtramck this fall. Magna broke ground on the facility in November. “We’ve already got a lot of cement in. We’ve made significant progress,” said Hinman the day after the MEDC approval on Feb. 23. “We’ll start seeing steel go in in the next week or two. We expect to start moving equipment in by mid-summer, and sometime in Q4, we’ll have some level of occupancy and producing our first parts.” Lansing-based Wieland Corp. is the general contractor. The plant will be built in phases, with a first phase of 345,000 square feet, and pending further contracts with GM or other OEM, could top out at one million square feet. That plant will be built at 1811 Range Road, two miles north of downtown, a mile and a half west of the St. Clair River. The county originally paid to have the land cleared. The city then put in the infrastructure in anticipation of quickly getting the property on the tax rolls. The city had been trying to develop it for more than 20 years, with a string of disappointments, deals that fell through,
financing that couldn’t be worked out and changes of mind. Bill Cedar has been mayor of St. Clair for 21 years, since just before the city bought the property. “We never thought it would take this long. There was an economic upturn when we started and we thought we’d get something done fast,” he said. “Deals would come along, and then they’d say they found an empty building somewhere, instead. Then we got to the Great Recession. Over the years, we had the land for sale, we offered it for free. “Obviously, we’re excited talking about hundreds of good jobs. Kids get out of school here and leave. They go somewhere else to find good jobs. My kids were the same way. These are good jobs. Kids will be able to stay and raise their kids here.” According to the MEDC, the jobs at the plant will pay between $17 and $48 an hour, with an average wage of $27. Last summer, when word got out that there seemed to be a deal brewing, government officials were hoping to get $200,000 for the sale of the land. The deal came in at half that, mostly because Magna didn’t need the whole site. It eventually bought 65 acres. On the remaining 24 acres of usable land, Cedar said a training academy on some of that would be great.
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CRAIN'S LIST | MICHIGAN BUSINESS INSURANCE AGENCIES AND COMPANIES Ranked by 2020 business insurance revenue COMPANY ADDRESS PHONE; WEBSITE
1
TOP EXECUTIVE(S)
BUSINESS INSURANCE REVENUE 2020/2019
REVENUE 2020/2019
PREMIUM VOLUME ($000,000) 2020
EMPLOYEES JAN. 2021 MICHIGAN/ TOTAL U.S. 2021
WORLDWIDE EMPLOYEES JAN. 2021
INSURANCE CATEGORY
H.W. KAUFMAN GROUP INC./BURNS & WILCOX LTD.
Alan Kaufman chairman, president and CEO Daniel Kaufman EVP, COO
$2,450.0
$2,450.0 $2,400.0
$2,450
306 1,576
1,826
Insurance Company
2
AUTO-OWNERS INSURANCE CO. INC.
Jeffrey Tagsold chairman and CEO
$2,284.5
$2,284.5 $2,148.3
$8,968
3,050 5,429
5,429
Insurance Company
3
ACRISURE LLC
Gregory Williams co-founder, president and CEO
$1,385.4
$2,037.7 $1,882.8
$22,176
1,238 8,386
8,840
Insurance Company
4
AMERISURE MUTUAL INSURANCE CO.
Gregory Crabb president and CEO
$754.9
$754.9 $840.0 1
NA
304 671
NA
Insurance Company
AMERITRUST GROUP INC.
Patrick Stewart CFO and treasurer
$621.3
$621.3 $622.9
$622
312 793
793
Insurance Agency; Insurance Company
6
GALLAGHER
Lenny Brucato area president, Benefits & HR Consulting Michael Miller area president, Insurance & Risk Management
$105.6
$105.6 $77.0
NA
373 16,654
32,959
Insurance Agency
7
BROWN & BROWN OF DETROIT
Todd Piersol Jason Vandeberghe EVPs
$72.6
$72.6 $71.0
$435
567 10,042
10,193
Insurance Agency
8
MARSH & MCLENNAN AGENCY LLC - MICHIGAN
Becky McLaughlan president and CEO, Health & Benefits Dan Hale president and CEO, Property & Casualty
$45.8
$45.8 $46.5
$1,865
170 170
170
Insurance Agency
HIGH STREET INSURANCE PARTNERS INC.
Scott Wick managing partner and CEO Scott Goodreau managing partner, COO and president, Midwest region
$38.6
$67.7 $29.7
NA
257 426
426
Insurance Agency
VALENTI, TROBEC, CHANDLER INC./VTC INSURANCE GROUP
Al Chandler president and CEO Jeffrey Chandler EVP
$38.3
$38.8 $40.0
$237
152 163
163
Insurance Agency
11
KAPNICK INSURANCE GROUP
Jim Kapnick CEO Michael Kapnick COO
$35.6
$35.6 $34.5
$330
180 184
184
Insurance Agency
12
HYLANT
Michael Nixon senior VP, SEMI Employee Benefits leader Patrick McDaniel Michigan partnership leader
$31.4
$31.4 $32.8
$466
166 774
774
Insurance Agency
13
LIGHTHOUSE, AN ALERA GROUP COMPANY
Tom Helmstetter managing partner
$25.6
$25.6 $25.4
$301
149 149
149
Insurance Agency
14
ASSUREDPARTNERS INC.
Maureen Gallagher Melissa Armatis Joel Clark agency presidents
$24.0
$24.0 $22.9
$364
101 6,500
6,500
Insurance Agency
15
LOCKTON MICHIGAN
Elaine Coffman president
$17.8
$17.8 $13.7
$347
41 5,074
8,300
Insurance Agency
16
THE HUTTENLOCHER GROUP
David Huttenlocher CEO
$14.8
$19.3 $19.8
$163
110 NA
NA
Insurance Agency
17
RALPH C. WILSON AGENCY INC.
Robert Farris president and CEO, owner
$8.2
$8.2 $8.1
$150
51 51
51
Insurance Agency
KIG INSURANCE
Jeffrey Belen president
$7.5
$7.9 $8.1
$63
54 54
NA
Insurance Agency
18
OSWALD COMPANIES
Catherine Kosin senior vice president, market leader (Michigan)
$7.5
$7.5 $7.0
$80
33 390
390
Insurance Agency
20
CAPITAL INSURANCE GROUP
Robert Moglia Jr., president; Tom Moglia, Edmund George, Donn Johnson, VPs
$6.3
$6.3 $6.3
$6
27 27
27
Insurance Agency
21
ALLIED INSURANCE MANAGERS INC.
Jayson Bass CEO Bill Sheldon president
$5.5
$5.5 $5.3
$36
29 31
31
Insurance Agency
22
MANQUEN VANCE (FORMERLY CORNERSTONE MUNICIPAL ADVISORY GROUP LLC)
Mark Manquen founder, president John Vance principal
$5.1
$5.1 $3.6
$219
21 22
22
Insurance Agency
5
9 10
18
30833 Northwestern Highway Farmington Hills 48334 248-932-9000; www.hwkaufman.com
6101 Anacapri Blvd. Lansing 48917 517-323-1200; www.auto-owners.com 100 Ottawa Ave. SW Grand Rapids 49503 www.acrisure.com 26777 Halsted Road Farmington Hills 48331 248-615-9000; www.amerisure.com
26255 American Drive Southfield 48034-6112 248-358-1100; www.ameritrustgroup.com 2600 S. Telegraph Road, Suite 100 Bloomfield Hills 48302 248-332-3100; www.ajg.com 35735 Mound Road Sterling Heights 48310 586-977-6300; www.bbdetroit.com
755 W. Big Beaver Road, Suite 2300 Troy 48084 248-822-8000, 734-525-2463; www.mma-mi.com 333 West Grandview Parkway, Suite 201 Traverse City 49684 231-486-5656; www.highstreetpartners.com
1175 W. Long Lake Road Troy 48098 248-828-3377; www.vtcins.com
1201 Briarwood Circle Ann Arbor 48108 888-263-4656; www.kapnick.com
2401 W. Big Beaver Road, Suite 400 Troy 48084 248-643-8750; www.hylant.com 56 Grandville Ave. SW Ste. 300 Grand Rapids 48105 800-344-3531; lighthousegroup.com
3099 Biddle Ave. Wyandotte 48192 734-283-1400; www.assuredpartners.com First National Building, 660 Woodward Ave. Detroit 48226 313-329-2800 ; www.lockton.com 1007 W. Huron Waterford Township 48328 248-681-2100; www.hgway.com
26026 Telegraph Road, Suite 100 Southfield 48033 800-638-1174; www.rcwa.net
26877 Northwestern Highway, Suite 400 Southfield 48033 248-352-5140; www.getkig.com 39572 Woodward Ave., Suite 201 Bloomfield Hills 48304 248-433-1466; oswaldcompanies.com 1263 W. Square Lake Road Bloomfield Hills 48302 248-333-2500; www.capitalinsuranceagent.com 1055 S. Blvd. E., Suite 110 Rochester Hills 48307 248-853-0930; www.alliedinsmgr.com
50 West Big Beaver, Suite 220 Troy 48084 248-878-2119; manquenvance.com
$2,400.0
$2,148.3
$1,053.5
$840.0 1
$622.9
$77.0
$71.0
$46.5
$16.2
$37.7
$34.5
$32.8
$25.4
$22.9
$13.7
$15.2
$8.1
$7.5
$7.0
$6.3
$5.3
$3.6
Researched by Sonya D. Hill: shill@crain.com | This list is an approximate compilation of the largest such agencies and companies in Michigan. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. Johnston Lewis Associates Inc. which was No. 18 and and Wilshire Benefits Group which was No. 21 both declined to partipate this year. and NA = not available. NOTES: 1. Crain's estimate.
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‘MICHIGAN COMPANIES SHOULD EXPECT MORE’ LOCKTON’S PRIVATE OWNERSHIP AND VALUE PROPOSITION BRING SOMETHING BRAND NEW AND DYNAMIC TO MICHIGAN BUSINESSES
Today’s business leaders are operating amid constant change. From the growing threat of cyberattacks to property risks posed by the climate crisis, protecting your company against unexpected losses demands a nimble, custom-tailored approach.
goal — to bring to Michigan what has been missing amid all of this change.”
“It’s just a very different world now in terms of what you’re trying to insure and protect your business from,” said Elaine Coffman, Michigan president for Lockton, the world’s largest privately held, independent insurance brokerage firm. “It’s no longer a one-size-fits-all approach and a quick conversation with a broker.” The company recently expanded its Michigan presence with a new office in Grand Rapids.
“Some of our competitors have centralized brokering centers where the team working with the client every day isn’t the one telling their story to the underwriters. This can create some value lost in translation as the person brokering the placement doesn’t have a personal relationship with the client. At Lockton, the team you see everyday is the one negotiating on your behalf to the insurance underwriters,” Damon said. “Lockton’s model is big on investing in our talent and people and giving them the resources and staffing they need to do right by our clients. We’re working six months ahead of the renewal cycle while many of our competitors are working 60 days ahead of the cycle.”
As business owners look to this year’s insurance renewals, personalized attention may seem more challenging than ever to obtain. Over the past several years, most of the robust regional firms in the Michigan insurance market have been merged with others or acquired. In Business Insurance’s latest annual ranking of the top 100 U.S. brokerage firms, the top 10 firms now represent over 80 percent of the market, Coffman said. “The mid-market space has kind of disappeared,” she explained. “Market complexity continues to drive the need for companies to work with a global firm. But most of them are publicly-traded or private equity-owned with margins that don’t allow for mid-market companies to get the service they’ve been traditionally used to.”
side, the COVID-19 relief bill passed at the end of last year contained many things that impacted employers’ benefits and HR practices. We’re in a constant state of compliance motion right now, educating clients and supporting employee communication and policy development.”
The ability to invest in people over profit margins sets Lockton apart, said Quinn Damon, vice president at Lockton Michigan.
Elaine Coffman, president, Lockton Michigan and Quinn Damon, vice president, Lockton Michigan.
growth, high client retention and exceptional employee engagement. “Lockton is the only Top 10 company on the latest Business Insurance list that is family-owned and privately held. And we have gotten there organically — by retaining our clients and having a strong value proposition we’ve been able to grow into that space without acquiring anybody,” Coffman said. By partnering with Lockton, a global yet privately-held firm currently operating in 125 countries, business leaders have access to the specialized technology and practice area experts needed to navigate today’s complicated market.
The ownership structure of these firms means they are generally delivering 30 to 40 percent of their profits to shareholder groups, compared to 10 percent at Lockton.
They can also expect a level of client service they may not have experienced to date in Michigan. Lockton’s expansion in the Great Lakes State includes 50 associates specializing in employee benefits, leave management, property and casualty, general liability, cybersecurity and other areas.
Despite the mergers and acquisitions trend, Lockton has remained private, keeping rates competitive and growing its business through a client-centric culture focused on organic
“With our lower margins, we are able to recruit the best talent and deliver more than twice the people value in this complex market,” Coffman said. “We can really deliver service. That is our
The pandemic’s widespread impact has prompted people to re-evaluate how they do things across the board, both personally and professionally, Damon added. For business owners, insurance is a major component of that. Lockton is staying ahead of the curve by integrating data analytics, positioning clients for success in underwriting, and “exploring every avenue available for clients,” he said.
As more companies seek out Lockton’s expertise, they are likely to notice a staggering difference in service, Damon asserted. “Michigan companies should expect more. They don’t know what’s available, and we’re excited for the opportunity to bring that to a market where what we do and the service we offer just didn’t exist,” he said. “Employers should be expecting more of their brokers.” One example of that service is ongoing guidance on the current challenges facing business leaders. Lockton has provided its clients with resources on employee engagement, considerations for a virtual workforce, confronting social changes and even preparing for COVID-19 vaccination rollout among workers.
“Many business leaders had to make an array of adjustments in the last year to how they operate their companies,” he said. “Now more than ever, companies need to look beyond the status quo for how to finance their risk. They should not continue to buy insurance the same way they have for the last 10 years. Frankly, too many lack insight into what is available because their brokers don’t have the insight themselves or the time to sit down and do the work that is required to explore all options.” Coffman agreed: “There is a whole new way of doing things and the Michigan market has been very underserved, particularly in the area of property casualty brokerage,” she said. “You need a partner that spends time and that brings you relevant solutions. We’re curating solutions specific to the customer.”
“The amount of work product that has come from our Coronavirus Advisory Practice is unbelievable,” Coffman said. “On the regulatory
LOCKTON AT A GLANCE
96%
CLIENT RETENTION
FAMILY-OWNED AND PRIVATELY HELD
3 50 15
OFFICES ASSOCIATES RANKING
125+
10.3%
8,500+ 8
12
ORGANIC GROWTH
CONSECUTIVE YEARS BEST PLACES TO WORK IN INSURANCE
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PEOPLE ON THE MOVE
To place your listing, visit www.crainsdetroit.com/people-onthe-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com ARCHITECTURE
ARCHITECTURE / ENGINEERING
HKS Architects, P.C.
Anderson, Eckstein & Westrick, Inc.
HKS is pleased to announce the promotion of Camilla Moretti, AIA, ACHA, LSSGB, LEED AP BD+C to Principal at the global architecture firm. A performance-driven design advocate and recognized healthcare thought leader, Camilla brings over 15 years of experience in research, planning and design for large-scale healthcare facilities around the world. Her work represents more than 1.5 billion dollars in domestic and international projects for renowned healthcare systems such as ProMedica, Baptist Health and Piedmont Healthcare.
AEW is pleased to announce that Mohammed T. Lutfi, PE, PTOE has joined our Traffic Engineering team. Mr. Lutfi has over 33 years of experience in both public and private settings, including 26 years as a traffic engineer for the Road Commission of Oakland County. He is experienced in traffic engineering, traffic safety, roadway design-including modern roundabouts, project management, traffic operations, and modeling/simulation. Mr. Lutfi is a proud Wayne State University graduate.
INSURANCE AGENCY / BROKERAGE ARCHITECTURE
HKS Architects, P.C. HKS is pleased to announce the promotion of Stephanie Butzke to Vice President at the global architecture Butzke firm. A regional marketing leader, Stephanie is an experienced marketer with 15 years of experience. She partners with marketing and firm Kook leadership on strategy, messaging and content to effectively communicate the firm’s value proposition to clients. HKS is pleased to announce the promotion of Maria Kook, AIA, PMP, LEED AP to Vice President at the global architecture firm. A proven leader, highly respected by clients and colleagues, Maria is an experienced, senior project manager with more than 20 years of proven expertise in all phases of capital building projects for commercial, healthcare, mixeduse and historic buildings. NEW HIRE? PROMOTION? BOARD APPOINTMENT?
Crain’s People on the Move showcases industry achievers
18 | CRAIN’S DETROIT BUSINESS | MARCH 8, 2021 and their companies to the Detroit business community. Contact: Debora Stein at dstein@crain.com
Kapnick Insurance Group Kapnick Insurance Group recently hired Keith Tubergen as Vice President and Transportation Practice Leader. In addition to leading the transportation division, Keith’s primary goal is to make long-lasting relationships and ensure his clients and teams are growing, succeeding, and having fun while doing so. Keith joins Kapnick with 26 years of experience in the towing industry. Beyond his towing and general business experience, he was also the head of a very successful MainStreet Department.
LAW
CND Law Peter Domas, attorney and CPA, has joined CND Law and will lead the firm’s Health Law Connect legal practice. Peter has extensive experience in the healthcare industry helping clients navigate complex statutory and regulatory requirements. He also counsels clients on matters relating to company startups, mergers and acquisitions, internal compliance programs, labor and employment, and corporate transactions. Peter is also joining Cole, Newton & Duran (CND) CPA, as a subject matter expert.
United Wholesale Mortgage rings the opening bell at the New York Stock Exchange on Jan. 22. | NYSE
UWM
From Page 1
Ishbia alleged that Rocket, as well as Madison, Wis.-based Fairway Independent Mortgage Corp., have been involved in “underhanded” business dealings to undercut the wholesale sector, which UWM dominates, in the hopes of boosting the retail side of the industry, dominated by Rocket. Ishbia said that based on conversations with brokers with whom his company works, the two competitors have been paying loan officers and real estate agents to bring them business.
Serious allegations Experts say the allegations levied by Ishbia at the other two companies are rather serious in nature. “That’s a pretty powerful allegation,” said Matthew Roling, and adjunct professor of finance at Wayne State University and the school’s executive director of the Office of Business Innovation at WSU’s Mike Ilitch School of Business. Roling, who previously worked for the Rocket Mortgage-affiliated Rock Ventures, questioned whether what Ishbia is alleging put Rocket and Fairway in violation of the federal Real Estate Settlement Procedures Act, or RESPA. “It might pass the letter of the law with RESPA ... but it still smells bad,” Roling said. “If what (Ishbia) said is true ... it seems like they’re paying people to steer clients in a certain direction, which maybe is not a kickback per se, but it isn’t that far away from one.” As such, Roling wondered why Ishbia wouldn’t simply rally his thousands of brokers to pursue a class action. Ishbia, for his part, told Crain’s in an interview that he’s not alleging any illegal wrongdoing, but simply trying to bring light to Rocket's and Fairway’s purported attempts to upend the broker channel where UWM operates as
LIVENGOOD
From Page 7
state’s calculations than it would have if doses were allocated based solely on its portion of Michigan’s population, a Crain’s analysis shows. Yet, Mike Duggan turned away one of the three vaccines. The White House can’t be pleased either. They’re trying to get as many shots in arms as possible and Duggan — a close ally to President Joe Biden — is pouring cold water on the newest vaccine to get approval by the CDC and FDA for emergency use. To be sure, the emergency still exists. Spring is quickly approaching and the urge for people to gather, attend a Tigers game, go out for dinner and repopulate downtown Detroit office buildings — and replenish the Duggan
the primary lender. He noted that he “assumes” the companies' actions are compliant with RESPA, adding that he aims to be neither judge nor jury. But the goal of his decree to brokers is to ensure that they’re not funding companies he says are trying to undercut their business model. “We’re going to protect the channel and that’s what we came out to do,” Ishbia said. “Rocket and Fairway would love the channel to go away because they can charge higher margins in the retail channel and we’re protecting that because that’s not better for consumers and it’s not better for our mortgage broker clients.” Asked why he believes he has the leverage to ensure brokers will opt to work with his company as opposed to the others, Ishbia said he has no apparent upper hand. “I don’t think I have any leverage,” he told Crain’s. “I think I was just stating a comment that this is what I believe and I’m going to support the broker channel. It’s freedom of choice.” UWM works with about 12,000 independent mortgage brokers from around the country, according to figures it sent to Crain’s. Approximately 3,300 of those brokers also have business relationships with Rocket Mortgage and/or Fairway. As of Thursday evening, UWM said it had received 600 responses from brokers who work with all three companies, and 93 percent said they would sign UWM’s addendum mandating that they drop their relationships with Rocket and Fairway. “There’s 75 great lenders in (the) wholesale (channel), and you can either be with us and 73 others, or be with them and 74 others,” Ishbia said. “No problem, whatever you want to do.”
Backlash There are indications that Ishbia’s decree may not be going over as smoothly in the broker community as administration’s coffers with badly needed tax dollars — is growing by the day. Those gatherings are inevitably going to cause the virus to spread again in Detroit and its suburbs; the vaccines will stop the virus from putting people on ventilators in the hospitals Duggan used to run. Again, time is of the essence. Duggan’s message that the J&J vaccine is inferior threatens to undermine the life-saving medicine in the court of public opinion beyond Detroit, where the jury is still out on whether the vast majority of adults will get a shot. Just 11 percent of Detroiters have been vaccinated, lagging behind Macomb County (16 percent), suburban Wayne County (18.6 percent), Oakland County (19.1 percent) and the state as a whole (18.5 percent). Detroit is less than 7 percent of Mich-
he puts it. A national trade group for independent brokers on Thursday released a scathing statement following Ishbia’s message. “We’re not sure this is even legal. It certainly isn’t ethical,” Kimber White, president of the National Association of Mortgage Brokers, said in a news release on Ishbia’s request to brokers. “And it doesn’t represent the American way of free enterprise. This is counter to the spirit of freedom and independence that is the very foundation of our broker businesses,” White said. White did not respond to a message from Crain’s inquiring whether the trade group, or independent brokers, would seek any legal recourse. UWM had no immediate comment on the trade group's suggestion that Ishbia's action could potentially be in violation of the law.
Rocket response Executives at Rocket, for their part, deny Ishbia’s allegations and say his actions stem from feeling threatened by Rocket’s growing presence in the broker channel. Rocket says it now has about 10,000 independent brokers with which it works, up from 3,000 three years ago, according to Austin Niemiec, executive vice president of Rocket’s wholesale broker platform, called Rocket Pro TPO. “The reason we’ve done that is because we’re giving brokers value,” Niemiec told Crain’s in an interview. “Not by threatening them. Not by giving them ultimatums. Not by telling them what to do. We’re providing value. Incredible interest rates, an awesome tech platform.” Niemiec equated Ishbia’s call for brokers to make a choice to someone going to FedEx and the logistics company saying they would not ship the package because that customer also uses UPS. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes igan’s population, but Duggan’s bully pulpit gives him an outsized political voice in this region and Michigan as a whole. Polling over the years has shown Duggan and his turnaround management in Detroit is popular in the suburbs, especially finicky Macomb County, Michigan’s live-free-or-die county. It’s no secret that Republican legislators often listen to Duggan before they listen to Whitmer. And if Mike Duggan says a vaccine isn’t good enough for Detroit, what’s to stop GOP legislators from pooh-poohing the science and efficacy of the vaccine in Decatur or Deckerville? That’s what makes Duggan’s initial dismissal of the J&J vaccine so dangerous. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood
DEALS
From Page 3
Washtenaw County, which like Oakland County has a smaller portion of its population living in poverty than most counties, also saw its weekly allocation reduced by 2,465 doses using the MDHHS formula, state data show. Ottawa, Livingston and Macomb counties saw overall reductions in vaccine allotments of 984, 726 and 687 doses, respectively, compared with what they would get by a formula tied only to population. The data MDHHS provided Crain’s only accounted for first doses of the two-shot Pfizer and Moderna vaccines shipped to providers last week before the new one-shot Johnson & Johnson vaccine became available. Suburban Wayne County, despite having some of the state’s poorest cities in Inkster, River Rouge and Ecorse, received 299 fewer doses of vaccine under the SVI formula than it would have if vaccines were allotted by population. Overall, Wayne County’s health department and suburban hospitals received a total of 18,322 doses last week for its roughly 1.1 million residents, while Oakland County received 20,854 doses for its 1.25 million residents, state data show. “We still are not getting as much as our neighboring counties and the city of Detroit,” said Dr. Mouhanad Hammami, Wayne County’s chief health officer. “The social vulnerability index should be considered for more doses, and because of that, we think we should receive more.” On the allocation, Hammami said he has asked for the formula in how the doses are distributed. “There are several factors the state bases its allocation on” for county heath departments, he said. “Population of the area, the number of essential workers, seniors 65 or older, plus the SVI. Is it one-to-one or how do they apply it? The formula seems a little questionable, but we hope as the (total) numbers of doses go up, we will all receive enough.” Khaldun defended the formula, pointing to how it helps distribute more vaccine to rural parts of the state that otherwise would get a smaller share based solely on population. State data show a district health department encompassing Alcona, Iosco, Ogemaw and Oscoda counties — four northeast Lower Peninsula with high rates of rural poverty — received 390 additional doses of vaccine last week using the SVI formula. In southwest Michigan, Van Buren and Cass counties got a 586-dose boost in vaccine last week under the state’s formula, data show. “There are many areas across the state that have a high (social vulnerability),” Khaldun said. “I think it’s a fal-
Shipments rising
While the SVI formula reduces vaccine allocations to more affluent counties in the state, their overall shipments still are increasing as more vaccine becomes available from Pfizer, Moderna and Johnson & Johnson. Last week, Washtenaw County received a 40 percent increase in doses, 7,000, including 2,000 of the new single-dose J&J vaccine, compared with the 5,000 doses the county health department received the week of Feb. 22. Two weeks ago, the county got a shipment of 3,000 doses, giving it a 133 percent increase the past two weeks. “We’re tremendously relieved to have more vaccine available, and we continue giving vaccinations as quickly as possible,” said Susan Ringler-Cerniglia, Washtenaw’s communications and health promotion administrator. Washtenaw County plans to expand hours at its mass vaccination clinic at Eastern Michigan University in Ypsilanti, from 5,000 to 9,950, where it has partnered with St. Joseph Mercy Health System, a division of Trinity Health Michigan. Meanwhile, eight-hospital Trinity Health Michigan, which has been working with local health departments and physicians to expand vaccination opportunities, received more doses of vaccines last week than in previous weeks, but not a large amount, an official said. “When we do (receive more doses) it will allow us to ramp up appointments to all eligible groups,” said Dr. Rosalie Tocco-Bradley, chief clinical officer with Trinity Health Michigan. Tocco-Bradley said Trinity Health has been transferring vaccine doses to local health departments in its market and also physician groups, where “eligible community residents and patients can more readily access it.” “We are also now reserving doses each week for eligible patients who reside in vulnerable ZIP codes in our communities,” Tocco-Bradley said At Henry Ford Health System in Detroit, the state shipped a total of 17,900 doses of the COVID-19 vaccine. The number included 700 of the J&J vaccine, 10,760 first doses of Pfizer and 6,440 second doses of Pfizer and Moderna. Under state directions, Henry Ford plans to use the 700 doses of J&J single-dose vaccine on patients 65 and older who are being discharged from the hospital or the emergency department. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood Contact: jgreene@crain.com; (313) 446-0325; @jaybgreene
Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
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CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455 / sjanik@crain.com or, for more information, visit our website at: www.crainsdetroit.com/classifieds
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Kautex Inc. has an opening in Troy, MI for a Sr. Engineer Battery Systems
CBU responsible for Ideation & Proof of Concept product/process dev’t. activities for Innovation Dep’t. w/ focus on innovative technology, incl. Battery Systems, Electrical Wiring, improved vehicle functionality & in-vehicle comfort. Master’s in Mech., Ind. or Electrical Engg. or related & 3 yrs. exp. in automotive (or Bachelor’s & 5 yrs.). Must have legal auth. to work permanently in the US. EOE. http://www.textron.com/careers (Requisition ID 290059) POSITIONS AVAILABLE is looking for the following full-time positions: Instructor, Computer Information Systems (Probationary Status), Instructor, Engineering Technology (Probationary Status), Instructor, English (Probationary Status), Instructor, Physics & Astronomy (Probationary Status) and Instructor, Psychology (Probationary Status) If you are interested in applying or would like more information regarding this position, please visit our website at www.sc4.edu/jobs
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September 2, 2019 | crainsdetroit.com
40 40
Dandridge Floyd, 37
UNDER
Assistant Superintendent of Human Relations and Labor Relations, Oakland Schools
T
hroughout Dandridge Floyd’s careers — whether as a social worker, attorney or assistant superintendent of Oakland Schools — making change has always been a center point. When United Way pitched a framework to Oakland Schools for a countywide breakfast program to address poor nutrition as a way to improve academic achievement, Floyd — who experienced food insecurity growing up — knew firsthand the powerful impact it could have. To secure the needed funds, Floyd led a team that earned support from all 28 local districts to finance the program — despite the fact that a majority of them would see no benefit. “The local districts were phenomenal,” Floyd said. “The biggest surprise was how quickly it happened. Education is a democratic system and democracy can be very slow, but this happened in six to seven months. That showed how committed people were to making sure the students of Oakland County have everything they need to be successful.” In a county where over 7,000 children suffer from hunger, and only two in five eligible students access a school breakfast, Floyd said a common misperception is that “Oakland County is rich.” “That makes this program all the more important, because if that is the bias or the thought process people have about Oakland County, then these kids would have never gotten help.” In a groundbreaking public/nonprofit partnership between the Oakland County Board of Commissioners, Oakland Schools and United Way, Oakland County is Better with Breakfast was born. “I’m impacting lives now,” Floyd said. “I know the effect food insecurity had on me and my peers growing up, and this was an opportunity to make a change that I wish an adult could have made for me.” — Laura Cassar
October 30, 2017 | crainsdetroit.com
UBS to open downtown Detroit office By Annalise Frank
October 30, 2017 | crainsdetroit.com
• UBS plans to open wealth management office in Detroit in mid-2018 • Office to include 6,000-squarefoot space and civic October 30,nonprofits 2017 | crainsdetroit.com
UBS to open downtown Detroit office By Annalise Frank
groups • UBS plans to open wealthcan use free of charge • Bedrock-owned buildings
office in Detroit “I’m impacting lives now. management I know undergoing renovations in mid-2018 • Office 6,000-squarethe effect food insecurity had onto includeUBS plans to open an office in downfoot space nonprofits and civic town Detroit in mid-2018, the company Annalise Frank growing groups meByand my peers up, andcan use free of charge announced Monday. • Bedrock-ownedUBS buildings Group AG’s U.S. and Canadian UBSan plans to open wealth this•was opportunity toundergoing make a renovations wealth management business, New Jermanagement office in Detroit sey-based Wealth Management change I wish an adult UBScould plans to open an office UBS in downin that mid-2018 Americas, to lease 13,000 square town Detroit in mid-2018, theplans company • Office to include 6,000-squarefeet on the connected sixth floors of have made for me.” announced Monday. foot space nonprofits and civic
UBS to open downtown Detroit office Bedrock LLC
From Page 3
lacy for some people to assume that we’re just talking about Southeast Michigan or the city of Detroit.” March 8, 2021
UBS will lease 13,000 feet from Bedrock LLC starting around mid-2018 in two buildings: the Grinnell Building (center left) at 1515 Woodward Ave. and the Sanders Building (center right) at 1529
neighboring buildings at 1515 Wood- Woodward Ave. Group AG’s 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 and the Sanders Buildingalong (centerthose right) at 1529 Bush said. and are undergoing said left) lines,” hold another six toAve. eight new staff memon in the connected sixth floors of renovations, Reprinted with permission from Crain’s Detroit Business. © 2019 Crain Communications Inc. All RightsUBS reserved. plans to open anfeet office downAve. for John Bush, 60, WoodMichiganWoodward market head UBS’s investment in the new ofbers, Bush said. It will act as an extension neighboring 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 to move open ato new The twoCanadian buildings built around 1900 arefor us “uniqueness Bush is based the Birmingham adequate office space to hostcomes do- at a price.” He said will 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 others and will meetings nor events 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 the Detroit branch. along those lines,” Bush said.cost of the build-out, as some another six to eight new stafftime memsey-based UBS Wealth Management nativemarket who grew City. “We John Bush, 60, Michigan headup forin Garden have yet The location have a less UBS’s investment in the new of- to be finalized. said. will act asDetroit an extension fromBush Bedrock LLCItstarting around mid-2018 in twowill buildings: the Grin- contracts Americas, plans to lease 13,000 square UBS will lease 13,000 feetbers, UBS Wealth Management Americas. really felt like we wantedofto have a physfice will be “significant,” hecompany said, as its the other wealth management offices. The plans to start its buildtraditional, more “urban” feelright) than 1515 Woodward Ave. and the Sanders Building (center atthe 1529 feet on the connected sixth floors of nell Building (center left) at “The real impetus for us to open new ical presence downtown to reinforce “uniqueness comes at a price.” He saidnext year, depending Bush is based outothers, of the he Birmingham out process early said. New York-based architecAve. a neighboring buildings office at 1515 Wood- toWoodward in Detroit is our support govision what’s for this particular 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,”to said 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 to the officelocation to or will who grew Garden “Wedowntown commitment contracts finalized. The Detroit have aon less UBS, based in Switzerland, employs Co. has signed as general contractor.yet to be owned by Detroit-based Bedrock nor events or board or things start, the office has the capacity really felt likeLLC we wanted tobut have a physThe company plans to start its buildtraditional, moreto“urban” than the outmeetings the city.” 60,000 across 54 countries. About 34 UBS feel plans to rent about half of the and are undergoing renovations, along those lines,” Bush said. hold six to eight new he staff memical presencesaid downtown toWealth reinforce year, depending others, said. New office York-based architecUBS another percent of them work in the Ameri— 6,000 square out feetprocess — at noearly cost next John 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 area onin when tureasfirm Verderameto Cale will design theother a n aBush gem e n tand cas, according to a news release. UBS nonprofits and organizations, 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 atUBS, a price.” Hein said is based the Birmingham to has Bush based Switzerland, employs has signed on as Woodward general contractor. metro De- out ofCo. ploys 280 in Michigan, 225 of whom Gallery. Its design and art office in Detroit is to support what’s go- office, but travels to theUBS heabout could not an estimate others and the city.” 60,000 across 54 countries. About 34 Detroit. plans towill rent will out half of yet the provide troit offices in are based in metro aim to showcase Detroit’s history ing on in the city,” said Bush, on the cost the build-out, asthem some spending Detroit branch. UBS a Detroit Wealth B be percent in the Amerioffice — 6,000 square feet at noof cost irm i n g h a time m , in the wealth management business and a — hub-and-spoke layout ofwill re- workThe native who grew up in Garden City. contracts have yet tocas, be finalized. Manag 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 to metro De- others, he said. New York-based outdesign process early year, depending architecploys 280 in Michigan, 225 of whom Woodward Gallery. Its and art next John Bush and Dearborn. erate 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 on the buildings the on based in metro Detroit. will will aimdesign to showcase Detroit’s history are 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 Detroit Business. © 2019 Crain Communications Inc. All Rights reserved. Americas also Bush said. The space will be called UBS Wealth Management Americas emFurther 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 and Dearborn. erate and provide services in the city 7 percent increase over last year. Bedrock LLC
VACCINE
For some who have recently completed deals, the pandemic has barely registered. Samuel Spencer became president and CEO of Madison Heights-based vehicle telematics supplier Guidepoint Systems last month, following the close of a transition that lasted about four years and resulted in the CRAIN’of SD ETROIT BUSINESS retirement the company’s founder, Rand Mueller. Despite uncertainty from the pandemic, the fundamentals of the deal more than withstood any challenges, according to Spencer. “This deal was four years in the making,” Spencer said in an interview with Crain’s. “So the potential growth in the market share, the demand for Guidepoint’s product and services, the ever-increasing reliance and importance of mobility: that compelling investment thesis still prevailed,” he said. “We’re looking at a three-to-five-year horizon. Long-term investors are do-
Bedrock LLC
JARRUS FOR CRAIN’S DETROIT BUSINESS
Deals aplenty
ing the same. That’s why you still saw deals get done in the first half of last year ... and a surge in the second half.” Among those who recently completed a deal to sell their business was Dr. Scott Plaehn, who in January completed a sale of East Lansing-based health care practice Michigan Gastroenterology Institute to a Boston-based private equity group, HIG Growth Partners. MGI’s affiliate, Capitol Colorectal Surgery Partners, was also sold in the deal. Plaehn, MGI’s president, told Crain’s that the impetus for the sale, terms of which were not disclosed, was a desire to streamline the back-office business functions of the organization while allowing the practice to better identify future acquisition opportunities. “We just felt like we had a lot of good ideas, but we could not really enact them and go to the next level and take the next steps,” Plaehn said. Cascade Partners in Southfield served as the health care practice’s financial adviser on the deal. Kothari noted that the current flurry of deals makes sense given that activity mostly halted early last spring due to the pandemic, but kicked back into high gear once businesses and advisers got acclimated to working remotely. “Everything took longer,” Kothari said. “You took the whole year and compressed it down to six months and now you’re having things trickle over.”
PHOTOGRAPH BY JACOB LEWKOW FOR CRAIN’S
Margaret McCarthy, an Oakland County nurse, places a dose of the Moderna vaccine into a needle at a recent clinic at the Suburban Collection Showplace in Novi. | SYLVIA
As such, companies are on the hunt for tech functions that fill those gaps. Indeed, one-quarter of companies surveyed for a February report by consulting firm Ernst & Young said that the acquisition of technology, talent, new production capabilities or innovative startups accounted for a main strategic driver of M&A activity. “Businesses are looking to cross-sector targets to broaden their product and service offerings, a key differentiator in attracting and retaining customers in a fiercely competitive market,” the Ernst & Young report says. Such a notion fits with the strategy being employed by DaySmart Software Inc., an Ann Arbor-based scheduling software company that’s been steadily growing organically and via acquisition, having completed two deals since December. The company now has more than 200 employees and over $40 million in revenue, according to CEO Patrick Shanahan. As it continues to eye opportunities for growth via dealmaking, DaySmart is looking closely at complementary companies to the markets it already serves, such as salons, spas and pet care service providers. For example, in December it acquired AppointmentPlus based in Scottsdale, Ariz., in a deal that expands DaySmart into categories such
as supply chain and logistics, health care, automotive and other segments. “Not only those, but adjacent markets,” Shanahan said. “And understanding what other markets do we want to go pursue and then making sure we find the right acquisition that allows us to have the right platform that’s competitive and we can go take more share (of the) market in that vertical. We’re always evaluating the platform.”
Albert Berriz talks workforce housing, Ann Arbor and Cuba
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MCKINLEY INC.: Ann Arbor-based real estate company McKinley Inc. saw the writing on the wall for its retail portfolio a few years ago and cut bait, turning its focus primarily to its large crop of tens of thousands of workforce housing units across the country. One of the people at the helm of that decision was Albert Berriz, CEO and managing member, who came to America as a young boy fleeing Cuba and now steers a large company with a portfolio valued at more than $4 billion. ` Crain’s Detroit Business: Can you talk a little bit about how the McKinley portfolio began and where it’s at today? Berriz: McKinley started in 1968 in Ann Arbor, and it was founded by (former U.S.) Ambassador Ron Weiser. It started in the student housing business and eventually transitioned into more traditional multifamily housing, and in addition to that, office and retail, as well. Today, we’re primarily a workforce housing multifamily operator. We have essentially disposed of our retail and office assets in an effort to really focus on multifamily and also focus on an asset class that I think is more in line with our current goal, which is to have a generational multifamily real estate enterprise and a pool of assets that really are long term in nature. ` Explain workforce housing versus affordable housing. We’re not in luxury housing. Our residents are working. They’re going to wake up tomorrow morning and go to work. Our average rents are, for example, in Washtenaw County, about $1,100 to $1,200 or in Orange County, or Seminole County, Florida, $1,400 or $1,500. So these are affordable rents. And the difference between us and affordable housing is our buildings are not subsidized. They’re all market rate, and they’re all privately owned. The owners are not receiving any form of subsidy, nor are the residents. However, if you wanted to sort of assess residents and low-income housing tax credit deals compared to ours, they’re probably not too dissimilar, the median incomes. The McKinley residents in, let’s say, Washtenaw County, when you look at the numbers are probably not going to be too much different than what you would see in a traditional LIHTC deal. But again, our buildings, the primary differences, our buildings are market rate and they’re not subsidized any way.
` I don’t think it’s overblown to use the word “crisis” for Ann Arbor’s affordable housing situation. Give us your perspective on how the city should go about addressing it. I think it’s a supply issue. The reality is that Ann Arbor has not really welcomed solutions from the private sector and has only sought solutions from the public housing side or the community nonprofit side. And both of those groups, while I think they’re very well intentioned, don’t have the capital and the expertise to resolve the problem at the scale it’s needed. To put it in perspective, you know, the Washtenaw County study that came out had a need of about 3,000 units. And if you look at the cost per unit today, and let’s say $250,000 or $300,000 per unit to build a brand new unit today, you know, it’s an $800 million to a $1 billion problem, so I don’t think that’s a problem that gets resolved on the public side or on the community nonprofit side. You know, they have to go to places to seek capital and there just isn’t enough capital, nor do they have enough resources or expertise to resolve the problems. So the city I think, by and large, has attempted to do this in those ways because they really haven’t welcomed the private side. And there is a lot of expertise and there’s a lot of capital that could do this, from the private side perspective. It just hasn’t been the way that Ann Arbor operates, so you see what has happened in Ann Arbor year over year, decade over decade is there’s a lot of conversations about affordable housing, but there’s no solutions. ` You were talking a little bit earlier about how McKinley got out of retail and office. What led to that decision and how has that reflected or shaped your business strategy? It was a risk profile that we were just not comfortable with. We are a generational business and so we look at our assets in
a way that we never expect to sell them. We expect to invest in them so they last for long term, and we just couldn’t see that on retail. We saw a significant degradation of our rent rolls. We had buildings that were, let’s say, 70 percent to 80 percent investment-grade credit tenant composition and then we saw that we saw that quickly degrade. We just didn’t see a place where we could really have an asset class retail that would last for the long run. And then office in many ways, the same way. The way people are shopping and the way people are occupying offices today, the risk profile is very different than it was, let’s say, when we were making those investments 20 and 30 years ago, so for us, it was the right move. It’s paid off because, had we held many of the assets today, they would be significantly compromised. I think they would be worth a lot less. We started those sales about six years ago, and we sold a lot of that early on, so we sold them still at a time they were being valued significantly more than they would be worth today, in our opinion. And we sold some big buildings. I mean, these weren’t small buildings. We sold a 1 millionsquare-foot shopping center, for example, in Norfolk, Va., which is one of the largest power centers in the state of Virginia. So these weren’t small assets. So they were important for us to move them out at the right time, and for people that thought that was there was a good upside for them, so we actually sold them at good prices, and certainly we couldn’t have sold them at those prices today.
trajectory was to where you are today in terms of the head of McKinley. I left (Cuba) compliments of Fidel Castro in early 1959 because of the Cuban Revolution. We had to flee. It was survival to leave the country at the time and my parents relocated to Miami. We were fortunate for that. We’re fortunate to have left alive, fortunate to have resettled in what is without question the greatest country on the planet. I was not born here. I was born in Havana and I emigrated as a Cuban refugee just before I was 4 years old with my parents. ` What consumes your day outside of the office? My wife and I walk. We like to boat, so those are the two things. In our summers we live at Saugatuck, and it’s a great place to live. We’d live there year-round, but it’s a little too cold in the winter.
` Can you give thumbnail sketch of coming here and what your
Albert Berriz, CEO and managing member, McKinley Inc.
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MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 19
VIRUS
From Page 1
When it comes to vaccination, Detroit hasn’t delivered as many doses as the state as a whole has, on average. But it has made strides and has a comparatively quick phone scheduling system through a contract with billionaire Dan Gilbert’s Rock Communications company. Duggan’s efficacy as a vaccination leader was complicated last week, though, when he made the controversial decision to reject Johnson & Johnson doses for now and stick to Moderna and Pfizer. The response has not been perfect, by any means. More than 1,800 Detroiters have died. And there are questions over accessibility among vulnerable and less mobile populations to the downtown TCF Center garage vaccination site, and whether the government’s outreach efforts are enough, despite several programs aimed at helping ease such difficulties. As the city’s strategies evolved through April, into the summer and beyond, Arrow Strategies has been there. It has done more than $7 million in contract work for the city during the pandemic, acquiring talent to fill ever-changing needs from contact tracing to administering vaccinations, according to city data. “As the need arose … we’ve been in lock-step with the city all the way and partnered with them as they pivoted, ‘Hey this is growing, we need more help,’” Styers said. “... As the city evolved in their approach to COVID, we provided the staffing behind that.” It started when a competitor that didn’t do health care talent acquisition — Styers declined to name it —
IMPACT
From Page 1
But between January and March 18, 2020, the state’s political, business, health care and education leaders witnessed the mirage of control they held evaporate into uncertainty. Those leaders, and those throughout the country, had no idea what they were about to face. This is the COVID-19 outbreak through their eyes.
` Jan. 21, 2020: A crack in the defenses U.S. Rep. Debbie Dingell sends a letter to the U.S. Centers for Disease Control and Prevention, imploring the agency to expand screening operations from major airports like New York’s John F. Kennedy International Airport and San Francisco International Airport to Detroit Metropolitan Airport. Only days earlier, Chinese authorities publicly identified a cluster of pneumonia cases as a new fast-spreading coronavirus in the industrial city of Wuhan. Health officials worry the virus is contagious and deadly enough to trigger a global pandemic. Wuhan is home to several factories of Detroit’s auto companies and frequent business travel occurs between the cities. Later that same day, the CDC announces the first confirmed case of the virus in the U.S. in Washington state, shredding optimism that the U.S. could block the virus’ entry. Delta Air Lines, the predominant airline at DTW, would suspend air traffic from China two weeks later. Dingell: “They were checking people at only a few airports, yet Detroit had the most direct traffic. It made no sense. We weren’t screening at DTW 20 | CRAIN’S DETROIT BUSINESS | MARCH 8, 2021
Detroit Mayor Mike Duggan gives an update on the city’s vaccine distribution efforts on Jan. 21, 2021. | CITY OF DETROIT VIA FLICKR
gave city officials Styers’ number, and Arrow Strategies worked into the night to get staffing set on short notice. Arrow’s involvement “snowballed” from there, he said. The company now deploys at least 150 nurses, certified nursing assistants and social workers to the city per day. “They were just absolute in their efficiencies and they were timely,” Styers said of the city’s response. “For example, for the first six months we weren’t doing contact tracers. Then suddenly ... ‘We don’t need contact tracers in two weeks, we need them yesterday.’ Everything was ‘yesterday’ ... We haven’t had the pleasure of two- or three-week notices of things happening. It’s not your typical assignment, it’s about trying to save lives, literally.”
and it was just obvious the virus would come through that airport at some point. People on Capitol Hill were making fun of me for how serious I was taking this threat. But I was very aware of the potential danger in January. The auto executives were talking to me about what was happening in China. They knew this could be bad.”
` Feb. 25, 2020: A peek into the future The CDC says the outbreak is headed toward becoming a global pandemic. David Lawrence, chief administrative officer for Livonia metal stamper and fastener firm Alpha USA, returned from a business trip to Japan days earlier. Japan was in the midst of its strategy to contain the virus and offers Lawrence a perspective on what may be coming to the U.S. “The (Diamond Princess cruise ship) was quarantined out in the port in Tokyo. I remember the fear in Japan. Everyone was already distancing and wearing masks and there was hand sanitizer everywhere. This was a country that had already faced SARS. I saw how a society could function using the appropriate safety measures and I expected it in the U.S. soon. Back home, at the end of February, we sensed COVID was spreading in the U.S. and it was only a matter of time before it landed in Michigan. There were talks circulating what could happen to manufacturing plants since we saw the shutdowns across China. But getting information at that time was difficult. There was a void of information coming from customers and the government. We were hanging on everything coming out of the press, wondering whether we’d have to shut down.”
‘We fought back’ Cases of COVID-19 flooded the city last spring. People lost parents, sisters, aunts, friends and colleagues. Business owners shut their doors and pivoted, applying for seemingly endless grant and loan programs. “We went from having no COVID to having our hospitals overrun with patients on gurneys and losing 50 people a day, but we did not, in Detroit, curl up. We fought back,” Duggan said Feb. 12 at a White House news conference. “We quickly set up one of the largest testing centers in the country ... and for the last six months, the city of Detroit has had a lower infection rate than the rest of Michigan and the surrounding suburbs.” While the fairgrounds served the
` March 10, 2020: We’re surrounded The first two confirmed cases of coronavirus are detected in Michigan, a man from Wayne County and a woman from Oakland County. Phillip Levy, an emergency room physician at Detroit Medical Center and chief innovation officer at Wayne Health, formerly Wayne State University Physician Group, calls colleague Steve Lanier, professor of pharmacology at Wayne State University and vice president of research at Wayne Health, to discuss the potential spread of the virus across Detroit’s hospital systems, including DMC. “We were realizing any hope of avoiding widespread exposure to the virus was wishful thinking. We knew the hospitals were going to be most impacted immediately, and soon. We had to determine what was needed here and right now. We had no idea how to prevent it and no idea how to treat it.”
` March 11, 2020: ‘Paralyzed by fear’ The World Health Organization declares the deadly coronavirus a global pandemic. Restaurateur Samy Eid heads back to Detroit on a flight from McGhee Tyson Airport near Knoxville, Tenn., after a weekend celebrating with friends. His restaurant, Leila, had been nominated for a prestigious James Beard Foundation award on Feb. 26, less than four months after opening its doors in downtown Detroit. On the flight home, Eid puts in his ear buds and tunes into a podcast with guest Michael Osterholm, a leading epidemiologist and then the director of the Center for Infectious Disease Re-
general public, Denise Fair, Detroit’s chief public health officer, led the health department as it tested 2,000 residents in the city’s 26 nursing homes. More than a quarter tested positive. Duggan, meanwhile, did what he does: used his business connections. The second-term mayor who’s running for re-election this year secured test-processing capacity through his relationship with JPMorgan Chase CEO Jamie Dimon. And he called the CEO of medical device maker Abbott Laboratories on a Sunday evening to directly negotiate a contract for testing kits while much of the country scrambled for those supplies. Then, eight months after the fairgrounds testing center opened, Detroit officials had another massive operation they needed to start figuring out: vaccinations. Hakim Berry, Detroit’s chief operating officer who has overseen the fairgrounds and TCF Center sites, said at first he thought about using somewhere with a lot of air flow. An open field on Belle Isle, maybe. But that was too cold and windy. An indoor clinic? “We were worried about creating a spreader event,” Berry said. So they turned to the half-indoor, half-outdoor option of a garage, looking at the Henry Ford Detroit Pistons Performance Center, Little Caesars Arena garage, a Detroit Tigers garage and finally settling on the riverfront convention center. There’s air flow and fans to push out vehicle fumes. That site opened Jan. 13. “One major reaction (to seeing the vaccination site) that I enjoyed was, I was leading a group of FEMA individuals from various states and they were coming to look at our operation,” Berry said. “When we got off the elevator
Volu
everybody’s jaws dropped because they hadn’t realized this was a drivethrough operation in a garage in a cold weather state.”
search and Policy at the University of Minnesota. “I had heard of coronavirus. But I thought we’d get scared for a week and then it’d disappear like SARS or Ebola. Listening to this podcast, I became paralyzed by fear. My mood changed. As I was listening to it on the plane, I wrote an email to my management team, calling for a team meeting the next day. We started planning immediately. I knew something bad was coming. I knew we were closing Leila.”
` March 12, 2020: Full and empty spaces A fearful public overruns grocery stores, stockpiling essential items like toilet paper and meat. Todd Robinson, director of marketing for Ann Arbor-based Busch’s Fresh Food Market: “All of a sudden people were buying $1,000 worth of groceries and we had a number of our associates who were older or who had pre-existing conditions who were afraid to come to work. The shelves were just empty. We had no choice. Myself and our CEO and CFO all began stocking shelves and running cash registers and filling online shopping orders just to keep the store open. We were getting twice the normal business with a third of the staff out. “I’m in my mid-50s. I wasn’t necessarily in the high target group but I knew there could be a problem. I worried about bringing it home, so I stripped off my clothes in the garage and went straight into the shower. I’m not sure I was scared but I was concerned and we just didn’t know what was happening.” At 11 p.m., RJ Webber, assistant superintendent of curriculum at Novi
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`M The Consolidated School District, is notified Gov. Gretchen Whitmer will close all schools across the state the next day. “Just two days before I was visiting an elementary school in Dearborn as part of Playworks (a national nonprofit that designs play-based curriculum for low-income school districts), just playing with all the kids. We were laughing and giggling, racing and playing foursquare with absolutely no sense of what was coming. Then it changed. We had to get the kids in and get all their stuff out.”
` March 13, 2020: Containing, confining Whitmer officially orders the closure of all schools in the state. President Donald Trump declares a national emergency.
` March 14, 2020: Masks and mitigation The U.S. House votes overwhelmingly to approve a coronavirus aid bill at 12:53 a.m. before members fly
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Volunteers and workers mill around April 2 at the former Michigan State Fairgrounds, which the city converted into a COVID-19 testing site. | CITY OF DETROIT VIA FLICKR
Senior needs
“WHEN WE GOT OFF THE ELEVATOR EVERYBODY’S JAWS DROPPED BECAUSE THEY HADN’T REALIZED THIS WAS A DRIVE-THROUGH OPERATION IN A GARAGE IN A COLD WEATHER STATE.”
In vaccination season, Detroit’s health department kept senior facilities on its list. Paralleling the prioritization given to testing at congregational homes for the elderly in the spring, the department has so far given COVID-19 vaccine shots to 3,609 people in senior apartments. It has also vaccinat-
back to their respective districts. Dingell boards a morning flight out of D.C. back to Michigan. “I was already wearing a mask and gloves and I wiped the seat down with bleach wipes. The whole thing. I also knew the UAW leadership were discussing walkouts at the plant and the automakers were getting nervous. We were beginning to schedule talks to get the auto leaders on the phone together to discuss a plan.”
` March 15, 2020: The weight of our worries Ron Hall Jr., president and CEO of Detroit-based automotive seating supplier Bridgewater Interiors LLC and Army veteran of the Gulf War, joins operations management in the company’s Warren plant as a show of solidarity with its workforce as anxiety over the virus ramped up. “We were literally showing presence on the production floors to show confidence. Walking the floor, a line worker took me aside and she said, ‘I could be infecting you right now or you could be infecting me.’ I had to acknowledge that she was absolutely right. But I didn’t know what to say. All I could tell her was ‘I am here with you. I don’t have answers. I don’t have anything to make you feel better. But I’m here with you.’ I knew bearing the risk with them was the right thing to do, but I had become afraid. Walking away from that conversation was the first time and the only time in my working life that I have been afraid for my own physical safety at work since I was in a war zone in Kuwait. I just kept thinking, ‘It
— Hakim Berry, Detroit’s chief operating officer
Lawrence
Eid
shouldn’t be like this.’ I was walking past the break room lockers in Warren. I wasn’t in Kuwait anymore; in Iraq anymore ... I was trying to display confidence even though I was afraid; to accomplish the mission and to take care of my people but also afraid for myself and afraid for them. It was difficult.”
` March 16, 2020: Last call A worker tests positive for COVID-19 at Chrysler’s Sterling Heights Assembly Plant, fueling talks of a UAW walkout. Dingell hosts calls with General Motors’ Mary Barra, Ford Motor Co.’s Bill Ford Jr., UAW CEO Rory Gamble and Whitmer about finalizing a plan to shut down operations temporarily. “The plants were starting to have cases. People were afraid of what was happening. There were no safety precautions or anything yet. Those days were very intense to me. Rory wanted to shut the plants down while they were putting protocols into place. The automakers didn’t want that but they came to an agreement to shut down that Wednesday (March 18),” Dingell says. Eid schedules an emergency meeting at Leila for its 12 managers. He decides to shut down the restaurant — which wouldn’t reopen until
Feb. 3, 2021. “I had decided closing Leila was going to be the right thing for the future of the business. We heard rumblings that the shutdown was coming, but Robinson we already watched business fall off the books the weekend before. Where we were completely booked to operating at 25 percent to 30 percent of projected revenue. We were watching it happen, watching the books dwindle to nothing. Leila was a machine. I was doing business I could only dream of. We got nominated for a James Beard award and got the Top 16 Restaurants in America nod from GQ. Then Free Press restaurant of the year. Those were brand builders. It was equity you can continue to cash in on for years and years. I drove down to Leila on Monday (the 16th) to tell my managers we were closing. I remember sitting in front of them that morning, crying like a baby. ... Trying to understand it; trying to mitigate the risk. A lot of what we did and what we gained was lost.” Later that morning Whitmer orders a temporary shutdown of all bars and restaurants in the state, effective at 3 p.m.
` March 17, 2020: Caring for the caretakers Michigan records its first COVID-19 death, a male Southgate resident in his 50s. Wayne Health, led by Levy, begins designing a plan to open a drivethrough COVID-19 testing operation
ed 795 people in mental health facilities, nearly 400 in substance use facilities, 2,052 in homeless shelters and 494 in neighborhood pop-up events as of Wednesday. At Pablo Davis Elder Living Center on Vernor Highway in southwest Detroit, residents and some seniors living nearby made appointments for vaccine doses Jan. 26 and Feb. 25 — not at TCF Center, but downstairs in
for health care workers as hospitals begin to become overrun with sick patients. Levy: “Workers were getting sick. All these first-line responders were getting sick, so how do we care for the sick people coming into the hospital? Nurses and doctors were coming into work with symptoms because the job had to be done. We had to change that. That’s why the testing was so important. Quarantining was quite onerous. If we could determine exposure versus who was ill, we could keep staff in the hospital. If half of the ER staff is quarantined, who was going to take care of all these sick people? We were flying blind but failure wasn’t an option at that point.” The group opened its first drivethrough testing site in Detroit on March 20.
` March 18, 2020: Shut it down The Detroit 3 announce closures to all U.S. plants by the end of the week through at least March 30. Auto plants ultimately remained closed until May 18. Bridgewater records its first three COVID-19 cases among its workforce. Hall Jr.: “Everyone was reluctant to push the red button. We didn’t do it until people got sick. It turned out we didn’t have clarity. The assembly plants were struggling themselves but we didn’t know that. They had outbreaks. When we went to raise our hand (to say we wanted to shut down earlier), turns out lots of people were raising their hands. We had gone a bridge too far. And I’m not sure that moment wasn’t the biggest failure of my career yet. I will forever look back and wonder whether I
the apartment facility’s community room. The health department vaccinated 61 out of 80 units. “They brought an additional 160-200 (doses) to the facility, so we were able to open it up and ... get members of the community to bring other seniors shots that might not otherwise have had transportation,” said Phyllis Edwards, executive director of Bridging Communities, a nonprofit that works with elderly residents and families in southwest Detroit. Edwards said the city has done well helping senior centers respond to the crisis. Detroit offers $2 rides to TCF Center through a contract with IntelliRide. It also has a “good neighbor” program where slightly younger individuals can take an older Detroiter to TCF and get vaccinated, too, and has begun vaccination events at neighborhood churches. However, Edwards said, transportation needs continue to be underestimated. She suggests a family-based marketing strategy to get younger people to drive their older relatives who may be homebound or have other physical challenges, and conversations with those hesitant about the vaccine. Black Americans overall have been more hesitant, per a survey from the Kaiser Family Foundation. “I believe there’s going to be a point that we have vaccinated the population that wants the vaccine, then we’ll really be able to identify where the vaccine hesitancy is,” Berry said. “I believe that’s when you’ll see a really robust campaign to get people out to get the vaccine. We’re still chipping away at it.” Contact: afrank@crain.com; (313) 446-0416; @annalise_frank
should have outright demanded we stop production. To raise my hand and say, ‘we’re just not doing it. The risk is too high.’ Faced with that, I blinked. I don’t have the illusion I could have made that decision alone. I don’t know ... For the rest of my career, I’ll wonder whether we should have shut down earlier.” Second guessing became the theme of our lives. Whitmer’s shutdown orders were later challenged, overturned and reestablished. COVID-19 turned political as then-President Donald Trump waffled on the severity of the outbreak and closures and mitigation strategies divided between red and blue states. Protests erupted across the country and in Lansing, leading to an eventual plot by members of a militia in Michigan to kidnap and potentially kill Whitmer. The virus became the ultimate factor in the November presidential election. Meanwhile, Michigan’s businesses spent the rest of 2020 navigating a sea of new rules and recommendations, opening and closing due to outbreaks. Offices remain mostly empty to this day. Manufacturing plants began reopening in mid-May but labor force struggles and supply issues crimp production almost weekly. Restaurants are now at a 50 percent capacity limit. Schoolchildren remain mostly on hybrid schedules with some in-class learning and some remote. The end of the virus isn’t marked on the calendar but vaccine rollout is speeding up and the hope lost in March 2020 is returning in March 2021. But, like everything in the past 12 months, there are no certainties. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh MARCH 8, 2021 | CRAIN’S DETROIT BUSINESS | 21
THE CONVERSATION
UM's Kelly Sexton: Biotech industry continues to thrive, find new solutions UNIVERSITY OF MICHIGAN: Last May, the University of Michigan inked a $130 million deal with New York City health care investment firm Deerfield Management Co. LP in an effort to ramp up drug commercialization efforts coming out of the Ann Arbor university’s tech transfer office. The deal created Great Lakes Discoveries LLC as the vehicle to drive those developments. The partnership is still in the early stages, said Kelly Sexton, the university’s associate vice president for research, technology transfer and innovation partnerships. But it’s indicative of the need to grow more biotechnology at the university level and figure out ways to bring it to market, Sexton said. | BY NICK MANES ` What would you say is the significance today of the May announcement of the deal with Deerfield Management Co.? That was a wonderful time to have a good news headline for campus, because that was — as you may recall — kind of in the dark days of the pandemic. And we had a lot of uncertainty about what that meant for how we were even going to engage in research moving ahead, but it was forward-focused, and it was nice to be able to deliver some good news to the community, (and) to the research community, specifically. We’ve since learned a lot about how we can continue to do amazing research at UM. Even in these challenging circumstances. And so our research labs are back up and running at reduced capacity, very safely, with no COVID transmission in any of our research laboratory facilities across campus. So we’re really proud of that, and we’re happy to have been able to bring new sources of research funding to help catalyze that research on campus. ` And where do things stand now with the deal with Deerfield? We began recruiting for the Great Lakes Discovery managing director (job), and we were really happy to be able to bring on a new member of our team to focus full time on supporting that alliance (Deerfield). And that is Seohee You ... Seohee brings a lot of industrial drug discovery R&D experience to our team and we were really happy to be able to get her. And so her role is really to work with faculty in the life sciences, with drug discovery portfolios, and help to connect them to Great Lakes Discovery for research funding. And to help with selecting the projects to present to Deerfield. ` Are deals in the works? So we recently closed the first request for proposals that we put out across
campus to invite faculty to apply for funding. We are working with the Deerfield team. Seohee is in conversation with them, and with faculty really frequently, helping them to, you know, select the appropriate UM projects to advance towards funding. And Deerfield has a very specific criteria and a very specific investment hypothesis, in terms of what they’re looking for projects that they want to take on, because this is, you know, very much a long-term investment and a long-term strategy on their road. We’re still in the early days of it, but I remain really impressed with the scientific rigor that they’re bringing to the process, the resources that they’re putting in to support the technology scouting efforts. And, you know, they’re definitely approaching it as a long-term relationship with the university. ` What else is the university working on as it relates to technology transfer initiatives? As devastating as this year has been for large swaths of the economy — and I in no way want to understate that — the biotech industry has really continued to thrive. I think society is saying that we need new solutions to health care crises, I think that’s clear. As important as infectious diseases and the COVID response (has been), cancer hasn’t gone away, either. So we’ve seen a lot of activity in our biotech startup portfolio. We’ve seen a number of acquisitions of our life science startup companies, by big Pharma. We’ve seen a number of new strategic alliances announced. ` The flip side to much of what we’re talking about is the sad but true reality that most biotech and pharma startups won’t succeed in getting a fully commercialized product. How does the university address that?
There are a lot of reasons the clinical candidates don’t advance. I mean, it is a tough, tough industry, and that’s why it’s very much a high risk, high reward undertaking. I think that’s why we have such a robust kind of publicprivate partnering model around this. You know, universities can’t take this risk on and advance these therapeutics that are in house. And we shouldn’t. You need people ... that are laser focused on driving value, looking really hard for signs that the project wasn’t going to advance as was hoped, and willing to pivot to try to find new indications, or try to bring new drugs to market. ` To what extent has the pandemic changed how a university like UM is looking to spin out new types of technology, particularly as it relates to health care? The optimist in me says that as a society, we’re going to realize that it wasn’t just good luck that were able to have these incredible vaccines available for us in less than a year. So I’m hoping as a society, that we recognize that these investments in research and innovation are vital to our success as a society and as a species. So that’s the optimist in me. The realist says that the research community needs to be helping the public to understand this. I mean, you hear Pfizer and Moderna and so there could be a perception in the public that, ‘Oh, these big pharma companies made this happen.’ The reality is that almost all of the underlying technology can trace its roots back to (National Institutes of Health)-funded research labs, or in academic laboratories. So we need to be sure we’re telling that story about the many years it takes to go from basic research funded by taxpayer dollars to, you know, civilizationsaving technologies. So, that’s my hope is that we realized that we need these investments and that they continue to happen.
REPORTERS
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
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Atwater beer headed to the Windy City
22 | CRAIN’S DETROIT BUSINESS | MARCH 8, 2021
A billboard advertising Atwater Brewery. | ATWATER BREWERY
tion network will make it possible. “The Molson Coors partnership has really put us in a great spot to be able
to launch the market properly,” Rieth said. “We put a lot of time, effort and energy prior to bringing our product
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JUST AS DETROITERS CAN BUY beers from Chicago’s Goose Island Beer Co., the Windy City will soon have access to another beer from the Motor City. Detroit’s Atwater Brewery is starting to distribute in Chicago following its acquisition last year by Tenth and Blake Beer Co., the U.S. craft division of Molson Coors, for an undisclosed amount. Atwater is among the top 10 craft brewers by volume and sales in Michigan. Chicago, and eventually the rest of Illinois, will be an important market for Atwater, said Mark Rieth, who first invested in the brewery in 2002 and bought it in 2005. Detroit transplants in Chicago have been asking for it, and Molson Coors’ distribu-
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to Chicagoland … Now it’s time.” The beer trucks left last Monday from Detroit, Rieth said. Atwater’s products are expected to hit Chicago retailers’ shelves by this week. The goal is to get some tap handles into bars and restaurants in the next month or two. Like Atwater, Goose Island Brewery was also acquired by a brewing giant in a deal with Anheuser-Busch in 2011. Atwater was founded in 1997 as Atwater Block Brewery. It will be Tenth and Blake’s first regional craft beer to hit Chicago. Atwater’s beer is also sold in Michigan, Indiana, Ohio, Wisconsin, Pennsylvania and Tennessee.
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NOMINATIONS OPEN For more information, visit crainsdetroit.com/nominate
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Crain’s Excellence in HR Awards recognizes metro Detroit’s outstanding human resources executives and teams. Often operating behind the scenes, sometimes boxed into stereotypes about pizza parties and paperwork, HR professionals are actually the nerve centers of their businesses – taking care of its people, controlling costs, keeping the business in compliance and helping achieve its strategic goals.
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Since 1997, Crain’s Most Influential Women list has honored 100 women business leaders who have made a significant cultural and social impact in metro Detroit and Michigan. Past winners include CEOs, company founders, nonprofit leaders and elected representatives. Do you know a woman deserving of this prestigious designation? Honor them by submitting a free nomination to Crain’s 2021 100 Most Influential Women award. Chosen winners be honored in the July 26 issue of Crain’s.
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