Crain's Detroit Business, July 28, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 30

JULY 28 – AUGUST 3, 2014

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ISTOCK PHOTO

St. Joe’s tower designed to elevate patient care

Democrats and Republicans are using new ways to get likely supporters into voting booths in November.

TRW talks could turbocharge supplier takeovers

State’s new political strategy: Grass roots meets high-tech

Detroit culture takes to the airport in new Metro retail

Focus: Finance

Video: Small-business owners in the footprint of the Wings’ arena project talk about how they hope to benefit, crainsdetroit.com/video DAVID HALL

BY CHRIS GAUTZ

George Boukas owns Temple Bar, which is at ground zero in a 45-block redevelopment plan for Detroit’s entertainment district. He’s hoping for more business once the plan comes to fruition.

How a local bank takes on giants – and thrives, Page 11

Shared goals? In shadow of planned Wings arena, small biz makes plans

ISelect signs deal with United Healthcare on PPO products

NEWSPAPER

ISelect Custom Health Benefits Store, a Royal Oak-based private health insurance exchange, has signed a deal with United Healthcare Group to sell seven PPO health insurance products on its exchange in Michigan and several other states, iSelect announced. United Healthcare will offer at least seven PPO options through iSelect and its certified agents to employers with 100 or more workers. The plans will be available starting Oct. 1. As a private health insurance exchange, iSelect offers small businesses from 10 to 10,000 employees a definedcontribution approach to health benefits that can help companies reduce long-term health care costs. ISelect already has preferred-vendor relationships with Detroit-based Health Alliance Plan and Grand Rapids-based Priority Health. — Jay Greene

hint of mischief.

BY AMY HAIMERL

This Just In

CRAIN’S DETROIT BUSINESS

eorge Boukas has spent most of his life either in front of or behind the long, wood and metal bar inside Temple Bar. His father and uncle bought the joint in 1927 and sold it in 1974. Boukas purchased the family business back in 1987 upon returning home to Detroit. His mother, Christina, was excited by the prospect of her son staying and running his own place, but she never expected what was coming. “I said, ‘Sit down, girl, because I haven’t told you what is yet,’ ” Boukas said with a

His mother was less than thrilled Boukas bought the bar back, but still she came in to help and brought back the old regulars. Boukas is the kind of owner who tends his own bar, day in and day out, watching the ebb and flow of customers and the neighborhood. He watched Temple Street in Detroit go from rows of Victorian homes to rows of vacant lots covered in broken asphalt, weeds and chainlink fences sprouting in the fissures.

CAPITOL CORRESPONDENT

Even the door-to-door canvassing in the battle for political power in Michigan is going high-tech. The state’s political party leaders are pulling out all the stops in hotly contested campaigns, primarily during the next three months leading up to the November general election. The tactics go beyond personalized direct-mail pieces or robocalls. In some cases, there’s an element of data-drilling and behavioral tracking on voters that can be interpreted as smart political strategy — or a dose of Big Brother-style surveillance. The state Democratic and Republican parties have invested more than a quarter million dollars into software and programs to prepare for the election this fall. That technology is expected to aid See Strategy, Page 29

See Arena, Page 26

Ex-NFL players’ game plan: 2 new Nissan dealerships BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

The New Jersey auto dealership management company All Pro Motors LLC is bringing its mix of retail expertise and National Football League star power to Southeast Michigan next year with new Nissan dealers expected to open in Dearborn and Clinton Township. The company closed on the pur-

NISSAN N.A.

All Pro Motors plans to open dealerships in Dearborn and Clinton Township.

chase of 6.7 acres of vacant land along M-59 near Elizabeth Road last week and will seek approval tonight to rezone the site before the Clinton Township board for an All Pro Nissan location, said Jeff

Mills, a director at the company acting as site developer on that proposal. The company expects to close soon on the purchase of a vacant former Pep Boys location along Michigan Avenue near Telegraph Road in Dearborn for a second, smaller Nissan location, he said. All Pro, co-owned by New Jersey auto dealer Michael Saporito and former New York Giants lineback-

ers Antonio Pierce and Jessie Armstead, will own and operate both Michigan dealerships, their first in the state, Mills said. Terms of the Clinton Township land purchase from Stonegate Properties LLC of Arizona were not disclosed, although the property had been listed at $2.15 million in recent months.

hospital in Michigan. U.S. News & World Report Ranking

See Dealerships, Page 27

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Autocam sold, but former owner still will challenge Obamacare rule John Kennedy plans to continue his fight against the Affordable Care Act even after selling his Kentwood-based auto supplier, Autocam Corp., to Tennessee-based NN Inc. in a deal valued at $300 million. In an interview with The Grand Rapids Press, Kennedy said he will challenge the Obamacare requirement that employer-provided health plans include birth control through Autocam Medical, a subsidiary he will continue to own and manage. Kennedy, a Catholic, became something of a national figure for challenging the birth control requirement. The U.S. Supreme Court’s recent ruling in a similar appeal has given new life to Kennedy’s own case. Autocam Corp. employs more than 2,100 in 15 factories in the U.S., Europe, South America and Asia.

Suniva plans plant near Saginaw, plans to create 350 jobs in solar Georgia-based Suniva Inc. plans to open a solar module assembly factory in a Saginaw Township building that used to be a Sears warehouse. Greg LaMarr, communications manager for economic development agency Saginaw Future Inc., said Suniva plans to create up to 350 jobs over the next three years. Marc Rogovin, a Suniva vice pres-

Mackinac Financial seeks a pleasant Peninsula Bank Manistique-based Mackinac Financial Corp., which has a growing presence in Southeast Michigan, has agreed to acquire Ishpeming-based Peninsula Financial Corp. and its $132 million in assets in a deal expected to close late in the third quarter or early in the fourth. Peninsula has six branches, all in the Upper Peninsula. It is the holding company for Peninsula Bank. Mackinac Financial (Nasdaq: MFNC) is the holding company for mBank. The agreement calls for Mackinac Financial to pay about $13.29 million in a combination of stock and cash for $10.50 million of equity. Shareholders of Peninsula will receive a special dividend before the close of any equity greater than $10.5 million. When completed, the acquisition will give mBank, already the largest bank headquartered in the Upper Peninsula, 13 branches in the U.P., 17 branches in the state and assets of about $710 million. The deal will ident, said the company had plans to come to Saginaw County a few years ago, but they did not materialize. He said Suniva chose the area in part because of its location “in the middle of the country. ... It’s straight up (Interstate) 75 from our factory.” The location also is close to Hemlock Semiconductor, which makes polysilicon used in solar panels.

MICH-CELLANEOUS 䡲

Craig Williams has been appointed director of Bishop International Airport in Flint after a ninemonth search. Williams has been

make mBank the 16th-largest of 123 Michigan banks. The transaction is subject to approval by Peninsula’s shareholders and approval by federal and state regulatory authorities. Peninsula branches will operate under the mBank brand. Last September, Mackinac Financial opened a subsidiary based in Birmingham, Mackinac Commercial Credit LLC, which does asset-based and accountsreceivable lending for companies. The bank opened a loan office in Birmingham in 2005, and the next year opened a branch there. Paul Tobias, chairman and CEO of Mackinac Financial, is based in Birmingham. He was an executive vice president at Comerica Inc. who helped guide the merger with Manufacturers Bank in 1991 and was CEO of Birmingham-based Munder Capital Management from 1996 to 1999. — Tom Henderson

director of operations and facilities for the Fort Wayne-Allen County Airport Authority in Indiana. 䡲 Next year’s Gilda’s LaughFest, the fifth annual carnival of laughter in Grand Rapids, will be March 5-15, organizers announced. LaughFest honors the memory of comedian Gilda Radner, who died of ovarian cancer in 1989. A preliminary study by Grand Valley State University said this year’s LaughFest had a $3.2 million economic impact on Grand Rapids, MLive.com reported. 䡲 The Nuclear Regulatory Commission determined that staff at the Palisades Nuclear Plant willfully violat-

ed the plant’s security plan in 2012, the Kalamazoo Gazette reported. 䡲 Marti Schrauben of Portland, Ore., was sentenced to up to four years in prison for stealing hundreds of thousands of dollars from Schrauben-Lehman Funeral Homes in Ionia, The Associated Press reported. Prosecutors say he forged death certificates and submitted fake

Warranty disputes, recalls, intellectual property theft, government investigations...there’s a lot at stake in the auto supply industry. So much, in fact, that our automotive attorneys represent ONLY suppliers. We represent more than 200 automotive suppliers, safely steering them through some serious hairpin turns. Contact us about preparing for the curves ahead.

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Find business news from around the state at crainsdetroit .com/crainsmichiganbusiness. Sign up for the Crain’s Michigan Morning e-newsletter at crainsdetroit.com/emailsignup.

CORRECTION 䡲 Marty Knollenberg was incorrectly listed as an incumbent state representative on Page 18 of the July 21 issue. He left office in 2012 because of term limits.

Read AheadOfTheCurve.wnj.com, the deﬁnitive law blog for navigating the automotive supply chain.

Keeping automotive suppliers ahead of the curve

claims to insurance companies. 䡲 Jackson-based CMS Energy Corp. selected four farms to produce electricity using biodegradable material in anaerobic digesters as part of an effort to diversify the use of renewable energy, The Associated Press reported. Consumers Energy said the energy created by the farms could power about 2,800 homes. 䡲 The newest winner of Hudsonville Ice Cream’s Pure Michigan flavor contest: Winter Campfire, made with marshmallow swirl, graham cracker pieces and milk chocolate flakes mixed into vanilla ice cream. (Yes … s’mores, notes MLive.com.) The runner-up: Cabin Fever, which has blueberry-coated granola clusters and chopped Michigan cherries in vanilla ice cream, and Lake Superior Thaw, which is chocolate ice cream with mint chocolate candy. Strangely missing: Coho Salmon Pate Cake Batter. (So much for that ice cream craving …)

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July 28, 2014

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Airport adds more Detroit flavor Local brands bolster Metro dining, retail BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

People traveling to or through a region often get their first or only taste of the local culture at the airport. Detroit names like Gayle’s Chocolates, Hockeytown Café and National Coney Island have been mainstays at Detroit Metropolitan Airport for years. Soon, they’ll be joined by other Detroit favorites, ranging from Andiamo to the Eastern Market Dining Experience, a food court that

WAYNE COUNTY AIRPORT AUTHORITY

E.W. Grobbel Sons Inc. is shown in a rendering as it will look in the airport’s McNamara Terminal.

will offer made-in-Detroit foods like corned beef from E.W. Grobbel Sons Inc., sausage from Corridor Sausage Co., coffee from the Coffee Beanery, and 18 craft beers and wines. The court also will include signage, an interactive feature to share the history of one of the country’s oldest

farmers markets, and a self-serve kiosk where travelers can buy items to take home. The local food movement is growing around the country, and airports have been trying to figure out how to connect to it, said Eastern Market President Dan Carmody. The Original Farmers Market in Los Angeles opened a scaled-down version of the market at Los Angeles International Airport in June. “We think it’s a great opportunity to expose the market to international visitors ... (and) a great way to showcase so many great brands,” Carmody said. Construction of the first of 25 new restaurants at the airport’s McNamara Terminal is set to begin in mid-August.

Inside

Q&As: American Axle’s David Dauch, Page 6 ... ... and Wayne State’s new research chief, Page 7

See Metro, Page 25

Company index

TRW talks could rev up supplier takeovers

These companies have significant mention in this week’s Crain’s Detroit Business: American Axle & Manufacturing . . . . . . . . . . . . . . . 6 Ann Arbor Angels . . . . . . . . . . . . . . . . . . . . . . . . . 13 Autoliv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bank of Ann Arbor . . . . . . . . . . . . . . . . . . . . . 11, 12 Beaumont Hospital Troy . . . . . . . . . . . . . . . . . . . . 28 Birdhouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Bookies Bar & Grille . . . . . . . . . . . . . . . . . . . . . . . 26 Budco Financial . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Comet Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Daly Merritt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Detroit Metropolitan Airport . . . . . . . . . . . . . . . . . . 3 Donnelly Penman & Partners . . . . . . . . . . . . . . . . 12 Esperion Therapeutics . . . . . . . . . . . . . . . . . . . . . 13 General Dynamics Land Systems . . . . . . . . . . . . . . . 5 Hacienda Mexican Foods . . . . . . . . . . . . . . . . . . . . 4

BY BROOKE SUTHERLAND AND MARK CLOTHIER

Harry’s Detroit Bar . . . . . . . . . . . . . . . . . . . . . . . . 26

BLOOMBERG NEWS

Inland Waters Pollution Controls Inc. . . . . . . . . . . 25

Ilitch Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 J&L Foreign Auto Centre . . . . . . . . . . . . . . . . . . . . 27

PHOTOS BY GLENN TRIEST

Fabian Fregoli, M.D., St. Joseph Mercy Oakland’s chief informatics officer, touts the hospital’s “intelligent care system” that is part of plans for the new south patient tower (below).

Rising high for better care St. Joseph Mercy’s new Pontiac tower puts hospitality into the hospital BY JAY GREENE CRAIN’S DETROIT BUSINESS

t. Joseph Mercy Oakland’s new $135 mil-

lion south patient tower in Pontiac is literally a work of art. From the 80 original paintings from Michigan artists hanging on its walls to the advanced technology featuring beds embedded with motion sensors and wrist bands continuously monitoring patients’ vital signs in its 136 staffed private rooms, St. Joseph’s new eight-

THIS WEEK @ WWW.CRAINSDETROIT.COM

story tower appears to have it all. “It was intentional,” CEO Jack Weiner said. “Our chairman (Timothy Caughlin) said if we do a bricks-and-mortar project, we want to make a statement and do something different.” The 301,000-square-foot wing, which will have enough space for 72 additional beds, was designed as a safe and calm “healing environment” for patients and families and to feature some of the most cutting-edge medical technologies possible, Weiner said. Thirty-six beds for a neuroscience unit will open this fall on the sixth floor of the new tower.

The biggest auto-parts deal since 2007 may be just the start of consolidation, with Autoliv Inc. and Visteon Corp. among the next potential targets. German supplier ZF Friedrichshafen AG, whose North American headquarters is in Northville Township, is exploring a takeover proposal for Livonia-based TRW Automotive Holdings Corp. that could value the provider of car Visteon Corp., Van Buren safety technology Township at as much as $13 TRW Automotive billion, people faHoldings Corp., miliar with the Livonia matter have said. Cooper-Standard More auto Holdings Inc., parts companies Novi may combine as Tower overcapacity conInternational Inc., strains their abilLivonia ity to add scale on their own, according to UBS AG. “I’ve been surprised over the last three years that we haven’t seen more M&A,” said Colin Langan, a New York City-based auto analyst at UBS. “This will probably put a lot of pressure on other suppliers to think of other deals. There’s definitely strategic rationale.” Stockholm-based Autoliv, with North American headquarters in Auburn Hills, is a $9.6 billion maker of airbags and shares the same allure as TRW, with consumer de-

KeyBank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 13 Lanzo Cos. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Michigan Democratic Party . . . . . . . . . . . . . . . . . . 29 Michigan Republican Party . . . . . . . . . . . . . . . . . . 29 Moosejaw Mountaineering . . . . . . . . . . . . . . . . . . . 4 Munder Capital Management . . . . . . . . . . . . . . . . 14 PayAnywhere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Perich & Partners . . . . . . . . . . . . . . . . . . . . . . . . . 12 People Protecting Michigan Jobs . . . . . . . . . . . . . . 9 Raise Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

POSSIBLE LOCAL

Renaissance Venture Capital Fund . . . . . . . . . . . . 13

TARGETS

St. Joseph Mercy Oakland . . . . . . . . . . . . . . . . . . . . 3

See Tower, Page 28

See TRW, Page 28

Time to make the bonbons Bon Bon Bon, an artisan chocolate shop, has opened in Hamtramck. See how they’re made. Prepare to be hungry: crainsdetroit.com/video ANJANA SCHROEDER/CDB

Residential Home Health . . . . . . . . . . . . . . . . . . . 17 TechTown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Telemus Capital Partners . . . . . . . . . . . . . . . . 14, 15 Temple Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Town Pump Tavern . . . . . . . . . . . . . . . . . . . . . . . . 26 TRW Automotive Holdings . . . . . . . . . . . . . . . . . . . . 3 U.S. Army Tacom . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Visteon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Wayne County Airport Authority . . . . . . . . . . . . . . . 25 Wayne State University . . . . . . . . . . . . . . . . . . . . . . 7

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 9 BUSINESS DIARY . . . . . . . . . . . . . . . . 22 CALENDAR . . . . . . . . . . . . . . . . . . . . 23 CAPITOL BRIEFINGS. . . . . . . . . . . . . . . 9 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 LETTERS . . . . . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . 30 WEEK ON THE WEB . . . . . . . . . . . . . . 31

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Advice at entrepreneurs event: Make fast decisions, see trends Entrepreneurs can make their own David-vs.-Goliath success stories if they put quick decisionmaking and differentiation to good use â&#x20AC;&#x201D; and spot industry trends early, said panelists at a Thursday Crainâ&#x20AC;&#x2122;s event held at The Henry in Dearborn. Some highlights: Eoin Comerford, president and CEO of Moosejaw Mountaineering, said his company is able to compete with large competitors like REI through quirky, memorable marketing and niche products. For example, an online catalog generated buzz because an X-ray vision feature in a Moosejaw app enabled viewers to see models wearing Moosejaw clothing or in their underwear. The companyâ&#x20AC;&#x2122;s Michigan roots are also a selling point to some customers, and one reason the Madison Heights-based companyâ&#x20AC;&#x2122;s Detroit store was the top-selling store of four Moosejaw stores opened in 2012. â&#x20AC;&#x153;We know who we are. We know who we arenâ&#x20AC;&#x2122;t,â&#x20AC;? he said. Comerford also had a tip for talent recruitment: Hire people with an entrepreneurial mindset who are capable of wearing multiple hats. Sure, theyâ&#x20AC;&#x2122;re a marketing whiz, but can they roll up their sleeves and help with another deadline-oriented task that needs doing? Marc Gardner, founder of PayAnywhere LLC, a mobile payment system that competes against Square Inc., said his Troy-based company differentiates itself through nimble decision-making. Thatâ&#x20AC;&#x2122;s a lesson learned from building his primary company, North American Bancard LLC, which processes $16 billion worth of

credit card payments annually for more than 250,000 merchants nationwide. Gardner launched PayAnywhere in 2011 with an app and its own small device to allow mobile phones to process payments. Gardner said keeping an eye on talent, including future needs, is the best path to quick company growth. He said he regrets not bulking up his team at a high enough level more quickly in the past. â&#x20AC;&#x153;Hire for where you can be in three years,â&#x20AC;? he said. â&#x20AC;&#x153;And allow people to make mistakes.â&#x20AC;? Quick decision-making also has come in handy for Lydia Gutierrez, president and CEO of Detroitbased Hacienda Mexican Foods. For example, Hacienda can retool quickly to produce a tortilla

in an oval shape instead of round, or can add additional ingredients, like whole grain, and produce small runs. â&#x20AC;&#x153;We can sell pallets, not just a truckload,â&#x20AC;? Gutierrez said. Gutierrez said she has designated her son as the companyâ&#x20AC;&#x2122;s innovation officer to add, among other things, a more tech-savvy strategy to its use of bar codes on products. The event also honored Crainâ&#x20AC;&#x2122;s Salute to Entrepreneurs winners: George Matick Chevrolet; Prolim Global Corp.; Beyond Gaming LLC; Michael Forsyth and Lori Allan, Revolve Detroit; Tekisha Lee, DiverseNote; and finalists Mango Languages, Avomeen Analytical Services and Noam Kimelman, Fresh Corner CafĂŠ L3C. For more information, see crainsdetroit.com/salute.

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SE Mich. contractors likely shut out from Army vehicle program BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

A $23 billion military vehicle contract opportunity that seemed to slip away from Southeast Michigan contracting teams two years ago is now unlikely to return, after a recent decision to limit bids on the next phase of the program. However, some of the losing contractors may still try for a supporting role in the supply chain of the winner. An amended draft request for proposals earlier this month from the U.S. Army Tacom Life Cycle Management Command in Warren reveals the Joint Light Tactical Vehicle program is open to limited competition for an initial production contract to be awarded next summer, rather than an open competition among all interested bidders. That’s bad news for some local contractor teams, who had been hearing as recently as May that the Army had not yet received a final decision on whether the next bidding phase was limited. The draft request is subject to change, but the limitation section is not expected to be amended when a formal request goes out in October for a JLTV award next July. In mid-2012, engineering teams led by BAE Systems Inc., Navistar Defense and a joint venture of General Dynamics Land Systems lost out on pre-production awards totaling about $190 million for the JLTV. The Army instead tapped Wisconsin-based Oshkosh Defense, Indiana-based AM General LLC and Maryland-based Lockheed Martin Corp., even though BAE and the joint venture, General Tactical Systems, were contractors for an early phase of JLTV in 2008. The new bidding guidance from the military means the teams that lost out before are all but shut out from re-entering the competition at the production phase, contractors and Army officials said. Instead the government will most likely choose a winner among the three pre-production contractors. The JLTV is a long-awaited pro-

CRAIN’S WEBINAR OFFERS ADVICE ON HEALTH INSURANCE Crain’s is collaborating with U.S. News & World Report to create a webinar offering strategies and advice to consumers who purchase their own health insurance. The one-hour webinar is scheduled for noon on Aug. 4 and will offer advice on ways to research insurance plans, pitfalls to avoid, and ideas on how to pick a plan that suits an individual’s needs. The webinar will feature two journalists from U.S. News & World Report: Kimberly Leonard, a health reporter, and Ben Harder, managing editor of health care analysis. Moderator will be Kate Kohn-Parrott, president and CEO of the Greater Detroit Area Health Council, a partner with Crain’s on the HealthFacts project, which offers strategies tied to changes in health care policy. To register for this free webinar, go to crainsdetroit.com/webinars. — Daniel Duggan

The Joint Light Tactical Vehicle program will replace more than 50,000 Humvees at a total acquisition and development cost of around $23 billion in 2012 dollars. posal to replace more than 50,000 military Humvees for the Army and U.S. Marine Corps starting late next year. A report by the Congressional Research Service in March estimates the JLTV’s total acquisition and development cost around $23 billion, measured in 2012 dollars. Michael Clow, strategic communication leader at Tacom for the office overseeing the JLTV, told Crain’s that vendors who didn’t have pre-production contracts can still conceivably submit production bids, but would need to provide the same performance results and test data the three pre-production winners have, at their own expense. Elissa Maurer, senior manager of communication for Navistar Defense parent Navistar Inc., said the company is weighing its options. Navistar Defense has an extensive engineering center in Madison Heights with more than 200 local employees. Navistar originally protested the 2012 loss of JLTV to the Army, but Maurer also said the current options under review include be-

ing available to support other companies in their JLTV bids. Peter Keating, vice president of government relations and communications at GDLS in Sterling Heights, said the company does not expect to submit an outside proposal and that limiting production bids is not uncommon for the military and it had stopped monitoring it for that reason. But GDLS is also one of the local businesses that submitted queries to the Army about becoming JLTV subcontractors once production begins, according to Tacom. Seven of the roughly 50 companies nationwide to voice interest in being JLTV subcontractors are based in Southeast Michigan. BAE, which had its own JLTV contender in the past and was also part of a separate industry team led by Lockheed, is focused on supporting the Lockheed proposal as one of the three still in contention, external communications manager Megan Mitchell said in a statement. Other interested JLTV subcontractors from the Detroit area include:

Piston Automotive LLC, suspension systems maker, Redford Township TIC Global, CAD designers and illustrations/visual aids maker, Dearborn Quality Metalcraft Inc., sheet metal stamping and metal fabrication, Livonia Roush Industries Inc., engineering, and composite components, Livonia

Rose-A-Lee Technologies, prototype/low volume assembly, Sterling Heights JP Sales Co., Ann Arbor, sales and management joint venture partner with Cignys Corp., Saginaw, and Jay Industries Inc., Ohio. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

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Dauch: American Axle develops new markets, finds diversity CEO David Dauch conenced significant growth tinues his late father’s in nontruck sales. quest to diversify Detroitbased American Axle & What percentage of sales Manufacturing Holdings Inc. comes from components for Enter China? Check. cars and crossovers? Produce components for For a significant cars and crossovers? amount of time, 98 to 100 Check. Ease American percent of our business Axle’s dependence on came from trucks and General Motors Co.? Check. SUVs. … Today, truck Expand production in components represent Mexico? Check. about 65 percent of our Next year, Dauch exNorth American business David Dauch, pects global sales will rise and 70 percent of our globAmerican Axle above $4 billion. And midal business. decade, he wants half of revenue to come from non-GM cusIs the Jeep Cherokee’s all-wheel-dritomers. ve system part of this effort? Dauch succeeded his father, Yes, we developed the all-wheelRichard Dauch, as CEO in Septem- drive system for the Cherokee so ber 2012. The elder Dauch died last that Chrysler could improve its year. fuel economy while maintaining David Dauch, 50, offered an up- Trail Rated status for Jeep. Alldate on the rest of American Axle’s wheel drive penalizes a vehicle’s expansion strategy in a recent con- fuel economy, but our EcoTrac versation with special correspon- system allows us to recover 80 perdent David Sedgwick of Automotive cent of the penalty. News, an affiliate publication of Crain’s Detroit Business. Are there new customers for EcoTrac? In recent years, American Axle deJeep was our first, and we have veloped driveline products for cars a lot of inquiries from multiple auand crossovers. Are there customers tomakers on a global basis. for those products? We started our development of How much revenue does American passenger car components in 2005. Axle generate per vehicle? But we didn’t launch any new busiFor cars and crossovers, we can ness until 2009, so it’s really over the do full drivelines for $900 to $1,000 last five or six years that we experi- or so. For trucks and SUVs, our

Q&A

content per vehicle is $1,655. Has the upsurge in truck sales caused the company to rethink the decision to diversify into cars and crossovers? I think it complements the plan. We’re seeing growth on a global basis for passenger cars and crossovers, and we are also seeing growth in light trucks. In our home market here in North America, we’re seeing trucks and SUVs getting stronger and stronger. So we’re right in that sweet spot. In three to five years, what percentage of sales will be truck components? I think it will be a 60-40 or a 65-35 split between trucks versus passenger cars and commercial vehicles. Trucks will still be a large part of our overall business, especially because there are a lot of growth opportunities for light and medium commercial vehicles.

cline to 65 or 70 percent. Asia is our primary growth opportunity, but there are other markets as well. When your dad spun off American Axle from General Motors in 1994, GM accounted for nearly all of its business. How big a customer is GM now? In 1994, GM represented 98 percent of our business, and Ford was the other 2 percent. Today, we have more than a hundred customers, but GM is still the largest. They represent 67 percent of our sales. By middecade, we want General Motors to be 50 percent of total sales. We were a big supplier for GM trucks, and now we’re a global supplier to GM for SUVs, trucks, luxury cars and crossovers. So we’ve diversified our GM business and brought in non-GM sales, too.

cility in Detroit. Most of the Hamtramck plant has been torn down, leaving about 360,000 square feet. What will happen to it? We’d like to put it back into use. We’re working on financing to see what we can do to make that happen. We need a competitive agreement (with the UAW) that would allow us to have a sustainable operation. Have you talked to the union about that? We’ve had some preliminary discussions but nothing formal.

How much revenue growth will American Axle generate over the next couple of years? I can see our sales growing to over $4 billion in 2015. And that doesn’t include anything that we might do from a strategic standpoint.

Now that North American vehicle production is booming, at what percent of capacity are plants operating? We are running close to 100 percent. We are putting new capacity into some of our facilities because truck and SUV production is running so strong and passenger cars as well. It’s a good problem to have.

North American light-vehicle production is likely to top 17.5 million units in a couple of years. Has American Axle experienced any production bottlenecks? The automakers and tier ones are getting their production aligned with what they think demand will be. But the real challenge is with the tier two, tier three and tier four companies. A lot of suppliers don’t have the capability that they once had, so we have to go out and reverify the capacity of our supply base.

In recent years, American Axle also has begun to diversify into new regions. How much success has it had? At one point, North America accounted for 100 percent of our sales. Now, it represents 80 percent, and I think you’ll see that number de-

American Axle has a big complex in Silao, Mexico. How is that doing? (Silao) is our largest operation in North America. We’ve got a third of our workforce in Mexico. We still have seven active facilities in the U.S., plus an inactive fa-

How will the company deal with suppliers that can’t meet its production needs? If we don’t have confidence with some suppliers, we have to ask ourselves if this is the time to vertically integrate where it makes sense.

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Wayne State’s new research chief wants to ‘get parts moving’ In April, Wayne State ter is huge. I visited TechUniversity President M. Town. And I have colRoy Wilson announced leagues at the University of that he had hired Stephen Michigan and Michigan Lanier to replace Hilary State, so it just clicked. Ratner as vice president of research. Lanier assumed Did you see the July 13 the position June 16. New York Times Magazine? Since 2006, Lanier had The cover story was about been the associate provost seeing Detroit through rosefor research and professor colored glasses, with a covof cell and molecular pharer shot of downtown glowmacology and experimening pink. tal therapeutics at the I did. I sent it to my Medical University of South Stephen Lanier, mother. She asked me to Wayne State Carolina in Charleston. He get her Dan Gilbert’s adUniversity was also the chief scientifdress so she can send him ic officer and chief rea thank-you note. search officer at the school. Lanier got his doctorate in pharSo you were fine about the city itmacology from the University of Ten- self. Was there anything that gave you nessee Center for Health Sciences pause about the job? and postdoctoral training at HarI was a bit concerned about the vard Medical School and Massachu- ability to be nimble. I don’t want to setts General Hospital. He spent say “bureaucracy,” but a compreeight years at Harvard and Massa- hensive research university has a chusetts General as a fellow, in- lot of moving parts. Could we be structor and assistant professor. nimble and get those parts movBefore the Medical University ing? post, he was chair of the departAs I met some of the people in ment of pharmacology at the the ecosystem and here in the ofLouisiana State University Health Sci- fice, I became convinced we could. ences Center in New Orleans. Before I came here, we hired John Now on the job a month, Lanier, Shallman (as senior director of li58, talked with Crain’s reporter censing) and Kenneth Massey (as Tom Henderson about why he took senior director of venture developthe job and his priorities. ment), and that’s a big deal. These are talents who are game changers. How did you hear that Wayne State (Shallman had been director of was looking for a VP of research? commercialization at Beaumont The last two or three years, I’ve Health System the past six years, been deciding what I wanted to do and Massey had been managing dinext. What I really wanted to do rector of MicroDose Life Sciences LLC was be at a comprehensive re- of Farmington Hills and its associsearch university. Medical Univer- ated venture capital fund, LifeLine sity didn’t have an engineering Ventures LLC.) school, for example, or a physics department. And I wanted to be in an Anything else give you pause? urban area. I got a call about DeThe weather. (Laughs.) The troit from a headhunter I had weather. I came here for visits in worked with before who knew January and February. But, hey, what I was thinking about. we broke a 100-year-old record for most snow, so we’ve got that beDid you say: “What! Detroit”? hind us. I read some things about what was going on here. I read Crain’s. You’ll still be doing your own reThere was a new mayor. The city search, too? I’m moving my lab from would be coming out of bankruptcy. There seemed to be a vibe. Charleston here. I’ll be setting it There were a lot of startups. Tech- up in Scott Hall and the chemistry Town was interesting to me. I read building. I’ve been supported by more about Wayne State, which the National Institutes of Health since 1987. For a long time, I’ve was right in the middle of it all. I’ve actually got a Detroit back- been focused on signal transducground. My mother, Joyce, was tion and how cells communicate. I born in Highland Park, on Pasade- used to run a lab with about 10 rena Street. I used to come here searchers, but with my added adevery summer as a kid to visit her ministrative responsibilities, I’ll parents. I remember seeing Al Ka- be down to about three. I won’t be line in the old Tiger Stadium. It bringing anyone here from must have been about 1965. I was Charleston. I’ll hire a small team. I always a huge Tiger fan. And I re- want to be part of an interdisciplinary group, so I’ll be looking for member visiting Belle Isle. significant interactions with other So, at least you weren’t turned off labs across campus. by the idea of moving from Charleston Have you found a place to live? to Detroit. What happened next? I took an apartment. My family I came and met with Roy. I knew Roy indirectly, but our paths had is still in Charleston. My three never crossed. He had worked kids will all be off at college in the closely with the former president of fall. I wanted to be in Midtown or the Medical University. I immedi- downtown, and people told me I ately connected with Roy. It felt might have trouble finding a place. very natural. We had a shared vi- I looked at the Park Shelton. They sion. Then I saw a bit more of the had one studio apartment, but I ecosystem. The (Detroit) Medical Cen- didn’t move right away and it was

Q&A

Yeah, Stephen Lanier got the “Detroit?” reaction when he decided to come to Wayne State.

Page 7

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So, what are your marching orders? To get the new building occupied, the biomedical research building that’s under construction across the street from TechTown. I’m really excited about that. I need to really work to develop partnerships with the local community, to make sure the work here has a broad impact. We need to jump-start tech development on campus, to nurture partnerships that will turn research into companies and jobs. State officials have been critical of the office of research in the past. Last year, it gave the school a grant of $100,000, to be used to bring in a consultant from Chicago to figure out how to improve processes in the tech transfer office. We’ve got good people in the office now. I mentioned the two we recently hired. Joan Dunbar (who was appointed director of tech transfer last year) is terrific. I’ve spent a lot of time meeting with the faculty, doing a lot of listening and reaching out. I tell everyone: “Look forward. Look forward.” We’re going to be doing good things. I’m excited to be here and excited about the opportunity.

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OPINION

Board made right call on signatures T

he debate over whether a proposal for increasing the minimum wage to $10.10 would be eligible for the November ballot was supposed to turn on technical arguments over whether voters can decide to amend a law that no longer exists. (See Capitol Briefings, Page 9.) But those arguments were never made because the state Board of Canvassers last week determined that the ballot petitions did not have enough signatures. Raise Michigan, the group behind the proposal, instead argued the board shouldn’t have disallowed duplicate signatures because the discovery was made too late in the process. The board, in our view, properly ruled that the state’s citizens are best served by only counting valid signatures. You either have them or you don’t.

Library millage should be OK’d In a long list of contested primaries and the statewide Proposition 1 to repeal the personal property tax, the renewal of the Detroit library millage has gotten little attention. But the 10-year, four-mill renewal is a critical part of the library’s budget — in fact, it can’t stay open without it. In truth, the system could use more money. Every branch is closed on Sundays and all but the main library are closed on Saturdays, and branches are hard to find in some areas of the city. The library has been plagued in recent years by instances of fiscal mismanagement and at least one FBI investigation. There’s no excuse for that, but the solution is strong controls, not closing down the system. The millage should be renewed. At a time when there are so many positive developments locally, Detroit shouldn’t become the first major U.S. city without a library system.

Plans shouldn’t ignore small biz It’s easy to get caught up in the excitement of the prospect of large redevelopment. And the plans by the Ilitch family for the entertainment district surrounding a brand-new hockey arena certainly are exciting. But as details of the plans get fleshed out, we hope they include a place for small businesses that have been toughing it out over the years as they wait for Detroit’s resurgence. (See story, Page 1.) There’s plenty of room for “new” Detroit without squeezing out “old” Detroit.

LETTERS ‘Ilitch city’ puffed up for press Editor: Thanks for the super-duper section on the proposed Ilitch city, but you guys forgot some of its special features, such as a replica of Big Ben with Mike Ilitch’s face on it that says “pizza pizza” every hour and “he shoots he scores” every 15 minutes. Or what about the Hot and Ready Rollercoaster that features a pizza oven 800 feet high? And don’t forget the aquarium with coral figures of Michigan sports greats like Bobby Hebert and Dave Yarema and stocked with piranhas and clownfish? Seriously, none of this will ever be built (except the arena and gift shop), and your editors ought to know better than to print this puffed-up press release as if it’s a done deal. Phillip Sherwood Troy

Crain’s Detroit Business welcomes letters to the editor. All letters will be considered for publication, provided they are signed and do not defame individuals or organizations. Letters may be edited for length and clarity. Write: Editor, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207-2997. Email: cgoodaker@crain.com

Vets section showed Red Cross’ hire power Editor: Crain’s special issue focusing on veterans issues (July 14) was comprehensive and informative. We appreciate your highlighting the work of the American Red Cross, especially our partnership with

MGM Resorts International on the Boots to Business initiative. When we launched Boots to Business in metro Detroit in July 2013, our goal was to place 10 veterans during the first year. We exceeded that goal by far, placing 22, including 12 at MGM Grand Detroit. Next to the program in Las Vegas, we have the most successful Boots to Business results in the country. Our program coordinator, AnneRenee Parks-Stoltman, reports that we’ve placed security guards, customer service representatives and casino auditors at MGM Grand and a variety of positions at nonprofits and government agencies. Thanks again for recognizing the American Red Cross and our partners as we continue this important work. La Forice Nealy Regional CEO American Red Cross Southeastern Michigan Region

KEITH CRAIN: For Detroit’s future, it is all about the money Last week, Detroit had another success by attracting an innovative project: a metals research institute that had been comparing Corktown to suburban Canton Township for a place to call home. While I am not a great fan of robbing Peter to pay Paul, we have to enjoy the city’s success and hope for more. The city’s bankruptcy is moving along — perhaps better than anyone could have hoped. The term of the emergency manager is winding down, and we have to start seriously considering the difference when

we are back on our own. A friend of mine, a freelance writer, asked me what Detroit would be like in five years. I said, simply, it depends on the city’s success in attracting jobs into our city and economic development. Without continual economic development, we could easily see Detroit slide back into the financial abyss that we’ve seen for five decades. We have to attract jobs. The more

blue-collar jobs, the better. It is going to be great if we can fill all of our office buildings with white-collar jobs. We’ll have folks wanting to move into the city, eat at new restaurants, shop in new shops and spend money in the city. But we have a community of 700,000 with huge unemployment. The city cannot afford to continue to subsidize tens of thousands of unemployed.

Those folks need jobs so they can come off the welfare rolls and pay their taxes and water bills. Right now, about the only surefire way to attract jobs and factories into Detroit is with substantial tax incentives. There are plenty of creative ideas on what sort of monetary incentives will attract the most jobs. Whether they’re talking about real estate incentives, job incentives or even sales tax incentives, companies are going to respond. Whoever gets the job at the Detroit Economic Growth Corp. is going to

have a very critical job. It is going to fall on that department to attract and nurture business in our city. Certainly one of the most exciting new companies that has started up in Detroit is Shinola, which has hired lots of new employees and is assembling watches that are sold around the world. We need a thousand Shinolas. Bankruptcy was no fun. Well, when the city gets out of bankruptcy, it’s still not going to be a lot of fun. The easy part is over. Now, we’ve got to get down to work.

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State board keeps minimum wage proposal off ballot Barring an appeal, voters mak- about math, and Raise Michigan ing the minimum wage will not did not come up with a sufficient number of signatures. have a chance to give This was not the arguthemselves a raise at the ment Raise Michigan ballot box in November. The Board of State was primarily focused Canvassers decided in a on fighting in court. The 3-1 bipartisan vote Thursbiggest fight was expectday to keep the proposal ed to be whether the proto raise the minimum posal should appear on wage from $7.40 an hour the ballot because it to $10.10 off the Novemwould be asking voters ber ballot because of an to amend a law that no proposal sought to amend. Gov. board that the proposal should not Rick Snyder signed it into law the be certified because the law the peinsufficient number of longer exists. signatures. When the Legislature day before Raise Michigan submit- tition addressed had been invaliChris Gautz Raise Michigan, the dated. voted to increase the ted its signatures. group behind the proposBrewer said that argument was Pirich and counsel for the attorminimum wage to $9.25 al, is still contemplating whether an hour, it repealed the law the ney general made the case to the unreasonable because it required to appeal, but it doesn’t have much time to make up its mind. Ballots have to be printed in a little more than a month. After collecting more than 318,000 signatures this past winter, Raise Michigan thought it had enough to meet the threshold of 258,088 valid signatures. And going into the meeting, it was told it did, after Michigan Department of State staff reviewed a sampling of the signatures recommended that the board approve the proposal’s spot on the ballot. But the group opposed to the ballot measure, People Protecting Michigan Jobs, found evidence the staff had not found — that there were more than 40 duplicate signatures in the sampling. If those were taken into consideration, the measure would fail to have enough valid signatures, said the group’s attorney, John Pirich, with Detroit-based Honigman Miller Schwartz and Cohn LLP. Ultimately, after hours of back and forth, the board agreed to examine duplicate signatures and agreed that the measure did not have enough signatures. Raise Michigan attorney Mark Brewer at Southfield-based Goodman Acker PC repeatedly said during the hearing that he believed the board did not have the authority to take the duplicates into consideration. That’s because the evidence was submitted more than a week past the deadline for challenges and so was not something the board could consider. But the board thought it could not turn a blind eye to bad signatures just because the information came late. Frank Houston, treasurer of When you reach a certain point in your life, you realize you need more Raise Michigan, said he was disapthan just a savings account. You need a bank that can help protect, pointed in the decision. nurture and grow your wealth. “The rules of the game were changed at the last minute, and I When it’s time, come to Comerica. think it was pretty clear they were looking for an end result, which was to keep it off the ballot,” Houston said. But Pirich, who praised the ruling, said that in the end it was

Capitol B r i e fi ng s

his clients to know the future. But in the end, those points are moot unless Raise Michigan is able to overturn the board of canvassers decision. Last week, it was considering whether to appeal.

The group opposed to the ballot measure, People Protecting Michigan Jobs, found evidence that the Michigan Department of State had not — that there were more than 40 Comings and goings 䡲 Deb Muchmore, vice president duplicate signatures in the sampling.

of Lansing-based Marketing Resource Group, will join the partnership of the Michigan government relations firm Kandler Reed Khoury & Muchmore. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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A CONVERSATION WITH INVESTING IN RETAIL MINDSET Telemus Capital turns to Gap Canada executive to help lead expansion plan, Page 14

Kirk Albert, KeyBank

KeyBank still keyed up about SE Michigan Like many other regional banks, KeyBank has shifted strategy in recent years. In 2006, Edward Reilly, who had just been named Michigan market president for the Cleveland-based bank, told Crain’s he planned to embark on an ambitious expansion in Southeast Michigan. Then the recession hit. Crain’s reporter Tom Henderson caught up with current market President Kirk Albert to talk about KeyBank’s plans. What has happened since Ed Reilly made his announcements? In 2006, Ed had just done the acquisition of Sterling Bank and was planning on a fill-in strategy for our footprint. That didn’t happen, but Michigan is a bright spot, again, for KeyBank. It’s the No. 1 middle market we see. We’ve hired an asset-based lender. We’ve hired two more middle-market lenders, and we’ll hire two or three more in 2015. We’ve hired a dealer finance manager and a privatebanking manager. KeyBank weathered the recession rather well. How? We weren’t in subprime mortgages. We weren’t doing credit cards. We did get hit by investment real estate. What is the bank’s footprint? We’re in the northern half of the country, from Maine to Alaska, along the ice belt. Any expansion plans? KeyBank has $91 billion in assets and is in a position to grow. But there’s a value proposition. Do you acquire a bank in a low-interest environment and look at deposits as loss leaders for the next year or two? When is the right time to buy? There’s nothing imminent, but we continue to look at opportunities. We’re positioned to be a buyer. Meanwhile, we’ll grow organically. What do you like about the local market, including Ann Arbor? We’re one of the largest SBA lenders in the country. There’s a resurgence of owners who want to sell their businesses, baby boomers who might have sold in 2008-2009 but didn’t because of the recession. There are a lot of acquisition opportunities. Private banking, which includes wealth management, is strong here. What’s your background? I grew up in Westland and was a finance major at UM. I graduated in 1991. I started my banking career as an intern at National Bank of Detroit and then joined Society Bank in 1992, which merged with KeyBank in 1994. If you know someone interesting in banking, finance, technology or biotechnology whom Tom Henderson should interview, call (313) 446-0337 or write thenderson @crain.com.

OFFBEAT BANK A look at the Bank of Ann Arbor’s billboard, radio ads, Page 12

President and CEO Tim Marshall credits the Bank of Ann Arbor’s success to an emphasis on community, including an ad campaign that stresses that its bankers know that Fielding Yost is a legendary University of Michigan football coach.

LEISA THOMPSON

How local bank takes on giants – and thrives Bank of Ann Arbor rose from No. 6 in market share to No. 2 by finding riches in niches

BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

he Bank of Ann Arbor has earned a reputation as the little bank that can — hold its own, that is, in the fight for market share among the national and regional powerhouses in one of the most highly competitive banking environments in the state. Eighteen banks do business in the Ann Arbor area. The top seven by deposit market share include banks based in New York City (Chase), Cleveland (KeyBank), Dallas (Comerica), Minneapolis (TCF), Pittsburgh (PNC) and Columbus (Fifth Third).

As of March 31, those banks had assets, respectively, of $2.5 trillion, $323.6 billon, $129.7 billion, $99.9 billion, $65.8 billion and $18.8 billion. The Bank of Ann Arbor? It had assets of $964 million, a number small enough that it wouldn’t even count as a rounding error in Chase’s asset tally. But the bank has carved out lending niches including: 䡲 Local investment real estate, which post-recession is a space many other banks strongly avoid. 䡲 Wealth management, where it has nearly $1 billion under management. See Ann Arbor, Page 12

ANN ARBOR’S BIGGEST BANKS: WHAT 6 YEARS CAN DO Deposit market share in Ann Arbor as of June 30, 2007: Number Deposits Bank of branches (millions) 1. KeyBank 2. National City* 3. TCF 4. Chase 5. Comerica 6. Bank of Ann Arbor 7. Ann Arbor Commerce Bank** 8. Flagstar 9. LaSalle*** 10. United Bank & Trust

4 9 5 8 7 5 1 4 4 2

$675.1 $541.5 $532.5 $475.7 $465.2 $329.8 $278.7 $215.6 $163.9 $123.7

Market share 16.45% 13.19% 12.97% 11.59% 11.33% 8.04% 6.79% 5.25% 3.99% 3.01%

Deposit market share in Ann Arbor as of June 30, 2013: Number Deposits Bank of branches (millions)

Market share

1. Chase 2. Bank of Ann Arbor 3. KeyBank 4. Comerica 5. TCF 6. PNC* 7. Fifth Third 8. Flagstar 9. Michigan Commerce Bank** 10. Bank of America***

17.30% 12.38% 11.85% 10.89% 10.07% 9.68% 5.53% 4.36% 3.96% 3.85%

* National City Bank was bought by PNC Financial Services Inc. in 2008. ** Ann Arbor Commerce Bank was renamed Michigan Commerce Bank in 2009 and bought by Talmer Bancorp last year. ***Bank of America acquired LaSalle Bank in 2007. Source: Federal Deposit Insurance Corp.

9 4 4 7 5 6 3 4 1 4

$901.6 $645.2 $617.6 $567.6 $524.6 $504.5 $288.4 $228.2 $206.2 $200.4

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Finance

Q: Is Bank of Ann Arbor trying to be funny? Out-of-town banks may not think that’s case The billboard and radio campaigns the Bank of Ann Arbor started in 2010 to poke fun at out-of-state banks were created by Ann Arborbased Perich + Partners Ltd. — whose president, Ernie Perich, is on the bank’s board of directors. Here are samples of some of the billboards around town: 䡲 “Non-local banks think Cazzie Russell is a designer dog breed.” He was an All-American basketball player at the University of Michigan in the 1960s. 䡲 “Non-local banks think Gandy Dancer won the Triple Crown.” It is a restaurant on the north side of downtown. 䡲 “Non-local banks think Hieftje is a typo.” John Hieftje is the mayor of Ann Arbor. 䡲 “Non-local banks think Eisen-

hower and Packard were WWII generals.” They are major streets in Ann Arbor. 䡲 “Non-local banks think the Power Center is a yoga position.” It is a center for the performing arts. 䡲 “Non-local banks think Brady Hoke is a private school out east.” He is UM’s football coach. Radio spots serve a second purpose by being what callers to the bank hear while they are waiting on hold. A question is asked of a clueless-sounding man who happens to be an out-of-state banker, and he fakes a response. Q: “Who are Bo and Woody?” A: “They’re in ‘Toy Story.’ ” They are, of course, Bo Schembechler, the legendary football coach at UM, and Woody Hayes, his archrival at Ohio State University.

Q: “Who are Ann and Ashley?” A: “They’re the Olson twins. They live in Hollywood.” They are streets downtown. Q: “What is the Michigan Union?” A: “It’s part of the UAW.” It’s a building on campus. Q: “Who is Alfred Taubman?” A: “He’s the Mad magazine kid. Red hair. Freckles. Parts his teeth in the middle.” He is the real estate pioneer and philanthropist who has donated heavily to UM. Bank President and CEO Tim Marshall said he hired a marketing firm last year to assess the results of the ad campaigns. “They said they’d never seen anything like it,” he said. “They said the brand awareness was off the charts.” — Tom Henderson

Ann Arbor: Local bank makes good ■ From Page 11

䡲 Lines of credit for venture capital firms — an area of particular interest to the tech community in its hometown. The bank brags about its role as the hometown underdog through funny radio and billboard campaigns that began in 2010. It contends that its brand recognition has helped it consistently eat into its rivals’ market share. (See related story, this page.)

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In 2007, before the recession hit, the Bank of Ann Arbor was sixth in deposit market share with 8.04 percent in the city, with deposits of $329.8 million, according to the Federal Deposit Insurance Corp. KeyBank was No. 1 at 16.45 percent with deposits of $675.1 million. As of June 30, 2013, the latest date for which data are available on the FDIC website, Chase was No. 1 at 17.3 percent with deposits of $901.6 million, while the Bank of Ann Arbor had climbed into second place at 12.38 percent and deposits of $646.2 million. (See chart, Page 11.) That is an increase in market share of 54 percent. Of the five banks that ranked ahead of it in 2007, only Chase also increased market share, improving 49 percent. The Bank of Ann Arbor, which followed record net income of more than $8.4 million in 2012 with record income of almost $9.7 million last year, continues to grow its presence both inside Ann Arbor and out.

3 ways to expand Three kinds of expansion are part of the bank’s strategy: 䡲 Geographic: Last year, it expanded into Saline, rehabbing a branch it bought from Bank of America. In addition, for years the bank’s technology group has provided a variety of funding to Detroit’s TechTown Detroit and to that city’s tech companies. 䡲 Products: Last year, the bank purchased Ervin Leasing, a 35-year-old Ann Arbor company that provided equipment financing for businesses. This month, it was rechristened UniFi Equipment Finance. 䡲 Headquarters: In September, the bank will begin a $4 million renovation and 10,000-square-foot expansion of its downtown Ann Arbor headquarters, adding a third floor. Bank President and CEO Tim Marshall credits the successes to an emphasis on the community, including sponsorship of numerous organizations and events; the long-

running ad campaign by Ann Arbor-based Perich + Partners Ltd.; and his bank’s conservative lending before the recession. “The only hedges we understood were the ones you trimmed in your front yard,” Marshall said. The bank was one of the founding organizations of Ann Arbor Spark. It committed $150,000 when approached in 2005 by Mary Sue Coleman, then president of the University of Michigan, and Rick Snyder, then a local venture capitalist, about helping launch a new nonprofit economic development agency. Marshall is now Spark’s chairman of the board. “The community recognized the commitment we have to the area,” he said. “It’s tough to go to a community event where there aren’t three or four Bank of Ann Arbor people.” His competitors and observers of the local banking scene praise Marshall and the bank for having good vision and planning. “This is a best-in-class bank and has been from day one,” said John Donnelly, managing director of Grosse Pointe investment banking firm Donnelly Penman & Partners. “When they started, they handpicked their investors. Donnelly They were almost interviewing people to become investors. Not many banks have that luxury.”

‘The bank bleeds Ann Arbor’ The bank opened its headquarters on Jan. 16, 1996, at 125 S. Fifth Ave. in a former Comerica branch. The bank was capitalized with $6 million raised from business leaders and launched with 15 employees and one location. Today, it has See Next Page

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seven branches and 170 employees. One of the original investors was Bill Martin, founder of the prominent Ann Arbor real estate firm First Martin Corp. and the UM athletic director from 2000 to 2010. Other business leaders who invested included Robert Teeter, for many years the leading pollster for the Republican Party and its national candidates; Peter Fletcher, an Ypsilanti businessman and activist in the Michigan Republican Party; Thomas Borders, founder of the Borders bookstores; and Cynthia Wilbanks, now vice president for government relations at UM. The result? The community ties that helped it compete with better resourced national and regional banks. “The bank bleeds Ann Arbor,” Donnelly said. Kirk Albert is president of the Michigan region of KeyBank (see A Conversation With, Page 11), a regional bank with assets of $91 billion that ranks third in market share in the city, behind the Bank of Ann Arbor. His office is in downtown Ann Arbor, a few blocks from Marshall’s. Albert said that the Bank of Ann Arbor’s ad campaign, stressing its local roots, helps it carve out a niche but that the economic health of the city and region allows other banks to carve out their own niches. “The Bank of Ann Arbor is a real formidable competitor,” Albert said. “There is an appeal to being the hometown bank. Some people love that, but you just have to find your niche. “There are things we can do that they can’t. For example, we do a lot of Small Business Administration lending because we have the infrastructure to do it. “On the other hand, the Bank of Ann Arbor is strong in investment real estate. They do it better than anyone. We have less of an appetite for that. If you don’t do it right, you can really get hammered.” As for Marshall, Albert said: “We sit on a lot of boards together. Tim is everywhere in the market. I’m trying to rival him by being on as many boards as him, but he still beats me.” John Carter, the Michigan market leader for J.P. Morgan Chase & Co., called the Bank of Ann Arbor “a very competitive bank in a really good and fertile banking environment. It’s a great example of a bank that has created a niche.” Carter said the Ann Arbor economy, anchored by UM and including technology companies backed by a strong venture capital community, has created “a broad and deep enough client base for community banks to have their niche and for national and regional banks to compete as well. Anyone who has a presence of any size in Michigan has to be in Ann Arbor.”

founder and managing director of Arboretum Ventures, which has had several successful exits from tech startups it helped launch; and Jeffrey Williams, the CEO of two of Cole Garfinkle’s companies, HandyLab Inc. and Accuri Cytometers Inc., when they were sold. After starting the tech group in 2004, Cole founded the Ann Arbor Angels to provide seed and earlystage funding for tech entrepreneurs. The bank can’t invest in the companies themselves but can provide lending and traditional bank-

ing services as they grow. Today, Cole’s group does debt financing for companies backed by venture capital, provides cash management and 401(k) services, makes bridge loans to companies getting other financing and provides lines of credit to venture capital firms. “The bank has been very supportive of us, both on the cash management side and on the lending side,” said Tim Mayleben, president and CEO of Ann Arbor-based Esperion Therapeutics Inc., a pharmaceutical company that went public on the Nasdaq stock exchange last year under the symbol ESPR. “They understand our kind of business. Fifteen years ago, when Roger (Newton, Esperion’s founder

and chief science officer) and I first started doing this, banks didn’t.” From the start, the tech group looked beyond Ann Arbor. “Josh Linkner was one of the first customers of the tech group when he was at ePrize,” Cole said of the founder of the Internet marketing firm who now is managing partner of Detroit Venture Partners. “We’re working more and more in downtown Detroit and TechTown and happy to be part of that.” Chris Rizik, president and CEO of the Ann Arbor-based Renaissance Venture Capital Fund, a firm that invests in venture capital companies that in turn invest in Michigan companies, said he maintains a line of credit with the Bank of Ann

Arbor — as do other area venture capitalists — to provide money for the short term while he waits for investors to respond to his requests for capital as needed. “Sometimes, it’s hard for banks to adjust to the needs of tech startups, but they’ve really stuck with it and got very good at it,” Rizik said. Said Leslie Smith, president and CEO of TechTown: “The bank has been very interested from the beginning in becoming more involved with our tech clients and has offered sponsorship, mentorship and access to capital in hopes of developing long-term relationships.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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Telemus Capital turns to retail exec as it steps up expansion BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

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Southfield-based Telemus Capital Partners LLC has hired Lloyd Perlmutter, the former CEO of Gap Canada Inc., to be COO as the wealth management firm embarks on an ambitious expansion to grow from $2.3 billion under management to $10 billion over the next five to 10 years. The strategy calls on both geographic expansion and reaching out to new types of customers. Partner and co-founder Lyle Wolberg said Telemus is in sePerlmutter rious negotiations to buy wealth management firms in Detroit, Ann Arbor, Los Angeles and Florida. The other part of the growth strategy is to market to the growing tech community in Detroit and Ann Arbor — and bring on as clients company founders or executives who are younger than Telemus’ typical client and have far less investable income than what the firm generally requires. Telemus has had a minimum threshold of investable assets for new customers of $1 million, with the average client having $5 million or more. Now, though, Telemus will take on clients with a small fraction of that $1 million minimum, provided they are the kind of successful entrepreneurs who Telemus execs think can evolve into a much more affluent customer. Sandy Kronenberg, who founded an IT company in 1997, is the poster child for what Telemus hopes to accomplish. In 2008, as an exception to its rule, Telemus took him on as a customer when he had

want to hire someone inside the “ We didn’tfinancial services industry. With his retail background, he (Perlmutter) can bring in a fresh set of eyes to look at the client experience.

”

Lyle Wolberg, Telemus Capital Partners LLC

far less than $1 million to invest. When Kronenberg sold his company in 2011, he suddenly — and easily — fit the traditional profile. To manage the accounts of younger customers, Telemus has hired younger investment advisers, bringing on five ages 30-35 in recent months. But while those younger, less-affluent customers build their investment base, it will be a geographic expansion that fuels Telemus’ growth plans, Wolberg said. “What’s the best way to get to $10 billion? By taking a company from being a regional powerhouse to having a national presence,” he said. Telemus will target wealth management firms run by veterans of the industry who may be thinking of retiring or putting a succession plan in place, Wolberg said. Telemus’ acquisitions will be funded in part by New York Citybased Focus Financial Partners LLC, a wealth management firm with more than $60 billion under management. Last August, Focus Financial bought a minority stake in Telemus. “They have more than a $500 million line of credit with eight or 10 national banks that we can draw on,” Wolberg said. In February, Telemus began its current expansion by buying Los Angeles-based Concentric Capital LLC, which focuses on clients in

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sports and entertainment, for an undisclosed amount. In 2006, Telemus made its first acquisition, of Ann Arbor-based Beacon Investment Co. Wolberg and his co-founders, Chairman Gary Ran and Robert Stone, wanted to bring in a COO with a background in managing growing retail businesses. While at Gap Canada from 1996 to 2003, Perlmutter grew its business from $200 million a year to $1.2 billion. After leaving the Gap, he ran retail operations for several Canadian companies, including Indigo Books and Music Inc., Clothing for Modern Times Ltd. and Mexx Canada Co. He has been in retailing his whole career, founding a company called Beaver Canoe after graduating from Harvard University and building it to 19 locations before selling it to Target Canada. Wolberg said Telemus’ partners wanted to continue concentrating on investment strategies and wealth management and leave to someone else the day-to-day problems of managing a growing business with more and more offices. “Lloyd is a perfect fit for us,” Wolberg said. “We didn’t want to hire someone inside the financial services industry. With his retail background, he can bring in a fresh set of eyes to look at the client experience.” Said Perlmutter: “It’s in my bloodstream. I wake up every day thinking about customers. My focus will be on improving the client experience, improving our inhouse processes, bringing consistency to our operations as we grow and using technology, which is underutilized, as a driver.” Telemus’ growth strategy is sound, said Jim FitzGerald, president of Birmingham-based Munder Capital Management Inc. In April, Munder announced it was being acquired by Cleveland-based Victory Capital Holdings Inc. in a $400 million deal that was expected to close in the third quarter. Munder primarily serves institutional investors. Telemus serves high-net-worth individuals, which makes a COO focused on the client all the more important, FitzGerald said. “Institutional investors,” he said, “don’t need as much handholding.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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A friend in need was new source of Telemus clients What began as a favor for a friend in 2008 has evolved into a new class of younger, less-affluent clients for Southfield-based Telemus Capital Partners LLC. In 1997, Sandy Kronenberg founded Netarx Inc., a provider of information technology services. In March 2008, with signs of the upcoming recession unmistakKronenberg able, Kronenberg sold all his stocks and mutual funds, going strictly to a cash position. At the time, Telemus had a minimum threshold of investible assets for new customers of $1 million, with the average client having $5 million or more. Although Kronenberg was well below the threshold, Josh Levine, a friend of his who was a financial adviser with Telemus, took him on as a client. It was an exception to the rule that paid off for all. In 2011, Kronenberg sold Netarx, which had annual revenue of $60 million, for $34 million to the Logicalis Group, the Farmington Hills-based U.S. division of Datatec Ltd. of South Africa. “I went from having hundreds of thousands of dollars of investible assets to millions,” he said. Telemus still manages it. Today, Kronenberg, 41, is a partner in Detroit-based Ludlow Ventures LLC, a venture capital firm that invests in early stage tech companies, and CEO of Locqus LLC, an app company he founded in 2013 that shares space on Woodward Avenue with Dan Gilbert’s Bizdom. And he serves as the best-case scenario for Telemus as it markets financial services to entrepreneurs in their late 20s and early 30s in Ann Arbor and Detroit. “They may only have $100,000 or $200,000 now, but we want to find the next generation of millionaires and work on their portfolios now,” said Lyle Wolberg, a Telemus founder and partner. Wolberg said five investment advisers ages 30-35 have been hired to work with entrepreneurs. The firm has 12 advisers in all. Josh Gershonowicz, 30, is another of Telemus’ younger clients, recruited by Charles Dabrowski, one of the firm’s advisers. who was a friend through the Detroit Athletic Club. Gershonowicz founded Rebuild Nation, a 2-year-old ad agency that just finished building out its new space in the Boulevard West Building in Midtown. “In a way, they’re doing what I’m doing,” Gershonowicz said. “I’m offering my services to startups, and a lot of them have negligible revenue and don’t need or can’t afford a lot of services now. But 10 years from now, they will.” — Tom Henderson

NEW YORK YANKEES

Budco Financial expects boost from dealer, health care clients BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

Budco Financial LLC projects revenue will increase 33 percent this year to $10 million on the strength of new business with automotive dealer and health care clients. The company is actively bidding on a contract with a health system outside of Michigan and expects to begin administration of medical payment plans by early August, Chairman Bud Brian said. “If we can finance a service contract, we ought to be able to finance medical expenses for a patient checking out of a hospital,” he said. It’s likely health care deductibles will go up for most people, Brian said. “More and more people are going to need alternatives to be able to pay their bills.” Through the new services, Budco Financial will finance a portion of the amount patients owe in medical costs and administer a medical payment plan for the health system. It will generate revenue from the interest for fronting the money to the health systems for those patient bills on payment plans and associated fees, Brian said. At the same time, Budco Financial looks to expand the number of Ford dealers the company provides

with an installment payment plan for their dealer service contracts. The plan enables dealers to offer customers interest-free financing on vehicle service contracts. And it plans to pursue business with other, unnamed carmakers and other manufacturers like Caterpillar Inc., John Deere and Harley-Davidson about providing the same services to their dealers, Brian said. “Our expectation is to double this business minimally in five years,” he said. Budco Financial and its 23 employees moved to 6,500 square feet of leased space at Fort Washington Plaza in downtown Detroit in March from the Highland Park headquarters of its former parent company, Budco Holdings Inc., which now operates as part of Dialog Direct. Brian founded Budco, a marketing services company, before selling it in 2006 and buying the Budco Financial division back in late 2012 for $10 million. Budco Financial is working with Southfield-based Moncur Associates Inc. on a new logo and plans to introduce it during an August open house at its new offices, he said. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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Birdhouse snags seed funds for products that aid with autism BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Birdhouse LLC, which has developed a website and smartphone apps for the parents of children with autism, has closed on a seed-stage funding round of $250,000 — including $25,000 from Grand Rapidsbased Start Garden, a $15 million early-stage fund created by Rick DeVos. Other investors included friends, family and angel investors.

Birdhouse, which is being incubated at the Bizdom headquarters in downtown Detroit, has been testing beta versions of its products. It will use the funds to develop more features and begin a marketing campaign, said co-founder Ben Chutz. The company, which markets its products under the name Birdhouse for Autism, was one of 10 finalists at the recent Rise of the Rest tour’s visit to Detroit, where AOL founder Steve Case invested $100,000 in the

winning company, social media startup Stik.com. Birdhouse was founded by Chutz and his girlfriend, Dani Gillman, after they experienced the frequent chaos that life Chutz can bring with an autistic child, he said.

Gillman has a young daughter, now 9, with autism. The company’s name comes from her nickname, Little Bird. Chutz said parents with autistic children usually run through a gamut of diets, drugs and often conflicting advice from pediatricians, specialists and other parents. In 2012, he; Gillman, who will head marketing; and Adam Milgrom, the chief technology officer, launched Birdhouse. By last summer, they

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had their beta web and smartphone products up and running. The beta version allows parents to keep a calendar of events, such as therapy sessions or doctor visits, and also log in such things as meals, sleep, the child’s mood, Gillman reasons for anger flare-ups and even bathroom visits. Chutz said the next version of Birdhouse will notify parents of correlations between what they are tracking, such as if sleep patterns have changed since a change in drugs, diet or physical therapies. Chutz said the company will generate revenue by charging a per-month subscription fee of $10. It will not sell ads. “This is a godsend. It’s an incredibly valuable tool,” said Jennifer Pike, a web developer with the New Hampshire Council for the Developmentally Disabled who came across the Birdhouse website last fall. “Every doctor you see says: ‘Can you track this? Can you track that?’ You end up with an overwhelming amount of paperwork. You just get overwhelmed.” Before co-founding Birdhouse, Chutz helped launch the e-commerce division of ReCellular Inc., a recycler of cellphones. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

NOMINATIONS SOUGHT FOR NONPROFIT CONTEST This year’s Crain’s Best-Managed Nonprofit Contest is focused on good management practices of nonprofits. Applicants are asked to give examples of how they deploy their mission and resources, among other information. Applications are due Aug. 25. Finalists will be interviewed in person by judges the morning of Nov. 10. Applicants for the award must be a 501(c)(3) with headquarters in Wayne, Washtenaw, Oakland, Macomb or Livingston counties. Applications must include an entry form, a copy of the organization’s code of ethics, a copy of the most recent audited financial statement and a copy of the most recent IRS 990 form. Previous first-place winners are not eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations. The winners will be profiled in the Dec. 1 issue, receive a special “bestmanaged” logo from Crain’s for use in promotional material and will be recognized at the Crain’s Newsmaker of the Year lunch early next year. For an application form, please email YahNica Crawford at ycrawford@crain.com or visit www.crainsdetroit.com/nonprofit contest. For information about the contest itself, email Executive Editor Cindy Goodaker at cgoodaker@crain.com or call (313) 446-0460.

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With capital infusion from sale, Residential Home plans expansion BY JAY GREENE CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

Residential Home Health in Troy plans to add a number of equity joint ventures with hospitals in Michigan and increase the number in Illinois over the next few years on the heels of its majorityinterest sale to Graham Holdings Co. Residential Home plans to use the financial backing and reputation of Graham Holdings â&#x20AC;&#x201D; former owner of The Washington Post â&#x20AC;&#x201D; to expand in Michigan and Illinois, where it also does business, said Mike Lewis, Residential Lewis chairman and CEO. Terms of the sale this month were not disclosed. â&#x20AC;&#x153;Access to capital is really important. For hospital joint ventures, you need a large base to fully participate with partners,â&#x20AC;? Lewis said. â&#x20AC;&#x153;We fully expect with this partnership to pursue acquisitions and joint ventures as we identify opportunities.â&#x20AC;? Last year, Residential generated revenue of $80 million, a 23 percent increase from $65 million in 2012, President David Curtis said. Residential Home, founded in 2001, serves more than 3,250 home health and hospice patients in 34 counties in the Lower Peninsula and in six counties in the Chicago area. About 650 of its 825 employees are in Michigan. Over the past several years, hospitals, physicians and such postacute care providers as home health agencies and nursing homes have been working closely to reduce readmissions. Residential has preferred-vendor arrangements with several hospitals, including Botsford Hospital in Farmington Hills, Metro Health Hospital in Wyoming and the Barbara Ann Karmanos Institute in Detroit. It also has equity joint venture arrangements in Illinois with Edward Hospital in Naperville, Elmhurst Memorial Healthcare and DuPage Medical Group, Curtis said. â&#x20AC;&#x153;Some hospitals want to do (home health services) themCurtis selves, and that is fine,â&#x20AC;? Lewis said. â&#x20AC;&#x153;Where we have taken over home health, hospitals have been shocked at the financial and quality improvements.â&#x20AC;? Botsford Hospital has been using Residential for the past three years to help reduce readmissions for about one-third of its patients discharged to home health care, said Jim Smith, Botsfordâ&#x20AC;&#x2122;s vice president of strategy and business development. Residential has helped cut Botsfordâ&#x20AC;&#x2122;s readmission rate, saving it thousands of dollars in Medicare

Residential Home Health plans to use the financial backing and reputation of Graham Holdings to grow in Michigan and Illinois. readmission penalties, Smith said. â&#x20AC;&#x153;The relationship between (Residential and Botsford) has exceeded expectations relative to the original agreement,â&#x20AC;? he said. Several other home health companies are also in talks with hospitals and accountable-care organizations, including Southfield-based Home Health of America Inc. Mazhar Jaffry, Home Healthâ&#x20AC;&#x2122;s president, said his company is in talks with two accountable-care organizations in Southeast Michigan to help manage the post-acutecare needs of Medicare patients. Home Health of America, founded in 2005, specializes in high-acuity patients who need wound care, home infusions and close monitoring of their conditions. â&#x20AC;&#x153;We expect to grow through acquisitions and joint ventures with ACOs, hospitals and nursing homes, all of the above,â&#x20AC;? Jaffry said. â&#x20AC;&#x153;There is a strong need for home health as Medicare looks to reduce costs and hospitals seek to reduce readmission penalties.â&#x20AC;? Technology, however, is a key to home health companies being able to manage patient care. Besides providing 24-7 nursing and administrative support for home health and hospice services, Residential Home uses mobile technologies to improve quality and reduce readmissions and unnecessary emergency department visits, Curtis said. For example, in 2011, Residential began using a remote nurse alert system with Critical Signal Technologies Inc., a Farmington Hills-based home medical technology company, to provide home health patients with quick access to a Residential call center nurse. Curtis said the Residential nurse alert system has saved millions of dollars in avoidable hospital costs over the past three years. Of 684 patients served in March 2013, 46 patients avoided a hospital readmission, saving a total of $6.7 million in avoidable EMS transportation, emergency room and hospital admission costs, Curtis said. Residential gives all home health patients a free 60-day trial of the nurse alert. Curtis said 54 percent retain the service after the trial at a $39.95 a month. â&#x20AC;&#x153;We are talking with hospitals, accountable-care organizations and area agencies on aging about using nurse alert,â&#x20AC;? Curtis said.

â&#x20AC;&#x153;This can help reduce readmissions and avoid ER visitsâ&#x20AC;? that can save hospitals millions in Medicare penalties. In October 2012, hospitals began paying financial penalties to Medicare for avoidable patient readmissions within 30 days of discharge and for exceeding the national average for congestive heart failure, heart attack and pneumonia. Up to 20 percent of all Medicare patients are readmitted to hospitals within 30 days, costing Medicare billions of dollars each year. The cost containment rule is just one of several similar provisions contained in the Patient Protection and Affordable Care Act of 2010 that are aimed at lowering costs and improving quality. Despite reducing readmissions, for example, Beaumont Health System in Royal Oak lost $2.3 million in Medicare reimbursement last year, Dearborn-based Oakwood Hospital and Medical Center lost $1.2 million, and St. John Providence Health System in Warren expected to lose $2.3 million. Detroit-based Henry Ford Health System projects to lose $2.2 million for having higher-than-average readmission rates the past three years. But those losses for the Henry Ford system will increase in 2014 to $4.3 million, including $2 million at Henry Ford Hospital, because the Medicare readmission penalties will increase to 2 percent in 2014 and 3 percent in 2015. â&#x20AC;&#x153;Hospitals and insurers have risks and need to reduce readmissionsâ&#x20AC;? to protect their revenue, Curtis said. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

CRAIN'S LIST: LARGEST BUSINESS INSURANCE AGENCIES Ranked by 2013 revenue Rank

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.

Company Address Phone; website

Top executive(s)

Revenue ($000,000) 2013

Revenue ($000,000) 2012

Percent change

Premium volume ($000,000) 2013

Employees 2014 Detroit-area/ Total U.S.

$145.0 B

, 61B

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+ 39 < $) -3 4$ )9 )

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127.6

Brown & Brown

+ $ 34+' ? <9$= =$ -3 4$ )9

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Arthur J. Gallagher & Co.

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A. E. Mourad Agency Inc.

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Daly Merritt leads growth in insurance Wyandotte-based Daly Merritt Inc. had the largest percentage growth in revenue of the largest area insurance companies from 2012 to 2013, increasing the bottom line by 55.8 percent. The companyâ&#x20AC;&#x2122;s revenue of $10.6 million moved it up to 12th on the Crainâ&#x20AC;&#x2122;s list of top 25 firms, after ranking 16th in 2012 with revenue of $6.8 million. That growth was fueled by the acquisitions of three Trenton-based insurance companies â&#x20AC;&#x201D; Advisors Financial Group, Buhl Insurance Co. and Jack W. Frost & Son Insurance Agency â&#x20AC;&#x201D; and strong organic growth, which totaled $950,000. Martin Daly, president and CEO of Daly Merritt, said the company is actively pursuing more local acquisitions, which are being fueled by small agencies being unable to cope with the cost or complications of electronic record-keeping and billing. He said Daly Merritt has put processes in place that have replaced all paper billing. As for future acquisitions, Daly said: â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ll continue to pursue acquisitions, but while we do business across the U.S., we arenâ&#x20AC;&#x2122;t going to be buying any companies in California. Weâ&#x20AC;&#x2122;ll keep our acquisitions local.â&#x20AC;? Daly credited MarshBerry, an insurance-management consultant that is part of Ohio-based Marsh, Barry & Co. Inc., with helping his growth. â&#x20AC;&#x153;Our business model is modeled after MarshBerry. Weâ&#x20AC;&#x2122;ve been working with them for years, and they guide our processes and keep us focused,â&#x20AC;? he said. Daly Merritt, formed in 1971 with the merger of the Daly Insurance Agency and the Harley Merritt Agency, has two offices in Trenton, and offices in Ann Arbor, Wyandotte and Monroe. â&#x20AC;&#x201D; Tom Henderson

)*3 ,*34 *3 ". "002/8*-"4& $/-0*,"4*/. /' 4)& ,"2(&34 35$) "(&.$*&3 *. "9.& "+,".% "$/-# "3)4&."7 ".% *6*.(34/. $/5.4*&3 4 *3 ./4 " $/-0,&4& ,*34*.( #54 4)& -/34 $/-02&)&.3*6& "6"*,"#,& ,,*".4 .352".$& &26*$&3 / /. ,"34 9&"2:3 ,*34 7)*$) Crain's #&,*&6&3 7/5,% -"+& 4)& ,*34 %&$,*.&% 4/ 02/6*%& ;(52&3 ".% " 2&,*"#,& &34*-"4& $/5,% ./4 #& -"%& .,&33 /4)&27*3& ./4&% *.'/2-"4*/. 7"3 02/6*%&% #9 4)& $/-0".*&3 /-0".*&3 7*4) )&"%15"24&23 &,3&7)&2& "2& ,*34&% 7*4) 4)& "%%2&33 ".% 4/0 &8&$54*6& /' 4)&*2 -"*. &42/*4 "2&" /';$& $45", 2&6&.5& ;(52&3 -"9 6"29

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CRAIN’S DETROIT BUSINESS

BUSINESS DIARY

outsourced risk management ACQUISITIONS & MERGERS Halberd Corp., Southfield, a holding

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20140728-NEWS--0024-NAT-CCI-CD_--

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CRAIN’S DETROIT BUSINESS

PEOPLE nior housing, CHE Trinity Health Senior Living Communities, Livonia,

ARCHITECTURE

IN THE SPOTLIGHT

from regional vice president of operations, Unidine Corp., Livonia.

MARKETING

Langford Elmiger

Mendoza field, from manager, social services. Carrie Mendoza to vice president /CFO, Community

Carlisle

Sally Elmiger and Ben Carlisle to senior associate, Carlisle/Wortman Associates Inc., Ann Arbor, from associate.

Hill

Housing Network Inc., Troy, from au-

Kelly

FINANCE Susan Misajlovski to vice president, commercial banking, Level One Bank, Farmington Hills, from vice president, business banking officer, PNC Bank, Troy. Dee Varicalli to branch manager,

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Snyder

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IndepenBank,

Yerby

dit Plante PLLC, Hills.

manager, Moran Auburn

Stacy

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small-meetings

Judson Center Inc., Royal Oak, has named Jenny Cederstrom vice president of finance and CFO. She had been the divisional CFO for the American Red Cross — Southeastern Michigan, Detroit, where she was Cederstrom responsible for more than 65 chapters. At Judson, she succeeds Carl Smith, who became managing director of New Urban Learning, a Detroit charter school. Cederstrom will be responsible for business operations, including

budgeting, accounting, finance and risk management, as well as strategic direction and oversight of IT, human resources and facilities management. She had been senior audit manager in Plante Moran PLLC’s not-for-profit and governmental audit group, Southfield. Cederstrom, 42, earned an MBA with a concentration in finance from Wayne State University and a BBA in accounting from Western Michigan University, Kalamazoo. She is a CPA and a member of the American Institute of Certified Public Accountants and the Michigan Association of Certified Public Accountants. In 2011, she was named one of the Crain’s Detroit Business 40 under 40 recipients.

manager, Detroit Metro Convention & Visitors Bureau, Detroit, from sales and catering manager, Doubletree by Hilton Hotel, Detroit-Dearborn, Detroit.

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REAL ESTATE

Michael Hill to vice president, chief marketing officer, Skidmore Studio,

Garfield branch, Clinton Township, from assistant branch manager, Flagstar Bank, Shelby Township.

Detroit, from vice president, business development. Also, to account manager: Caitlin Kelly from account manager, DigitasLBi, Chicago; Brittany Spino from account supervisor, Young & Rubicam Group, Chicago; and Leah Brasch from marketing manager, Reach Influence, Royal Oak.

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Announcements are limited to management positions. Email them to cdbdepartments@crain.com or mail notices to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 482072997. Releases must contain the person’s name, new title, company, city in which the person will work, former title, former company (if not promoted from within) and former city in which the person worked. Photos are welcome, but we cannot guarantee they will be used.

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Metro: Detroit culture takes to the airport in retail Inland prevails in bid protest ■ From Page 3

The restaurants will feature both local food establishments and popular national brands, adding about 22,000 square feet of additional restaurant space and accounting for about $31.6 million in capital investment. The new restaurant concepts, chef-inspired menus, gate-area dining and interactive technologies for information and entertainment “will make Detroit Metropolitan Airport’s food program truly unique,” said Marcus Kemper, senior vice president of facilities and development for the Wayne County Airport Authority, in an emailed statement. “Since the airport authority is entirely self-sustaining and does not receive local tax dollars to support our operations, the enhanced non-airline-based revenue these new concessions will generate ... are vital and (will) help ensure we maintain a competitive cost structure,” which helps keep the airport’s carrier rates competitive and allows it to attract new flights, he said. The new restaurants are expected to generate $63 million in top-line sales during the revamped program’s first year, an increase of more than 47.5 percent from the current sales volume of food and beverage concessions in the terminal. That’s expected to translate to $10.2 million in revenue for the authority from the sale of food and beverages during the first full year of operation from $6.5 million in 2013, the authority said. Blending local offerings with national offerings makes sense, said Ken Nisch, chairman of JGA Inc.

P.F. Chang’s is coming to the McNamara Terminal at Metro Airport, as shown in a rendering. COURTESY OF WAYNE COUNTY AIRPORT AUTHORITY

An airport is “one of the most important and effective places to welcome people, particularly (those who) aren’t familiar with the Detroit area (and) to show them what the area has to offer.” The Southfield-based retail consulting firm is doing the designs for the Eastern Market-themed dining area, and several of the other restaurants planned. The firm also developed the design for many of the new stores that opened in the terminal over the past year.

First phase During the first phase of construction, work will begin on just under half of the new restaurants: PF Chang’s will replace Chili’s in its current location. Longhorn Steakhouse will replace Jose Cuervo Tequileria. Espressamente Illy Caféé and the Fountain Bar will replace a Starbucks location (one of four in the airport). Max & Erma’s will replace Diego’s Cantina. Gordon Biersch brewpub will replace Heineken Bar.

Chili’s and Papa Joe’s Gourmet Market, an express market, will both move into the vacant former Northwest Airlines Worldclub on Concourse B. Ember’s Fire & Ice Lounge and Papa Joe’s Dining Room will occupy a new gate area dining area at the end of Concourse B. Other restaurants set to open over the next year and a half include: Zingerman’s Deli, Bigalora Wood Fired Cucina, Plum Market, Grobbel’s Gourmet Deli, Chick-fil-A, Bruegger’s Bagels, Potbelly Sandwich Works, and Pinkberry, a frozen yogurt, smoothie and shake shop. Also operating new restaurants as part of the new retail program is Atlanta-based Hoeji Brand Foods.

Beyond food The new restaurant program comes on the heels of 35 new stores that opened in the McNamara Terminal over the past year following a $13.8 million investment to build out the spaces. Like the restaurants, the new stores incorporate new and interactive technology, more eco-

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friendly products, international brands and local merchants like Birmingham-based Mills Pharmacy + Apothecary, an independent pharmacy that incorporates a coffee bar and gourmet market with its pharmaceutical offerings, and Ann Arbor-based Running Fit. National retailers include: The Body Shop, Spanish fashion label Desigual, EA Sports, The New York Times, Pandora, Spanx, The Wall Street Journal, Johnston & Murphy, Be Relax Spa, the first U.S. airport locations for Forbes and Porsche Design, and one of the first two U.S. airport locations for Dylan’s Candy Bar, founded by Ralph Lauren’s daughter Dylan. Another new retailer, Estéée Lauder Beauty Boutique, opened in mid-June, in the terminal’s central link area in what was formerly a food court, after a $3.3 million investment to build out the space. Several existing stores were also redesigned as part of the new retail program, including Brighton Collectibles, Brooks Brothers, Brookstone, Erwin Pearl, NBC News and PGA Tour Shop. The airport stores, under the operation of Bethesda, Md.-based World Duty Free Group, Atlantabased Paradies and France-based retailer Be Relax, are expected to generate $7.7 million in operating revenue for the Wayne County Airport Authority in the first year. That marks a nearly 17 percent increase in annual revenue, and $62 million in revenue for the authority over the seven-year contract. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

Roseville-based Lanzo Cos. Inc. went from $30 million worth of new Detroit sewer-lining contracts to a four-month bridge deal of just $900,000, after rival bidder Inland Waters Pollution Controls Inc. prevailed in a protest of the award. The Board of Water Commissioners overseeing the Detroit Water and Sewerage Department voted unanimously last week to award a single contract to Lanzo in lieu of a three-year deal awarded May 28. The Detroit City Council on July 15 reviewed a bid protest from Inland Waters and recommended that DWSD put the original contracts out for new bids. The award, approved last week, is a temporary contract through early November while the department completes the new bidder solicitation and review process, said Public Affairs Officer Bill Johnson. “We have been bidding this thing since 1995, about every three years since then, having to bring the city documents on ability to perform, and bonding. So this is a major undertaking, only to get the job through November,” said Fred Tingberg Jr., vice president and business development manager for Lanzo Trenchless Technologies. “That’s just not addressing the problem that exists for the city. It’s like if someone goes to an auto dealer and gets a price on a group or fleet of vehicles, with a price for scale on a large order or leases over time, and the customer comes back later and says, now we want the same unit price but just one car.” — Chad Halcom

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J&L Foreign Auto Centre

Temple Bar

Comet Bar Harry’s Detroit Bar

Town Pump Tavern

Bookies Bar & Grille

A panorama of the arena site shows an area that will look substantially different when

Arena: In shadow of planned arena, small biz hopes to stay put ■ From Page 1

But he’s always stayed, always ready with another drink, another story of what once was, what is and what could be in the no-man’s land between downtown and Midtown Detroit. The Temple Bar is now at ground zero in a 45-block redevelopment plan for the city’s entertainment district announced earlier this month by the Ilitch family. Anchoring the district is a $450 million, 20,000-seat hockey arena for the Detroit Red Wings. In the family’s vision, there is the core hockey arena area — squatting on the parcels of mostly vacant land in the rectangle between the I-75 service drive and Charlotte Avenue and Cass and Woodward avenues — as well as four other distinct neighborhoods surrounding the Wings’ new home. Temple Bar sits right on the northwest edge of the red zone — the color the Ilitches painted the arena blocks in their renderings — and is one of the last buildings in the path of progress. It’s a blinkand-you-miss-it place with an avocado green exterior and glass-block windows, a classic dive bar that gets hopping around last call, when revelers make their way there for one last drink. It looks and sounds nothing like the lofts, apartments and restaurants the Ilitches plan for the area surrounding the arena. They are investing in a “deconstructed” design where the arena itself is detached from other restaurants, retail and offices available year-round, not just on game day. But Boukas has no plans to leave the neighborhood. His mother still owns the building and he has no need to sell out. Boukas said he fielded two offers to buy his bar, offers he suspects came from the Ilitch organization, but he’s not certain because the broker didn’t disclose the prospective buyer. The last offer, which came in 2010 or 2011, was for $184,000 — for the building, his business and his liquor license. He said an emphatic no. And that’s back when times were tough and business was off nearly 60 percent. He was funneling money

into the bar, keeping it alive, with proceeds from his side gig as an accountant. These days business is better, though still 20 percent off. Ms. Karen, a regular at the end of the bar, hollers over: “You’re going to be a hockey bar! I’ll still come in, I guess.” He is hopeful that the Red Wings will bring in patrons — especially because his day business is “dead, nonexistent between the smoking ban and gentrification” — but he also wants the area to remain economically diverse. “I’ve seen many plans by planning departments that never happened,” he said. “What excites me about this project is not just the stadium; it’s the housing, businesses it can bring. This neighborhood has always been economically diverse. I hope that maintains.” In particular, he wants to see options for low-income residents, not just the affluent, in the residential plans.

Harry’s Detroit Bar sits at the southern tip of the arena development.

Vowing to stay Temple Bar is one of just a handful of small businesses left in the 45block development area. As you approach Woodward Avenue around Grand Circus Park, there are more restaurants and shops emerging, including the Fox Theatre, the headquarters of Ilitch Holdings. But in the shadow of the new hockey arena, the fort is held down, so to speak, by Temple Bar, Harry’s Detroit Bar and Comet Bar. At the southern tip of the arena development, sits Harry’s, a nondescript watering hole that has been a staple of the downtown drinking

The fate of the Comet Bar, located in the arena footprint, is uncertain.

scene for more than two decades. Owner Harry Kefalonitis bought the bar in 1994 — it was coincidentally already named Harry’s — and he doesn’t plan to move from his spot on Henry Street, despite the “baddest bowl in the NHL,” as Ilitch Holdings President and CEO Chris Ilitch calls it, rising directly across the street. “We’re staying!” Kefalonitis exclaimed. “We’re excited for the new arena; it’s going to bring us a lot of business.” And not just from thirsty Wings fans; Kefalonitis is preparing for the onslaught of construction workers and demo teams who will be on site for the next three years. Construction begins in September, and the anticipated opening date of the new facility is summer 2017. The fate of Comet Bar, which is actually in the footprint of the arena, is less certain. Property records show that the Detroit Planning and Development Department owns the building, and Crain’s was unable to reach the owner. The bar world is a small, small place, but even many of the nearby owners weren’t sure what fate would befall Comet. Everyone universally agreed that the bar, which also acts as a way station for dogrescue group Detroit Bully Corp., is closing, though timelines differed. Doug Kuiper, vice president of corporate communications for Ilitch Holdings, did not respond to questions about the future of Comet Bar or plans for integrating the Comet, Harry’s and Temple bars into the arena area.

Beyond the Red Zone The red zone is just one tiny por-

tion of the Ilitches’ plans for the development area in the entertainment district. Last week, the family said it would invest $200 million into four other neighborhoods adjacent to the hockey arena. Surface parking lots surrounding Comerica Park will make way for 300 apartments/lofts. A new 120,000square-foot office building is scheduled for Columbia Street, between the Fox Theatre and Fillmore Detroit. Streets are to be re-paved and parks rehabbed. But while some development highlights were revealed with specific timelines and details, the exact nature of much of the investment was hazy. Much of the money and effort may flow to the west of Temple, Harry’s and Comet bars, specifically into the Cass Park area, which is home to Cass Tech High School and the Masonic Temple. The Ilitches have promised to upgrade the park itself as well as offer infrastructure improvements. “I hope they do it; we’ve been lied to before,” said Sean Harrington, owner of the Town Pump Tavern, Centaur Bar and Hot Taco Detroit, all of which reside in the newly designated Columbia Park Area, which is to the west of the Fox Theatre and Fillmore. “They say we’re going to turn these neighborhoods into ShangriLas, but what happens to so-and-so building? How are you going to make them fix it up? Or are you just dropping in some paving bricks and a planter and a tree and a place to tie your bike up to?

Jay Lambrecht, who owns Bookies Bar & Grille on Cass Avenue, hopes his place will fill with hockey fans.

Which absolutely is needed. But I’ve been sitting down here for years planting flowers and ivy and cleaning my street, and I stare onto a cyclone fence.” When Harrington built the Town Pump Tavern 18 years ago, people then assumed it was because Harrington was betting that the hockey arena would be built nearby. But he said that’s not the case. He invested in Detroit, even when everyone told him to go to Royal Oak, because of what the Ilitches did with the Fox Theatre. But now that the arena is finally coming, “this,” he said, “is going to be huge for us.” The same goes for Jay Lambrecht, the owner of Bookies Bar & Grille on Cass Avenue, on the far west edge of the planned Cass Park Village. Lambrecht doesn’t own his building, but he recently renegotiated his lease for an additional 10 years. “For us, it’s great,” he said. “We get a good Red Wings crowd now, but this makes it so that all three of our floors will fill up with hockey. We also put in an awning so we can close and heat our patio in the winter so we can use it year around.”

Spotting the owners

Sean Harrington, who owns three local bars, says, “We’ve been lied to before” about redevelopment.

Developing 45 blocks will take more than vision, however. Execution and cooperation will be critical. First, the Ilitches don’t own all the property in the area, though they are a predominant landlord. Looking at a map, you can’t See Next Page

the

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Dealerships: Ex-NFL stars set Nissan locations ■ From Page 1

PHOTOS BY DAVID HALL

when

the new Red Wings home is slated to be finished in 2017. From Previous Page

readily identify what is Ilitch-owned because so many parcels are held in so many different names. But Boukas has his method of figuring out what the family owns. “You can tell what properties are theirs,” he said, “by the paint. If a property gets tagged, the city gives you a ticket. Now when anything is tagged, you can see all these buildings with the same paint color.” Ilitch Holdings will be working with other developers to evolve the neighborhoods into the thriving entertainment zone they envision. They will also have to work with the city of Detroit. In other cities, planning departments are tasked with visioning neighborhoods, in collaboration with residents, rather than private developers. That’s not always the case in Detroit. Mayor Mike Duggan, however, is committed to being involved. “The information we have on the actual development that will take place is largely conceptual,” said John Roach, the mayor’s spokesman. “As the plan gets more specific, the role the city will play will become more clear. However, the city will be heavily involved in the zoning approvals, site plan reviews, recommended road closures or vacating roads, for example.” Because of the construction timelines, coordination with the M-1 Rail project up Woodward Avenue is also critical.

Initially M-1 officials considered closing them off during construction in order to accommodate a faster pace, but when they heard from small-business owners that the side streets were imperative for deliveries, they agreed to ensure they stayed open. Sidewalks will also be open and accessible.

In need of repair J&L Foreign Auto Centre is a repair shop on Cass Avenue.

Groundbreaking on the 3.3-mile light rail line begins on Monday, while the initial phases of site clearing and planning for the arena begin in September. “We’re developing a phasing and construction plan that includes business continuing and public safety as primary considerations,” said Ilitch spokesman Kuiper. Sommer Woods, director of external relations for M-1, said her organization is meeting with the Olympia Development team biweekly to talk about coordination not just with construction with also with their vendors. “We want to know how it will impact that coming downtown,” she said. M-1 has started efforts to make the small businesses along Woodward Avenue accessible during construction process, including phasing the project so that all of Woodward is not closed at once. Side streets will also be kept open.

“Keeping the public safe … has been my job,” says Neil Dempz, who bought J&L Foreign Auto Centre 18 years ago.

Much of the traffic that usually cruises down Woodward may find its way over to Cass Avenue, where you occasionally spot a Jaguar or BMW, cars that don’t look like they belong in the home of the Detroit Three. These cars are likely out on a test drive or being moved around in the shop of J&L Foreign Auto Centre. Neil Dempz has operated the repair shop for the past 18 years, since he bought the business and moved it to Midtown from Gratiot Avenue and Conner Street. “Rite Aid bought our location,” he said. His new location, which is a block from the north end of the new hockey arena, came with some significant challenges: theft, prostitution, drugs. So, for the past two decades, Dempz has been the neighborhood police presence. He even keeps handcuffs in the shop and has been known to lock up wrong-doers while he waits for the cops to arrive. “Keeping the public safe down here, that has been my job for the past 18 years,” he said. “We don’t get a whole lot of police help.” Despite that, Dempz hopes to stay, not get pushed out again for progress. He hasn’t been approached by the Ilitches – or any straw buyers he thinks could be representing them – but he is prepared. Now he’s half-block away from the north end of the hockey arena district. He hasn’t been approached by the Ilitches — or any straw buyers he thinks could be them — but he is prepared. He wants to stay, not get pushed out again for progress. His building is owned by Joel Landy — a major landowner and personality around Detroit — who has expressed no interest to sell. “I hope they don’t forget about us,” Dempz said. “We’ve been here for 18 years. I hope it helps. I just hope (Chris Ilitch) doesn’t decide that he wants all the businesses gone and turn it all into cafés.” Amy Haimerl: (313) 446-0416, ahaimerl@crain.com. Twitter: @haimerlad David Hall contributed to this report.

All Pro also operates Englewood Cliffs Cadillac in Englewood Cliffs, N.J., and Saporito and Armstead have also co-owned Hamilton Honda in Hamilton Township, N.J., since 2009. “We’re still fairly early on in the game, but the Detroit area is supposed to become an actual hub location for the company,” Mills said. “The Clinton Township site is going to be about (average in) size for the industry, not a super dealer, because we’re only planning now to build on the front four (acres).” The Dearborn location is a retrofit of a Pep Boys store, Mills said, “so it’s going to be smaller, but we don’t have an exact (plan) worked out yet.” The request to rezone the property from industrial to community business use has already cleared the Clinton Township Planning Commission and goes before its trustees for a decision Monday night. All Pro Nissan would be the eighth automotive dealer in Clinton Township and its fourth along M59, said Carlo Santia, director of planning and community development in the community of about 95,000. A former Nissan dealer was reopened last September by Sellers Auto Group Inc. of Farmington Hills as Sellers Subaru along M-59 in neighboring Macomb Township. “We were definitely looking at that same (vacant) site ourselves at one point, along with about half a dozen others in the same area, when we first started out” scouting a Subaru dealer location, said President Sam Slaughter of Sellers Auto Group. Slaughter said the former Macomb Nissan dealership closed its doors while he was in the midst of looking, allowing the company to remodel and reopen the building just a few months later. First-year sales have been brisk, he said, and the location was Subaru’s second-largest sales point in Michigan last November. He was unfamiliar with All Pro Motors but said he does not expect a new Nissan dealer in the vicinity to create much competition. Proximity to other dealers even used to be a boon in generating customer traffic, he said, but that’s much less common today. Where industry research suggests buyers visited between four and five dealers on average before making a purchase, today the average is about 1.2 dealers, he said. “Ten years ago or 20, I would say that was much more how the market worked. In small towns, a dealer would move from the downtown to a spot by the freeway, and soon they were all there. But with the Internet it’s a lot less about physical location.” All Pro is perhaps best known in the New Jersey area for its recent TV ad campaign featuring Pierce, an NFL analyst for ESPN since his retirement from the league in 2010, and Armstead speaking from behind a “Cadillac Sports Desk” about the Englewood Cliffs dealership. Pierce, who was also named head coach this year at Long Beach Polytechnic High School in California, played for the Giants from 2005 to 2009, including its 2008 Super Bowl championship season, after four seasons with the Washington Redskins. Armstead played 12 pro seasons, his first nine with the Giants, before his retirement in 2004. Hamilton Honda has more than 40 employees in New Jersey and claims to have sold more than 10,000 new Honda vehicles since Armstead and Saporito opened it in May 2009, but revenue figures were not available. Mills said if the rezoning and the Dearborn store refit go forward as planned, the company could open the doors of both stores by next spring or summer. The Clinton Township property appears to be the last Michigan holding of Stonegate Properties, said Joseph Sowerby, a partner at the Mt. Clemens commercial real estate broker Anton Sowerby & Associates Inc., who represented the seller and listed the property last year. All Pro represented itself and used no broker in the transaction. Its owners had once lived in St. Clair Shores and managed a small trucking business but haven’t lived in Michigan for years, Sowerby said. “The property had been with one family a long time and went through a few brokers before we finally came aboard and were able to get it done,” he said. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

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Tower: Tech, visitor space play large role in hospital renovations ■ From Page 3

“We took eight different manufacturers (of health care products), brought them to the table and told them what we wanted,” Weiner said. “They had never done that before.” Many hospitals in Southeast Michigan — including Henry Ford Hospital in Detroit, Crittenton Hospital Medical Center in Rochester Hills and Beaumont Hospital Troy — have been renovating patient towers the last several years that offer larger private rooms with more space for technology and family visitors. Jack Poma, administrative director of nursing services at Beaumont Hospital Troy, said advanced building designs and newer patient-monitoring technologies have improved quality and reduced costs at many hospitals. For example, Beaumont Troy has tracked financial and quality improvements after opening an inpatient rehabilitation unit in December 2012 and an inpatient oncology unit in May 2013, Poma said. “There have been a number of innovations in technology and buildings the last five to seven years,” Poma said. “There is evidence of improved patient safety and lower costs.” Poma said the Patient Protection and Affordable Care Act, or Obamacare, has incentivized hospitals to install electronic medical record systems and connect the EMRs to patient monitoring devices for improved safety. “Vital signs can be automatically updated without users needing to enter anything,” he said. “There is a lot of video monitoring technology to watch patients. We can monitor them constantly, so if they try to get out of bed without assistance, we see them and can prevent them from falling.” But at 443-bed St. Joseph Mercy,

St. Joseph Mercy Oakland calls the hospital’s multiple technologies the “intelligent care system,” says Fabian Fregoli, M.D., the hospital’s chief informatics officer (right), shown with CEO Jack Weiner.

Weiner said the number of new medical technologies installed in its new south patient tower is beyond what most hospitals have done. St. Joseph Mercy calls the multiple technologies in the hospital the “intelligent care system,” which also includes the Visensia early detection monitoring system, said Fabian Fregoli, M.D., the hospital’s chief informatics officer. The Visensia system, licensed by Abingdon, England-based Oxford BioSignals Ltd., helped St. Joseph Mercy earn recognition by the American Hospital Association as one of the nation’s six most innovative “wired” hospitals. For example, ViSi Mobile wristband devices, piloted at St. Joseph Mercy since March, track five vital signs — blood pressure, heart rate, pulse, skin temperature and respiratory rate — and wirelessly transmit signals to central stations where nurses are monitoring patients. Fregoli said the ViSi Mobile device feeds patient vital signs to the hospital’s Cerner Corp. electronic medical record, which then directs the information to the Visensia software. The Visensia system analyzes the data along with the patient’s medical records and helps predict

GLENN TRIEST

medical problems before they occur. So far, code-blue responses (patient emergency) have declined 37.5 percent in the medical-surgical unit of the hospital. Fregoli said it will take several more months of data to show results across the entire hospital. “We are installing this (across the hospital) now,” he said. “This tells us how patients are doing and when we need to intervene.” However, during the nearly four years of pilot study with Visensia, Fregoli said, there has been a 34.5 percent reduction in mortality rates and nearly half a day reduction in length of patient stay. This was especially significant because there was a 22 percent increase in the severity of illness of patients during that period. “Now we can go out into the community and tell patients if they come here, you have a better chance of surviving and going home,” Weiner said. The new tower and other improvements at the hospital have helped on the financial side as well, he said. So far, St. Joseph Mercy appears to have increased revenue per patient overall this fiscal year. For example, revenue per patient im-

proved 3.9 percent to an average of $6,457 during a recent 10-month period starting July 1, 2013, compared with average per-patient revenue of $6,213 in May 2013. On the expense side, average expense per discharge, after adjusting for average sickness of patients, increased 3.1 percent to $6,539 from $6,341 during a 10month period from July 1, 2013, through April this year. “There is no question we have been trying to reduce our operating costs, even though we opened a new building,” Weiner said. Revenue per case has been dropping because of lower reimbursement and Medicare cuts, he said. Here are some other examples of technologies at St. Joseph Mercy and the improvements that the administration has tracked so far: 䡲 Sensors attached to handwashing stations next to patient rooms identify nurses, doctors and other providers through their badges as they enter and exit rooms. On television screens, patients see the name and title of the caregiver as they enter the room. 䡲 The sensors also remind providers to wash their hands before entering a room. So far, there has been a 57 percent improvement in hand hygiene compliance in a hospital pilot unit and no hospital-acquired infections during that three-month period. “Infections at hospitals are a major problem,” Weiner said. “Our infection rates have dropped to nearly zero.” 䡲 Nurses and physicians carry specially designed iPhones connected to equipment in patient rooms — including nurse call buttons, cardiac monitors and smart beds — that alert nurses to potential problems.

䡲 Smart beds designed by HillRom are connected with patients’ electronic health records. For patients at high risk for falls, the beds are programmed to alert staff through the iPhone when a patient tries to get out of the bed. So far, no falls with injuries have occurred. “We wanted the bed to talk to the TV and have the (nurse) call button communicate with the physician and nurse directly,” Weiner said. 䡲 Each 380-square-foot patient room features a family area and a specially designed Wieland sofa bed with a pop-up table with separate adjustments for lighting and television volume and an electrical outlet for charging phones and computer equipment. “We know families want to spend more time with their loved one,” Weiner said. “We have enough space for six people now.” While not a technology, Weiner said, the hospital’s healing arts program complements bedside care by reducing stress and enhancing the body, mind and spirit experience. The artwork was produced exclusively for the patient tower and is integrated into each floor to create a calming and restorative environment for patients, families and friends. Dallas-based HKS Inc. was the architect for the St Joseph Mercy patient tower, and Southfield-based Barton Malow Co. was the construction management firm. St. Joseph Mercy Oakland is part of the six-hospital St. Joseph Mercy Health System in Ann Arbor and also is part of Livonia-based Trinity Health, the parent company. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jay bgreene

TRW: Potential sale could start flurry of M&A activity ■ From Page 3

mand and government regulation fueling greater adoption of safety features, according to consulting firm Teneo Holdings. Visteon could attract suitors with a strong foothold in climate systems and vehicle electronics, UBS said. The $4.7 billion auto parts company trades at a discount to the industry’s median sales multiple, as does Lake Forest, Ill.based Tenneco Inc., a $4.2 billion emissions-control supplier with operations in Michigan that Gabelli & Co. said may lure Cummins Inc.

TRW outlook ZF confirmed July 10 that it’s in talks with TRW about a possible offer after a Bloomberg News report of the company’s takeover interest. The supplier is exploring a bid that would value TRW at $110 to $112.50 a share, people with knowledge of the matter later said. Should the companies agree to a takeover, it would be the biggest deal in the industry since Continental AG bought VDO Automotive AG from Siemens AG in the midst of the financial crisis seven years ago, accord-

ing to data compiled by Bloomberg. Other suitors, such as Magna International Inc. and Continental, still could enter the bidding for TRW, said Richard Hilgert of Morningstar Inc. A private-equity buyer can’t be ruled out, either, he said. Representatives for TRW, Magna and Continental declined to comment. A representative for ZF referred to its statement earlier this month.

The leftovers Even without a bidding war for TRW, industry dealmaking isn’t going to disappear. As automakers such as Ford Motor Co. try to cut development costs by reducing their roster of suppliers, scale becomes increasingly important. And improved profitability and cash flow at car parts companies means “the pieces are there for M&A,” said Brian Sponheimer, a Rye, N.Y.-based analyst at Gabelli, whose parent company, Gamco Investors Inc., oversees about $49 billion. Van Buren Township-based Visteon, which was spun off from Ford in 2000, is still undervalued

even after a 47 percent gain in the last year, said Sponheimer, who thinks it could be a target. The company makes heating and air-conditioning systems and automotive electronics, such as smartphone integration tools. “That’s a name that has a very underappreciated business in terms of the quality of the assets they hold,” Langan of UBS said. “They’re small enough that it could fit into a larger supplier’s footprint.” Since taking over as CEO in 2012, Tim Leuliette has remade Visteon, focusing on Asia and its higher-margin, higher-growth businesses. In the past three years, the company sold its lighting business, exited complex Chinese joint ventures and agreed to buy Johnson Controls Inc.’s electronics business.

ing to data compiled by Bloomberg. Cummins, a $28 billion supplier of truck engines based in Columbus, Ind., could be interested, said Sponheimer, whose parent company owns Tenneco shares. Demand for car safety products is rising, adding another reason for dealmaking. TRW estimates the market for driver-assistance technology will increase more than fivefold through 2020. Autoliv offers potential suitors an entry into that market, said Sanjeev Varma, a managing director at Teneo Capital, the investment bank arm of New York City-based Teneo Holdings. “If anyone is using the same investment thesis used on TRW, they would look at Autoliv,” he said.

Safety matters

Smaller consolidation candidates include Novi-based CooperStandard Holdings Inc. and Livoniabased Tower International Inc., which have market values of $1.1 billion and $739 million, respectively, said Hilgert of Morningstar. Suppliers of lesser size will have to evaluate whether they’re big

Tenneco is another company that buyers would be able to get for a relative bargain. The maker of diesel-exhaust filters and mufflers trades at about 0.5 times its revenue in the last year, lower than the median peer multiple, accord-

Bite size

enough on their own to support large automakers, said Dietmar Ostermann, the head of PricewaterhouseCoopers LLP’s global auto advisory practice. “It’s becoming almost impossible for smaller suppliers that are not completely global,” he said. A deal for TRW “will have a very significant sobering effect on some of the smaller suppliers.” Representatives for Visteon, Autoliv and Tenneco declined to comment. So did representatives for Cooper-Standard and Tower International. A Cummins representative didn’t respond to requests for comment. Rising stock prices may dissuade some buyers from pouncing. The Bloomberg World Auto Parts & Equipment Index has climbed 74 percent in the past two years, almost twice the gain for the Standard & Poor’s 500 Index. Even so, ZF’s discussions with TRW signal that “buyers and sellers are coming closer to reaching agreements on price,” said Langan of UBS. “It’s a sign that other transactions that maybe have been slow to come about maybe will move forward.”

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Strategy: Even door-to-door canvassing is high-tech ■ From Page 1

in identifying voters, persuading voters to support their candidates, and finally pushing those voters to actually get to the polls. “The fundamentals are still the same. Technology just allows us to work faster and smarter,” said Lon Johnson, chairman of the Michigan Democratic Party. “Walter Reuther and Martin Luther King, Jr. changed the world with index cards. Imagine what we can do with an iPhone.”

GOP plays catch-up President Barack Obama’s political machine in 2008 — and again in 2012 — was revered for its micro-level data-mining capabilities that helped propel Obama to the White House and kept him there. The data enabled the campaign to find and communicate with supporters, turn those supporters into volunteers, and turn those volunteers into donors. Ever since, Republicans have been trying to play catch-up. After the 2012 election, when Republican presidential candidate Mitt Romney lost in Michigan, his native state, to Obama by 9.5 percentage points, the state GOP knew it needed to come up with a way to better identify voters and then get them to turn out in the next election. After the defeat, Michigan Republican Party Chairman Bobby Schostak asked his staff members what it would take to win and tasked them to draw up a plan to do just that. Much of what they needed, the staff determined, in terms of making contacts with voters and gathering information, was already being done to some extent, but was not managed or used well. And the party was not building lasting relationships with enough voters. To solve those problems, they came up with a system they call Dashboard. State Democrats have similar tools at work as well. Dashboard enables activists and volunteers to input data about their friends, neighbors and social media contacts into the system — as well as information they gather as they go door to door in neighborhoods across the state. Observations such as bumper stickers and yard signs can be tracked. They can use smartphones or tablets to input any information they find.

Personalized voter files Before Dashboard, volunteers were asked to come to a local GOP office and were given a list of phone numbers to cold call, or given a clipboard with a list of addresses to visit and gather information. Any data they collected was then brought back and uploaded by party staff. The information they are collecting helps identify voters as strong Republicans, strong Democrats or independents and also any pertinent information that could be useful when a volunteer, or a candidate later, knocks on a particular voter’s door and looks to strike up a conversation. Today, that volunteer might know what church the voter belonged to, or social clubs, or even their stance on a certain political issue. The system can then create walk-

STATE POLITICAL PARTY TECH VENDORS Michigan Republican Party Detroit-based Lochbridge, formerly part of Compuware Corp., built Dashboard, a data-mining and tracking system that allows volunteers to input data about the political leanings of their friends, neighbors and social media contacts and target messages to voters down to the precinct level. Lochbridge also built an Election Day operations application that enables poll watchers to compare their list of expected voters to who has actually voted, and then contact those who haven’t before the polls close. Mooresville, N.C.-based Bridgetree developed the smartphone app that volunteers use when they go door to door to tell them the name, political party affiliation and other information about the voter they are about to meet.

Michigan Democratic Party Chicago-based Digital Turf and Detroit-based Dandelion built a website to be unveiled after the primary that will help volunteers identify Democratic voters the party wants to persuade to vote this November. Dandelion also built a website that allows voters in Detroit and Lansing, and soon across the state, to request an absentee ballot from their phone. Washington, D.C.-based Ruck.us was contracted to supply free websites to every candidate across the state running for office who is a Democrat.

Walter Reuther “ and Martin Luther King, Jr. changed the world with index cards. Imagine what we can do with an iPhone.

”

Lon Johnson, Michigan Democratic Party

ing lists of neighborhoods where independent voters might live. As a volunteer approaches each home, a script will appear on his or her smartphone to use to persuade that voter to support Republican candidates. It will also weed out homes belonging to strong Republicans voters already known to be on board as well as homes where strong Democrats live. The system will also remove those Democratic addresses from the list of political mailings. Schostak said the GOP is focusing on 2,000 of the state’s roughly 5,000 precincts statewide. Both Johnson and Schostak believe there are about 1.4 million voters each that are dedicated to voting Democrat or Republican this November. Republicans are working to identify swing voters and Republicans who may not be motivated to vote in a non-presidential election. Democrats are putting their resources toward getting voters to the polls that didn’t come out four years ago. And they are encouraging them to vote absentee. In 2012, 1.2 million voters used absentee ballots, making up 27.3 percent of the vote — a statistic Johnson recites with ease because he is focused on growing that number this fall. As part of that strategy, he rolled out a plan two weeks ago to make it easier for Lansing and Detroit voters to request absentee ballots via smartphone.

Watching social media The Dashboard system is made available to all Republican candidates free of charge, and as they go door to door themselves, they can add information they find about

voters to refine and improve the quality of the voter data. Schostak said one of the main benefits of the program is that it empowers local volunteers to manage their own local precincts. The party includes goals for the number of voters to identify each time a volunteer logs in to Dashboard. But not only can volunteers update voter information for their own precincts, they also have access to the entire state voter file. This way they can create a group in the system that might include friends in other parts of the state, high school or college friends, or their entire list of Facebook friends. Dashboard allows users to sync Facebook lists and then input information about them to the statewide voter file. If a friend posted something positive about Gov. Rick Snyder on Facebook, the volunteer can add that information to the file. One of the overall goals is to save time and resources, Schostak said. Most adult Facebook members have more than 200 friends, according to a Pew Research survey released in February. So if 1,000 volunteers sift through their friends list and update information about their friends’ political leanings into Dashboard, that’s a quarter million voters on whom the party now has better information. That can be done in one afternoon; before, it would have taken 50,000 volunteer hours of door knocking and phone calls. As word of Dashboard spreads, it is becoming the envy of state Republican Party operations across the country, Schostak said. “We are getting a lot of calls,” he said. “We have something no one has in the country.” The system was designed by the professional services division at Compuware Corp. before it was sold in January to Hermosa Beach, Calif.- based Marlin Equity Partners. The division was renamed Lochbridge, but the employees still work in the Compuware Building. Bob Kennedy, vice president of strategic services at Lochbridge, said Dashboard took about a year to develop. He said as interest in the system grows, it could lead to more business for the company. The state party owns the coding for the system, and if other GOP operations wanted to use it, they could license it, Schostak said.

While that could help offset the cost of the initial investment — which, Schostak said, when combined with other tech purchases was north of $300,000 — breaking even is not the goal. “Our ROI is measured in November,” he said. “It’s designed to help us win up and down the ballot. It’s designed to keep our majorities and widen them if we can.” Schostak said he believes the Dashboard system puts the party ahead of Democrats as it relates to technology, but Johnson disagrees. He said he already has the information on voters across the state that Republican volunteers are gathering for Dashboard. The Obama organization had already done this work in the past two presidential campaigns, and Johnson hired the same team to update information on Michigan voters for this election. So he has moved on to the next phase of his political operation, which will be unveiled after the Aug. 5 primary. Johnson said the party has identified 995,000 Democratic voters in Michigan who did not vote in 2010’s gubernatorial election. To find those voters, and encourage them to show up to the polls this November, he plans to engage 20,000 party volunteers to use a new website developed by Chicago-based Digital Turf, and assisted by Detroit-based Dandelion. When the volunteers log into the new site, they will enter their address and it will bring up a map of their neighborhood and show with pin drops the names, addresses and e-mail addresses among the 995,000 targeted Democratic voters that live near them. Volunteers can then choose to visit those voters or send them an e-mail to encourage them to vote in November, while also sending a link to how they can obtain an absentee ballot. “Technology helps us deliver that message to the right voters at the right time,” Johnson said.

There’s an app for that Johnson has also already deployed two other technological tools that he believes will set the party up for success this fall. The first was to hire Washington, D.C.-based Ruck.us to supply free websites to every Democratic candidate statewide, including township and village council candidates on nonpartisan ballots. Those candidates for local office will someday be the next candidates for the state House and Senate, and Johnson said getting them set up with a website to communicate with voters is a first step. There are 4,500 elected Democratic officials in the state, Johnson said; fewer than 500 have websites. “We have to create a digital infrastructure,” he said. The second step, the absentee ballot app developed by Dandelion, was announced earlier this month. Johnson said because so many voters are attached to their smartphones, the effort is needed. “We must meet them there, or we will lose,” he said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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Survey: Detroit Metro has nation’s fastest airport Wi-Fi The promised faster wireless Internet service at Detroit Metropolitan Airport appears to be a reality. In fact, at 4.63 megabits per second (mbps), it’s the fastest airport for average

July 28, 2014

CRAIN’S DETROIT BUSINESS

RUMBLINGS Ex-Pentagon CIO ready to do home work eresa Takai, former chief information officer for the state under Gov. Jennifer Granholm and later for the Pentagon, is back in southeast Michigan to pursue her next job. Takai, 66, resigned from the U.S. Department of Defense in May after serving as Pentagon CIO under defense secretaries Robert Gates, Leon Takai Panetta and Chuck Hagel. She joined the DoD in that role in November 2010. She currently works as a consultant to Lansing-based technology services firm Dewpoint Inc. Takai also serves on the board of the National Telecommunications and Information Administration’s First Responder Network Authority (FirstNet). However, Takai is looking to re-engage with the local business community. “I always kept a home here (in Troy) and my roots are here,” she said. “It’s always been my sense that I was going to come back to Michigan, but I always had more work to do.” She said she’s currently assessing whether she’d like to serve on more boards of directors, do more consulting work or find another full-time position. Takai will be a speaker at the Michigan Women’s Council of Technology IT Executive Connection Summit in September at the Westin Book Cadillac Detroit. Prior to joining the DoD, Takai was CIO for the state of California. She also held several technology leadership roles locally at FederalMogul Corp. and Ford Motor Co. She earned bachelor’s and master’s degrees from the University of Michigan.

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connectivity in the country, according to a new summer travel survey of Wi-Fi at airports, hotels and beaches by the Denver-based mobile and networks analytics firm WeFi Inc. The metrics are based on a 45-day average of Wi-Fi speeds for each location from April 1 to June 15, WeFi said. Among the airports Detroit edged were Denver (4.33 mbps); Los Angeles (3.29 mbps); Washington, D.C.’s Dulles (3.09 mbps); Dallas-Fort Worth (2.88 mbps); New York City’s LaGuardia (2.67 mbps); Atlanta (2.66 mbps); and San Francisco (2.29 mbps). Metro last year promised faster wireless service and signed a five-year, $2.1 million deal with Miami-based Advanced Wireless Group LLC to become the new Wi-Fi provider in the airport’s two passenger terminals. The deal also includes three two-year renewal options, meaning it’s a potential 11-year contract. Metro launched free wireless Internet access in 2012 with Los Angeles-based Boingo Wireless Inc. Before that, Wi-Fi at Metro required a subscription. AWG replaced Boingo. Under the AWG deal, the airport collects 52 percent of Wi-Fi sales, 62 percent of cellular sales and 15 percent of any sales from the cabling. The basic free Wi-Fi includes full-screen commercials, while premium Wi-Fi does not.

Schuette has no plans to sue 5-Hour parent firm Don’t look for Michigan to get on the bandwagon of states suing Farmington Hills-based Innovation Ventures LLC, maker of 5-Hour Energy, on allegations the company engaged in deceptive advertising. Joy Yearout, communications director for Michigan Attorney General Bill Schuette, said Tuesday the state isn’t contemplating legal action in the wake of lawsuits brought by three states July 17. Oregon Attorney General Ellen Rosenblum filed suit in Multnomah County Circuit Court alleging Innovation Ventures misleads consumers by claiming they get

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF JULY 19-25

energy from a blend of ingredients in 5-Hour, when its only active ingredient is a concentrated dose of caffeine. The suit also alleges it is misleading to claim the product does not cause consumers to feel a “crash” at some point after drinking it. Similar lawsuits were brought by the attorneys general in Vermont and Washington. Melissa Skabich, a spokeswoman for 5-Hour Energy, could not be immediately reached for comment. However, she told The Associated Press that the company is defending against what she describes as civil intimidation. “When companies are being bullied by someone in a position of power, these companies roll over, pay the ransom and move on,” Skabich said in a statement. “We’re not doing that.”

Revised Richard Bernstein suit downplays bike incident Attorney Richard Bernstein of the Sam Bernstein Law Firm PLLC pedals onward with his 2012 lawsuit alleging violations of the Americans with DisBernstein abilities Act at New York City’s Central Park — although its latest incarnation downplays his collision with a bicyclist there. Bernstein, who is blind, was wearing a fluorescent yellow shirt and bright blue sneakers and was using his reflective white cane when, he originally alleged, a cyclist struck him at about 35 mph — 10 mph above the posted limit. The city of New York had asked for the lawsuit to be dismissed, contending that the park is available to people with disabilities and that the city isn’t required by the ADA to regulate bicycle traffic. But Magistrate Judge Sarah Netburn instead allowed Bernstein to submit an amended version. Netburn had noted that Bernstein’s new allegations are substantially different from those in the original complaint. The new complaint filed earlier this month now discusses hundreds of visits to Central Park where he had been unable to navigate the park without the assistance of strangers. Only one reference in the new version is made to the August 2012 cyclist collision as the catalyst for the lawsuit.

Birmingham Kroger to close for remodeling he East Maple Road Kroger store in Birmingham will close for about 3½ months starting Aug. 2 for a $5.5 million remodeling — part of a potential $137 million investment The Kroger Co. of Michigan has planned for the state. The Michigan investment included a new 88,000-square-foot store in Commerce Township in November and a 114,000square-foot store in Shelby Township in January.

ON THE MOVE 䡲 Susan Sherer will leave as CEO of The Heat and Warmth Fund on Sept. 1. The Detroit nonprofit plans to launch an immediate search for her succesSherer sor. 䡲 Cheryl Coleman, 64, will retire at year’s end as president and CEO of the Detroit-based Northeast Guidance Center. Vice President Sherry Ellen McRill, 62, was named her successor. 䡲 Steve Spreitzer was named president and CEO of the Detroit-based nonprofit Michigan Roundtable for Diversity and Inclusion. Spreitzer, 58, had been interim president and CEO for 10 months after succeeding Thomas Costello, who will take a teaching position at Ohio University.

COMPANY NEWS 䡲 The American Lightweight and Modern Metals Manufacturing Innovation Institute announced, as reported by Crain’s in June, that it will locate this fall in a vacant Corktown building in Detroit instead of Canton Township, as previously pitched. 䡲 Russian steelmaker OAO Severstal entered into an agreement to sell its Dearborn plant to AK Steel Corp. as part of a deal to sell its U.S. operations for $2.325 billion. The Sierra Club and Great Lakes Environmental Law Center filed a lawsuit in Wayne County Circuit Court objecting to the Michigan Department of Environmental Quality’s May decision to revise the permit for the plant, saying it will continue to allow pollution levels cited in state enforcement actions. 䡲 The Troy-based Subur-

ban Collection acquired BMW of Ann Arbor and MercedesBenz of Ann Arbor from Charlotte, N.C.-based Sonic Automotive Inc. for an undisclosed amount. 䡲 P.F. Chang’s China Bistro Inc. will open its seventh Michigan restaurant, at Ann Arbor’s Briarwood Mall, in December. 䡲 An artisan chocolate shop, Bon Bon Bon, opened in Hamtramck in a 650square-foot former cupcake shop. Owner and CEO Alexandra Clark is a Michigan State University graduate who formerly worked at Boston chocolate bar Max Brenner International. 䡲 The state awarded a $500,000 incentive to encourage Southfield-based Nemo Capital Partners LLC and its subsidiaries to consolidate Ohio and New Jersey offices to Michigan, a move expected to bring 125 jobs to Southfield.

OTHER NEWS 䡲 Michigan Attorney

General Bill Schuette announced felony charges against four Southeast Michigan individuals and three companies — Capital Wealth Management of Canton Township, Detroit-based E3A and Southfield-based Woodberry Modification Solutions — for allegedly operating fraudulent mortgage or loan modification schemes. A New Haven company, Impact Homeowners, was convicted on six counts of violating the Credit Services Protection Act. 䡲 The U.S. Bankruptcy Court’s chosen expert on the feasibility of Detroit’s debt adjustment plan said that the city will be able to meet its financial obligations without significant probability of default but that city government needs to improve information systems and recruit more skilled employees, Bloomberg News reported. 䡲 Former U.S. Treasury Secretary Henry Paulson told business leaders at a Detroit Economic Club luncheon that the city should embrace China’s growing economy and seek the potential to commercialize on problems China faces. 䡲 The Detroit City Council is considering the transfer of 301 city-owned properties to the Michigan Land Bank in exchange for $1.4 million from the Canadian government as part of plans for the $2 billion New International Trade Crossing over the Detroit River between Detroit and Windsor, AP reported. 䡲 The Community Foundation for Southeast Michigan approved nearly $22 million in grants to organizations including the Detroit Historical Society, for digitizing collec-

tions; Detroit RiverFront Conservancy, for an environmentally friendly parking lot; and Autism Alliance of Michigan, for a pilot project for families, AP reported. 䡲 Hatch Detroit’s annual contest awarding cash prizes and support to fledgling businesses will continue while an investigation into co-founder Ted Balowski’s role in the nonprofit’s finances is underway. 䡲 Eight homes eligible for $25,000 in forgivable rehabilitation grants went on sale in the Marygrove neighborhood in Detroit through an online auction by the Detroit Land Bank Authority, AP reported. 䡲 The Detroit Institute of Arts began installing reproductions of paintings from its collection at outdoor sites throughout metro Detroit as part of the museum’s 5-year-old Inside/Out project, AP reported. 䡲 Detroit said it would suspend water service cutoffs of delinquent customers for 15 days as residents sued, claiming shutdowns to about 30,000 low-income households violated constitutional rights, Bloomberg reported. 䡲 More than 400 suppliers met with automakers in nearly 800 meetings in the first Detroit Three supplier summit, hosted by the Michigan Economic Development Corp. at Cobo Center. 䡲 Metro Detroit median home sale prices rose 20.2 percent over June 2013 to $149,000, said Farmington Hills-based Realcomp II Ltd. 䡲 Auto industry companies with Southeast Michigan ties — Brembo North America Inc., H.A. Automotive Systems Inc. and Magna Exteriors and Interiors USA Inc. among them — received assistance through the Michigan Strategic Fund, through which they are expected to invest more than $1 billion and add 3,877 jobs. 䡲 Seventeen Michigan health insurers were ordered to refund $13.2 million in premium overcharges to individuals and businesses by Aug. 1 under the Patient Protection and Affordable Care Act, according to the U.S. Department of Health and Human Services. 䡲 Paul Saginaw, co-founder of the Zingerman’s community of businesses in Ann Arbor, was honored by the White House with a Champions of Change award for the company’s service to employees, AP reported.

OBITUARIES 䡲 Lawrence Buhl Jr., long-

time civic leader and greatgrandson of former Detroit Mayor Christian Buhl, died July 22 in Harbor Springs. He was 80.

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