20140929-NEWS--0001-NAT-CCI-CD_--
9/26/2014
5:53 PM
Page 1
®
WWW.CRAINSDETROIT.COM VOL. 30, NO. 39
SEPTEMBER 29 – OCTOBER 5, 2014
$2 A COPY; $59 A YEAR
©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved
Page 3 Bid to privatize city parking likely to expire without Orr City steps up to receive Tiger Stadium site pitches Inside Networking works to create new VC fund, Page 4
Governor’s race putting spots before voters’ eyes BLOOMBERG NEWS
Analysts say TV ads help Schauer, so far BY CHRIS GAUTZ CAPITOL CORRESPONDENT
Talks between McLaren, DMC over Karmanos are heating up, Page 6
If television viewers feel as if they are being bombarded with political ads lately, it’s not just perception, it’s reality. A recent analysis by the Center for Public Integrity found that Michigan viewers were seeing one political ad every two minutes. And that was just counting the ads in the U.S. Senate race. And that was just for the second week of September, when 4,419 ads were shown. “You can’t watch TV right now without being inundated with ads,” said Kelly Rossman-McKinney, CEO and principal of Truscott Rossman, a bipartisan strategic communications firm in Lansing. The hotly contested gubernatorial race is only
Stephen Ross says the University of Michigan’s David Brandon is “probably the most qualified athletic director in the country.”
TALES FROM CAMPAIGN 2014 University boards: Contests are less about the candidates and more about who’s atop the ticket, Page 3 Biz has nothing to ad: Some companies are pulling back on ad buying so as not to get lost in political ads or be associated with them, Page 28 Economic numbers point to ... Pollsters may see a statistical dead heat in the gubernatorial race, but economist David Sowerby sees a clear winner, Page 28
adding to the broadcaster bonanza of ad buying. Through Sept. 21, television spots in that race totaled 25,151, with 7,562 airing in the Detroit market, according to the Michigan Campaign Finance Network, which cited Kantar Media/Campaign Media Analysis Group. So far, a total of more than $10 million has been spent on TV ads by the campaigns of Gov. Rick Snyder and his Democratic challenger, former U.S. Rep. Mark Schauer, along with their allies. More than See Ads, Page 28
Redico adds to out-of-state portfolio with Mo. purchase
NEWSPAPER
How an Oakland University medical student used Google Glass to give doctors a second set of eyes. See Page 11
Surgeon optimization
BY BILL SHEA CRAIN’S DETROIT BUSINESS
The University of Michigan’s largest donor is giving an unequivocal vote of confidence to Athletic Director David Brandon, who has been under criticism for a struggling Wolverines football team along with increased event prices and marketing gimmicks. “He’s probably the most qualified athletic director in the country. I think he’s terrific,” said billionaire real estate developer Stephen Ross, a UM alumnus who has given the university $310 million in recent years. Ross, who owns the National Football Brandon League’s Miami Dolphins and is estimated by Forbes to be worth $6 billion, said his donations to the athletic department happened because he trusts Brandon. “I wouldn’t have given my gift to the athletic department if I didn’t believe in Dave,” said Ross, who spoke with Crain’s from London, where the Dolphins were scheduled to play the Oakland Raiders on Sunday at Wembley Stadium. “You don’t go around giving $100 million if you don’t feel there is going to be bang for the buck.”
This Just In
Redico LLC has added 900,000 square feet of office and retail space to its portfolio with the purchase of the CityPlace office complex in Creve Coeur, Mo., a suburb of St. Louis. The purchase price on the deal that closed Friday was not disclosed. It marks the second Midwest office purchase outside of Michigan for the Southfield-based company, which bought the six-building complex from the Missouri-based Koman Group. “It’s part of our decision to build our presence in the Midwest. Previously we had been investing on the coasts,” said Dale Watchowski, president, COO and CEO of Redico. In December, Redico bought the 80,000-square-foot 10 North Dearborn building in Chicago’s Loop area for $11.5 million and opened a small office there, according to Washington, D.C.-based real estate information service CoStar Group Inc. The CityPlace complex is 94-percent leased. — Kirk Pinho
Major donor Ross backs embattled Brandon
See Ross, Page 27
GLENN TRIEST
Rocking the Intellectual Property World AT T O R N E Y S AT L AW
(see our ad on page 2)
WNJ.com
20140929-NEWS--0002-NAT-CCI-CD_--
9/26/2014
3:35 PM
Page 1
Page 2
September 29, 2014
CRAIN’S DETROIT BUSINESS
MICHIGAN BRIEFS Schuette sues one propane firm over price gouging, settles with 2nd Attorney General Bill Schuette filed suit in Berrien County Circuit Court in Southwest Michigan against Pennsylvania-based AmeriGas Propane Inc., alleging violations of the Michigan Consumer Protection Act for price-gouging last winter. Schuette also reached an agreement with Kansas-based Ferrellgas Partners LP under which more than 600 propane customers will receive a share of more than $100,000. The agreement resolves an earlier announced investigation.
Grand Rapids ArtPrize competition bans artist Downtown Grand Rapids is again an objet of art lovers’ affections as its annual ArtPrize international competition continues its run through Oct. 12. The event has a prize pool of $560,000 and encompasses more than 1,500 entries from 51 countries. Give or take one. That one would be a stunt artist named Gurmej Singh, known as Artist SinGh, who was permanently banned after repeatedly breaking public safety rules. Maybe it was the 3-mile-long painting he unfurled last year without permission, or the effigy of Saddam Hussein in a cage the year before that.
New at CMU: A belchelor’s degree in beer-making On rare occasions in our state, a story comes along where one can almost imagine half of Michigan’s population lining up to deliver their one-liners. Such is the case here. And, yes, again, it involves beer. Last week, The Associated Press reported, Central Michigan University in Mt. Pleasant announced plans to launch a degree program in “fermentation science” in the fall of 2015. The objective: Support the state’s fast-growing craft brewing industry, now a $1 billion-plus annual business. And just a wild guess here: Neither Gov. Rick Snyder — nor, for that matter, any other Michigan governor from now until the United Nations takes control of the United States — is likely to deliver a speech about the lack of talent in fermentation science.
MICH-CELLANEOUS 䡲 Mercy Memorial Hospital System in Monroe signed a letter of intent to join ProMedica, a not-for-profit, multihospital system based in Toledo, Mercy Memorial said in a release. The systems will begin a period to determine details of the deal and expect that to take several months. 䡲 Oscar-winning documentary filmmaker Michael Moore no longer is on the Michigan Film Office Advisory Council, The Associated Press reported. Gov. Rick Snyder replaced Moore with Ted Serbinski of Detroit Venture Partners LLP. Serbinski, who will serve a four-year term, is a former director of tech-
Similar programs operate at the University of California’s Davis and San Diego campuses and at Oregon State and Central Washington universities, in case your kid’s ACT score doesn’t cut it with CMU. Central’s program will include classroom and lab work in biochemistry, chemistry and microbiology as well as a 200-hour internship in a “production-scale facility.” To say nothing of all that independent study. In related brews … er, news: 䡲 The HopCat bar in Grand Rapids — soon to open a Detroit watering hole — was crowned one of the five “Great American Beer Bars” in the U.S. in the Brewer’s Association’s 2014 “Great American Beer Bar” survey. 䡲 The city of Grand Rapids has a significant lead in the USA Today “Best Beer Town” competition. Last call for polling is Oct. 13.
nology for A&E Television. 䡲 The Michigan Court of Appeals ruled that Lansing-based Jackson National Life Insurance Co. should not have fired a white employee, Angela Shaft, who offended a black co-worker, overturning an Ingham County judge. The Associated Press reported that in 2012 Shaft sent an email to Candace Jones about finding a ticket to a basketball game between the Ku Klux Klan and the Knights of Columbus to benefit a Jewish group. Shaft submitted a picture for an employee newsletter. Jones complained, and Shaft was fired for violating the insurer’s harassment policy. 䡲 Toronto-based Lundin Mining
Corp. began work at an underground nickel and copper mine in Marquette County in the Upper Peninsula after a 12-year struggle over the $800 million project. The Eagle Mine employs more than 300 for produc-
tion and is the only U.S. mine where nickel is the primary mineral. 䡲 Kalamazoo-based Zeigler Auto Group Inc. has acquired the Rosen Nissan store in Gurnee, Ill., MiBiz reported. The acquisition should push the Zeigler to sales of 30,000 new vehicles this year and revenue of around $850 million. 䡲 Officials of the Benton Harbor Area Schools voted to enter into a consent agreement with the state to address a $15.5 million deficit, The Associated Press reported. 䡲 The Battle Creek-based W.K. Kellogg Foundation said Linh Nguyen, the organization’s former vice president of learning and impact, had been promoted to COO. He will lead operations and oversee the foundation’s vice presidents. 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 A story on Page 3 of the Sept. 22 issue should have said that Athens
Acquisition LLC, not Rock Ventures LLC, owns Greektown Casino-Hotel. Athens is a Rock affiliate. Also, the casino, not Rock Ventures, secured the permit to expand the I-375 ramp to Lafayette Street. 䡲 Phil Incarnati, CEO of McLaren Health Care Inc., should have been included in a list of top-paid nonprofit health care executives in metro Detroit that was published on Page 14 of the Sept. 22 issue. He had total compensation of $8,823,941 in 2012.
Rocking the Intellectual Property World Warner Norcross & Judd attorneys blaze new trails in intellectual property law. Raymond Scott and Greg DeGrazia represent KISS Catalog, Ltd., providing trademark solutions and litigation that protect the licensing of the rock stars’ images. When the U.S. Patent and Trademark Office said that faces of entertainers couldn’t be trademarked, they were persuaded to approve precedent-setting trademarks for the iconic face paint of KISS. Trademarks for the face paint and logo are now registered in more than 40 countries. Finding new ways to protect intellectual property is one way our attorneys go the extra mile for clients.
A BETTER PARTNERSHIP ® WNJ.com • 866.533.3018 Southfield
Macomb County
Midland
Lansing
Grand Rapids
Kalamazoo
Holland
Muskegon gon
Image © 1983 KISS Catalog, Ltd.
-A
20140929-NEWS--0003-NAT-CCI-CD_--
9/26/2014
5:42 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 3
New pitches for Tiger Stadium site City considers 2 plans for retail, residential
See Stadium, Page 29
e3 Zon . Ave ne hra Coc
The “Corner” at Michigan and Trumbull, former home of Tiger Stadium, is getting closer to redevelopment as the Detroit Economic Growth Corp. weighs plans from two developers — both with close ties to the city. The developers under consideration are Detroit-based The Roxbury Group LLC and Bloomfield Hillsbased Larson Realty Group LLC. The
The DEGC issued the RFP in March for development of two cityowned parcels on the Tiger Stadium site, called Zone 1 and Zone 2. Larson Realty and Roxbury are the finalists for the redevelopment, but it’s not clear when the DEGC will make its final decision. The Old Tiger Stadium Conservancy Inc. and the Detroit Police Athletic League Inc. are also working on a proposal to restore the baseball field and build a new headquarters for PAL on Zone
e4 Zon
. Ave ull mb Tru
CRAIN’S DETROIT BUSINESS
firms recently responded to the city’s request for proposals with plans for a mixed-use development including retail and residential space. Eric Larson, president and CEO of Larson Realty, is also the CEO of the Downtown Detroit Partnership. Stacy Fox, co-founder of Roxbury, has been Detroit’s deputy emergency manager since October 2013. She leaves that post Oct. 1 to become senior vice president and general counsel of Wilmington, Del.-based DuPont.
e Driv vice r e S wy. er F Fish
e2 Zon
BY KIRK PINHO AND DUSTIN WALSH
Inside
e1 Zon
McLaren bid for new hospital hits skids in Lansing, Page 5
Michigan Ave. 2 developers are finalists to redevelop Zones 1 and 2. Detroit PAL HQ, restored baseball field planned for Zones 3 and 4.
Company index These companies have significant mention in this week’s Crain’s Detroit Business:
College board races less about candidates, more about who’s atop ticket
Barbara Ann Karmanos Cancer Institute . . . . . . . . . 6 Beaumont Health System . . . . . . . . . . . . . . . . . . . 11 BioStar Ventures . . . . . . . . . . . . . . . . . . . . . . . . . 12 Center for Automotive Research . . . . . . . . . . . . . . 17 Children’s Hospital of Michigan . . . . . . . . . . . . . . 15 Code Fellows . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 CourseWeaver . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Party schools
Crossroads Consulting Group . . . . . . . . . . . . . . . . 22 Deloitte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Detroit Economic Development . . . . . . . . . . . . . . . 29 Detroit Economic Growth . . . . . . . . . . . . . . . . . . . . 3 Detroit Medical Center . . . . . . . . . . . . . . . . . . . . . . 6 Detroit PAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FoveOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Functional Fluidics . . . . . . . . . . . . . . . . . . . . . . . . 15 Global Productivity Solutions . . . . . . . . . . . . . . . . 22
BY CHRIS GAUTZ
Grand Circus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CAPITOL CORRESPONDENT
Karp & Associates . . . . . . . . . . . . . . . . . . . . . . . . 10
Among the candidates for seats on the governing bodies of three of the state’s top universities, many have years of business and professional experience, personal wealth and strong name identification. But if recent history proves correct again, none of that will matter much, if at all. Who is running at the top of the ticket on the November ballot almost always matters more than who is actually running for the Candidates for two seats each on the University of boards at Wayne State, Michigan board of UM and MSU, regents, Michigan Page 26 State University board of trustees and Wayne State University board of governors. Party affiliation and the year of the election end up being the deciding factors more so than anything else, said Bill Ballenger, a former state Republican lawmaker and founder and associate editor of the Lansing-based Inside Michigan Politics newsletter. “If you have a strong performance by one party at the top of the ticket, they are going to sweep,” he said. In 2006, a year Democrats swept because of the strong national wave election, Republican — and future university athletic director — David Brandon, then CEO of Domino’s Pizza Inc., lost his seat on the UM board, despite television
Larson Realty Group . . . . . . . . . . . . . . . . . . . . . . . . 3
A UNIVERSITY WHO’S WHO
See Boards, Page 26
Lear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Ludlow Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Main Street Strategies . . . . . . . . . . . . . . . . . . . . . 28 McLaren Health Care . . . . . . . . . . . . . . . . . . . . . 5, 6 Michigan Chamber of Commerce . . . . . . . . . . . . . . 5 Michigan State University . . . . . . . . . . . 3, 13, 14, 16 O’Connor Realty Detroit . . . . . . . . . . . . . . . . . . . . 29 PHOTOS BY ANJANA SCHROEDER
Old Tiger Stadium Conservancy . . . . . . . . . . . . . . . . 3
Nearly 1,000 spaces of the 2,600-space Joe Louis Arena garage are not being used because of structural disrepair. The city of Detroit has agreed to make more than $2.5 million of improvements.
Phenometrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Rock Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Roxbury Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SMZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Effort to privatize city parking likely to expire without Orr Duggan ‘not a fan’; Syncora deal a thorn BY CHAD HALCOM CRAIN’S DETROIT BUSINESS
Kevyn Orr’s impending departure from Detroit means an idea to privatize the municipal parking department is as likely to expire as a city parking meter. Day-to-day control of the city was transferred back to the mayor and City Council last week per a council vote. Orr is retained solely to oversee the bankruptcy case. His remaining task as emergency manager is to usher the city’s plan of adjustment through confirmation before U.S. Bankruptcy Judge Steven Rhodes. With Orr focused on navigating the city’s exit
THIS WEEK @ WWW.CRAINSDETROIT.COM
from bankruptcy, his spokesman said the parking plan is now parked in the hands of the city’s elected officials. A review of bids collected Aug. Report details 25 for a private lease of the city’s how to improve 18 city services, $23.4 million parking operation is Page 22 not expected to yield a contract, Orr spokesman Bill Nowling said. “The request-for-proposal quotes are there for the mayor or council to look at, and it’s up to them how they want to proceed,” he said. “I don’t ever want to say anything’s dead, but realistically … we don’t see it as a viable option right now.” Nowling said the city received five bids, of which three appeared viable and were under review as of mid-September. But while a parking decision isn’t final, the city is no longer expected to enter into a
THE D’S GREAT LEAN FORWARD
See Parking, Page 29
Wayne State a bit more stately The university closed last week on the $2.3 million purchase of the Hecker-Smiley mansion in Midtown ... or hadn’t you heard? Catch up on other news you may have missed at crainsdetroit.com. COSTAR GROUP INC.
Tanner Friedman Strategic Communications . . . . . 28 Truscott Rossman . . . . . . . . . . . . . . . . . . . . . . . . . . 1 United Auto Workers . . . . . . . . . . . . . . . . . . . . . . . 17 University of Michigan . . . . . . . . . . . . . . . 1, 3, 7, 11 Versicor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Wayne State University . . . . . . . . . . . . . . . . 3, 11, 15 William Davidson Institute . . . . . . . . . . . . . . . . . . . 7
Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 6 BUSINESS DIARY . . . . . . . . . . . . . . . . 24 CALENDAR . . . . . . . . . . . . . . . . . . . . 23 CAPITOL BRIEFINGS. . . . . . . . . . . . . . . 5 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . . 9 OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . 30 WEEK ON THE WEB . . . . . . . . . . . . . . 30
20140929-NEWS--0004-NAT-CCI-CD_--
9/26/2014
3:31 PM
Page 1
Page 4
September 29, 2014
CRAIN’S DETROIT BUSINESS
Networking strategy of Ludlow Ventures founder helps propel a new VC fund BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
The
GO TO
advisors for Intellectual Property
McDonald Hopkins PLC 8PPEXBSE "WF 4VJUF #MPPNĂśFME )JMMT .* t Stephen M. Gross, Detroit Managing Member
$IJDBHP t $MFWFMBOE t $PMVNCVT t %FUSPJU t .JBNJ t 8FTU 1BMN #FBDI mcdonaldhopkins.com
Carl J. Grassi, President
ADVISOR SPOTLIGHT AARON LOISELLE Vice President of Employee Benefits Aaron has 15 years of experience in the employee health and benefits field. With a strong actuarial and financial background, Aaron is able to communicate well with CEOs/CFOs, while addressing the very real and constant benefits issues that face HR managers. Born and raised in the Detroit area, Aaron believes that reviving the city can be achieved by attracting and retaining the best talent, and a significant part of that starts with providing a well thought out and cost effective benefits program. 535 Griswold Street, Suite 1600 • Detroit, MI 48226 • www.lovascogroup.com • 313.394.1700 A Member Firm of M Financial Group. LoVasco Consulting Group is Independently Owned and Operated.
At 1:30 p.m. Sept. 17, a call came in with the good news Jonathon Triest and his Detroit-based Ludlow Ventures LLC had been hoping for. An investor was on the line to commit $600,000 to Ludlow’s new venture capital fund. Triest — who started raising the fund, Ludlow Ventures II LP, last year — had been targeting $15 million, to be invested in early-stage technology and consumer product companies. With this call, he had gone slightly past his Triest goal and, slight as that might be, it allows him to use a venture capitalist’s favorite adjective to describe a fund: oversubscribed. “Being oversubscribed is certainly flattering and a testament to our initial traction,� Triest said. He said his limited-partner investors include Karen Davidson, the widow of former Detroit Pistons owner Bill Davidson, and Marc Weiser, managing director of his own venture capital firm, Ann Arbor-based RPM Ventures. Triest, a member of the Crain’s 20 in their 20s class of 2011, launched Ludlow Ventures in 2009 as an investment vehicle for family members, and he raised money from them as needed to do deals. His father, Brent Triest, is an attorney who manages several private equity firms. His great-uncle, Warren Coville, co-founded Guardian Industries Inc. with Bill Davidson and was president of the Guardian Photo division from 1955 to 1985. A fund of $15 million is small by national standards and smaller than average for Michigan funds, but it is larger than several firsttime funds raised here recently. For example, Tom LaSorda, former CEO of Chrysler Group LLC, last year launched IncWell LLC, a seedstage fund in Birmingham, with less than $5 million; Ann Arborbased Huron River Ventures closed on its first fund of $11 million last year; and Ann Arbor-based Resonant Venture Partners announced a goal of $10 million when it began its first fund in 2010. Though the new fund hadn’t hit the finish line, Triest began investing from it last year and has invested in 28 companies. Included are two in the portfolio of Detroit Venture Partners, the VC firm founded by Dan Gilbert, Josh Linkner and Brian Hermelin, both housed in the Madison Building downtown — UpTo Inc., which is developing a calendar for smartphones, and Chalkfly LLC, which sells office and janitorial supplies online. Ludlow is also based in the Madison Building, but Triest has more of a national focus, with investments in companies based in California, New York, Nevada, Nebraska, Ohio, Pennsylvania and Colorado. Though he has a small fund and
UpTo’s calendar for smartphones
LUDLOW’S ADVENTURES Here are some of the companies Ludlow Ventures has invested in: UpTo Inc., which is developing a calendar for smartphones, Detroit Chalkfly LLC, which sells office and janitorial supplies online, Detroit uBeam Inc., a maker of wireless charging technology for portable devices, Los Angeles Navdy, a maker of heads-up displays for cars, San Francisco Lob, a company founded by University of Michigan students that does cloud-based printing and logistics, San Francisco AngelList, connects investors with entrepreneurs and helps companies recruit talent, San Francisco Sprig, health-food-on-demand delivered to your door, San Francisco Roadtrippers, online trip planning service, Cincinnati — Tom Henderson is far from the VC hot spots of Boston and Silicon Valley, Triest has co-invested with some of the bigger names in the business, including the Boulder, Colo.-based Foundry Group, which has more than $1 billion under management, according to its website; San Francisco-based Founders Fund, which has $2 billion under management; and Menlo Park, Calif.based Andreessen Horowitz, which has $4 billion under management. “He definitely punches above his weight class,â€? Weiser said. Triest said he sources deals by serving as a mentor at technology accelerators across the country, which gives him entrĂŠe to companies and technologies before they are ready for investment. He is a mentor at such accelerators as Up West Labs in Silicon Valley, The Brandery in Cincinnati and Highway 1 in San Francisco. Triest said he also has a network of sources who are involved with product launches for new companies. One of them, Adam Lisagor, is listed on Ludlow’s website as entrepreneur-out-of-residence, a play on the more common title of entrepreneur-in-residence. Lisagor is founder of Los Angeles-based Sandwich Video Inc., which did product-launch videos for Groupon Inc., airbnb, Square Inc. and Lyft Inc. Triest said Lisagor will tip him off to cool early-stage products for vetting. “Typically I’ll write a small check to the founders to start things, then try to find a larger VC to become the lead investor,â€? said Triest. Triest said an example of that is Navdy Inc., a San Francisco company that has been getting media buzz for its dashboard-mounted device that displays text messages and smart-
phone apps on a heads-up display on the windshield and allows hands-free operation by voice. In August, Navdy hit $1 million in orders in the week it launched an online sales campaign. Another reason for Ludlow having a broader reach than would seem likely was networking Triest began before launching his own company in 2009. For example, Brad Feld, one of the co-founders of the Foundry Group, said he met Triest before he started Ludlow at TechStars, a mentor-driven organization that runs tech incubator programs in New York City, Seattle, San Antonio and Boulder. Feld is an investor in the new fund and serves as an adviser as well. “Ludlow has an ability to identify strong entrepreneurs and companies in their infancy and, with great hustle, leverage their network to help them grow. A lot of their early success has come from their give-before-the-get approach, a deeply held belief of mine about how VCs should work with entrepreneurs,� Feld told Crain’s. Weiser, though, said the quality of Triest’s co-investors isn’t what impresses him, that rating a VC by whom it co-invests with can be misleading. “What is impressive about the firm is that in a few short years they have been able to find deals before other investors even have them on their radar. This is the result of being smart and hustling harder to generate great investment opportunities,� he said. “Jonathon has built his reputation with entrepreneurs by being willing to roll up his sleeves and work to help with his portfolio companies, which is not the case with many seed investors.� Another company Ludlow has invested in is Los Angeles-based uBeam Inc., whose founder and CEO, Meredith Perry, was profiled this summer by The New York Times and named by Business Insider as one of the 30 most powerful women in tech under age 30. Ludlow has invested in two rounds of funding for the company. Marissa Mayer, the CEO at Yahoo Inc., has been reported by various sources as another of uBeam’s investors. UBeam is developing a way to wirelessly charge devices by converting electricity to sound waves that travel through the air and are converted back to electricity by a receiver attached to electronic devices. “I can say that Jonathon is one of the most determined, supportive and loyal investors I’ve ever encountered. He is very hands on with the company and really runs the extra mile to help out founders,� Perry, who founded her company in 2012, told Crain’s. She raised $1.7 million in her seed round, which Triest participated in. She declined to say how much she is raising in her A round, in which Triest is also investing. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
20140929-NEWS--0005-NAT-CCI-CD_--
9/26/2014
3:36 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 5
McLaren bill opposition leaves few options The fast-paced effort to talk with his caucus give Flint-based McLaren members more about Health Care Inc. a special the issue before moving exemption to build a new forward. hospital near Clarkston The opposition to the hit a snag last week and bill includes the Detroit the next step is in doubt. automakers, Michigan Many business groups, Manufacturers Associahealth systems and labor tion, Small Business Assounions voiced their oppociation of Michigan, Michisition to Senate Bill 1073, gan Nurses Association, sponsored by Majority the UAW and Blue Cross Leader Randy Blue Shield of Michigan Chris Gautz Richardville, R-Monroe, SB 1073 would allow at a hearing last week, McLaren to transfer and no vote was taken on the bill. beds from its McLaren Oakland in That may have been because Pontiac to the new hospital. Such a Richardville does not have the transfer has been denied by the votes to move the bill out of the state and the courts in recent five-member committee he chairs. years because it doesn’t meet state The two Democ- certificate-of-need requirements. rats on the panel McLaren CEO Phil Incarnati said are opposed, he doesn’t see what the problem is, and as Gongwer and called the opposition “arroNews Service re- gant” in its attempt to tell residents ported, Sen. of northern Oakland County that Dave Hilden- they should have to travel long disbrand, R-Lowell, tances to get to a hospital. is also opposed. He said the bill will save lives in Unless Pontiac by keeping the Pontiac Richardville can hospital open and save lives in the Richardville persuade his Clarkston area because a hospital colleague to change his vote, the would be closer. other solution is to discharge the Without the bill, Incarnati said, bill from committee to the Senate he may have to close McLaren floor, where the entire Senate Pontiac, where 1,435 people work. could vote on it instead. Future investments in Michigan Richardville said he wants to also may not happen, he said.
Capitol B r i e fi ng s
“We want to stay, but make no mistake. At some point in time, McLaren will build a new, state-of-the-art facility,” Incarnati said. “Our home is right here in MichiIncarnati gan. As we grow into a system of the future, our new investments may not be.”
State climbs competitive index When the Michigan Chamber Foundation unveiled the Northwood University Competitiveness Index in 2012, Michigan was, well, not that competitive. That year, the state was ranked 47th in the study by Northwood University, which looks at more than 200 metrics, including tax and regulatory policy and employment growth. The latest version of the study, released last week, showed Michigan has shot up to 30th, up from 39th last year. Utah was highest in the study. Rich Studley, president and CEO of the Michigan Chamber of Commerce, said these are good signs that show “strong leadership in the state’s economic policy is
making a difference.” The state also outperformed the surrounding Great Lakes states. Michigan ranked best in the category of state debt and taxation at 12th, though it was ranked 10th in 2012. The lowest ranking for the state
came in the workforce composition and cost, and labor and capital formation categories, finishing 38th in both. In 2012, the state ranked 45th in both categories. Chris Gautz: 517-403-4403, cgautz@crain.com. Twitter: @chrisgautz
Let the Giant Buy Your
IT A$$ET$
E-waste recycling/data destruction/computer liquidation Call: 248-891-7330 or Email: info@R2Giant.com
We’re doing our part to ensure that Future Leaders, Technologies and Local Economies are Bright. Bright House Networks is proud to present Bright Ideas STEM from Today’s Youth, a multi-state competition that showcases student innovations designed to make life better for their community, and to show how science, technology, engineering and math can help bring their ideas to life. Join us as we encourage high school students 14 and older to dream up Bright Ideas that could change the world. Today’s youth are tomorrow’s leaders. They are the ones that can help create new opportunities for our local economies to prosper and flourish.
brighthouse.com/brightideas
20140929-NEWS--0006-NAT-CCI-CD_--
9/26/2014
3:39 PM
Page 1
Page 6
September 29, 2014
CRAIN’S DETROIT BUSINESS
Talks progress between McLaren and DMC over Karmanos BY JAY GREENE CRAIN’S DETROIT BUSINESS
Talks are heating up to settle the lawsuit between McLaren Health Care Corp. and Detroit Medical Center over the acquisition last year of Barbara Ann Karmanos Cancer Institute by McLaren. Officials for DMC and McLaren said they hope to reach a comprehensive settlement by the end of the year. The trial is expected to begin sometime in the first quarter next year in Oakland County Circuit Court before Judge Wendy Potts. “We agree with our colleagues at McLaren that talks so far have been
productive and substantive,” said Conrad Mallett Jr., DMC’s chief administrative officer. “The issues in front of both parties are complex and we certainly agree that the Mallett parties are working hard to work out a mutually satisfactory settlement.” On the same day McLaren’s board agreed to acquire Karmanos in September 2013, McLaren filed a lawsuit against DMC in which it
Officials at the Detroit Medical Center and McLaren Health Care hope to reach a settlement on McLaren’s acquisition of the Barbara Ann Karmanos Cancer Institute by the end of the year.
asked the court to declare DMC’s 2005 affiliation agreement with Karmanos to be an “unreasonable restrictive covenant” that violates Michigan’s antitrust laws.
DMC’s suit against McLaren charges “tortuous interference” and “breach of contract” with the prior contractual agreement it has with Karmanos.
“IS IT REALLY EASY TO SAVE MONEY BY SAVING ENERGY?” It’s never been easier to save your business money. Replace old incandescent exit signs with LEDs, and you can save up to 95% on energy costs. An energy management system that turns lighting equipment off during downtime can save you a lot. And installing a programmable thermostat to automatically lower heating temperatures during off hours will save you even more. Plus, you can tour our Interactive Business and Lighting Advisor tools for more ways to save. For additional cost-saving tips, go to dteenergy.com/biztips. Saving money has never been easier.
DMC said it sold DMC’s cancer business to Karmanos in 2005 for a below-market price of $9.9 million because it included an exclusive affiliation into perpetuity. Karmanos had offered a no-strings $45 million deal for the DMC cancer operations. “We have always believed there is a business solution to this litigation,” said Greg Lane, McLaren’s chief administrative officer. While not listing all the settlement and contractual talk items, Lane said the agreement would “reinforce the commitment for Karmanos to remain on the DMC campus, to put capital dollars into the (cancer) program and develop a strong and meaningful relationship with DMC and McLaren.” McLaren has already pledged to spend $80 million over the next four years to upgrade Karmanos’ downtown hospital and expand two outpatient centers, in Farmington Hills and Monroe. Lane said the two companies also are talking about a new purchased services agreement with DMC. Before the sale, Karmanos CEO Gerold Bepler told Crain’s that DMC was overcharging Karmanos for most services and would not discuss lower rates. “There are a lot of synergies with DMC,” Lane said. “We see more cooperative competition going forward.” In its lawsuit, McLaren said it wants to use Karmanos’ name on its cancer centers at McLaren Oakland, a hospital in Pontiac; McLaren Cancer Institute Clarkston; and other McLaren health care facilities in Oakland County. But DMC and Karmanos’ 2005 sale agreement also prohibits Karmanos from marketing or advertising its services in the tri-county area of Oakland, Wayne or Macomb counties with anyone other than DMC, court documents say. Officials for McLaren and DMC said it is possible that the settlement could include McLaren compensating DMC for the loss of marketing rights for Karmanos in Oakland County. “There could be some funds exchanged,” Lane said. “We have many details to work out.” Another option, say officials, is that Karmanos could be jointly marketed and advertised by DMC and McLaren in Southeast Michigan. DMC was acquired by for-profit Tenet Healthcare Corp. last October after Vanguard Health Systems Inc., another for-profit chain, took over DMC on Jan. 1, 2012. McLaren, a nonprofit system, owns and operates 12 hospitals in Michigan, including Karmanos. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene
BANKRUPTCIES Start saving today, visit:
dteenergy.com/savenow
The following business filed for protection in U.S. Bankruptcy Court in Detroit Sept. 19-25. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. A.M. Total Being Fitness LLC, 5500 Auto Club Drive, Dearborn, voluntary Chapter 11. Assets and liabilities unknown. — Dustin Walsh
20140929-NEWS--0007-NAT-CCI-CD_--
9/26/2014
3:35 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 7
Davidson Institute chief stresses education as biz, UM expertise Paul Clyde was named thinking of private-sector the new president of the development, we worked William Davidson Institute at with institutions, both the University of Michigan in multinationals as well as Ann Arbor in June, relocal companies and instiplacing interim President tutions in these emerging Rosemary Harvey. markets to try to help Clyde, 51, is now in them become profitable charge of developing and and more effective in managing the 22-year-old what they are doing. It is, institute’s strategy for rein my view, a thriving prisearching and developing vate sector that will play business and public policy the most important role in solutions focused on chalthe development of these Paul Clyde, lenges and opportunities economies. in emerging economies William Davidson Institute around the world. What are some specific The Ann Arbor native examples of that? is also academic director of partWe’ve got two prongs to health time MBA programs in UM’s care. One major area is on supply Stephen M. Ross School of Business, is chain management and market dya graduate of Indiana University and namics. We have been involved in earned his master’s and doctorate projects with USAID (the U.S. Agency degrees from the University of Califor- for International Development), the nia, Los Angeles. From 1990 to 1996, World Health Organization, and we are he was an economist in the anti- trying to figure out ways to more eftrust division of the U.S. Department fectively get drugs into the rural of Justice. He will continue to lecture parts of these countries. A lot of the in the Ross School on business eco- health care problems we know about nomics and public policy. can easily be addressed by mediHe spoke with Crain’s Detroit cines that are proven to be effective. Business reporter Kirk Pinho. Is it infrastructure or transportation Give us an overview of the William systems that pose the greatest chalDavidson Institute and its work. lenge to that? The William Davidson Institute It can be, but it more has to do was focused on the private sector with the businesses themselves. and assisting the private sector in The way I think of it, it has more to the role it could play in the develop- do with the information flows to ment of economies. When you’re and from the patients.
Q&A
For example, there is a treatment for diarrhea that is wellknown and that WHO recommends. In a survey of clinicians in the rural parts of Uganda a couple years ago, it found that less than 10 percent of the clinicians were recommending it. That’s not transportation or infrastructure. Some of the things that I worked with are hospitals and clinics that have begun to develop ways to provide health care to the poor in the community, but we are trying to work with them to develop ways to do that without relying on donations. One of the organizations we worked with was Aravind Eye Care System in India. What are some of your priorities and how will those be achieved? I’d like to push us more into taking on more detailed, significant roles with some of our partners. We do projects with a wide variety of organizations and local institutes. We have operations going on in education. We are working with financial institutions as well. We have, through our relationship with UM, opportunities to do a variety of student projects valuable to the company, the local market and to the students because they get a unique experience. What does the William Davidson Institute view as the most secure emerging markets and why?
If you looked at the markets today versus 25 years ago, the landscape has changed completely. That was before India had gone through its reforms. Since the 1990s, it has been growing like gangbusters. Much of India is developed, although there are still significant parts of India that are underdeveloped. As you’re talking about a whole country, that one is hard to imagine turning around. It will continue to grow in significant ways. But more importantly, in subSaharan Africa, there wasn’t a lot of hope. But even there, we are seeing examples of organizations that are succeeding, making real headway. We are seeing multinationals dipping their toe in it because they realize these are the markets that growth is going to come from. South Africa has always been the big one. Nigeria has grown now in terms of size, but in terms of stability it’s not there. South Africa — there are two economies there. There are parts of it that are very much like Europe and parts that are very underdeveloped. Some of the other interesting ones are Uganda, Rwanda, Tanzania that don’t necessarily pop up. They’ve shown steady progress in the last few years. What about emerging economies that are less likely to succeed? There certainly are some economies that continue to face severe
challenges around the world because of the geopolitical factors that are affecting them. None of those would be surprises to people. Where can the WDI have the most impact and why? If you take education, we are going to sort of broaden our focus to think about developing educational institutions and education as a business. We can tie in the expertise from the other schools at the University of Michigan and bring our approach on the business side of things and start thinking of health care and education as business — really working with them, not just having one-off projects. What else is important to add about the institute and your work? The most important thing about the institute is its affiliation with the Ross School and other schools at the university and combining that with our approach of testing out business models. I’m working on a project right now with some in the nursing school and the Democratic Republic of Congo and doing work with medical schools in Uganda, Ethiopia and India. The Davidson Institute has sponsored work in a large number of countries in health care, education and a wide variety of different industries. What I’d like to do is focus it a little bit more in some areas where we can take advantage of the expertise at UM.
Business law has shaped who we are. We are Howard & Howard. Howard & Howard is a full-service law firm with a national and international practice that provides legal services to businesses and business owners. Our focused expertise provides us with a solid understanding of the industries we serve, and our results-oriented approach to practicing law is a beacon for business owners in search of intelligent counsel that aligns with their business goals.
®
www.howardandhoward.com | 248.645.1483
Bankruptcy & Creditors’ Rights | Business & Corporate | Commercial Litigation | Employee Benefits
Ann Arbor, Michigan | Detroit, Michigan | Chicago, Illinois
Environmental | Estate Planning | Franchising | Intellectual Property | Labor, Employment &
Peoria, Illinois | Las Vegas, Nevada
Immigration | Mergers & Acquisitions | Real Estate | Securities | Tax | Automotive & Industrial Construction | Energy & Utilities | Financial Services | Gaming | Healthcare | Hospitality
20140929-NEWS--0008,0009-NAT-CCI-CD_--
9/26/2014
5:08 PM
Page 1
Page 8
September 29, 2014
CRAIN’S DETROIT BUSINESS
OPINION
Wrong move for Cadillac
Follow GM’s lead in United Way drive
The creative vibe is here in Detroit, not in New York
Business, corporate leaders must rally against N.Y. move
T
O
T
he economy is getting better; per capita income is up slightly in Michigan. But human needs are still great. And that’s why employers — and those fortunate to be working — should consider a pledge to United Way for Southeastern Michigan during its annual fundraising campaign this fall. Since 2008, United Way has focused on impacts in key areas: education, financial stability for families and basic needs. It has stepped up to new and emerging challenges, too, such as managing the new Detroit Water Fund for aiding Detroit residents unable to pay their water bills. United Way kicked off its campaign last Monday; its goal is $42 million, up $2 million from what it raised in the 2013-14 campaign. The chair for the campaign, Dan Ammann, president of General Motors Co., announced last week that the General Motors Foundation will match all new or increased giving by company employees. That should help increase the net. This follows other GM investments in United Way, most particularly the pledge of $27 million to help increase graduation rates at seven area high schools and the 65 United Waysupported early learning centers in the region. That’s a great start to an important campaign. Now it’s up to others to step up and bring more resources.
City parking merits viable plan A plan to privatize Detroit’s city-owned parking looks likely to depart with Emergency Manager Kevyn Orr, who as of last week remains EM for the purposes of finishing up the bankruptcy but not for operations. (See story, Page 3.) Although there are responses to a request for proposals issued over the summer to operate the garages, Mayor Mike Duggan is in general opposed to privatization because of the loss of operational control. Many of the mayor’s prior successes in other positions have been tied to the ability to control a lot of variables, so his view is understandable. However, the mayor also has been known for challenging orthodoxies, so we would hope he wouldn’t throw possible choices off the table before evaluating all the facts. The decision shouldn’t be about whether to privatize or not to privatize — hiring vendors to provide government services sometimes works well, sometimes it doesn’t. The point, though, is to devise the best plan for repairing, maintaining and operating the garages for the benefit of the city residents. The mayor in general seems to keep those interests front and center. We trust he’ll do the same here as well.
OTHER VOICES
KC CRAIN n Sept. 23, we had our Automotive News Marketing Seminar in New York and I listened to Matt VanDyke, director of global Lincoln marketing, talk about how Ford moved the operations of the Premier Automotive Group to California many years back. That was when Ford owned Aston Martin, Volvo and Jaguar/Land Rover. He said the biggest issue was that the move ended up being the same people relocated to a new geographic area. Now, Lincoln has developed Hudson Rouge, a team of luxury and fashion folks that helped launch the new Lincoln Motor Co. in late 2012. This team KC Crain works on marketing and vehicle launches out of New York. Matt says these non-automotive folks give a different perspective. The Lincoln leadership still works in Dearborn close to product planning and design. General Motors announced last week that Cadillac will be moving its headquarters to New York. They’re setting up an office in trendy SoHo. I’m not sure if it will be the headquarters or just a marketing office, but it seems to me they’re missing an opportunity. I know I’m biased, but I can’t think of many cooler places to have a marketing office than Detroit. They don’t have to be in the Renaissance Center. They could build a new space in Corktown or Eastern Market and take advantage of all the creativity that is exploding in the city right now. Technology will have to play a large role in how the brand communicates. The president of Cadillac will be in New York and all the product planning, design and manufacturing will be elsewhere. GM is a heavyweight when it comes to supporting Detroit with its RenCen investments and many philanthropic investments, especially in education. But I find it extremely interesting that the only automaker really embracing Detroit in its branding is owned by an Italian, now Dutch, company. Chrysler has done a great job of using the Detroit brand. It’s impossible to fully measure the positive impact of the “Imported from Detroit” campaign. There is a reason why Shinola chose to have its headquarters in Detroit and not SoHo or Brooklyn. All the data and focus groups said they would sell more watches if they were stamped with “made in Detroit.” I understand the difference in the brands, but you would have to think Detroit can do luxury, too. We should just hope the Cadillac team in NYC can feel from a distance the vitality of the resurgent Detroit creative vibe. KC Crain is executive vice president/director of corporate operations for Crain Communications Inc. and group publisher of Automotive News, Autoweek, Crain’s Chicago Business, Plastics News, Rubber & Plastics News and Tire Business.
wo events happened in Detroit this week that exemplified the mindsets that exist within two of Detroit’s very different worlds — the sports world and the business world. The first was an announcement by GM that the Cadillac brand is moving to New York. The second was when one of the Tigers’ best hitters was intentionally hit by a pitch in a critical game. It was the responses to these events that were most revealing. Both instances involve a potential blow that could have significant negative impact. The first, on a recovering but fragile city trying to emerge from bankruptcy. The second on a Tim Smith team trying to make the playoffs. The response by the Tiger teammates was swift. They were out of the dugout immediately, sprinting onto the field to protect their player. In that move, they made a clear and direct statement to the other team and the league. Do not mess with us. The response to the Cadillac announcement was almost nonexistent. How can we sit by and allow our biggest corporate citizens, and most established brands, to push Detroit backward, and not forward? The claim that the Cadillac brand needs to be in New York to “develop attitudes in common with our audience” is ludicrous. The fact that this news broke during the Detroit Regional Chamber’s MICHauto Conference, and during the Detroit Design Festival, should have brought a resounding slap down from our business and corporate leaders. We must be united in our effort to show the world we are not what they think we are. We are celebrating what we are, what we’ve accomplished and the opportunities that exist in Detroit. And then GM allows a new guy, a month on the job, to tell the world: Detroit is exactly what you think it is, and I’m taking my new job and moving out. To say in the same breath that he is proud of Cadillac’s Detroit roots, but that his marketing team can’t understand the luxury market without being in New York, is reinforcing a negative stereotype about Detroit. How can we compete in the world when we watch one of the largest and most recognizable global brands tell the world they want out of Detroit? Where’s Detroit’s team sprinting out of the dugout? Where are our leaders telling GM that this is a mistake? Who’s reminding them that Ford did this same move years ago with the Lincoln brand, but it lasted just a few years? Who’s gonna tell Mr. Johan de Nysschen, the new head of Cadillac, that his comments are both insulting and inaccurate? I am. Join me. Share, comment, forward — make your voice heard. Tim Smith is president and CEO of Detroit-based Skidmore Studio.
KEITH CRAIN: Two Detroit eyesores that have to be fixed It has been quite a while since we were able to get the cement plants on Detroit’s riverfront torn down, and it has made a dramatic difference in the waterfront. Now we have to turn our attention to two major architectural eyesores that need the entire community’s action to get rid of or fixed up. The Michigan Central Depot railroad station is a giant eyesore that almost symbolizes the plight that Detroit has had for the last few decades. We all know the owner and how he has fought the new bridge being built just a bit downriver
from his existing bridge. Somehow, this railroad station has something to do with his plan. There are some tunnels under the station, and I have no doubt it will become a pawn in whatever Matty Moroun’s grand plan turns out to be. By all accounts, it would take far too much money to fix up the station for some business use, and so it would seem that unless someone comes up with a plan, the best
thing to do is tear it down. Perhaps it should even be condemned, if for no other reason than it is a hazard. Meanwhile, right in the middle of downtown is the legacy of our Wayne County Executive Robert Ficano: the half-built or less county jail. Sitting in a spot that was pretty inappropriate to begin with, it stands as a symbol of the corruption and inefficiency of our county government.
Hopefully, the plans for this jail will be transferred to somewhere outside of downtown Detroit. But in the meantime, let’s hope that Dan Gilbert’s plan for demolishing the structure can come to pass. It is amazing that these two structures, separated by decades, can create such a blight on our image. The city is doing a great job of attacking blight in our city, and there is a real program to eliminate abandoned houses or to sell them with plans for renovation. To continue to allow these two eyesores to remain standing as the
perfect photo op for every visiting journalist who comes to write about our city seems simply absurd. Both of these structures have existed far too long without positive resolution. I am not sure how we ever got those concrete monstrosities removed from the riverfront, because it took several decades. But it happened, and I hope that we’ll find the same government magic to make these two structures disappear as well. Maybe we can ask the Ilitches to tear them down when they’re building their new arena.
20140929-NEWS--0008,0009-NAT-CCI-CD_--
9/26/2014
11:42 AM
Page 2
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 9
MARY KRAMER: Rebuilding city takes patience, vision In 1990, a Crain’s reporter and an intern walked the downtown streets, block by block, to identify vacant space, then looked up the records to determine the square footage. I’m not sure the city itself had this kind of data at that time. The tally: Nearly 50 empty buildings in the central business district, the equivalent in office space to 31/4 times the size of the Renaissance Center at that time. We called the package “The Incredible Hulks.” Some of those buildings were “camouflaged” during the Super Bowl XL game in Detroit in 2006, Roger Penske recalled recently. Penske marvels at the change today. Fewer empty buildings — a recent Detroit News tally estimated the number to be 13 — and a lot more people on the street. (Thank you, Dan Gilbert, for literally creating a market for downtown real estate.) And last week, the Ilitch family broke ground on their piece of downtown — a hockey arena and lively, contiguous blocks of shops and restaurants connected to it. A hugely important project from the family that was among the first to reinvest downtown. The M-1 streetcar project is tearing up Woodward, but when it’s done in 2016, it will connect the dots, from the riverfront to the cultural center and medical complexes. More density. More construction jobs. More permanent jobs in the
TALK ON THE WEB From www.crainsdetroit.com Re: Lowe Campbell Ewald plans uncertain after news of Cadillac move Why does GM not want a Detroit-based luxury car represented in Detroit? It seems like a very poor decision that will only end up costing the consumers more money. Detroit Rock Not to wish Cadillac any ill will, but moving to California in 1998 didn’t do much to help Lincoln-Mercury. Michael Elledge
Re: Work starts on Red Wings arena If I were getting a taxpayer-financed facility from which I could pocket the proceeds, I would be throwing a party too. Carolyn Mazurkiewicz The city should just green space the JLA site. It’s a horrible location for redevelopment. David Silverman
Re: Senate bill allowing new McLaren hospital in Oakland attracts foes There is a CON system in this state for a reason. This new hospital doesn’t meet those requirements. So why change them? If there is no need and we have a CON system, then tough luck. If this passes, then you might as well get rid of the CON system completely. LCS
restaurants and shops. It’s an inspiring vision and seems realistic. Last month, historian Thomas Sugrue spoke to the annual meeting of the Citizens Research Council. Sugrue, who teaches at the University of Pennsylvania, wasn’t optimistic that big downtown projects translate to neighborhood prosperity. (My question: What would Detroit be like without them? Answer: More like East St. Louis.) Sugrue’s right, though. We need
neighborhoods that families want to live in and schools they want to send their kids to. Today, we have too many neighborhoods without hope, populated by people who have no alternatives. Detroit’s low barrier of entry — especially cheap housing — just might be enough to attract new residents. But good schools are critical. Last month, Crain’s took a lead role in an inaugural event, the Detroit Homecoming. Former Detroi-
ters who had achieved great financial and/or professional success outside of metro Detroit came home to see and experience their hometown. Dan Doctoroff, an “expat” who was deputy mayor of New York City after 9/11, cautiously compared Detroit to Harlem, which started attracting diverse residents — and many immigrants — in the past decade. The real growth came when federal dollars propping up what existed tapered off, he said. “Rebuilding takes patience,” he said. It doesn’t happen in a year or an election cycle.
How true. It was 20 years ago that we tallied the empty hulks downtown. “Midtown” was known as the “Cass Corridor” in those days, too. A favorite observation from a Homecoming expat and corporate consultant Sara Sefcovic: “Detroit is big enough to matter in the world, but small enough that you can matter in it.” Mary Kramer is publisher of Crain's Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com/kramer. E-mail her at mkramer@crain.com.
20140929-NEWS--0010-NAT-CCI-CD_--
9/26/2014
11:54 AM
Page 1
Page 10
wmich.edu/GoWest
September 29, 2014
Gilbert buys former sound studio building on Griswold BY KIRK PINHO CRAIN’S DETROIT BUSINESS
GO WEST.
Download the free Layar App Scan this p page g for interactive content interact inte ractive ive cont conten entt
PEOPLE COME HERE BECAUSE B THEY’RE LOOKING FOR SOMETHING. It’s not about packing up
the car and going to a d different town. For them it’s about discovery. What they find is a challenge— something unexpected—that opens up new frontiers. When you come here, you’ll find there are frontiers already inside you, just waiting to be found. Go West. Discover. Explore. This is one of America’s great universities. A lot of people who have become successful—skilled, happy, wealthy and influential—started by heading West. Western Michigan University. It’s your turn to GRAB THE REINS.
Timothy K. Kroninger
In Your Corner.
®
Varnum is pleased to welcome Tim Kroninger to the firm. ■
■
■
Extensive experience in intellectual property, contract, corporate and general business law. Works with clients in strategically analyzing, evaluating, protecting, and enforcing their intellectual property.
Metro Detroit
■
Grand Rapids
■
Kalamazoo ■ Grand Haven
■
Lansing
Contact Tim Kroninger at tkkroninger@varnumlaw.com
Dan Gilbert’s purchase of a small Griswold Street building in Capitol Park marks another real estate deal for a part of Detroit drawing new loft projects and rehabbed office space. Gilbert bought the vacant 8,700square-foot structure at 1250 Griswold St. between Grand River Avenue and State Street earlier this month. “Development plans are not determined, however we will focus on retail for the first floor,” said Jennifer Kulczycki, vice president of communications for Gilbert’s Rock Ventures LLC. COSTAR GROUP INC. Dan Dietz, 1250 Griswold St. president of Bloomfield Hills-based Dietz Commercial, which represented seller Patrick Harwood, said the sale closed Sept. 18. Harwood, co-owner of Pearl Sound Studios in Canton Township, bought the building 18 years ago and eventually leased it to Industry Sound Studio, which moved out about three months ago, Dietz said. “They didn’t have to sell it, but they recognized the development in the area,” Dietz said. “There’s been a lot of demand the last four months. When the activity started happening, it became obvious that it was going to be in the path of a lot of foot traffic.” The building, which was built in 1945, was listed for $750,000. “It sold for a fair price,” Dietz said. In addition to recent Gilbert deals in Capitol Park, there is also the redevelopment of three buildings in the area by Richard Karp, principal of Lansing-based Karp and Associates LLC Karp plans to turn the 126,000square-foot building at 1212 Griswold into office space for Archdiocese of Detroit employees and 56 loft-style apartments. Karp’s plans for the 72,000square-foot Capitol Park Building at 1145 Griswold includes retail/office space and 63 apartments, while the Farwell Building’s plan at 1249 Griswold includes firstfloor retail and 83 apartments. In April, Gilbert bought the 42,000-square-foot building at 119 State, the 10,000-square-foot Church Building at 45 W. Grand River and the vacant lot at 28 W. Grand River. Gilbert also owns buildings at 1215 and 1265 Griswold. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB
20140929-NEWS--0011-NAT-CCI-CD_--
9/26/2014
10:35 AM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 11
A CONVERSATION WITH WHAT’S BLUE AND GREEN? MSU prof grows profits for school with his blueberry research, Page 13
John Shallman, Wayne State University
University research
Meet WSU’s innovation rep In May, Wayne State University announced it had recruited two local brand names in technology commercialization to beef up its tech transfer office. Kenneth Massey, who has 28 years in biotechnology, most recently as managing director of MicroDose Life Sciences LLC of Farmington Hills and its venture capital fund, was named senior director of venture development. John Shallman, who has more than 24 years in tech commercialization, most recently as director of commercialization at Royal Oak-based Beaumont Health System and before that with the Michigan Economic Development Corp., was named senior director of licensing. Crain’s reporter Tom Henderson talked with Shallman. How did you get recruited? I met Joan Dunbar (named the head of tech transfer at WSU last year) after I moved back here from New Jersey in 2004 to join the MEDC. This was one of the opportunities where I was absolutely not looking to move on. I was very happy at Beaumont. But the scenario as Joan explained it — that she was revamping the department, that Steve Lanier was coming in as the new vice president for research, that they were building an environment that didn’t exist before — it was a perfect opportunity for me.
Making Google eyes What do you think about a doctor who takes his eyes off the patient during surgery? In her search for a solution, an OU medical student turned to Google Glass.
The state wanted WSU to become more active about tech transfer; what’s the plan? In the past, not enough was getting out to the street, so it was a department ripe for growth. The key thing is, we’re creating a foundation that didn’t exist. So how are things going? I’m still kind of getting to know all the department heads, but there’s pent-up demand to get things licensed. You also have to groom the faculty about what industry’s needs are. We’ve got some fascinating things going on you can build nice portfolios around — metal deposition and chip manufacturing; exciting things in cell isolation, where there’s a real interest and a need to be able to harvest certain kinds of cells and isolate them, which could potentially lead to some pretty big deals near-term; and on the software side, health care IT is one of the things Joan asked me to chaperone. There are software research tools for drug discovery, for example. We have applications coming out there that are almost fully formed products already, and software can be marketed much faster than other biotechnology. Such as the software Patrick Hines, a doctor at Children’s Hospital and a Wayne State researcher, has developed? (See related story, Page 15.) The fascinating part of what he’s doing is dealing with the unmet needs of the African-American community and those with sickle cell anemia, which often gets overlooked. 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.
PHOTOS BY GLENN TRIEST
Florence Doo, a second-year medical student at Oakland University, listens to Jeffrey Fischgrund, M.D., during a spinal surgery at Beaumont Hospital. Both are wearing Google Glasses as a demonstration of how surgeons may be able to operate in the future without having to look away from a patient to see vitals and other information on video screens. Doo has formed a company to make the Google Glass device.
BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
F
lorence Doo, a second-year medical student at Oakland University, has her hands full. Not with school, although that certainly keeps her busy, but with starting and growing a medical device company that plans to use Google Glass to deliver heads-up displays to surgeons.
The benefit? Surgeons don’t have to take their eyes off their patients during procedures to look around at video screens scattered around the operating room displaying the information they need. Surgeons can pull up important images such as CAT scans — and even transmit images of the operation in progress for teaching purposes — all while keeping their eyes on the task at hand.
The big idea Doo’s company is called FoveOR LLC — “fove” coming from the word “fovea,” a specialized part of the eye for high-acuity vision. “OR” is the abbreviation for operating room. Doo has the avid support of leading surgeons at Royal Oak-based Beaumont Health System and is getting support services from
The scope of the device’s capability is broad. Surgeons would be able to access CAT scans, MRIs and Xrays that were taken previously and look at current X-ray or cameragenerated images of an operation in progress, including computer-assisted navigation. Supporters say it’s invaluable for teaching hospitals to be able to show, through the Internet, images of an operation in progress to students anywhere. Currently, those images are available on various screens throughout the operating room, forcing surgeons to continually focus their attention away from the patient. Doctors and nurses focus on a single patient during surgery Doo, who turned 25 this month, – but they also monitor TV screens scattered about the first drew attention for her idea of operating room. keeping surgeons focused on patients last May when she finished second in OU Inc., Oakland’s on-campus tech incubator. a Google Glass Challenge put on by MedTech She’s also in the final stages of negotiating Boston, an innovation network. the designing and building of a working proShe was one of 12 finalists and the only totype and has funding sources lining up to medical student, winning a consultation invest as she needs capital. with White House Innovations Fellow Nayan Despite her status as a student at OU, Doo Jain. is even taking part in weekly classes that The other finalists and most of the 50 who provide practical advice and mentoring to entered the challenge were M.D.s. would-be entrepreneurs. The classes are put After being told she was one of the Google on in Ann Arbor by David Brophy, director Glass Challenge finalists, Doo started apof the Center for Venture Capital and Private proaching OU professors to vet her idea. Equity at the University of Michigan’s Stephen M. Ross School of Business. See Google, Page 12
20140929-NEWS--0012-NAT-CCI-CD_--
9/26/2014
10:35 AM
Page 1
Page 12
September 29, 2014
CRAIN’S DETROIT BUSINESS
NEW ARRIVALS FRACTIONAL AND MANAGED BUSINESS AVIATION PROGRAMS. SERVING ALL SOUTHEASTERN MICHIGAN.
Focus: University Research
Google: Docs see patients, vital signs ■ From Page 11
“It seemed like it would be valuable and someone was needed to get this done,” said Doo, who has filed one provisional patent on her idea. “I asked myself, ‘Am I the right person?’ I said: ‘You know what? You might as well try it.’ ”
Testing the market
KING AIR B200
CORPORATEEAGLE.COM
Based on her success at the Glass Challenge, Doo was asked to go to New York City this month to meet with one angel investor. She said she had feelers from a West Coast tech network asking her whether she would be willing to move to California if funding were available. Doo said “no.” Though not long a resident of Michigan, she wants to grow the company here as a joint effort with her Beaumont supporters.
WE’RE SHAPING THE FUTURE OF BUSINESS IN MICHIGAN. Our award-winning programs and innovative research in cutting-edge fields help students make an impact and allow our corporate partners to thrive. Together, our talented faculty, students and alumni make University of Michigan-Dearborn a leader in business education.
Learn more at cob.umd.umich.edu.
“I want to keep it at Beaumont,” Doo said moments after observing a spinal surgery in the operating room at the behest of Jeffrey Fischgrund, M.D., one of her mentors, Beaumont’s chief of orthopedic surgery and chairman of the department of orthopedic surgery at OU’s William Beaumont School of Medicine. A reporter and a photographer had been invited into the O.R. to watch the surgery, too, to see how the handful of doctors and nurses used the various TV screens scattered about and to get a feel for how Google Glass would be of value during surgery. “You heard what she just said. She wants to keep it at Beaumont. We’ll keep it here,” Fischgrund said. “I have funds available to me. There’s philanthropy and other sources of money we can tap into. It’s a priority to get this funded, let’s put it that way.” “Obviously, Flo’s pretty dynamic. She has the drive,” Fischgrund said a few days before the spinal surgery. “When I heard about her idea, I called her up and had her in the operating room within 48 hours. Not having to lift your head up from the patient takes you to the next level of confidence.” Word spread quickly among department chairs at Beaumont about what Doo had in mind, Fischgrund said. “We all started outbidding each other — ‘No, I want her to work with me.’ ” he said. Another of her mentors is Steven Almany, a cardiologist at Beaumont and an associate professor at the OU medical school. He is also one of the managing directors of Petoskey venture capital firm BioStar Ventures LLC. “Florence came to me and asked me if her idea was something of value,” Almany said. “She gave me a road map of what this would look like. “There’s a long way to go, obviously, but this is the kind of thing that will be the future of medicine.”
Tapping the experts UM’s Brophy is a director of BioStar Ventures. When Almany told him what Doo was up to, Brophy said, he suggested she apply for his weekly practicum, which meets for three hours each Wednesday. About 50 would-be entrepreneurs applied for the current class and 15 were accepted, including Doo. “She’s smart and she’s an innovator,” Brophy said. “She built a $10,000 device for $250 when she was at Boston University. “Her head is in the right place. She’s already dealing with intellectual property and negotiating contracts, and the space she wants to be in is quite exciting.” The $250 device was a reference to a device Doo cobbled together during graduate school at BU to track the eye movements of video game players for a neuroscience class. She used open-source software, two Web cameras and a pair of lab goggles for her head-mount-
ed eye tracker. The actual cost was $178, she said. “I discovered I could build things,” Doo said. “But it caused a crisis. I thought maybe I should go into engineering instead of medical school.” But the crisis passed for Doo, a native of Huntington Beach, Calif., who got her undergraduate degree in neuroscience in 2010 at Wellesley College outside Boston and her master’s in medical sciences from BU in 2012. Beaumont’s Almany said it was too early to start negotiating terms for an investment in FoveOR by BioStar, which is raising its third and largest fund. Almany couldn’t disclose details because of restrictions by the U.S. Securities and Exchange Commission but is targeting between $100 million and $200 million, according to The Wall Street Journal. “I’m just mentoring her for now,” Almany said. “If we had started negotiating terms this early, it would have been taking advantage of her. We’ll see how things develop, but certainly funding her at some point is an option.” What needs to be developed now is a working prototype. Through Amy Butler, OU Inc.’s executive, Doo was introduced to Christie Coplen, president of Royal Oak-based Versicor LLC, a maker of electronic control units for medical device manufacturers that also provides consulting, engiCoplen neering services and prototyping for startups. Coplen is helping FoveOR with its prototype plans. Versicor, she said, also will help Doo pitch to potential investors. “A minimally viable product will involve some hardware interface with Google Glass and software to pull data down from the hospital, manipulate it into the cloud and then pull it back down into Glass,” she said. Surgeons would be able to operate the system and change images on the heads-up display with verbal commands. While Google Glass is where Doo is starting, she said it will be important to have FoveOR’s technology work with head-up displays besides Google’s — such as that developed by Oculus, a maker of virtual reality headsets now on the market; Epson, which markets Moverio smart glasses; and Avegant Corp., an Ann Arbor-based maker of 3-D headsets that raised a $4 million round of venture capital in June. Avegant’s headsets are meant for video gamers as well as for watching any video source on mobile devices, including streaming video. Said Doo: “We’re starting with Google Glass, but we’ve got to be device-agnostic. We can’t just focus on Google.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
20140929-NEWS--0013-NAT-CCI-CD_--
9/26/2014
10:36 AM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 13
Focus: University Research
The berries are blue, the research turns money-green for MSU prof BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
James Hancock has a passion for blueberries. And a passion for making them better. Citing the six new varieties of blueberries that Hancock has developed over the years as a professor of horticulture at Michigan State University — not to mention the $6 million in royalties that his varieties have generated for the school since 2003 — Hancock has been awarded the MSU technology transfer achievement award for 2014 by the school’s tech transfer office. Besides the royalty revenue, the recognition is a nod to decades of advancements. After 14 years of trial and error by Hancock and his team, in 2004 MSU released three new varieties of high-bush blueberries — the Draper, Liberty and Aurora. It released a fourth variety, the Huron, three years ago, and this year has released two more, the Calypso and Osorno. Each variety has its own patent. Distributors collect a 30-cents-abush royalty for each bush they sell to their growers, with all of that money going to MSU. While the intent is to extend the growing season for blueberries and to extend their range — the Osorno, for example, was named for a city in Chile in a hot climate that traditional high-bush blueberries wouldn’t tolerate — Hancock has a more mundane reason to do what he does. Forget extended growing seasons and forget extended ranges, Hancock said the real motivation for his work is “for better fruit, better quality.” Blueberry work began at MSU in the early 1960s when horticulturist Stanley Johnson, best known for developing the popular Red Haven peach, created the Northland and Blue Haven blueberry varieties. But blueberry development kicked up a notch after Hancock joined the school in 1979. Before MSU released his first three new varieties, the dominant varieties in Michigan were more than 50 years old. The old varieties were harvested at the same time, were difficult to harvest by machine and did not store well. The Liberty has a late harvest season, from mid-August into September, and the Aurora is even later. All store well and can be harvested by machine. Today, Hancock’s first four varieties account for about 10 percent of worldwide acreage of high-bush blueberries. Oregon-based Fall Creek Farm & Nursery Inc., the world’s leading blueberry nursery stock company, distributes MSU’s varieties to its customers. Dick Mombell, Fall Creek’s commercial sales manager, said the MSU varieties have directly led to an increase in acreage devoted to blueberries in the Pacific Northwest. Mombell said the Draper line “has been a dramatic game-chang-
Graduate programs that change lives! Open House
MONDAY, OCTOBER 6, 2014 5 – 7 p.m. ROOM 2102 IN THE MAIN ACADEMIC BUILDING
Graduate School TO RSVP OR FOR MORE INFO: Sharon Urso, 734-432-5739 surso@madonna.edu madonna.edu/gradopenhouse
BUSINESS t CRIMINAL JUSTICE t EDUCATION t HIGHER ED & STUDENT AFFAIRS t HISTORY HOSPICE t HUMANE STUDIES t LEADERSHIP t NURSING t PASTORAL MINISTRY t PSYCHOLOGY t TESOL
THE MILLER LAW FIRM Changing the Odds in our Clients’ Favor
KEVIN W. FOWLER
By creating six varieties of blueberries, James Hancock has generated $6 million in royalties for Michigan State University.
VERY BERRY According to the Michigan Ag Council: The state has the largest blueberry crop in the nation, with a 2013 harvest of 114 million pounds valued at $122.7 million. Blueberries are grown on 600 family farms in the state. Michigan yields an average of 5,000 pounds of blueberries per acre on the almost 21,000 acres devoted to them. The state has been the No. 1 producing state for blueberries for 70 years. Blueberries are regarded as the best source of antioxidants, are a remedy for gout because of their inflammatory-fighting polyphenols, have only 80 calories per cup, are high in vitamins A and C, and are a good source of manganese for bone development and dietary fiber. — Tom Henderson er” for farmers because its increased size and firmness make it cheaper to pick and easier and cheaper to process. The Liberty, while not as big or as firm and therefore not quite the grower’s favorite, “is the people’s choice when it comes to taste, no doubt about it,” he said. The Aurora’s strength is that it extends the growing season well into September. Fall Creek and Florida-based
Berry Blue Farms & Nursery LLC also have breeding agreements with MSU allowing them to use Hancock’s varieties to create new varieties that can expand into hotter climates. In 2004-05, licensing agreements were concluded with distributors that covered Canada and South America. In 2012, agreements were extended to South Korea, with Japan, New Zealand and Australia gaining coverage in 2013 and China this year. “Dr. Hancock’s legacy of blueberry breeding has increased the access to healthy, antioxidant-rich fruit for families around the world,” Rich Chylla, executive director of MSU Technologies, said in a news release about Hancock’s award. MSU Technologies is a tech transfer arm of the university. “Pairing that with the multimillion-dollar impact it’s made for growers across Michigan and internationally, the strength of his research program has created a win-win for everyone involved,” Chylla said. Hancock, 64, said he is cutting back his workload at MSU but still will be tinkering with blueberries in the years to come. “I wouldn’t call it retiring,” he said. “I’ll be around half time.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
The Miller Law Firm is Recognized as a Leader in Complex Business Litigation Q
Automotive Supplier Counseling
Q
Commercial and business lawsuits
Q
Employment litigation
Q
Shareholder and partnership disputes Referral fees honored on contingency fee cases
950 West University Drive, Suite 300 Rochester, Michigan 48307
248-841-2200
millerlawpc.com
20140929-NEWS--0014-NAT-CCI-CD_--
9/26/2014
10:37 AM
Page 1
Page 14
SHAPING A RESURGENT CITY AND STATE. Grand Valley State University is developing the talent and resources to help re-energize Detroit and Michigan. Our Detroit Center at Madison and John R supports the services Grand Valley provides in metro Detroit. In addition, our College of Education offers in-service training and graduate degree classes to teachers employed in the charter schools authorized by Grand Valley. Our charter schools staff provides advice and oversight to charter school boards and staff -- the kind of help that places Grand Valley charter schools among the state’s top performers. And, our small business and technology development service helps new and existing small businesses to succeed, creating jobs and economic stability in Detroit and everywhere in Michigan. Visit online or call (800) 748-0246 to learn more about the innovation and creativity that is Grand Valley State University.
Grand Valley’s Detroit Center
Tablet Users: Have you seen what’s NEW at crainsdetroit.com?
September 29, 2014
CRAIN’S DETROIT BUSINESS
Focus: University Research
Helping algae grow has become a growth industry for MSU spinoff BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
With distributors now in place to cover major world markets, revenue should start spiking later this year for Phenometrics Inc., a Michigan State University spinoff that makes bioreactors for growing algae. “We’ve loaded the cannons and now we’re closing deals,” CEO Michael Chaperian said. “The plan a year ago was to take our reactors to global markets, and that’s what we’ve been up to.” Chaperian said the company, which was founded in 2010 and began operations in 2011, now has independent distributors for China, India, Australia, Europe and Canada. “We didn’t want to do direct sales. As a small company, that is very challenging,” he said. “We’ll still sell direct to the U.S. market, but that’s about it.” Phenometrics, which employs four, sells its reactors, which are about the size of a coffee maker, for $10,000 in the U.S. and for $14,950 in other countries. Chaperian said Phenometrics has no U.S. competitors, with its main competition a company in the Czech Republic named Photo Systems Instruments, whose reactors sell for $30,000 to $40,000. Phenometrics generated revenue of about $1 million last year and will exceed that a bit this year, with a sharp increase expected next year, Chaperian said. In February, the company hired Timothy Alavosus, a 17-year veteran of the biotech industry, as vice president of sales and marketing. Phenometrics’ photo bioreactors allow academic researchers and for-profit companies to test algae growth in the lab under the same conditions algae will face in large outdoor ponds. The reactors mimic such environmental or production conditions as temperature, light intensity, turbidity (clarity) and carbon dioxide through algae’s various growth phases to know what helps or hinders growth. Algae is used to make nutraceuticals — products deemed a cross between food and medicine — fish food and animal feed, cosmetics and biofuels. Algae is also used in waste removal and is an area of growing research and support through federal grants. “Asia and India, in particular, are huge markets for algae byproducts,” Chaperian said. He said nondisclosure agreements prohibit him from identifying some of his clients, but they include biofuel and aqua-farming companies in Europe and petrochemical and biofuel companies in Australia, India, Japan, Argentina, Israel, Singapore, China and Abu Dhabi. Another Israeli customer is using Phenometrics’ bioreactors to improve its processes for making fish food, Chaperian said. Phenometrics was licensed by
KEVIN W. FOWLER
How did testing algae become a business for Michael Chaperian, CEO of Phenometrics Inc.? Turns out algae helps make nutraceuticals, cosmetics and biofuels; helps with waste removal and is attracting federal grant money.
MSU Technologies to commercialize the work of David Kramer, the John A. Hannah Distinguished Professor in photosynthesis and bioenergetics in the department of biochemistry and molecular biology. Work was performed under a grant from the National Alliance for the Advancement of Biofuel and Biomass Consortium, which is funded by the U.S. Department of Energy. Kramer’s work at MSU was conducted in the DOE Plant Research Laboratory. His work has also been supported by the National Science Foundation, the National Institutes of Health and the U.S. Department of Agriculture. In 2012, Phenometrics got $50,000 through the Michigan Economic Development Corp.’s Michigan Microloan Fund Program, which is administered by Ann Arbor Spark. Since then, Phenometrics has been able to fund growth through sales — an enviable position for a tech startup. The company is profitable and hasn’t had to take on any equity capital, either in the form of angel or venture capital investments, Chaperian said. He jokes that after a career spent mostly with drug discovery startups, “I finally went to work for a for-profit company. In drug discovery, you can spend hundreds of millions of dollars and never get to market.” Chaperian began working with Phenometrics in 2012 as a consultant at Spartan Innovations, a nonprofit funded by the Michigan State University Foundation to help commercialize university research. Chaperian, who has a Ph.D. in biochemistry, was the director of biotechnology development at Arizona State University from 1997 to 2002. There he helped launch OmniScience Pharmaceuticals Inc. Chaperian then moved to Boston and helped a startup there, SelectX Pharmaceuticals Inc., raise $45 million in venture capital to develop antibiotics to fight hospital-based infections.
In 2010, the Michigan native moved back to the state and began consulting for Spartan Innovations. “Phenometrics was based on a great idea and had a very good prototype, and there was tremendous demand for its product, but it needed management experience,” said Chaperian, who officially joined the company as CEO in January 2013. Some of Phenometrics’ customers have been its best marketers, too. For example, Aurora Algae Inc., a Hayward, Calif., company that makes algae-based products for the pharmaceutical, nutrition, aquaculture and biofuels markets, conducted an internal study to document how using Phenometrics’ bioreactors in research labs actually helped the company’s field work. Aurora, which lists Phenometrics as a partner on its website, gave the company rave reviews and later let it use the results as part of a presentation in June at the annual International Conference on Algal Biomass, Biofuels & Bioproducts in Santa Fe, N.M. Among the conclusions Aurora reached were that Phenometics’ equipment “allows selection of the best-producing strain for production for a local environment, provides for rapid optimization of production conditions (and) provides a clear path to scale up, reducing capital expenditure, risk and time while optimizing growth, production and return on investment.” Peter Ralph, director of plant functional biology and climate change at the University of Technology, Sydney in Australia, uses a bank of Phenometrics reactors in the lab of the school’s Algal Biofuels Group. On a video on the UTS website, one of Ralph’s team members points to the reactors and describes them as “state-of-the-art technology.” Ralph said the bioreactors have helped his team “push the envelope of algae research.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
20140929-NEWS--0015-NAT-CCI-CD_--
9/26/2014
10:37 AM
Page 1
September 29, 2014
CRAIN’S DETROIT BUSINESS
Page 15
Focus: University Research
WSU doctor’s research set to be the lifeblood of a startup BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
Patrick Hines is moving full speed ahead as he adds entrepreneur to his other titles — which are doctor in the intensive care unit at Children’s Hospital of Michigan in Detroit and assistant professor of pediatric critical care medicine at Wayne State University. In June, the WSU board of governors granted approval for Hines to license his research at the school for a startup company, Functional Fluidics LLC. In July, before the legal paperwork with WSU had been signed, the company had landed its first customer, doing contract research for San Diegobased Mast Therapeutics Inc. Functional Fluidics’ microfluidic devices help drug companies evaluate how drugs designed to fight such things as deep-vein thrombosis and pulmonary embolisms may increase the unwanted side effect of causing blood clots. They also help individual physicians assess which drugs to use to treat patients when clotting is a concern, particularly AfricanAmericans with sickle cell anemia. Functional Fluidics projects revenue from work for Mast Therapeutics and other pharmaceutical companies at about $100,000 this
TOM HENDERSON
When he wasn’t working as a doctor at Children’s Hospital of Michgan or as a professor at Wayne State University, Patrick Hines was creating a company, Functional Fluidics.
year and $750,000 next. Even before Hines got to the point of asking the board of governors for a license, his research was being funded by Biogen Idec Inc., a large pharmaceutical company based in Weston, Mass. He also has received funding from private foundations and the National Institutes of Health and expects to hear soon whether he will receive a phase-one Small Business Innovation Research grant of $225,000 from the National Heart, Lung and Blood Institute of the NIH to support
ongoing research and development. Whether Hines receives the grant will influence where Functional Fluidics establishes an office and lab. He has been talking with TechTown Detroit, the WSU-affiliated incubator in Midtown. Mast Therapeutics confirmed that it was a customer but declined to discuss specifics. Hines, a member of last October’s class of Crain’s 40 under 40, said a nondisclosure agreement prohibits him from discussing details. The idea is for doctors to use a tiny amount of a patient’s own blood and observe how it flows through small channels cut into a plate about the size of an index card that’s attached to a microscope and PC. Hines has developed a way to have the blood pulse through the channels similar to the way it pulses through the patient’s body. The doctor can evaluate how fast or slowly the blood clots and decide what drug to use, if necessary, to straddle the fine line between too much bleeding and too much clotting. Currently, Functional Fluidics buys the microfluidic plates off the shelf from San Francisco-based Fluxion Biosciences Inc. But Hines said the company’s business plan calls for it to eventually design and build its own devices, with a main focus
%4#( T+N) )11& B''4, +T’S WH#T + .18' T1 &1. FIGURING OUT PHONE SYSTEMS, NOT SO MUCH.
9hen you run your own business Ć guring out your +nternet or phone service should be the least of your worries. That’s our job. We’re your tech experts. We’ll make sure you get the right services and the tech support you need, so you can focus on your business, because that’s the way it should be.
1-855-339-4514 | BRIGHTHOUSE.COM/BUSINESS PHONE
|
INTERNET
|
VIDEO
Š2014 Bright House Networks. Some restrictions apply. Serviceable areas only. Service provided at the discretion of Bright House Networks.
of targeting the needs of patients with sickle cell disease. Because of the sickle shape of cells, blood doesn’t flow well through vessels. “Patrick is a remarkable guy with a brilliant mind,� said Adrian Fortino, a vice president of Invest Detroit and a director of its two early stage investment funds, the Detroit Innovate Fund and First Step Fund. Hines got his medical degree and Ph.D. in pharmacology from the University of North Carolina. He joined Children’s Hospital in 2009. Fortino has advised Hines on turning his research into a company and is willing to be an investor down the road. What Hines has now is a fledgling contract research organization, the kind of service organization that investment funds tend to avoid. Once he builds up a consistent revenue stream by helping other companies do their research, Hines and his team plan to morph Functional Fluidics into a maker of microfluidic devices. Once the company becomes a device maker, too, it becomes a worthy target of venture capital, Fortino said. “They need to find a product, eventually,� he said. But for now, “Patrick’s doing it the old-fashioned way,� Fortino said. “He’s getting a critical revenue stream coming in while he de-
cides what product to make. He’s as sharp as it gets, and I have no doubt he’s going to be a success.� Hines has recruited a COO and a chief science officer to help run things day to day while he concentrates on his twin day jobs of research and critical care medicine. But he plans to be active in the company in a role yet to be defined. John Cunningham is the COO, a former mentor-in-residence at the tech transfer office at Wayne State who had been asked to mentor Hines when he was thinking of starting a company. Cunningham, in turn, recruited Ke Liu, an engineer with a background in microfluidics, as science officer. “I was really impressed with Patrick out of the gate. He’s a dynamic person with a great background and great people skills,� Cunningham said. “He’s identified a real need in the marketplace, which was his own personal diagnostic need that he’s been struggling to find a solution for. “What will be interesting is how many other people share his need. It’s starting to look as if there are a sizable number of clinicians who do share it. We’ve got customers waiting for us to deliver our services.� Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
20140929-NEWS--0016-NAT-CCI-CD_--
9/26/2014
11:06 AM
Page 1
Page 16
CRAIN’S DETROIT BUSINESS
September 29, 2014
Focus: University Research
Do your homework? Startup offers to track that, other educator tasks BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
TEXTBOOK LEADERSHIP ISN’T JUST LEARNED FROM TEXTBOOKS. Getting a master’s in business or organizational leadership administration isn’t just about the lessons you learn. It’s about the values you take away. Concordia University Ann Arbor’s Christ-centered education develops the kind of leaders businesses need now more than ever. With flexible scheduling, online courses and multiple locations, CUAA makes growing those skills easier than ever before.
Contact us to learn more.
degree.cuaa.edu
A company aiming to turn a longtime nonprofit educational service at Michigan State University into a forprofit company is raising a Series A venture capital round of $4.5 million. CourseWeaver Inc., incorporated in May 2013 and launched this past January, allows teachers and professors to customize their course materials and track students’ progress on assignments online. It also offers Web hosting services to universities that would rather outsource course and homework management. The company’s roots go back to 1992 when CAPA, or computer-assisted personalized approach, was piloted by a small physics class at MSU. It has evolved over the years into an ability to provide students personalized quizzes and exams and to give students instant feedback through the Internet on assignments in progress. The CAPA project morphed into LON-CAPA in 2001 — the LON standing for LectureOnline — as a result of a $4 million grant in 2000 from the National Science Founda-
{Our two cents.} Sign up for a Plante Moran Webinar Fall is finally here and Plante Moran is prepared with a webinar series that you do not want to miss. With topics ranging from fraud prevention to year-end tax planning, each session is CPE-approved.* Double-booked? Don’t worry. Visit our archives and enjoy the presentation at your convenience. Sign up today and find out why Plante Moran’s webinars offer
a higher return on experience.
Register at webinars.plantemoran.com. * Plante Moran is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.
KEVIN. W. FOWLER
CEO Robert Fulk said CourseWeaver expects to hire 15-20 additional employees by the end of this year, adding to the four currently there.
tion to develop a complete learning management system. By the time CourseWeaver was incorporated last year, the system was being used by more than 160 institutions, from middle schools to universities such as Ohio State University, the Massachusetts Institute of Technology and Harvard University. CEO Robert Fulk said CourseWeaver is now up to 250 institutions in nine countries and is on track to
generate revenue of $700,000 this year. The company expects to be profitable in 2016 on revenue of $9.6 million and targets revenue of $50 million in 2018. In February, CourseWeaver bought Haslett-based EduCog LLC, a company founded in 2004 to offer universities and K-12 schools hosting, support services, textbook content conversion and training to support LON-CAPA. This month, the company signed a contract with the state’s Michigan Virtual University to deliver the new Web platform currently being developed by CourseWeaver to all K12 schools in the state. CourseWeaver has four employees and is housed in a small incubator space in MSU’s Technology Innovation Center in East Lansing. Fulk said he hopes to close his $4.5 million fundraising round within 60 days and has been negotiating leases for much larger offcampus space. He expects to hire 15-20 employees, including 10 software engineers, by the end of this year. “We’ll have two main revenue streams,” Fulk said. “The first, which we’re already doing, is from charging schools for Web hosting, service support and integration with our platform. “Eventually, we’ll also collect licensing fees from students using customized course content.” Hugo Braun, a partner in Ann Arbor-based North Coast Technology Investors LP, is vetting CourseWeaver and said his venture capital firm may join the round. “The education market is incredibly hot right now and is ripe for technology innovation,” he said. “It’s kind of like health care, where everyone knows that what’s been done is inefficient but it’s been hard to change. “What’s interesting about CourseWeaver is it’s coming out of an environment where they’ve already developed a suite of products and have a lot of universities that have been using it for years, albeit it for free. The trick is converting them to paying customers.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
20140929-NEWS--0017-NAT-CCI-CD_--
9/26/2014
10:38 AM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 17
UAW-Lear fight shows stubbornness of two-tier wage hold BY DAVID BARKHOLZ CRAIN NEWS SERVICE
The United Auto Workers this summer vowed again to end the practice of paying workers in the same plant different wages for the same work. But a contract signed last week at a Lear Corp. seat plant in Indiana illustrates just how hard it will be to eliminate socalled two-tier wages. When the fouryear agreement was announced, it appeared the UAW had put all 730 workers at the plant on a track to earn the maximum wage of $21.58 by contract end. The vast majority of the workers were two-tier workers earning $11 to $14 an hour. Then, more details became available from Southfield-based Lear and the union. The UAW explanation of the contract omitted a key concession the union had made to Lear to keep the contract affordable for the supplier. That is, about 120 of the workers at the seat-assembly plant were given a new job classification of “subassembly” worker. They were told they would move in the coming weeks to a different plant in the area and not be paid the higher wages of their coworkers in the seat-assembly plant. But they would get raises:
problem for the UAW. I “ This is a sticky don’t think we’ll see the elimination of tier two this time around (in contract talks). Maybe some erosion of it.
”
David Cole, Center for Automotive Research
ANALYSIS
170 workers for the subassembly plant from a nearby parts plant that currently supplies Lear. Those hires will immediately see their wages jump to $11 an hour from $8.50 today. And all 300 subassembly workers who eventually staff the Lear subassembly plant will have first dibs to transfer to the higher-wage seat assembly plant when jobs open, the UAW said.
Tier creep Subassembly workers will earn a maximum of $15.25 at the end of the contract with hires starting at $12 an hour. This balancing act that eliminated two-tier wages in one plant only to re-establish it at another demonstrates why two-tier wages are likely to survive the UAW-Detroit 3 contract negotiations next year, said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor.
Erosion, not elimination “This is a sticky problem for the UAW,” said Cole, who has witnessed decades of Detroit 3-UAW contract talks. “I don’t think we’ll see the elimination of tier two this time around. Maybe some erosion of it.” The Detroit 3 are profiting from
a combined 130,000-person UAW workforce that is now 25 percent two-tier workers earning about $16 an hour in wages versus $28 an hour for legacy workers, Cole said. Closing that hourly gap completely is probably too expensive in one four-year contract cycle, Cole said. That’s especially true if the Detroit 3 try to keep their overall hourly labor cost increases at about the rate of inflation, which they achieved in the 2011 contract negotiations. Lear also said cost increases at Hammond, Ind., will rise “consistent with cost-of-living” under the new contract. The UAW sees the contract as a win because all workers will get raises, including the employees redesignated as subassembly workers. Also, Lear will be hiring about
New UAW President Dennis Williams said tackling two-tier wages is a priority of the union when he was elected in June at the UAW Constitutional Convention in Detroit. Two-tier wages are divisive on the facWilliams tory floor because new employees earn lower wages and benefits than veteran co-workers for doing the same jobs, said Jerry Dias, president of Unifor, the successor union to the Canadian Auto Workers. It is especially onerous because the new hires are on a different compensation track and can never
catch veteran workers, Dias said. Canadian auto workers have refused to accept a two-tier system. Cole said the UAW accepted a two-tier system at the Detroit 3 in 2007 to provide cost relief and encourage the carmakers to bring parts-supplier jobs back into Detroit 3 plants at more competitive wages. After the recession, though, the use of two-tier wages exploded beyond what was originally expected as the Detroit 3 quickly ramped up production to what now is prerecession levels, Cole said. The new hires were at lower wages. What further opened the door to two-tier wages was the union’s agreement at General Motors Corp.’s Orion Assembly plant to allow most of that workforce to be paid less to permit GM to build its subcompact Chevrolet Sonic there, Cole said. “It kind of got out of hand,” he said. At Chrysler Group LLC today, almost 40 percent of the hourly workforce receives lower, two-tier wages. At this point, it’s going to be tough returning to a one-tier system when even a Lear plant with 720 workers couldn’t achieve it, Cole said. He added: “You’re seeing the difficulty of getting back to parity.” From Automotive News
Michigan exporting opportunities are easier than you think
Learn how your business can reach global markets Global Trade Days connects you one-on-one with experts from Brazil, Canada, China, Mexico and UAE to begin your global export expansion to these dynamic markets. Learn about: • Assistance with vetting, finding foreign buyers, market research and appointment setting • Regulatory, customs and duty assistance • Trends in top export markets • Success stories from participating Michigan companies • Upcoming Michigan trade missions and events
THURSDAY, OCTOBER 16
8:30 a.m. –4:30 p.m.
Management Education Center, Troy
FRIDAY, OCTOBER 17
8:30 a.m. –4:30 p.m.
Suburban Collection Showplace Diamond Center, Novi Pre-scheduled one-on-one meetings only
For more event and registration information, visit michiganbusiness.org/global-trade
DBpageAD_DBpageAD.qxd 9/18/2014 3:19 PM Page 1
Unique. Just like your ideas. At Brooks Kushman, we are committed to INNOVATION. Recognized as a leader in patent prosecution strategies, intellectual property litigation, and trademark protection, our attorneys and agents strive to meet our clients’ evolving needs. The depth and technical background of our professionals allow us to deliver unprecedented IP strategies.
# 0CVKQPCN .GCFGT KP +PVGNNGEVWCN 2TQRGTV[ .CY
5QWVJĆ‚GNF /+ | .QU #PIGNGU %# YYY $TQQMU-WUJOCP EQO
20140929-NEWS--0019-NAT-CCI-CD_--
9/26/2014
10:39 AM
Page 1
September 29, 2014
Page 19
CRAIN’S DETROIT BUSINESS
CRAIN'S LIST: INTELLECTUAL PROPERTY LAW FIRMS Ranked by number of IP lawyers !
! "" & " #
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 10. 10. 10. 14. 15. 16. 17. 17. 19. 19. 19. 22. 22. 22. 25.
' $# % "
# #$ # $ ! )$ ! # #" ! !#( &( !" &( !" ) & ! & $ $
! # ! "
.**%/ 5/"' (
2& )8+2 -2 3$ )8
0 6
5
6
B
.( // # % 7 # .
> ;8$< +(($88
13 6
6: 6
6 *:9
8 )83 82 ( 2&3 +-?2$!"83 '$8$! 8$+) 82 )3 8$+)37 ; $'$! ) )8$# +;)8 2 $8$)! +2 $!) 2$!"83 -- '' 8 '$8$! 8$+)
# %#(/*( .#!"2
$''$ ( ;2! 33
3 9,
,65 , 5
B
)8 '' 8; ' -2+- 28? ;3$) 33 8 ")+'+!? +-?2$!"83 - 8 )83 82 ( 2&3 $)8 '' 8; ' -2+- 28? ) 82 3 2 83 '$8$! 8$+)
<$ +'8?) ::*A $238 8$+) ' ;$' $)! 66A ++ = 2 B< 0 82+$8 " $2( ) ) ::6#9 A6 .9,9/ 6 #5AAA4 ===0"+)$!( )0 +(
34 9A
:A ,*
: *
2 ( 2& ) +-?2$!"8 - 8 )8 ) $)8 '' 8; ' -2+- 28? '$8$! 8$+) -2 8$ !2+;-3
*6 . *6 . :22*.( 7/
2& <$3 -2 3$ )8 )
3+ 9,
65 6*
, 965
8 )83 82 ( 2&3 +-?2$!"83 '$ )3$)! 8 ")+'+!? 1;$3$8$+)3 +2 3 ' 34 - 8 )8 $) 2$)! ( )8 82 3 2 8 82 ( 2& ) ;) $2 +(- 8$8$+) +-?2$!"8 $) 2$)! ( )8 ) +2 ( )8 ) )3
*5(! /#& (&*( .& ( - -
B) 2 = 3$' 20 -2 3$ )8
4) :
9A :
6A
8 )8 ) 82 ( 2& '$8$! 8$+) -2+3 ;8$+) ) +;)3 '$)!4 8 ")+'+!?#2 ' 8 82 )3 8$+)3 $) '; $)! '$ )3$)! 1;$3$8$+)3 ) $< 38$8;2 34 2 -2 3 )8 8$+) + ( 2!$)! !2+=8" +(- )$ 34 ) +(( 2 $ ' ) (-'+?( )8 '$8$! 8$+)0
. #/"' ( . 5 .
) ! ( )8 +(($88
4+ :A
:, :A
B
2 ( 2& +-?2$!"8 - 8 )8 - 8 )8 -2+3 ;8$+) 82 3 2 83 3+ $ ' ( $ ; $'$! ) '$8$! 8$+)
#/#(! 2"#(!2*(
$''$ ( 2 ) $3 -2 3$ )8 ) 3" 2 "+' 2
49 ,
,* ,
99
8 )83 82 ( 2&3 +-?2$!"83 82 3 2 83 +;)3 '$)! +-$)$+)3 -+28 +'$+ ( ) ! ( )8 '$8$! 8$+)
.&/*( /% 7 & /
" + +2 ' 3 -2 3$ )8 )
+) :A
,* ,
, 6,
# *. . // ,.#(%& :( ./*( #2%*6/%#
) ! ( )8 +(($88
+1 ,*
,6 ,*
* A
5#(( 6 .*5,
"2$38+-" 2 ;$)) -2 3$ )8
+1 ,5
,6 ,5
, : A
* ' (
'-" += '' " $2( )
+1 ,6
,99 ,99
A
.#(%/ #&/*( #*(
8 < ) 2"+'8@ 2 ( ) !$)! - 28) 2 B)) B2 +2 +
+1 ,
,6 ,
B
8 )8 -2+3 ;8$+) $)8 '' 8; ' 33 8 ( ) ! ( )8 82 ( 2& '$8$! 8$+) !2 ) 8 " '$ )3$)! $+8 "7-" 2( ) )+8 ")+'+!?
#&& . ( & * % ( 2*(
$ " '
+4 ,:
,
, 6
B
8 )83 82 ( 2& +-?2$!"8 ) 82 3 2 8 -2+3 ;8$+) +;)3 '$)! ) '$8$! 8$+)
(2*. *& 5.(
+88 $) - 28) 2
++ *
,, *
6 69
$#( # ( ' (
"+( 3 %$) ) " 2' 3 $ ) ( ) ( ( 23
6
B 6
, A
8 )8 -2+3 ;8$+) '$8$! 8$+) 82 ( 2&3 '$ )3$)! ; $'$! )
. ( 5 *6 #&& .
+") $''++'? " $2( ) + > ;8$< +(($88
0 5
6 6
B
2 ( 2& 82 2 33 ) +-?2$!"8 $) 2$)! ( )8 8$+)3 '$8$! 8$+) 82 ( 2& 82 2 33 ) +-?2$!"8 --'$ 8$+)3 82 3 2 8 +) )8$ '$8? )+)# $3 '+3;2 +2 )+)# +(- 8 ' ;3 3
" * .5/#( 6 #.'
2$ + 2;3$) -2 3$ )8 ) 3" 2 "+' 2
0 6
6
:
8 )8 -2 8$ 82 ( 2& -2 8$ 382 8 !? ) +;)3 '$)! - 8 )8 +-$)$+)3 ; $'$! ) 8 ")+'+!? 82 )3 2 !+< 2)( )8 +)82 83 ;38+(3 ) +2 ( )8
528 & *(!
;38$) '$(&+ -2 3$ )8 ) ( ) !$)! 3" 2 "+' 2
1 6
,, *
99
+-?2$!"8 '$8$! 8$+) '$ )3$)! ) 8 ")+'+!? - 8 )8 ' = 82 3 2 8 ) )+)# +(- 8 82 ( 2& ' =
7% ' *// 22
8 2 '' 88 " $2( ) )
1
, 9 , *
B
%$8$! 8$+) -2+3 ;8$+) 82 ( 2& +-?2$!"8 ) -+28 +'$+ ; $'$! )
..# . & %' ( ://* # 2 /
+3 -" 22$ 2 3 )$+2 - 28) 2
1
6
9AA
8 )8 # ( " )$ ' " ($ ' ' 82$ ' +(-;8 24 82 ( 2&4 +-?2$!"84 82 3 2 84 8 0
; #22 5 . #//
$'' $ 2 ) ( ) !$)! - 28) 2
6
,A ,A,
A
2$!"83 82 ( 2& ) +-?2$!"8 2 !$382 8$+) '$ )3$)! 82 )3 8$+)3 $)<+'<$)! 8 ")+'+!? ) # +(( 2 '$8$! 8$+) 2 $82 8$+) ) -- '3 (-'+?( )8 ) > ;8$< +)82 83 8 ")+'+!? 82 )3 23
#&& ( * (/%# *
$ " 2 $'' ) ( ) !$)! - 28) 2
5A:
8 )83 82 ( 2&3 +-?2$!"83 '$ )3$)! '$8$! 8$+) 3;--+28 $)8 '' 8; ' -2+- 28? ( ) ! ( )8 3?38 (3 3 ;2 8 3 "+38$)! $)8 '' 8; ' -2+- 28? 3+ 8= 2 3;--+28 3 2<$ 3 +8" 2
*& 7 . ( .
'%$8 ++! ' 82+$8 + ( ) !$)! - 28) 2
9A 99
5
8 )8 -2+3 ;8$+) 382 8 !$ ( ) ! ( )87-+28 +'$+ < '+-( )8 ' 2 ) 2 +( 8+ +- 2 8 ; $'$! ) '$ )3$)! ) 82 )3 8$+)3 '$8$! 8$+) ) ) +2 ( )8
& .% #&&
+") 2)
, 9 , 5
B
,AAA +=) )8 2 ::) '++2 +;8" ' A5
.: / 9 # AA4 ===0 2++&3 ;3"( )0 +(
+2-+2 8 2$< ;$8 :AA 2+? A* .: / 6 ,#,6AA4 ===0" -0 +(
AA ++ = 2 B< 0 ;$8 AAA 82+$8 ::6 .9,9/ ::9#9 AA4 ===0 $ &$)3+)=2$!"80 +(
*(#!' ( #&& . "6 .28 ( *"(
A 0 +;28" 80 +? ' & A65 .: / 6 #, 94 ===0"+= 2 ) "+= 2 0 +( 9AA, 0 $! < 2 + ;$8 6: 2+? A .: / 6 *#99994 ===0?+;)! 3$' 0 +(
9* 99 ++ = 2 B< 0 ;$8 , A '++( ' $''3 A9 .: / * #A6AA4 ===02 2 3"( )0 +( 5
0 $! < 2 + ;$8 , A 2+? A .: / 6 *#9 AA4 ===02 $3$)!0 +( AA 0 -' + ;$8 9 A $2($)!" ( AA* .: / * # 96A4 ===0 !+' =0 +(
8 )8 -2+3 ;8$+) 82 ( 2&3 $)8 '' 8; ' -2+- 28? '$8$! 8$+) -+38#!2 )8 -2+ $)!3 +- ) 3+;2 +(-'$ ) ; $'$! ) 82 3 2 83 '$ )3$)! +-?2$!"83 ' ! ' +)3;'8$)! +(-'$ ) ) # $3 +< 2? 8 ")$ ' 3$!) +)3;'8$)!
8 )83 82 ( 2&3 +-?2$!"83 82 3 2 83 # =+2' =$ 0 )8 '' 8; ' -2+- 28? ) +(( 2 $ ' '$8$! 8$+)0 8 )8 82 ( 2& ) +-?2$!"83
:5A, 2+? )8 2 2$< ;$8 99A 2+? A .: / 6 5#6AAA4 ===0- 8' =0 +(
9*
2 " 2 $'' ' ;$8 :A +<$ 95
.: / 9 A#*9AA4 ===01;$))' =!2+;-0 +( $>8" '++2 8 +2 $ ' ,*A, 80 B)8+$) 80 82+$8 ::6 .9,9/ : *#55554 ===0 + ( )' =0 +(
: 0 $) 80 ;$8 :AA B)) B2 +2 ,A #:*:, .59 / 9A:#6AAA4 ===0 2$)&3!$'3+)0 +( , A 0 23+) B< 0 ;$8 : AA 82+$8 ::6# .9,9/ *69#6 :A4 ===0($'' 2 ) ' 0 +(
,
:A, 0 $! < 2 + ;$8 ,,A, 2+? A .: / : #:9AA4 ===0 )8+2 +' ;2)0 +( 9AA $< 2 ' ;$8 ,6 A 82+$8 :A5 .9,9/ : # :4 :$-' =0 +( ,AAA ++ 2$ ! ' 82+$8 :A5 .9,9/ 6#, 9A4 ===0! 2 )'; +=0 +( :* 0 % =2 ) ;$8 :,A +)8$ 9 :#: ,9 .: / :*:#:*:A4 ===0- 8 )8 +0 +( , A 0 23+) B< 0 ;$8 ,AA 82+$8 ::6 .9,9/ :: #5AAA4 ===0 ;8@ '0 +( AA ) $33 ) )8 2 82+$8 : 9 .9,9/ 6 #6 AA4 ===0 ?& ( 0 +( 9 A 0 ,A $' + +<$ 95
.: / 9 # ::4 ===0 22$ 2# ' &( )0 +(
:5555 2 )&'$) + ;$8 : AA +;8" ' A9 # :, .: / 9 ,#9AAA4 ===0% ' =0 +( 9 5A < ) $' + ;$8 A %$<+)$ , : .59 / :#A*AA4 ===0(38 2(0 +( ) 82+$8 )8 2 AA ++ = 2 B< 0 ;$8 :5AA 82+$8 ::6#9 * .9,9/ :9 #5,AA4 ===0 +' ?0 +(
AA ++ = 2 B< 0 ;$8 9 AA 82+$8 ::6 .9,9/ *6 # 9AA4 ===0 ' 2&"$''0 +(
8 )83 ) 82 ( 2&3
")+'+!? 82 )3 2 '$8$! 8$+) $!$8 ' -; '$3"$)! 82 ( 2& 3 ' 8$+) 2 !$382 8$+) ) '$ )3$)! +)+($ 3-$+) ! )8 28 $)( )8
%$8$! 8$+) - 8 )83 82 ( 2&3 ) +-?2$!"83 '$ )3$)! +-$)$+)3
+-?2$!"83 $)8 '' 8; ' -2+- 28? '$8$! 8$+) - 8 )83 8 ")+'+!? 82 )3 2 82 ( 2&3 ) 3 2<$ ( 2&3
) " )* ) $ &&(%. # * %#& " * %$ % $* "" *+ " &(%& (*/ 0(#) $ /$ !" $
%# ) * $ - $ , $ )*%$ %+$* ) * ) $%* %#&" * " )* $ +* * #%)* %#&( $) , , " " $" )) %* (- ) $%*
$ %(# * %$ - ) &(%, / * 0(#) (#) - * '+ (* () ") - ( ( " )* - * *
( )) $ *%& . +* , % * ( # $ *(% * ( % 0 $%* , " " 1 1
DBspreadAD_DBspreadAD.qxd 9/25/2014 1:25 PM Page 1
Crain’s Detroit Business was proud to convene The Detroit Homecoming Sept. 17-19 where 160 ex-pats returned to Detroit to reconnect and reinvest. Many people and companies contributed to the success of the program and we are grateful. The kickoff event was only the beginning. These former Detroiters are already creating plans to make a difference and we are looking forward to following their successes in the days to come.
H O S T
C O M M I T T E E :
MITCH ALBOM author/radio host/columnist TONYA ALLEN CEO, Skillman Foundation MARY BARRA CEO, General Motors Co. SANDY BARUAH CEO, Detroit Regional Chamber MANOJ BHARGAVA CEO of Living Essentials LLC, maker of 5-Hour Energy DAVE BING Former Mayor of Detroit MARGE BYINGTON POTTER Continental Rail Gateway
MARY SUE COLEMAN president, University of Michigan
CHRISTOPHER ILITCH president and CEO, Ilitch Holdings, Inc.
RIP RAPSON CEO, Kresge Foundation
SHERY COTTON Meridian Health Plan
JOHN C. KENNEDY president/CEO, Autocam Medical
WALTER ROBB co-CEO, Whole Foods
MIKE DUGGAN Mayor of Detroit
SERGIO MARCHIONNE chairman and CEO, Chrysler Group LLC
NANCY SCHLICHTING CEO, Henry Ford Health System
DAVID FOLTYN chairman and CEO, Honigman
WILLIAM MARTIN president, FirstMartin Corp.
LOU ANNA SIMON president, Michigan State University
EDSEL B. FORD II Ford Motor Co.
JERRY NORCIA president and chief operating of cer, DTE Energy
DAN GILBERT chairman and founder, Rock Ventures/Quicken Loans ROD GILLUM partner, Jackson Lewis chair, Detroit Economic Growth Corp.
MITCH ALBOM author/radio host/columnist
ANDY DOCTOROFF senior advisor for transportation initiatives, State of Michigan
TONYA ALLEN CEO, Skillman Foundation
DAN DOCTOROFF president and CEO, Bloomberg LP
RICHARD BARON co-founder and chairman, McCormack Baron Salazar
JON COTTON president, Meridian Health Plan
S P E A K E R S :
MARY BARRA CEO, General Motors Co. BRENDA BELCHER, principal, Ben Carson School of Science and Medicine RALPH BLAND, CEO, New Paradigm Schools ELI BROAD, founder, The Broad Foundations WARREN BUFFETT investor GWEN BUTLER, president and chief operating of cer, Capri Capital
KEITH CRAIN chairman, Crain Communications Inc KC CRAIN, executive vice president/ director of corporate operations, Crain Communications Inc NICOLE CURTIS host, Rehab Addict — cable TV show
MATT SIMONCINI president and CEO, Lear Corporation
CYNTHIA PASKY president and CEO, Strategic Staf ng Solutions
A. ALFRED TAUBMAN founder, The Taubman Company
ROGER PENSKE founder and chairman, Penske Corp.
M. ROY WILSON president, Wayne State University
EX-PAT HOSTS: RICHARD BARON co-founder and chairman, McCormack Baron Salazar MIKE JBARA president, Alternative Distribution Alliance
ERIC RYAN co-founder, Method CO-DIRECTORS: JIM HAYES retired publisher, Fortune magazine MARY KRAMER publisher, Crain’s Detroit Business
DAN GILBERT chairman and founder, Rock Ventures/Quicken Loans
JERRY NORCIA president and chief operating of cer, DTE Energy
ANDRA RUSH founder, president and CEO, Rush Group LLC
BERRY GORDY JR. founder, Motown Records
JACQUES PANIS president, Shinola
VERONIKA SCOTT CEO and founder, The Empowerment Plan
JOHN HANTZ founder, Hantz Woodlands
RON PARKER president and CEO, Executive Leadership Council
JIM HAYES, co-director, Detroit Homecoming CHRIS ILITCH president and CEO, Ilitch Holdings GREG JACKSON chairman, president and CEO, Prestige Automotive Group MARY KRAMER publisher, Crain’s Detroit Business
CYNTHIA PASKY founder, president and CEO, Strategic Staf ng Solutions ROGER PENSKE, founder and chairman, Penske Corp. . QUINTIN PRIMO III co-founder, Capri Capital RIP RAPSON president and CEO, Kresge Foundation
PETE DAWKINS, retired vice chair, Citigroup Private Bank
NATHAN LABENZ co-founder, Social Proof
MAYOR MIKE DUGGAN City of Detroit
NOAM KIMELMAN founder, Detroit Food Academy
WALTER ROBB co-CEO, Whole Foods Market
MICHAEL EVANS senior developer/founder, Loveland Technologies
KEVIN NIXON co-founder, Detroit Institute of Music Education
JALEN ROSE broadcaster, ESPN and founder, Jalen Rose Academy
“We’re ready to buy a business here tomorrow,” Warren Buffett, chairman and CEO, Berkshire Hathaway
BRIAN OWENS vice president, global head of brand strategy, eBay
“ I hang around a lot of cool crowds and this was the coolest ever. The genuine connection of Detroiters and the careful selection and recruiting you did created a magical grouping,” Jules Pieri, co-founder and CEO, The Grommet
“If Detroit was a stock, I’d be a buyer,” Dan Doctoroff, president and CEO, Bloomberg LLP
“Detroit is big enough to matter in the world, but small enough that you can matter in it,” Sara Sefcovic, vice president, Sloane & Co.
“Detroit needs to be about continuous improvement, multi-tasking the challenges of today while continuing to build a culture of success and optimism,” Mike Jbara, president, Alternative Distribution Alliance
GEORGE STEWART managing partner, Woodward SA-PK LLC GOV. RICK SNYDER State of Michigan
WITH GENEROUS SUPPORT OF:
ANDY STEFANOVICH corporate curator and provocateur CHUCK STOKES editorial director, WXYZ-TV BANKOLE THOMPSON editor, Michigan Chronicle SAM VALENTI III president and CEO, Valenti Capital LLC FRANK VENEGAS chairman/CEO, Ideal Group
DTE Energy Ford Motor Co. Michigan State Housing Development Authority Rock Ventures/Quicken Loans Chrysler Group LLC JP Morgan Chase Display Group Pulse 220 Downtown Detroit Partnership Goldman Sachs Ilitch Holdings, Inc. Lear Corp. Meijer Richard and Jane Manoogian Foundation
Strategic Staf ng Solutions Skillman Foundation Bank of America Butzel Long Comerica Bank Detroit Economic Growth Corp. Deloitte Henry Ford Health Systems/HAP Honigman Hudson Webber Foundation KPMG Lambert Edwards & Associates Lowe Campbell Ewald Michigan State University/Broad College of Business
Microsoft Moosejaw Dakkota/Rush Group Family of Companies University of Michigan Wayne State University W.K. Kellogg Foundation John Kennedy/Autocam Medical Carhartt First Merit Bank College for Creative Studies Miller Can eld Penske Corp. Shinola Detroit Talmer Bank and Trust
University of Detroit Mercy Verizon WXYZ-TV SPECIAL THANKS TO College for Creative Studies David Whitney Building/Whitney Partners Detroit Institute of Music Education Display Group Epicurean Group Ilitch Holdings/Comerica Park Michigan DNR/Globe Outdoor Activities Center Premier Creative Group Pulse 220 Rock Ventures/Quicken Loans
DBspreadAD_DBspreadAD.qxd 9/25/2014 1:25 PM Page 1
Crain’s Detroit Business was proud to convene The Detroit Homecoming Sept. 17-19 where 160 ex-pats returned to Detroit to reconnect and reinvest. Many people and companies contributed to the success of the program and we are grateful. The kickoff event was only the beginning. These former Detroiters are already creating plans to make a difference and we are looking forward to following their successes in the days to come.
H O S T
C O M M I T T E E :
MITCH ALBOM author/radio host/columnist TONYA ALLEN CEO, Skillman Foundation MARY BARRA CEO, General Motors Co. SANDY BARUAH CEO, Detroit Regional Chamber MANOJ BHARGAVA CEO of Living Essentials LLC, maker of 5-Hour Energy DAVE BING Former Mayor of Detroit MARGE BYINGTON POTTER Continental Rail Gateway
MARY SUE COLEMAN president, University of Michigan
CHRISTOPHER ILITCH president and CEO, Ilitch Holdings, Inc.
RIP RAPSON CEO, Kresge Foundation
SHERY COTTON Meridian Health Plan
JOHN C. KENNEDY president/CEO, Autocam Medical
WALTER ROBB co-CEO, Whole Foods
MIKE DUGGAN Mayor of Detroit
SERGIO MARCHIONNE chairman and CEO, Chrysler Group LLC
NANCY SCHLICHTING CEO, Henry Ford Health System
DAVID FOLTYN chairman and CEO, Honigman
WILLIAM MARTIN president, FirstMartin Corp.
LOU ANNA SIMON president, Michigan State University
EDSEL B. FORD II Ford Motor Co.
JERRY NORCIA president and chief operating of cer, DTE Energy
DAN GILBERT chairman and founder, Rock Ventures/Quicken Loans ROD GILLUM partner, Jackson Lewis chair, Detroit Economic Growth Corp.
MITCH ALBOM author/radio host/columnist
ANDY DOCTOROFF senior advisor for transportation initiatives, State of Michigan
TONYA ALLEN CEO, Skillman Foundation
DAN DOCTOROFF president and CEO, Bloomberg LP
RICHARD BARON co-founder and chairman, McCormack Baron Salazar
JON COTTON president, Meridian Health Plan
S P E A K E R S :
MARY BARRA CEO, General Motors Co. BRENDA BELCHER, principal, Ben Carson School of Science and Medicine RALPH BLAND, CEO, New Paradigm Schools ELI BROAD, founder, The Broad Foundations WARREN BUFFETT investor GWEN BUTLER, president and chief operating of cer, Capri Capital
KEITH CRAIN chairman, Crain Communications Inc KC CRAIN, executive vice president/ director of corporate operations, Crain Communications Inc NICOLE CURTIS host, Rehab Addict — cable TV show
MATT SIMONCINI president and CEO, Lear Corporation
CYNTHIA PASKY president and CEO, Strategic Staf ng Solutions
A. ALFRED TAUBMAN founder, The Taubman Company
ROGER PENSKE founder and chairman, Penske Corp.
M. ROY WILSON president, Wayne State University
EX-PAT HOSTS: RICHARD BARON co-founder and chairman, McCormack Baron Salazar MIKE JBARA president, Alternative Distribution Alliance
ERIC RYAN co-founder, Method CO-DIRECTORS: JIM HAYES retired publisher, Fortune magazine MARY KRAMER publisher, Crain’s Detroit Business
DAN GILBERT chairman and founder, Rock Ventures/Quicken Loans
JERRY NORCIA president and chief operating of cer, DTE Energy
ANDRA RUSH founder, president and CEO, Rush Group LLC
BERRY GORDY JR. founder, Motown Records
JACQUES PANIS president, Shinola
VERONIKA SCOTT CEO and founder, The Empowerment Plan
JOHN HANTZ founder, Hantz Woodlands
RON PARKER president and CEO, Executive Leadership Council
JIM HAYES, co-director, Detroit Homecoming CHRIS ILITCH president and CEO, Ilitch Holdings GREG JACKSON chairman, president and CEO, Prestige Automotive Group MARY KRAMER publisher, Crain’s Detroit Business
CYNTHIA PASKY founder, president and CEO, Strategic Staf ng Solutions ROGER PENSKE, founder and chairman, Penske Corp. . QUINTIN PRIMO III co-founder, Capri Capital RIP RAPSON president and CEO, Kresge Foundation
PETE DAWKINS, retired vice chair, Citigroup Private Bank
NATHAN LABENZ co-founder, Social Proof
MAYOR MIKE DUGGAN City of Detroit
NOAM KIMELMAN founder, Detroit Food Academy
WALTER ROBB co-CEO, Whole Foods Market
MICHAEL EVANS senior developer/founder, Loveland Technologies
KEVIN NIXON co-founder, Detroit Institute of Music Education
JALEN ROSE broadcaster, ESPN and founder, Jalen Rose Academy
“We’re ready to buy a business here tomorrow,” Warren Buffett, chairman and CEO, Berkshire Hathaway
BRIAN OWENS vice president, global head of brand strategy, eBay
“ I hang around a lot of cool crowds and this was the coolest ever. The genuine connection of Detroiters and the careful selection and recruiting you did created a magical grouping,” Jules Pieri, co-founder and CEO, The Grommet
“If Detroit was a stock, I’d be a buyer,” Dan Doctoroff, president and CEO, Bloomberg LLP
“Detroit is big enough to matter in the world, but small enough that you can matter in it,” Sara Sefcovic, vice president, Sloane & Co.
“Detroit needs to be about continuous improvement, multi-tasking the challenges of today while continuing to build a culture of success and optimism,” Mike Jbara, president, Alternative Distribution Alliance
GEORGE STEWART managing partner, Woodward SA-PK LLC GOV. RICK SNYDER State of Michigan
WITH GENEROUS SUPPORT OF:
ANDY STEFANOVICH corporate curator and provocateur CHUCK STOKES editorial director, WXYZ-TV BANKOLE THOMPSON editor, Michigan Chronicle SAM VALENTI III president and CEO, Valenti Capital LLC FRANK VENEGAS chairman/CEO, Ideal Group
DTE Energy Ford Motor Co. Michigan State Housing Development Authority Rock Ventures/Quicken Loans Chrysler Group LLC JP Morgan Chase Display Group Pulse 220 Downtown Detroit Partnership Goldman Sachs Ilitch Holdings, Inc. Lear Corp. Meijer Richard and Jane Manoogian Foundation
Strategic Staf ng Solutions Skillman Foundation Bank of America Butzel Long Comerica Bank Detroit Economic Growth Corp. Deloitte Henry Ford Health Systems/HAP Honigman Hudson Webber Foundation KPMG Lambert Edwards & Associates Lowe Campbell Ewald Michigan State University/Broad College of Business
Microsoft Moosejaw Dakkota/Rush Group Family of Companies University of Michigan Wayne State University W.K. Kellogg Foundation John Kennedy/Autocam Medical Carhartt First Merit Bank College for Creative Studies Miller Can eld Penske Corp. Shinola Detroit Talmer Bank and Trust
University of Detroit Mercy Verizon WXYZ-TV SPECIAL THANKS TO College for Creative Studies David Whitney Building/Whitney Partners Detroit Institute of Music Education Display Group Epicurean Group Ilitch Holdings/Comerica Park Michigan DNR/Globe Outdoor Activities Center Premier Creative Group Pulse 220 Rock Ventures/Quicken Loans
20140929-NEWS--0022-NAT-CCI-CD_--
9/26/2014
11:07 AM
Page 1
Page 22
CRAIN’S DETROIT BUSINESS
September 29, 2014
With recommendations in, Detroit ready to get leaner suggested. In fact, Deloitte was so engaged with the process that managing partner Mark Davidoff CRAIN’S DETROIT BUSINESS offered to be the organizer of all Detroit is ready to “Lean For- the activity. ward.” “We were so excited about the The first phase of Mayor Mike opportunity and what was about to Duggan’s plan to teach and apply be undertaken that we said we will lean-management principles to take one project but we will also city agencies is complete, and the head up a project management ofteams are looking at fice for all 18 recommendations for projects,” how to improve 18 Davidoff said. city services. The recomThe mayor mendations issued a plea are part of an for help to ongoing business execprocess led by utives at the Aimee Crain’s NewsCowher, the maker of the city’s new diYear lunrector of lean cheon at the process manMotorCity Casiagement, who no Hotel in dubs it “Lean February, asking Forward.” them to be a part of Cowher, 44, lean-process teams to is the former streamline city departCEO of Clinments and engage ton TownMark Davidoff, Deloitte LLP workers. As a result, ship-based 18 teams of city emGlobal Producployees and volunteers from 23 tivity Solutions LLC, which was one businesses were formed to review of the firms that responded to the everything from special event per- mayor’s request for help. Last mitting to the procurement process. month, Cowher replaced Mary Now, seven months later, De- Martin in the city’s lean post; Marloitte LLP, which focused on issues tin accepted a job as associate hossurrounding snow removal, has is- pital director for operations and sued a report that illustrates the clinical services for the University battery of fixes that all 18 teams of Michigan Health System in July.
BY KIRK PINHO AND AMY HAIMERL
were so “ We excited ... that
we said we will take one project but we will also head up a project management office for all 18.
”
“We are training internally to use (the recom䡲 Advanced Manufacturing Group LLC, Royal Oak. Trafmendations) as a fic signs project, to process requests for signs; through framework and the Department of Public Works. look at the ac䡲 Dawn Thompson, independent consultant, formerly tions that were of Warner Norcross & Judd LLP, Clinton Township. Farecommended,” cilitate obtaining permits for special events and valet Cowher said. services; through Public Works. “Are we going 䡲 Deloitte LLP, Detroit. Find improvements in snow reto implement Cowher moval processes, driver assignments or materials; them? Are we gothrough Public Works. ing to implement some variation of 䡲 Global Productivity Solutions LLC, Clinton Township. Streamthem? Or, when we dig into the data line procurement processes; through purchasing division analysis, maybe some of these recof the Finance Department. ommendations weren’t necessarily 䡲 Grant Thornton LLP, Southfield. Expedite issuing income the right actions to take.” tax refunds; through the General Services Department. To make building inspections 䡲 Jama Consulting LLC, Livonia. Speed up securing a cermore efficient, for example, the retificate of occupancy; through the Buildings, Safety, Engiview team recommended that inneering and Environmental Department. spectors from the Department of 䡲 Mary Martin, city of Detroit. Reduce delays and bureauBuilding, Safety Engineering and Envicracy in business licensing, encourage development and ronment be sent to properties create a one-stop-shop for assistance. Also coordinating owned by the same person at the other reviews at the Fire Department and Municipal same time and on a street-by-street Parking Department. basis. That would cut back on in䡲 Metro-West Appraisal Co. LLC, Detroit. Review methods of spection response time. maintaining vacant lots, response to complaints and coorIn addition, inspectors were recdinating with city developmental agencies; through Genommended to cite property owners eral Services. more frequently for violations. Ac䡲 MPM Consulting, Waterford Township. Increase the cording to the report summary, rate of on-time starts of city buses; through the Departthe Department of Administrative ment of Transportation. Hearings received about 600 tickets 䡲 Osirius Group LLC, Troy; Patriot Systems Inc., Troy. Refrom the building department last view the process of following up on complaints about year. If more citations are issued, lighting and handling repairs; through the Public Lightthat would generate more iming Department. provement to residential and com䡲 Plante Moran PLLC, Southfield. Leading two project mercial properties. teams, one to streamline site-plan review, through BuildRecommendations also includings Safety; and another to review and prioritize pothole repair proed that site plan reviews should jects and follow up on citizen complaints; through Public Works. be done by the Planning and Devel䡲 Companies on the Plante Moran team: Belfor USA Group Inc., Birmopment Department instead of the ingham; Karoub Associates Inc., Lansing Township; Mercy Education building department. That “reProject, Detroit; Wayne County Airport Authority; DAJ Consulting, Laurel, moves the bottleneck that has hisMd. torically impeded project ap䡲 PMC (Production Modeling Corp., Dearborn); University of Michigan-Dearproval,” the report summary born. Select codes for enforcement and streamline processes, and exsays. plore revenue opportunities; through Buildings Safety. Things like reorganizing the PricewaterhouseCoopers LLP, Detroit. Reduce the av䡲 building department’s Licensing erage time of hiring and onboarding from 144 days and Permitting Division website to 45 days; through the Human Resources Deand correcting materials online partment. and in print with updated location Vedant Ghang, UM graduate school. Refine the 䡲 and contact information would process of evaluating and removing diseased trees; also save trips for people applying through General Services. for business licenses, the report Weblyn Group, Northville. Reduce response time to 䡲 said. So would creating checklists respond to and track IT issues from city employees. for new business owners. 䡲 Western Michigan University Bronco Force executive education proOther areas that will be focused gram, Kalamazoo. Two auto parts replacement projects, for General on are snow removal, potholes and Services and DDOT. public lighting. The common theme: All of them have been points of concern for city business- will be a change to what they have and imagine what all the solutions es and residents for years. been doing for the last however- are, but I guarantee you they will “The architecture of the report many years.” uncover solutions in a 90-day, fois driven by things Cockrel cused effort,” Cowher said. that directly affect called the reThe Project Lean review largely citizens, which is a port a good mirrored a similar process Dugreally good thing, and starting point, gan initiated as CEO of the Detroit things that but one that Medical Center. impact the raises a larger “It was just obvious that he city’s ability issue about (Duggan) was looking for the busito function,” city govern- ness community to lean in and be said Sheila ment. helpful,” Davidoff said. Aside from Cockrel, a “But at Deloitte, other local companies former Detroit some point, that sent volunteers included PriceCity Council there is this waterhouseCoopers LLP, Plante member and underlying, Moran PLLC and Metro-West Apthe founder really big praisal Co. LLC. of Detroit question of The departments reviewed were government relations whether the public works; public lighting; and firm and advocacy city is really building, safety engineering and company Crossroads organized in environment, as well as others in Consulting Group. an appropri- its finance and human resources Sheila Cockrel, Still, streamlining ate manner,” departments, general services, Crossroads Consulting Group Detroit’s government she said. transportation and information won’t be a cakewalk. And she expects more recom- technology services. mendations by the end of the year. Davidoff expects good things “Change is hard,” Cowher said. “These are being led by the per- from the Process Lean review. “There will be some people who “This is serious business,” he really engage and embrace that op- son who leads each department, to portunity to improve, and it will come up with how we can do this said. “The positives of this first be challenging to others because it better. I couldn’t possibly sit here phase will be infectious.”
THE LEAN TEAM GAME PLAN
“ Theofarchitecture the report
is driven by things that directly affect citizens, which is a really good thing.
”
20140929-NEWS--0023-NAT-CCI-CD_--
9/26/2014
10:39 AM
Page 1
September 29, 2014
CRAIN’S DETROIT BUSINESS
Page 23
CALENDAR THURSDAY OCT. 2 HealthcareNEXT: Using the New Science of Leading Change to Create High-Performance Teams. 7:30-9:30 a.m. Inforum Michigan. With Doug Finton, master trainer for Vital Smarts, in a workshop on learning strategies for leading change. Mackinaw Conference Room, Oakwood Health System, Dearborn. $20 Inforum members, $30 nonmembers; includes program and continental breakfast. Contact: (877) 633-3500; website: inforummichigan.org. Radio Day: Tom Izzo, 8:30-10 a.m. Adcraft Club of Detroit. Join the
Michigan State University basketball coach for a special breakfast event. San Marino Club, Troy. $15 junior and student members, $25 members, $35 nonmembers; preregistration reIzzo quired. Contact: Melanie Davis, (313) 872-7850; email: mdavis@adcraft.org; website: adcraft.org.
Michigan Energy Forum — Alternative Fuel Technologies, 5-7 p.m.. Ann Arbor Spark. A panel will discuss opportunities and key issues associated with alternative fuel technologies and will touch on opportunities for entrepreneurs and technology innovation occurring in Michigan. Spark Central, Ann Arbor. Free; registration ends Oct. 1. Contact: (734) 761-9317; email: alissa@annarborusa.org; website: annarborusa.org.
UPCOMING EVENTS Maverick Marketing Monday. 11:30 a.m.-1 p.m. Oct. 6. Detroit Regional Chamber. Join Nikki Little, marketing manager at Identity Marketing and Public Relations LLC, for “Blogging 101 for Small Businesses,” with tips on how to get started, content inspiration and “getting smart” on blogging. Emagine Royal Oak, Royal Oak. $20 DRC members, $50 nonmembers; preregistration required. Contact: Janelle Arbuckle, (313) 596-0340; email: jarbuckle@ detroitcham ber.com; website: detroitchamber.com. CBS Radio Detroit Tour. 4-5:30 p.m. Oct. 8. Engineering Society of Detroit. Join the ESD for an insider’s look at CBS Radio Detroit’s new headquarters in Southfield, including WWJ
950, WXYT-FM 97.1, WVMV-FM 98.7, WOMC-FM 104.3 and WYCDFM 99.5. CBS Radio, Southfield. $25 ESD members, $60 nonmembers (firsttime members can join ESD and attend tour for free). Contact: (248) 3530735; email: esd@esd.org; website: www.esd.org. Membership Maximizer. 5:30-7:30 p.m. Oct. 15. Detroit Regional Chamber. Networking session with information about DRC programs and benefits. Free to members. Contact: Robin Reinhart, (866) 627-5463; email: rreinhar@detroitchamber.com; website: www.detroitchamber.com.
Forward Thinking: Business Strategies for Health Care, 8:30 a.m.-noon Oct. 16. Detroit Regional Chamber. Larry Boress, president and CEO of the Midwest Business Group on Health, will share strategies MBGH members are using to improve health care value and will highlight ways to implement a strategy at other organizations. Detroit Regional Chamber, Detroit. $25 DRC members, $50 nonmembers; preregistration required. Contact: Jonathan So, (313) 596-0340; email: jso@detroitchamber.com; website: detroitchamber.com.
Setting the Course for Growth: CEO Perspectives on Critical Business Issues, 11:30 a.m.-1:30 p.m. Oct. 16. Detroit Economic Club. With John Veihmeyer, chairman and CEO, KPMG
LLP. Cobo Center, Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econclub.org. Inno-vention 2014: A Medical Main Street Conference. 6:30-8:30 p.m. Oct. 21, 7:30 a.m.-4:30 p.m. Oct. 22. Medical Main Street, Oakland County Advantage. An event showcasing the life science and health care industries in Southeast Michigan and beyond. With keynote speaker Krischa Winright, CIO, Priority Health, and vice president of information technology, Spectrum Health, plus matchmaking sessions and startup pitches. Suburban Collection Showplace. Novi. $149, includes networking reception, conference and luncheon; register at medicalmainstreet.com; website: advantageoakland.com.
The Price Is Right: Are You Offering a Competitive Wage? 11:30 a.m.-1 p.m. Oct. 21. Automation Alley. A “lunch ’n’ team” with Colby Spencer-Cesaro, research director, Workforce Intelligence Network for Southeast Michigan. as she discusses how small- to medium-sized companies can attract and retain a skilled workforce. Automation Alley Resource Center, Troy. Members, $20 advance, $40 at door; nonmembers, $30 advance, $50 at door. Preregistration deadline is Oct. 17. Contact: (800) 437-5100; email: info@automationalley.com; website: automationalley.com.
Inforum BoardAccess Workshop: Kickstart Your Board Experience. 1-5:30 p.m. Oct. 27. Inforum Michigan. With Jennifer Dudley, partner, Warner Norcross & Judd; Blaire Miller, entrepreneur and partner, The Hunter Group; Nancy Phillippart, general partner and co-founder, The Belle Michigan Fund; and Mary Brevard, executive director, Inforum BoardAccess, in a conversation on board service opportunities with privately funded companies. Skyline Club, Southfield. $125 Inforum members, $175 nonmembers. Contact: (877) 633-3500; website: inforummichigan.org.
website: econclub.org.
Business Leaders for Michigan CEO Summit, 8 a.m.,-3 p.m. Nov. 13. Business Leaders for Michigan. The third annual event, with keynote speaker Peter Diamandis, chairman and CEO, X Prize Foundation, and the author of Abundance — The Future Is Better Than You Think. Westin Book Cadillac, Detroit. $125. Contact: Jennifer Hayes, (313) 259-5400; email: jenniferh@businessleadersformichi gan.com; website: businessleaders formichigan.com. Inside the CEO Mind, 8-10 a.m. Nov. 13. Detroit Regional Chamber. Participants can hear from Tony Michaels, president and CEO of The Parade Co., then take a behind-the-scenes tour of the company headquarters. The Parade Co., Detroit. $20 members, $50 nonmembers (includes continental breakfast); preregistration is required. Contact: Maggie Oldenburg, (313) 596-0482; email: moldenburg@ detroitchamber.com; website: detroitchamber.com.
CALENDAR GUIDELINES If you want to ensure listing online and be considered for print publication in Crain’s Detroit Business, please use the online calendar listings section of www.crainsdetroit.com. Here’s how to submit your events: From the Crain’s home page, click “Detroit Events” in the red bar near the top of the page. Then, click “Submit Your Entries” from the drop-down menu that will appear and you’ll be taken to our online submission form. Fill out the form as instructed, and then click the “Submit event” button at the bottom of the page. That’s all there is to it. More Calendar items can be found on the Web at www.crainsdetroit.com.
Thursday, October 9th
for kerkstra precast’s
open house 3373 busch drive - Grandville, MI plant & office tours * networking * Food
rsvp: . .
https://kpopenhouse eventbrite com
KENT ISD GRAND RAPIDS, MI
KERKSTRA PRECAST KERKSTRA PRECAST www.kerkstra.com
Detroit Economic Club Presents: Mary Barra. 11:30 a.m.1:30 p.m. Oct. 28. Detroit Economic Club. With Mary Barra, CEO of General Motors Co. Detroit Marriott at the Renaissance Center, Detroit. $45 DEC members, $55 guests of members, $75 others. Barra Contact: (313) 9638547; email: info@econclub.org; website: econclub.org.
Research for a Brighter Future Lawrence Technological University is leading the way to a safer, healthier world. From groundbreaking research to improve the longevity of bridges
The Future of Global Healthcare From Your Local Pharmacy, 11:30 a.m.-1:30 p.m. Oct. 31. Detroit Economic Club. Gregory Wasson, president and CEO of Walgreen Co., and Nancy Schlichting, CEO, Henry Ford Health System,
to studies on using electrospun
will discuss the merger of Walgreens and Alliance Boots and global health care trends. Westin Book Cadillac, Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econclub.org. Maverick Marketing Monday. 11:30 a.m.-1 p.m. Nov. 3. Detroit Regional Chamber. Join Alexandra Gonzalez, Google expert, on how to use search engine marketing and how Google can grow business. Emagine Royal Oak, Royal Oak. $20 members, $50 nonmembers; preregistration required. Contact: Maggie Oldenburg, (313) 596-0482; email: molden burg@detroitchamber.com; website: detroitchamber.com.
that interact with humans
Detroit Economic Club Presents: Mike Jackson. 11:30 a.m.-1:30 p.m. Nov. 6. Detroit Economic Club. With Mike Jackson, chairman and CEO, AutoNation Inc. Dearborn Inn Marriott, Dearborn. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org;
nanofibers for knee ligament regeneration and building robots
effectively and safely, Lawrence Tech faculty and students are conducting leading-edge research to create a brighter future.
Explore over 100 undergraduate, master’s, and doctoral programs in Colleges of Architecture and Design, Arts and Sciences, Engineering, and Management.
Lawrence Technological University 21000 West Ten Mile Road, Southfield, MI 48075-1058 800.225.5588 | admissions@ltu.edu | www.ltu.edu
2014
BEST COLLEGES in the Midwest Princeton
Review®
2014
GREEN COLLEGE Princeton
Review®
2014 AMERICA’S BEST
UNIVERSITIES U.S. News & World Report®
20140929-NEWS--0024-NAT-CCI-CD_--
9/26/2014
10:40 AM
Page 1
Page 24
CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS
September 29, 2014
PEOPLE ARCHITECTURE Drew Melow to interior
designer,
Kraemer Design Group PLC, Detroit, from interior designer, Scarcello Associates Inc., Southfield. Also, Jennifer Elmore to project architect, from proMelow ject architect, Ehresman Associates Inc., Troy.
CONSULTING Elise Iafrate to business development consultant, Rain BDM, Bloomfield Hills, from business development manager, Warner Norcross & Judd LLP, Southfield. John Kontos to director of business development, Cambridge Consulting Group, Troy, from business development consultant, Arthur J. Gallagher & Co., Bingham Farms.
FINANCE Michael Stolnack to vice president of credit administration, Clarkston State Bank, Waterford Township, from bank examiner, Michigan Department of Insurance and Financial Services, Lansing.
LAW Ilana Ben-Zeâ&#x20AC;&#x2122;ev to partner, real estate department,
Honigman Miller Schwartz and Cohn LLP, Bloom-
Ben-Zeâ&#x20AC;&#x2122;ev
IN THE SPOTLIGHT McLaren Macomb, Mt. Clemens, has named Thomas Brisse president and CEO. Brisse replaces Mark Oâ&#x20AC;&#x2122;Halla, who was promoted to executive vice president and COO of Flint-based McLaren Health Care Inc. Brisse brings Brisse 27 years of hospital operations experience to his new role. He most recently was executive vice president of operations for Beaumont Health System and before that held administrative positions at Beaumont Troy, including senior vice president/hospital president and vice president of operations. Brisse, 51, earned a bachelorâ&#x20AC;&#x2122;s degree in sociology and a masterâ&#x20AC;&#x2122;s in health service administration from the University of Michigan. Bill Johnson to director of finance, MVP Collaborative Inc., Madison Heights, from CFO, Xcend Group Inc., Brighton. Max Muncey to account supervisor, The Quell Group Inc., Troy, from senior account executive.
NONPROFITS
field Hills, from dean of students, Wayne State University Law School.
Scott Harrison to vice president for advancement and external relations,
Troy, from freelance writer and researcher, Troy.
from chief information officer. Cheryl Kohs to director of marketing, Lutheran Social Services of Michigan, Detroit, from vice president, PCG Campbell, Dearborn. Michelle Malamis to director of development, Kadima, Southfield, from executive director, Canton Community Foundation, Canton Township. Caen Thomason-Redus to director of corporate partnerships, Sphinx Organization, from manager of corporate partnerships.
SERVICES Greg DeSandy to director of sales for Cobo Center, SMG, Detroit, from director of sales and marketing, Augusta Marriott at the Convention Center, Augusta, Ga. Mary Engelman to director of government and public relations, OpTech LLC, Troy, from executive director, Greater Farmington Area Chamber of Commerce, Farmington.
TECHNOLOGY Rejji Hayes to se-
from executive director of board engagement and strategy.
Joanne Bender to associate director of content development, 2XL Co. Inc., Harrison
Shaindle
Braun-
Thomason-Redus
stein to chief administrative officer, Jewish Family Service of Metropolitan Detroit, West Bloomfield Township,
Detroit Symphony Orchestra, Detroit,
MARKETING
1HHG DQ ,QYHVWPHQW 5HDO (VWDWH /RDQ"
Kohs
Hayes
nior vice president and CFO, ITC Holding Corp., Novi, from interim CFO.
BUSINESS DIARY ACQUISITIONS & MERGERS Butzel Long PC, Bloomfield Hills, acquired May, Simpson & Strote PC, Bloomfield Hills. Website: butzel.com. Penske Automotive Group Inc., Bloomfield Hills, has signed an agreement to acquire MTU Detroit Diesel Australia, Victoria, Australia, a distributor of diesel and gas engines and power systems, operating in Australia, New Zealand and the Pacific. Website: penskeautomotive.com.
&DOO XV /RDQ DPRXQWV DQG DERYH $GGLWLRQDO DYDLODEOH ORDQV Â&#x2021; 6%$ 86'$ /RDQV Â&#x2021; 2ZQHU 2FFXSLHG 5HDO (VWDWH Â&#x2021; /LQHV RI &UHGLW Â&#x2021; $FFRXQWV 5HFHLYDEOH Â&#x2021; (TXLSPHQW Â&#x2021; %DQN :RUNRXWV
ZZZ HFOLSVHFDSLWDOJURXS FRP 2UFKDUG /DNH 5G 6\OYDQ /DNH 0, ³6LQFH ´
CONTRACTS Advanced Photonix Inc., Ann Arbor, a supplier of optoelectronic sensors, devices and instruments used by the test and measurement, process control, medical, telecommunications and homeland security markets, was awarded a contract of about $1.6 million from a leading military contractor that acts as a prime supplier for the U.S. Navyâ&#x20AC;&#x2122;s guided missile weapon system. The contract, for a custom photodiode, is expected to be completed within 18 months. Website: advancedphotonix.com. Creative Breakthroughs Inc., Troy, an IT risk management company, has entered into an agreement with FireMon LLC, Overland Park, Kan., a provider of security intelligence, to use the FireMon Security Intelligence Platform. Websites: firemon.com, cbihome.com. Michigan Schools and Government Credit Union, Clinton Township, selected iDashboards Enterprise Suites by iDashboards, Troy, a supplier of business intelligence dashboard technology, to create dashboards to track
key performance indicators. Websites: msgcu.org, idashboards.com. Yottabyte LLC, Bloomfield Township, a provider of software-defined data storage and data centers, and creators of yCenter and yStor, announced that Chemical Bank, Midland, has deployed the yStor software-defined storage solution to help maintain its growing IT infrastructure. Website: yottabyte.com.
EXPANSIONS The Better Health Store Inc., Novi, has opened a Better Health Market at 14105 Hall Road, Shelby Township. Telephone: (586) 884-6160. Website: thebetterhealthstore.com. Cupcake Station, Birmingham, has opened a location at 205 S. Main St., Rochester. Telephone: (248) 651-5401. Website: cupcakestation.com. Daifuku America Corp., a subsidiary of Daifuku Webb Holding Co., Farmington Hills, opened 8,000 square feet of new office space and a complete remodel of its building at 6700 Tussing Road, Reynoldsburg, Ohio. Website: daifukuwebb.com. Gongos Inc., Auburn Hills, parent company to Gongos Research and O2 Integrated, has launched its third business unit, Arti|fact. Founded on the philosophy of insight curation, Arti|fact contextualizes and preserves knowledge inside organizations, making it more consumable, immersive and memorable. Website: gongos.com.
The Guarantee Co. of North America USA, Southfield, has opened a branch at 470 Olde Worthington Road, West-
erville, Ohio. Website: theguaran tee.com/us. Halla Visteon Climate Control Corp., a subsidiary of Visteon Corp., Van Buren Township, has started production at its new manufacturing facility, Climate Systems Mexicana SA de CV, Queretaro, Mexico. Website: hvccglobal.com. Rainbow Child Care Center, Troy, an early education provider, has opened a new school at 2065 Three Mile Road, Walker. Website: rainbowccc.com. Waveform Technology LLC, Troy, a data center and Internet bandwidth provider, has added 1 megawatt of electrical infrastructure upgrades to support the Bitcoin mining segment, which has received 40,000 square feet of data center floor space for Bitcoin mining equipment. Website: wave form.net. Wright & Filippis Inc., Rochester Hills, has launched a wholly owned subAccess, dedicated sidiary, A4 to providing accessibility products and related services. Website: a4-access.com. 101 Mobility LLC, Wilmington, N.C., which provides accessibility equipment, has opened Mobility of Livonia at 13995 N. Haggerty Road, Unit 817, Plymouth. Telephone: (734) 367-4105. Website: http://101mobility.com/Liv oniaMI/index.php.
NAME CHANGE Clean Green Energy LLC, Brighton, a renewable energy company, has changed its name to CGE Energy. Website: cgeenergy.com.
20140929-NEWS--0025-NAT-CCI-CD_--
9/26/2014
5:28 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 25
Fed weighs impact of jobless boomers in labor market BLOOMBERG NEWS
Constantine Kortesis says he can sense the odds of finding work at his age are against him. “I’ve gotten to the point where I know it’s just a waste of time” to apply for jobs, said Kortesis, 61. “Once you get past 50 years old, nobody really wants to talk to you.” Kortesis, a former senior engineering project manager at Electronic Data Systems Corp. in metro Detroit, says he was let go more than five years ago in a round of mass firings after the company was acquired by Hewlett-Packard Co. The certified manufacturing engineer is looking for steady employment that’s yet to materialize, and now he’s counting the days until he can apply for Social Security. Since 1980, just 20 percent of 55to 59-year-olds who leave the workforce during economic slumps or in early stages of recoveries are employed again within four years, according to a study by Federal Reserve Bank of Boston economists Daniel Cooper and Maria Jose Luengo-Prado published last month. Re-entry improves the younger the worker, with the share climbing to 41 percent of 45- to 54-yearolds and 78 percent of 25- to 44year-olds, according to their research. Kortesis personifies the gray area between the so-called cyclical component of the drop in workforce participation during this economic expansion, which can be influenced by the strength of the recovery, and irreversible structural elements such as an aging population.
MARKET PLACE BUSINESS SERVICES
BUY or SELL a BUSINESS
You’re not going “ to get a bounce-back of the baby boomers suddenly getting younger.
”
Jim Stock, Harvard University
Weighing the balance is a critical issue for Fed officials as they gauge labor-market strength for signs that it’s safe to raise the benchmark rate for the first time since 2006. The Boston Fed findings illustrate just how difficult it will be for monetary policy to pull older Americans, who make up a large share of the long-term unemployed, back into the workforce. “You’re not going to get a bounce-back of the baby boomers suddenly getting younger,” said Jim Stock, an economics professor at Harvard University, referring to the generation born between 1946 and 1964. “There’s this vague line between structural and cyclical,” he said. Figuring out where it lies “is actually quite important for the Fed because it gives an indication of how far the labor market is from recovery.” About 40 percent of unemployed Americans 55 to 64 years old had been jobless for 27 weeks or more in August, according to U.S. Labor Department data. That’s higher than any other group except for those 65 and older. Meanwhile, almost 30 percent of
OFFICE SPACE û BLOOMFIELD HILLS û EXECUTIVE OFFICE SUITE FOR LEASE
jobless workers 25 to 34 years old were long-term unemployed. Because younger workers are less likely to drop out of the labor force for reasons such as disability or retirement, they have a higher probability of being pulled back in, said Dana Saporta, U.S. economist at Credit Suisse Securities USA in New York City. From the fourth quarter of 2007 as the recession was about to start through this year’s second quarter, the labor force participation rate — or the share of the working-age population with a job or looking for one — declined by 3.1 percentage points to 62.8 percent, the lowest since 1978. The drop in participation has helped cut unemployment more than projected by Fed policymakers. The jobless rate was 6.1 percent in August, down from 7.2 percent in the same month last year. In order to be considered unemployed, a worker has to be actively looking for a job. Retiring baby boomers account for 1.3 percentage points of a 2.8point decline in participation since the end of 2007 through this year’s second quarter as calculated in research by Fed economists. They adjusted the gauge for population shifts and a redesign of the government survey, and the results were published by the Washington, D.C.-based Brookings Institute this month. Such demographics will continue to weigh on the rate going forward, they found. Anywhere from 0.25 percentage point to 1 percentage point of the decline in participation is attributable to the effects of a weak re-
OFFICE BUILDING
COMMERCIAL PROPERTIES
û DOWNTOWN BIRMINGHAM, MI û
û MOTEL FOR SALE û MACKINAW CITY, MICHIGAN On Straits of Mackinaw and overlooking the Mackinac Bridge. 24 units plus living quarters. Large repeat business. Owners Retiring.
Call Bill 248-505-5840 MetroSoldBusiness.com Outside Waterfront Weddings & Receptions DestinationWeddingsUpNorth.com
Limited 2015 Dates Available
906-643-8621 Call Us For Personalized Service: (313) 446-6068 CLOSING TIMES: Monday 3 p.m., one week prior to publication date. Please call us for holiday closing times. FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds Confidential Reply Boxes Available PAYMENT: All classified ads must be prepaid. Checks, money order or Crain’s credit approval accepted. Credit cards accepted.
See Crainsdetroit.com/Section/Classifieds for more classified advertisements
Call Steve at 231-631-6686 sdsteffes@gmail.com Private office atmosphere with full service environment including conference rooms, receptionist, coffee service, parking and more. Can accommodate a professional organization with 6 to 12 individuals. A desirable Bloomfield Hills address, southwest corner of Maple and Lahser. Call (248) 644-2701.
JOB FRONT POSITIONS AVAILABLE EASTERN MICHIGAN UNIVERSITY Vice President for Advancement & Executive Director of the EMU Foundation Eastern Michigan University, a metropolitan University serving over 22,000 students, seeks an experienced advancement leader to serve as Vice President for Advancement & Executive Director of the EMU Foundation. This position serves as the chief advancement officer for EMU. The Vice President will oversee all development and alumni relations strategies, operations and campaign planning processes needed to help the University achieve its short and long term goals.
To learn more about the job and to apply online go to: http://www.emich.edu/jobs
Economists at Goldman Sachs Group Inc. in New York are wagering the cyclical effect is probably on the higher end of the Fed researchers’ range, meaning there’s a large amount of labor-market slack waiting to come online as the economy improves, according to a Sept. 10 research note. They found that other economists agree. A full percentage point of the decline in labor-force participation is due to cyclical factors, according to the median estimate of 15 papers on the topic analyzed by Goldman Sachs. “We believe the evidence continues to show a meaningful cyclical effect on the participation rate,” Goldman economists David Mericle and Sven Jari Stehn wrote. Certain elements of labor market slack may be flying under the radar for some economists, illustrating the blurry line between what is cyclical and structural. For example, Kortesis, who now lives near Lake Michigan in the northern part of the Lower Peninsula, exhausted his unemployment benefits in October. He said he would take a job if one were easily available in his field. A position wouldn’t even have to be full time, Kortesis said. “All it would take was if somebody just said, ‘Hey, I got a job for you.’ ” He keeps busy by putting the finishing touches on the cottage where he and his wife, who is supporting the couple by juggling three jobs, now live. While that’s stressful, she’d like him to finish the construction project and forgo the job search, Kortesis said.
REAL ESTATE
Expert Results! WEDDING SERVICES
covery and labor market, the Fed economists found. Central bankers can influence how much of this slack is erased by keeping interest rates low to boost growth, whereas there is little they can do about more permanent shifts in the workforce. New York Fed President William Dudley last week said he favors letting the economy run “a little hot” by allowing the unemployment rate to fall a little below what central bankers consider optimal. The Fed is carefully monitoring the labor market and any remaining slack as it winds down an unprecedented monetary stimulus aimed at lifting the economy out of the worst recession in the post-World War II era. “The labor market has yet to fully recover,” Fed Chair Janet Yellen said during a Sept. 17 press conference following a meeting of the policy-making Federal Open Market Committee. “There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work, and too many who are not searching for a job but would be if the labor market were stronger.” If the decline in participation is mostly structural, it means “we’re going to arrive at full employment sooner,” said Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co. in New York, referring to the level of joblessness consistent for stable inflation. He estimates the cyclical component of the drop in participation since 2007 is “less than a percentage point.”
For Sale ~ Rare Opportunity Class A ~ Core Asset Requests for information by email only to: 260eastbrown@brodersachse.com
NOVI MEDICAL INVESTMENT 23,325 sq ft - 9% Cap - $3.95 Mil Beaumont Hospital Tenancy Long term leases - Expandable site
DeLorean Assoc., Inc. 248-646-1930 deloreaninc@comcast.net
WATERFRONT PROPERTY
FOR SALE: 16 Acres on Private Lake Oakland County. Over 400 ft. Lakefront, 528 ft. paved rd. frontage, Fenton SD, 8 miles to I-75. $495,000. 810-444-1240
Grand Rapids Area 18 Hole Golf Course Restaurant/Banquet Facility
AUCTIONS
A U C T I O N
VACANT LAND
Core Commercial Real Estate corere@msn.com / 586-992-8800
û ADDISON TOWNSHIP û Lakeville / Barr Road Area Vicinity of former Mt. Grampition Ski Resort 64 Acres ~ Asking $695,000
Call Realtor Broker, Tony McHugh Real Estate One Westrick 586-530-1094
REAL ESTATE IN BLOOMFIELD HILLS
1130 BURNHAM ROAD BLOOMFIELD HILLS MICHIGAN 48304 MONDAY, OCTOBER 13 at 7:00 pm ĞĂƵƟĨƵů Ϯ͘ϮнͬͲ ĂĐƌĞ ƉƌŝǀĂƚĞ ǁŽŽĚĞĚ ůŽƚ ŝƐ ƚŚĞ ƐĞƫŶŐ ĨŽƌ ƚŚŝƐ ƐŽůŝĚ ďƌŝĐŬ Ϯ ƐƚŽƌLJ ŚŽŵĞ ǁŝƚŚ ϯ ůĞǀĞůƐ͕ ϯ ďĞĚƌŽŽŵƐ͕ ĂŶĚ ϯ͘ϱ ďĂƚŚƐ͘ /ƐůĂŶĚ ŬŝƚĐŚĞŶ ǁŝƚŚ ŐƌĂŶŝƚĞ ĂŶĚ ƚŽƉ ŽĨ ƚŚĞ ůŝŶĞ ĂƉƉůŝĂŶĐĞƐ͘ >ŽǁĞƌ ůĞǀĞů ǁŝƚŚ ƚŚĞĂƚƌĞ ƌŽŽŵ͕ ǁŝŶĞ ĐĞůůĂƌ ĂŶĚ ǁĞƚ ďĂƌ͕ ǁĂůŬ ŽƵƚ ƚŽ ƉŝĂŶŽ ƐŚĂƉĞĚ ƉŽŽů ĂŶĚ ŚŽƚ ƚƵď͘
View More Online at ǁǁǁ͘ƉĂŵĞůĂƌŽƐĞĂƵĐƟŽŶ͘ĐŽŵ YƵĞƐƟŽŶƐ͍ Call Us At 877-462-7673
Financing Available
WĂŵĞůĂ ZŽƐĞ͕ ƌŽŬĞƌ͕ ƵĐƟŽŶĞĞƌ͕ Z ͕ / ƉĂŵΛƉĂŵĞůĂƌŽƐĞĂƵĐƟŽŶ͘ĐŽŵ
RECREATIONAL PROPERTY
DŝĐŚĂĞů DƵƌƌĂLJ͕ Z >dKZΠ͕ ƵĐƟŽŶĞĞƌ ŵŝĐŚĂĞůΛƉĂŵĞůĂƌŽƐĞĂƵĐƟŽŶ͘ĐŽŵ
MIDLAND COUNTY 65 Acres, Hunting/Building Site, 430’ on North Coleman Rd. New Pole Barn. 30’ x 48’ x 12’. All equipment included. State land front & back. $225,000. CALL DAVE AT 989-777-1437.
© 2014
BY VICTORIA STILWELL
PAMELA K ROSE ç ã®ÊÄ Ê >>
20140929-NEWS--0026-NAT-CCI-CD_--
9/26/2014
5:06 PM
Page 1
Page 26
September 29, 2014
CRAIN’S DETROIT BUSINESS
BOARD CANDIDATES: A WHO’S U Wayne State University board of governors
University of Michigan board of regents
Michigan State University board of trustees
Seattle firm plans Detroit location to train Web developers BY SHERRI WELCH CRAIN’S DETROIT BUSINESS
Kelly
Thompson
Democrats 䡲 Marilyn Kelly, 76, Bloomfield Hills. Former Michigan Supreme Court justice, State Board of Education member and Michigan Court of Appeals judge. 䡲 Dana Thompson, 42, Ann Arbor. Attorney, clinical professor of law and director of the University of Michigan’s Entrepreneurship Clinic.
Busuito
Behm
White
Democrats 䡲 Michael Behm, 46, Grand Blanc. Attorney, chairman of Business Forward Michigan; cofounder and former president of Level Field Institute. 䡲 Kathy White, 48, Ann Arbor. Two-term incumbent, chair of board of regents, law professor at Wayne State University Law School and the U.S. Military Academy at West Point, N.Y.
Owen
Perles
Democrats 䡲 Faylene Owen, 78, East Lansing. Incumbent, founder and former owner of Mica Corp., a small market research and communications firm; former director of special projects for Gov. James Blanchard. 䡲 George Perles, 80, Haslett. Incumbent, former Michigan State University athletic director and football coach, founding CEO of the Motor City Bowl.
Jasti
Republicans 䡲 Michael Busuito, M.D., 60, Troy. Plastic surgeon, Somerset Plastic Surgery. 䡲 Satish Jasti, 55, West Bloomfield Township. Vice president and senior loan officer at the Bank of Ann Arbor; former president, founder and CEO of Novibased Lotus Bancorp Inc.
Steele
Weiser
Republicans 䡲 Robert Steele, M.D., 57, Ypsilanti. Founding shareholder of Michigan Heart PC, full-time cardiologist. 䡲 Ron Weiser, 69, Ann Arbor. Founded McKinley Associates Inc., a national real estate investment company; former Michigan Republican Party chairman; former U.S. ambassador to the Slovak Republic.
Foster
Sakwa
Republicans
䡲 Melanie Foster, 59, East
Lansing. Served one term on board. Manages a real estate portfolio, former president of Reinhold Landscape. 䡲 Jeff Sakwa, 54, Farmington Hills. President and CEO of Farmington Hills-based Noble Realty.
Boards: What’s in a name? Not much ■ From Page 3
commercials with Bo Schembechler campaigning for him. In 2010, Democrat Colleen McNamara lost her seat on the MSU board during a national wave election for Republicans. In 2008, Danialle Karmanos ran for a seat on the Wayne State board but lost, as did all other GOP candidates. She tried again in 2010 and won along with every other Republican running for the three boards. In 2004, former Republican House Speaker Paul Hillegonds lost a race for a seat on the Wayne State board in a year dominated, though not swept, by Democrats. T.J. Bucholz, president of Lansing-based Vanguard Public Affairs, has worked in both Democratic and Republican administrations. He said that because of frequent shifts in party dominance, some candidates are just lucky based on when they seek the position, as voters rarely know anything about the candidates. In the past two presidential election years, the Democratic candidates for the three boards all won. And in 2010, the last nonpresidential election year, the Republican candidates swept. The last presidential election year that wasn’t a Democratic sweep was in 2004. That year, when Michigan voted narrowly for John
If Republicans sweep all six university board seats, all three boards would go from having a 6-2 Democratic majority to being evenly split between the two parties. Kerry, Republican Melanie Foster won a seat on the MSU board but lost a re-election bid in 2012 and is seeking a spot again this year. Ballenger said that because the race for governor is expected to be close, this could be the first time in 10 years where there is not a one-party sweep. “There is a good chance you will get a split on one or more of these boards this year,” he said. And then names might matter. Two of the better-known candidates this year are former Michigan State football coach George Perles, who is seeking re-election to the MSU board, and former Michigan Supreme Court Justice Marilyn Kelly, running for the Wayne State board. Both are De-
Michigan Union
mocrats. But if Republicans sweep all six seats, all three boards would go from having a 6-2 Democratic majority to being evenly split between the two parties. “This could be a big deal,” Ballenger said. “The Democrats have nothing to gain and everything to lose.” While university board members are not as partisan as lawmakers in Lansing, he said, issues can arise that can be ideologically driven — such as collective bargaining rights for graduate students, domestic partner benefits and other cultural issues. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz
Seattle-based Code Fellows LLC has set its sights on opening a Detroit location by next summer to help meet local demand for Web and mobile developers. The company’s CEO, Kristin Smith, a Troy native, was in town during the recent Crain’s-led Detroit Homecoming event to pave the way. She met with organizations offering incubator and co-meeting Smith space and with the Detroit Economic Growth Corp. and its vice president of business development, Olga Stella, whom Smith said she knew in high school. Smith, 39, is contacting area employers as a first step in developing the local training Code Fellows will offer in the Detroit market. Detroit has “a great growth trajectory and a lot of openness to new ideas that will help the company grow ... and be part of this next evolution of what Detroit is going to be,” Smith said. It also doesn’t hurt, she said, that since she is from metro Detroit, she has relationships with people here who can run a satellite location. “It’s a matter of when we open in Detroit, not if we open there,” Smith said. “We’re hoping to have a presence in Detroit by next summer.” Code Fellows, which launched a year and a half ago, teaches people to write code through three levels of courses that add up to four months of training that costs $12,000. They range from a technology overview to an eight-week intensive focus on one of five technology tracks it offers to train would-be developers: Ruby on Rails and Full-stack Java Script for creating Web apps; iOS Development for cellphones and iPads; Front-End UX used in website design/marketing; and Python, which is used to make websites and in other data-intensive applications such as research and medical labs. The company guarantees that within nine months of graduating, its graduates will get a job offer for at least $60,000 per year or Code Fellows will reimburse tuition. Smith projects the company, which has graduated more than 250 people since its March 2013 launch, will reach $5 million in sales this year. More than 80 percent find jobs within three months of graduation as Web and mobile developers, and all but a few find employment as software developers within six months, Smith said. Last week, Code Fellows announced plans to open its second location, in Portland, Ore., with the November launch of its fourweek Foundations I course to teach the basics of computer sci-
ence and Web development. Demand for Web and mobile developers in Detroit is only a fraction of that in Seattle, Smith said. Last week, Code Fellows pulled the number of jobs on simplyhired.com in several major cities for positions in one of the five code areas it teaches. There were 3,352 openings in metro Detroit versus 5,981 in Portland, 15,766 in Seattle, and 26,334 in San Francisco. “While Detroit isn’t as large as Seattle or San Francisco, there are still a ton of open positions that represent talent that companies have not yet found,” she said. “We hope to make a bigger pipeline of talent so that they don’t operate without this talent for long and to help people improve their lives and careers.” And there are lots of opportunities for growth in Detroit, she said. Software is broadly used in the automotive industry inside vehicles, in manufacturing processes and in managing supply chain logistics, and it’s taking off in health care with the advent of electronic medical record systems and online portal communication between doctors and patients, Smith said. Technology is also playing a big role in the operations of other traditional businesses, she said. “In Seattle, we’ve been surprised at the breadth of industries that have this talent need,” Smith said. “It’s really going in and finding where there’s this need for talent and crafting the right curriculum” to meet it. Since its launch in Detroit early last year, Grand Circus LLC has provided similar types of technology training to more than 500 people through workshops and boot camps held over several weeks, said Grand Circus CEO and cofounder Damien Rocchi. He couldn’t say how many of the total are working now in jobs tied to that training, since not all were seeking new jobs, but he points to stories of former pizza delivery drivers and personal trainers now working in Web development and quality assurance testing of code. Rocchi also said that of 42 people who took place in a July-August boot camp for .NET developers and quality assurance testers, 70 percent are in jobs already. And 100 percent of the 12 people trained as junior iOS developers in a separate, apprenticeship program with Detroit Labs have been hired. “There’s a chronic shortage in some of these new skills, and we think Detroit is a great place to build a business,” Rocchi said. “We feel strongly about building a business by doing good and creating jobs for Detroit.” If Code Fellows is able to help out with that mission, “we think it’s a great thing,” he said. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch
20140929-NEWS--0027-NAT-CCI-CD_--
9/26/2014
5:09 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 27
Ross: Major UM donor says criticism of Brandon ‘hurting’ UM ■ From Page 1
Ross is the chairman of the university’s $4 billion “Victors for Michigan” fundraising campaign. The athletic department and the business school are splitting $200 million that Ross pledged to the university in September 2013. He also gave $100 million in 2004 to the business school that prompted UM to rename it for him. Ross, 74, has not suggested his donations to the university would cease if Brandon were fired, and said he hasn’t spoken to anyone at UM about him. A source within the university, who agreed to speak only on the condition of anonymity, said concerns about Brandon and UM athletics are a talking point, but little else at this point. “There’s no movement to push Brandon out,” the source said, who noted that any change would go through the university president, to whom the athletic director reports, and would be a long-term process rather than a sudden dismissal. Ross, who will be in Ann Arbor for the football game against Penn State University on Oct. 11, said it is “hurting Michigan by pressuring” Brandon, 62, who declined to comment. Ross said he only occasionally talks to Brandon, and has not since negotiating the leasing of Michigan Stadium this summer for $2.6 million for the Manchester UnitedReal Madrid match Aug. 2. Ross and Brandon negotiated the deal for Ross’ New York Citybased Relevant Sports to use the stadium for the match, which was part of the wider International Champions Cup exhibition tournament. “He’s a tough business guy,” Ross said. The revenue from the soccer match is an example of the fundraising that Brandon was hired to do as athletic director. “All of our (Big Ten Conference athletics) departments crave capital to build facilities to compete at the highest level,” Brandon told Crain’s in February for a story about the football coach job having a donor’s name added to it as a formal title. “All of these departments are out trying to maximize the opportunity to raise funding support.” The athletic department’s current budget estimates $151 million in revenue against $145.9 million in expenses. Fans and pundits have grumbled as UM has struggled on the field, and Brandon has been a target since he was hired in 2010 with a plan to give the athletic department a corporate-style overhaul — and raise money.
Criticism One of Brandon’s leading critics is author John U. Bacon, a UM alumnus and journalist-turned-author/speaker, who noted in a Yahoo Sports column in June that 6,000 UM students didn’t buy football ticket packs this season. “I’ve come to believe it’s not scandal that will bring down college athletics, but greed. How long can these numbers, fueled by increasingly unhappy fans, continue to skyrocket before they come
crashing down to earth?” he wrote. “Tickets used to be underpriced, and you knew that when you scalped them for more than you paid. Now they’re overpriced, and you know that when you try to sell them through Michigan’s Official Scalper, StubHub, and get far less.” Brandon also has been under a microscope for two recent incidents: The regents on July 17 rejected the athletic department’s request for fireworks during the Sept. 13 home football game against Miami University, and the Oct. 11 game against Penn State. Fireworks have been approved for games in the past, so the rejection was seen by some as a message by the regents to Brandon of their displeasure with him. On Sept. 22, a photo on Twitter revealed that two $75 tickets for the Sept. 27 game against the University of Minnesota would be given away for every $3 Coca-Cola product purchase at the Michigan Union on campus — prompting howls of outrage over tickets being devalued and accusations that UM wanted to ensure at any price its streak of 100,000-plus attendance continued. The athletic department said the giveaway was a misunderstanding with Coke, which bought a batch of tickets for promotional purposes, and shouldn’t have happened. Other criticism of Brandon has included what some say is the failure to hire Les Miles or Jim Harbaugh as football coach, the scheduling of mediocre non-conference football opponents, market-driven pricing for single-game tickets, and replacing student seating by seniority with general admission. The latter was later revised.
Football and contracts Looming over everything are the football team’s struggles. Going into Saturday’s home game against Minnesota, Michigan was 2-2, a record that included humiliating losses to Notre Dame and the University of Utah. Head coach Brady Hoke’s career win-loss record through his fourth season at UM going into Saturday was 28-15 (15-9 in the Big Ten). He’s 1-2 against both archrivals Ohio State University and Michigan State University. Ross said that even if the football team continues to struggle, he doesn’t expect Brandon to fire Brady Hoke in midseason. “In college, you don’t change coaches in the middle of the season. That’s just not rational. That will hurt the whole program,” he said. “Michigan isn’t going to act that way. It’s not the SEC. I’m sure Brady feels the pressure and knows his job is on the line.” Michigan signaled its approval of Brandon’s work when it gave him a new contract in July 2012 that pays him a base salary of $900,000 in 2014-15. The six-year deal is through 2018, and pays him a $5.55 million base, and he can earn up to $1.3 million in deferred compensation through 2018. He gets fringe benefits such as free tickets, use of two cars, a golf club membership, and travel reimbursement for his wife. Brandon’s contract stipulates
that if he’s fired without cause prior to Jan. 1, 2016, the university must pay him his remaining base salary and his remaining deferred compensation. Firing him after that date reduces the payout to 50 percent of both the remaining base salary and deferred compensation. The for-cause firing reasons under the deal are limited to failing to carry out his job duties, felony convictions and other legal issues, and NCAA violations. Any suggestion that Brandon may be ousted has come from the blogosphere and social media, and fueled by the football defeats that magnify displeasure over price increases and marketing ploys. The university source who would speak about Brandon only without attribution said the UM administration could have hashed out any serious concerns about him on Sept. 18 when the regents approved the $168 million Athletics South Competition and Performance Project. “That’s where this could have played out, and it didn’t.”
Money talks Ross’ financial commitments to Michigan make him a voice to whom the university listens. The school’s sprawling collection of athletics buildings and sports venues for its 931 studentathletes has been named the Stephen M. Ross Athletic Campus. His money is paying for new facilities for both athletic and academic support, including the $168 million Athletics South Competition and Performance Project, which includes a men’s and women’s lacrosse stadium, indoor track, outdoor track, men’s and women’s soccer team building, and a team and performance center. “It’s something that’s damn impressive, and that’s what Michigan is about, the combination of sports and academics,” Ross said. He previously donated $5 million toward the construction of what became the 38,000-square-foot, threestory Stephen M. Ross Academic Center, an academic study space for UM athletes that opened in 2006 at a cost of $12 million. He also gave $5 million for the Michigan Stadium expansion and $50,000 to the College of Literature, Science, and the Arts for the Henry Pearce Endowed Scholarship, and scholarship support for student athletes. Brandon played a major role in Ross’ donations. Brandon explained what he was going to do with the money, and took him around the campus to explain the plan, Ross said. “No one has a bigger vision for Michigan athletics, all sports,” Ross said. “He really cares about the whole department, all the student athletes. Now is the time to be supportive of him. He will do the right thing.” Ross said he first met Brandon after the latter became athletic director in 2010, and has spent time with him. He said he was close to Brandon’s predecessor, the retired Bill Martin. “I really liked (Martin), and he set the stage for Dave,” Ross said. Ross, whose name is on the 6,000-student Stephen M. Ross
School of Business, earned an accounting degree from Michigan in 1962 after transferring from the University of Florida. That was followed by a law degree from Wayne State University in 1965 and a master’s of law degree the next year from New York University. He is chairman and majority owner of The Related Cos. LP, the real estate development firm he founded in New York in 1972. Ross is a Detroit native who grew up in Miami Beach and lives in New York. His uncle was the late Max Fisher, the noted Detroit philanthropist and industrialist. Ross began his career as a tax attorney with the Detroit office of Coopers & Lybrand, which later became PricewaterhouseCoopers.
‘He wants to win’ Brandon himself is a donor: In 2006, he and his wife, Jan, gave $4 million to the university. About $2 million of that was earmarked to build a modern neonatal intensive care unit at the C.S Mott Children’s and Women’s Hospital. David Brandon’s twin sons, Nick and Chris, were treated as newborns at the university hospital when they were born prematurely. Money for the gift also set up a $250,000 David and Jan Brandon Scholarship Fund for student athletes, $750,000 for the athletic department, $500,000 for a digital records storage center for the
school of education, and $250,000 each for the university’s art museum, urology department and business school. Brandon’s Michigan roots are deep: He was a high school quarterback from South Lyon who played sparingly under head football coach Bo Schembechler, and later switched to defensive end. He began his career, on the recommendation of Schembechler, at Cincinnati-based Procter & Gamble Co. and in 1979 joined Livoniabased Valassis Communications Inc. when it was called GFV Communications Inc. He was CEO there from 1989 to 1998 and was hired in 1999 as CEO of Ann Arbor-based Domino’s Pizza Inc., a job he left to become athletic director in 2010. He also has served on the university’s Board of Regents. He also was among the five finalists to become NFL commissioner in 2006. As a football team owner, Ross said he’s familiar with being under fire. “I know that feeling. I know how it is when you don’t win games, how people react,” he said, chuckling. “It’s got to be killing him, from that standpoint. He bleeds blue all the way. His passion for Michigan isn’t exceeded by anybody. He wants to win.” Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19
AMERICAN LEAGUE
DIVISION SERIES
& WILD CARD TICKETS ON SALE NOW Postseason luxury suites still available
ONLY AT Limit 12 tickets per game, per person. Some restrictions apply. While supplies last. Tickets not available by phone or box office.
20140929-NEWS--0028-NAT-CCI-CD_--
9/26/2014
5:21 PM
Page 1
Page 28
September 29, 2014
CRAIN’S DETROIT BUSINESS
Ads: Analysts say television ads are helping Schauer – so far ■ From Page 1
$6 million of that has been spent in the Detroit TV market, according to the Campaign Finance Network. In the 2010 race for governor between Snyder and Lansing Mayor Virg Bernero, the two sides spent $23 million, but that includes the ad buys during the heated primaries in both parties. The spending was not as heavy during the general election because it was never really a close race. Snyder cruised to victory by 18 percentage points. The reverse is the case this year as neither candidate had a primary opponent. Now Snyder and Schauer find themselves statistically tied, according to recent polling. (For another view, see story, this page.) But are all the ads working? Many analysts credit the political ads the Schauer campaign has been running for making this a tight race. Schauer’s messaging “is very disciplined. They’ve got three talking points, and they say them over and over again,” said Republican political strategist Dan Pero, who ran former Gov. John Engler’s first gubernatorial campaign in 1990 and his re-election in 1994. Pero said Schauer’s ads have focused on the tax on some pensions that Snyder signed into law as well as the reduction in the Homestead Property Tax exemption, which many seniors relied on, and the controversial notion that Snyder cut education funding by $1 billion. It’s on that point that many Republicans have been waiting for Snyder to finally fire back on and make clear he actually has increased spending on education by $1 billion. The Schauer campaign’s claim does not account for the federal stimulus funding that dried up the year Snyder took office. And state funding of K-12 education has gone up every year Snyder has been in office, totaling more than $1 billion. “Mark Schauer is lying,” said John Truscott, president of Truscott Rossman. “You have to go after that. You have to get that on the air.” But Joe DiSano, a partner with Main Street Strategies, a Democratic political consulting Truscott firm, said voters don’t look at fact-checking websites or research the claims made in ads. “Stacks of facts can’t turn around what people feel. Voters don’t pay attention to actuarial tables,” DiSano said. On Friday, the Snyder campaign debuted its first ad that hits back on the claim of education spending cuts. DiSano doesn’t think it will work. “That’s contrary to what people see when they go to their kid’s school,” he said. Truscott said that with fewer than 40 days until the election, time is running out to disabuse voters of the notion that Snyder has slashed education spending. And, he said, the campaign needs to start running ads that attack Schauer the way the Democrats have been attacking Snyder.
Strategist Dan Pero, who ran John Engler’s first campaign for governor in 1990, said the ad messaging of Democrat Mark Schauer “is very disciplined. They’ve got three talking points, and they say them over and over again.”
AARON ECKELS
Gov. Rick Snyder needs to start running ads that attack his opponent the way the Democrats have been attacking Snyder, says John Truscott of Truscott Rossman. Research has shown that voters typically need to see an ad five or six times before the message sinks in.
MARK SCHAUER FOR GOVERNOR
TV political barrage keeps other ad buyers away BY CHRIS GAUTZ
“Nobody has laid a glove on Schauer at this point,” Truscott said. When they do, he thinks Schauer’s poll numbers may slide by as many as five points. But it takes time to make that happen, Truscott said. Research has shown that voters typically need to see an ad five or six times before the message sinks in. And many voters in the state will start to receive their absentee ballots in the mail this week, so Truscott expects even more television ads to air and then again in the last week or two before Election Day. “Independents don’t tune in until the last few weeks anyway,” Truscott said. “You don’t run a campaign for the people that have already made up their mind.” DiSano said Snyder’s ads have not been focused or as well-done as Schauer’s, starting with the governor’s Super Bowl ad that showed him emerging from a swimming pool in scuba gear. Snyder’s ads then touted Michigan as the DiSano comeback state but then later assured voters that while “they might not feel” the economic recovery yet, they will. “It’s asking voters to have shortterm memory loss,” Disano said.
But what’s their agenda? One thing both sides agree on so far is that viewers watching the ads have no idea what Snyder would do if given a second term and only a slightly better idea of what Schauer would do if he was elected. Snyder’s ads so far have been spent defending his record or explaining what he has done, while Schauer’s ads have introduced him to voters and attacked Snyder on a host of issues. “Voters don’t know what either candidate wants to do in the next four years,” Pero said. Schauer will need to transition away from attacks on Snyder and explain to voters why he is a better
CAPITOL CORRESPONDENT
State political ads are dominating the airwaves, but it’s not just because both sides have the money to spend on them. Some businesses are pulling back their ad buying so as not to get lost in the midst of all the political ads, or be associated with them. “They don’t want their message surrounded by negativity,” said Matt Friedman, co-owner of Tanner Friedman Strategic Communications. Friedman said his firm has clients that have gone completely dark on television and plan to do so through Election Day, with one client that hasn’t been on TV since July. Friedman said clients are making up for the loss of exposure on TV with more Internet and print ads, and are budgeting for a longer stretch of TV ads next year. Jamie Michelson, president of Friedman the Troy-based advertising agency SMZ, said he also has clients that aren’t advertising as much, if at all, during the election season. He said some of that is planned, though, as much as a year in advance. But this year has stood out, he said, with the political ads starting much earlier and continuing all year.
“It’s a longer season, there’s more of it and it’s been running for a lot longer than usual,” Michelson said. For his clients, he said, it’s not so much about being around the negativity of the political ads. It’s more to do with the uncertainty that comes with ad buying this time of year, because broadcasters have the ability to pre-empt other advertising to ensure political ads are put on air, he said. But not all of his clients are staying off the air. Some have to still be active on TV because of timeliness issues, Michelson said. SMZ does work for the Detroit Tigers, who need to get the word out about playoff tickets, and the Michigan Lottery, another client, has new games it wants to promote, he said. But it’s those coming Tiger playoff games, and other live sporting events and newscasts, that are becoming more attractive to political campaigns to air ads during, making less room for other businesses to advertise even if they wanted to do so. “Media buying inventory is tight, but exceptionally tight this year,” Friedman said. With more TV viewers recording their favorite shows and watching them later and fast-forwarding past commercials, political campaigns want to make sure their ads often run during programming that people will watch live. “That’s DVR-proof,” Friedman said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz
Sowerby: Economic numbers add up to Snyder win Pollsters may be touting a statistical dead heat in Michigan’s gubernatorial race, but economist David Sowerby stands by the analysis he has used to call every race since 1994. It’s a nonpartisan measure, he said, that determines whether the “incumbent party” has a chance in November. A numbers wonk, Sowerby uses two metrics — the “misery index” that plots unemployment and inflation, and the “prosperity metric” reflecting job and income growth. By that measure, Sowerby told the audience of the Conference of Sowerby Western Wayne’s annual dinner in Dearborn last week, Gov. Snyder wins with 57 percent of the vote. With room for statistical error, on alternative, Pero said. DiSano said Schauer has made the case, after attacking Snyder for cutting education, that he would make education spending a top priority if elected. Truscott agrees that Schauer has been running good ads but said they open him up to attacks because he has yet to articulate how
the low side, Snyder wins with 53 percent of the vote, Sowerby later told Crain’s. “Today, the misery index has improved, or declined, and prosperity has improved. Game, set, match,” he said. “If you go back to 1978, this has accurately predicted the outcome in every gubernatorial election except for 1990. In 1990, it was simply too close to call,” Sowerby said. In that race, incumbent Gov. James Blanchard lost to Republican challenger John Engler. To explain his theory, Sowerby said: “Technically, I take two independent variables in a regression equation as a predictive, with a high correlation of the percent of vote to the incumbent parties.” Sowerby said he has gone back to the early 1960s, and the theory has never failed to predict the outcome. “People vote their pocketbooks,” he said.
he would pay for raising spending on education or the other ideas. “What he’s offering is very vague.” Pero said. Snyder ads that talk about how he fixed the state’s budget problems and that the state is now on a road to recovery are something easy for voters to visualize, he said. “I think voters will see the road
to recovery is a journey worth taking and the trip will get smoother as we go on,” Pero said. “Are we going to take this road to recovery, or are we going to take a detour ... into more (former Gov. Jennifer) Granholm?” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz
20140929-NEWS--0029-NAT-CCI-CD_--
9/26/2014
5:10 PM
Page 1
CRAIN’S DETROIT BUSINESS
September 29, 2014
Page 29
Parking: Meter’s running on plan to privatize ■ From Page 3
parking lease deal before it wraps a bankruptcy plan confirmation hearing before Rhodes in October. For now, the city will work within the parameters of its current parking plan, which includes limited deals with outside operators. One thing elected officials and Orr agree on: Infrastructure, both meters and structures, needs some TLC.
Outside operators Complicating matters, Nowling said, is that the current parking plan includes an option for creditor Syncora Guarantee Inc. to enter a longterm lease to operate and collect revenue from the city’s Grand Circus parking garage at 1600 Woodward Ave., after Syncora settled with the city earlier this month. The Grand Circus garage is the third-largest of seven city-owned garages that were originally expected to come under an operating lease to a private contractor. That means the valid bids likely would need to be updated before the city could reach a decision, Nowling said. Orr sent out the bid request in early August despite a 6-2 vote of the Detroit City Council July 29 to reject seeking contractor bids. The state emergency manager law allowed Orr to proceed without council approval during his 18month appointment by Gov. Rick Snyder, which expired last week. Another move by Orr was to push to increase parking revenue. He increased parking violation tickets starting June 1 from $20 to $45 for expired meters, and from $30 to $45 for double parking or blocking a driveway, after an analysis by city consultants determined that the
city spends about $32 on writing tickets and processing costs for every $30 parking fine it collects. The overall city parking RFP called for experienced bidders to submit quotes for a 30- to 50-year lease to manage, maintain and improve all or part of the city’s 6,884 parking spaces in seven garages, 3,200 on-street metered parking spaces, a related boot and towing service, and violation enforcement. That included the 2,600-space Joe Louis Arena garage, of which nearly 1,000 spaces were closed due to structural disrepair. The city has agreed to make more than $2.5 million of improvements to that garage, regardless of whether a lease deal is signed, even though the Michigan Strategic Fund earlier this year approved up to $6 million for demolition of the arena itself. Groundbreaking was Thursday on a new arena and entertainment district along Woodward near I-75, with Olympia Development of Michigan expected to operate the new arena starting in 2017. The state will demolish Joe Louis after the Detroit Red Wings’ last lease, approved in March, expires. That deal, approved for $1 million per year retroactive to 2010, also called for a $5.2 million payment to the city to resolve a dispute with the Wings over cable TV programming fees, and for the city to bear the garage repair cost. The 350-space Detroit cultural center garage along Third Street is also closed due to disrepair.
Best practices When it comes to parking, city
One thing elected officials and Emergency Manager Kevyn Orr agree on: Both parking meters and structures need some TLC. officials have said the parking plan initiated by Orr was unlikely to yield a contract without Orr in office. The mayor’s communications director, John Roach, said Friday only that the issue is “currently under review.” Duggan has said previously he is “not a fan of privatization” as a local government restructuring tool because of the loss of operational control; sometimes cities can simply more efficiently manage their assets. Besides structures that need repair, the city has previously estimated about half of its parking meters are broken. Orr had argued that privatization deals in other cities have improved repair times and operating rates. Norwalk, Conn.-based Xerox Corp. helped make improvements to more than 3,600 parking meters in Indianapolis after ParkIndy LLC entered a 50-year lease deal in 2011 worth more than $200 million for the city.
ParkIndy is a joint venture of Xerox and local minority owners Denison Global Parking and Evens Time, and paid the city over $3 million, or nearly half of its total $6.1 million of meter revenues, in 2013, its third year as operator under the lease deal. That’s compared with just $339,000 of operating income for the city on $2.15 million total revenue in 2010, its last year under city management. Xerox also took over parking meter operations in Oakland, Calif., in 2010, and has parking contracts with several other California cities, said Carl Langsenkamp, vice president for global public relations. Langsenkamp would not confirm whether Xerox was among the bidders for Detroit parking, but Nowling said the city was looking for proposals that increased recurring city revenue like the Indianapolis contract had done. “We’re always looking into putting in an (request for proposals) bid on public parking systems, when we see them. But I can’t tell you where we’re at with Detroit’s (specific) request,” Langsenkamp said. The bidder request in August said Detroit had “pro forma operating income” of $12.3 million on $23.4 million of parking system revenue in the fiscal year ended June 30, 2013. But a Comprehensive Annual Financial Report for the same year said the city’s Parking Fund had lost $2.9 million over the same year, after it paid down bond debt and other non-operating costs. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom Tom Henderson contributed to this story.
Stadium: ‘The Corner’ finally may have a new life
www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or mkramer@crain.com ASSOCIATE PUBLISHER Marla Wise, (313) 4466032 or mwise@crain.com EXECUTIVE EDITOR Cindy Goodaker, (313) 4460460 or cgoodaker@crain.com MANAGING EDITOR Jennette Smith, (313) 4461622 or jhsmith@crain.com DIRECTOR, DIGITAL STRATEGY Nancy Hanus, (313) 446-1621 or nhanus@crain.com MANAGING EDITOR/CUSTOM AND SPECIAL PROJECTS Daniel Duggan, (313) 446-0414 or dduggan@crain.com SENIOR EDITOR/DESIGN Bob Allen, (313) 4460344 or ballen@crain.com SENIOR EDITOR Gary Piatek, (313) 446-0357 or gpiatek@crain.com WEB EDITOR Kristin Bull, (313) 446-1608 or kbull@crain.com RESEARCH AND DATA EDITOR Sonya Hill, (313) 446-0402 or shill@crain.com WEB PRODUCER Norman Witte III, (313) 4466059, nwitte@crain.com EDITORIAL SUPPORT (313) 446-0419; YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 4461687 TIP LINE (313) 446-6766
REPORTERS Jay Greene, senior reporter: Covers health care, insurance, energy utilities and the environment. (313) 446-0325 or jgreene@crain.com Amy Haimerl, entrepreneurship editor: Covers entrepreneurship and city of Detroit. (313) 4460416 or ahaimerl@crain.com Chad Halcom: Covers litigation and the defense industry. (313) 446-6796 or chalcom@crain.com Tom Henderson: Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho: Covers real estate, higher education, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor: Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Dustin Walsh: Covers the business of law, auto suppliers, manufacturing and steel. (313) 4466042 or dwalsh@crain.com Sherri Welch, senior reporter: Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com LANSING BUREAU Chris Gautz: Covers business issues at the Capitol and utilities. (517) 403-4403 or cgautz@crain.com
ADVERTISING SALES INQUIRIES (313) 446-6052; FAX (313) 393-0997 SALES MANAGER Tammy Rokowski SENIOR ACCOUNT EXECUTIVE: Matthew J. Langan ADVERTISING SALES Christine Galasso, Jeff Lasser, Joe Miller, Sarah Stachowicz CLASSIFIED SALES Angela Schutte, manager, (313)-446-6051 DIGITAL MARKETING MANAGER Jennifer Chinn AUDIENCE DEVELOPMENT DIRECTOR Eric Cedo EVENTS MANAGER Kacey Anderson SENIOR PRODUCER FOR DIGITAL/ONLINE PRODUCTS Pierrette Dagg SENIOR ART DIRECTOR Sylvia Kolaski SALES SUPPORT Suzanne Janik, YahNica Crawford PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Andrew Spanos
■ From Page 3
CUSTOMER SERVICE
3 and Zone 4. The Detroit Economic Development Corp. was scheduled to pick a developer for commercial redevelopment by Aug. 26, according to the RFP, but developers are still waiting for final approval. The DEGC declined to reveal a timeline for the process. “(The DEGC) is taking the time necessary to develop recommendations to the EDC board that have high possibilities for success,” Bob Rossbach, media relations representative for the DEGC, wrote in an email to Crain’s last week. Roxbury, developers of the David Whitney Building, the Globe Trading Co. building for the Michigan Department of Natural Resources and other local projects, proposed a development of 180 market-rate one-, two- and three-bedroom apartments as well as retail space with two large anchor tenants and an additional 6,000 square feet of “neighborhood retail space,” said James Van Dyke, vice president of development. “We have an interest from a number of groups who want a presence there, including a Detroit sportsthemed restaurant, which would be very exciting,” Van Dyke said. He added that Roxbury has been meeting with the Corktown business community and neighborhood associations on how they
MAIN NUMBER: Call (877) 824-9374 or customerservice@crainsdetroit.com
want to see the site developed. “We are thinking of this site a lot like Campus Martius,” he said. “This is really a community center that we want to build there, their town square in the neighborhood.” Larson declined to get specific with his group’s proposal but said it will “wrap the old ballpark with a series of neighborhoodstyle retail and residential.” “Corktown is a very unique neighborhood,” Larson said. “This is an opLarson portunity to fill the area with 24-7 activity and to continue to strengthen the linkages between downtown and Corktown and get back the street-level action that’s been missing for some time.” Ryan Cooley, owner of O’Connor Realty Detroit LLC in Corktown, said the project, and the development plans, fill a need in the area. The developers also worked to include feedback from other stakeholders in their proposals, he said. “The retail space demand is there; there is no space in Corktown available,” Cooley said. “Everyone working on (the project) reached
out to the neighborhood people. It’s the perfect fit, keeping it an urban development.” Cooley said multifamily rents in Corktown are about $1.50 per square Cooley foot and $12 to $15 per square foot for retail. PAL and the conservancy have until Sept. 30 to issue plans to the DEGC. The plan is to build a new PAL headquarters along Cochrane Street; the baseball field would cover about the same footprint as the field on which the Tigers played from 1912 to 1999, until Comerica Park opened downtown in 2000. The EDC will then have 15 business days to determine the project feasibility, according to a July memorandum of understanding. Once approved, Detroit PAL, the conservancy and the EDC will negotiate a development agreement. The group currently has the bulk of a $3.8 million federal earmark for redevelopment of the site in the wings. “We’re still sorting out the final details, but we want to restore the ball diamond and capture the magic of the field,” said Tim Ritchey, CEO
of Detroit PAL. “It’s about making it a place where Detroiters feel proud and creating an environment for the next generation to play ball.” Detroit PAL provides games, sports leagues, camps and clinics to more than 11,000 children in the city in 11 different sports. Its current headquarters are on Willis Street west of Woodward Avenue in Midtown. Also as part of the agreement, PAL and the conservancy have conditional rights to develop the area along the Fisher Freeway, Zone 3, until Jan. 1, 2018. Ritchey said the group currently has no plans for Zone 3. The site of Tiger Stadium has seen redevelopment plans in the past. Plans dating back to before 2006 included total demolition for construction of a major retail store and a $200 million rehabilitation within the shell of the stadium to include luxury condos and a health club. In 2000, St. Louis-based McCormick Baron Associates Inc. proposed redevelopment in the stadium, but talks with the city apparently broke down. In 2001, a group of private investors pitched leasing the stadium to make it a home for minorleague and college baseball games. The stadium was demolished in 2009.
SUBSCRIPTIONS $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. SINGLE COPIES: (877) 824-9374 REPRINTS: (212) 210-0750; or Alicia Samuel at asamuel@crain.com TO FIND A DATE A STORY WAS PUBLISHED: (313) 446-0406 or e-mail infocenter@crain.com CRAIN’S DETROIT BUSINESS IS PUBLISHED BY CRAIN COMMUNICATIONS INC. CHAIRMAN Keith E. Crain PRESIDENT Rance Crain TREASURER Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) EDITORIAL & BUSINESS OFFICES: 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of August, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2014 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.
20140929-NEWS--0030-NAT-CCI-CD_--
9/26/2014
5:33 PM
Page 30
I
AgriSight software grows trust with nation’s farmers Business is sprouting for Jesse Vollmar. In January, his company, AgriSight Inc., raised $4 million. He was recognized as a Crain’s “20 in Their 20s” winner this spring. And now he’s announced that more than 15 percent of the nation’s row crop farms use AgriSight’s software, FarmLogs, to manage their crops. That means his company has more than $11 billion in crops under management. Not bad for a fifth-generation farm boy whose par-
September 29, 2014
CRAIN’S DETROIT BUSINESS
RUMBLINGS Duo Security VC round caps season t was a good summer for Dug Song, CEO and co-founder of Duo Security Inc., an Ann Arborbased, fast-growing provider of highly secure, cloud-based authentication services for companies. On June 21, the Ann Arbor Skatepark, a 30,000square-foot park free to all skating enthusiasts, opened in Veterans Memorial Park in Ann Arbor. For years, Song, Song a member of the 2012 class of Crain’s “40 under 40,” had been one of the main organizers behind getting park space set aside for his fellow hobbyists. Summer ended last Monday, Sept. 22, the day it was announced that Duo Security had raised $12 million in a Series B round of venture capital, led by Benchmark, a Silicon Valley-based firm, and joined by Google Ventures, True Ventures and Radar Partners, three other West Coast VCs. In 2009, Song and Jon Oberheide co-founded Duo. In 2000, Song was one of five self-described geeks and hackers who co-founded Arbor Networks, a University of Michigan spinoff doing network security that would attract $33 million in venture capital over the next two years. In 2010, Arbor Networks was sold for an undisclosed sum, which by all accounts made a nice return for investors, to Texas-based Tektronix Corp.
Page 1
ents and family work 1,200 acres east of Saginaw. “We are excited to have earned the trust of farmers around the country,” Vollmar, CEO and co-founder of the Ann Arbor-based company, said in a press release. The Web-based software soaks up publicly available data — market prices, rainfall, crop rotations and inventory — and delivers it to farmers in easy-toview disVollmar plays. Farmers can access the cloud-based system from the field, allowing them to better manage operations on the spot.
Car czar on Cadillac move: It’s not driving me crazy The state’s car czar is downplaying the move by General Motors Co. to spin its Cadillac brand into a separate business unit and move its global headquarters to New York City. “This is not a massive thing,” said Nigel Francis, senior automotive adviser for the state of Michigan and a senior vice president at the Michigan Economic Development Corp. In all, about 50 jobs will leave the state next year when Cadillac moves its sales and marketing team to New York. “It’s a small number of jobs,” Francis said. “Every job counts, but this has almost certainly more to do with the executive and where that person wants to have his top office.” In its official announcement, new Cadillac President Johan de Nysschen said the move came because “there is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York.” He went on to add that “establishing our new global headquarters in Soho places Cadillac at the epicenter of sophisticated living.” Wrong, Francis said. “I think we’ve got a much better standard of living in Detroit than you would ever have in New York,” Francis said. “My money goes a lot farther here, that’s for sure.”
WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF SEPT. 20-26
Macomb-OU Incubator offers tech cash, support The Macomb-OU Incubator, the Sterling Heights-based business incubator run by Oakland University, is offering $20,000 in cash and inkind services in a businesspitch competition open to young, fast-growing tech companies. First place is $8,500 in cash and a package of support services from the incubator, with second place worth $1,500 in cash and support services and third place worth $500 in cash and support. The contest is open to Michigan-based companies with revenue of $2.5 million or less that have been in business for five years or less. The deadline for entry is Oct. 14, with finalists announced on Oct. 28 and the pitch contest on Dec. 11. Finalists will also get a one-hour prep session for their pitches. Entrepreneurs can apply at www.oakland.edu/ macombouinc.
Internet’s down, so let’s use the Volt! Things ground to a halt one morning this month at Buff Whelan Chevrolet in Sterling Heights after the dealership’s Internet connection went dead. Staffers couldn’t run lease payments, find cars in inventory or report sales to the factory. Then a lightbulb came on for Matthew Oleszczuk. The new-car salesman remembered that a few of the showroom models were equipped with 4G LTE service, a feature that Chevy is rolling out across most of its 2015 models. The connection through OnStar provides a mobile hot spot that gives users a high-speed Internet connection for up to seven devices. Oleszczuk put a ’15 Volt plug-in hybrid into accessory mode, keeping it plugged into a charging station to avoid battery drain. Within 30 minutes, several sales consultants’ desktop computers were connected. The staff members were laughing because the signal strength topped the dealership’s internal network. Oleszczuk then fired up a Malibu, to connect another seven desktops. Once both cars were beaming signals, sales staffers used the opportunity as — what else? — a selling tool. “One lady asked why the Volt was on, and we told her that our landline was down and the 4G connection was keeping our network going,” Oleszczuk said. “She thought that was pretty impressive.”
GM names Blanchard to lead city initiatives
TURNING SHOVELS FOR ARENA
eneral Motors Co. appointed John Blanchard as lead executive for the company’s initiatives and projects within the city of Detroit and communities throughout Southeast Michigan. Blanchard, 52, has been director of GM local government relations since 2011. He will continue to represent the company on several local boards and commissions.
G
ON THE MOVE Thomas Shafer was named president of Troybased Talmer Bank and Trust and COO of its holding company, Talmer Bancorp Inc. David Provost, president and CEO of Talmer Bancorp and chairman and CEO of the bank, had been the bank’s president; there had been no COO at the holding company. Shafer had been president of Ohio-based First Place Bank, acquired by Talmer in 2012. Mark Forchette was named president and CEO at Plymouth Townshipbased Delphinus Medical Technologies Inc. Forchette, formerly president and CEO at Santa Clara, Calif.-based medical device maker OptiMedica, replaces Mark Morsfield, interim president and CEO since October.
COMPANY NEWS Japan-based Yazaki Corp., with its Yazaki North America Inc. subsidiary in Canton Township, agreed in federal court in Detroit to pay $100 million in a civil case related to its three-year criminal prosecution of automotive supplier price-fixing. About $24 million of the settlement is earmarked for auto dealerships; $76 million will go to consumers. The Institute for Population Health, the nonprofit that acts as the city of Detroit’s health department, was to lay off about 135 employees, according to a Worker Adjustment and Retraining Notice filed with the state. Dexter-based Northern United Brewing Co. LLC plans to open its fourth Jolly Pumpkin microbrewery and distillery location early next year in Detroit. The space in the historic Willys Overland Building at 441 W. Canfield St. in Midtown will join locations in Ann Arbor, Dexter and Traverse City. Kmart announced the closing of five Michigan stores, including locations in Madison Heights and
ANJANA SCHROEDER/CRAIN’S DETROIT BUSINESS
Construction of the new Detroit Red Wings arena got underway Thursday with a ceremonial groundbreaking at the venue’s Woodward Avenue and Fisher Freeway location. Gov. Rick Snyder (from left), Ilitch Holdings Inc. President and CEO Chris Ilitch, Mayor Mike Duggan and Detroit City Council President Pro-Tem George Cushingberry Jr. launched the $650 million project, which also includes plans for a 45block entertainment district.
Rochester Hills, effective in December. Stores in Flint, Burton and Port Huron also will close. Detroit-based United Way for Southeastern Michigan launched its annual giving campaign, setting a goal to raise $42 million, up $2 million from its 2013-14 goal. The Chaldean Community Foundation was set to break ground on a $3 million, 11,500-square-foot community center in Sterling Heights. The project, slated for completion next year, will replace the foundation’s 2,500-square-foot leased location. Rhode Island-based Citizens Financial Group Inc., which operates Charter One branches in Michigan, had its initial public offering on the New York Stock Exchange after reducing its target price. The IPO, which raised $3 billion, was the largest bank IPO in a decade in the U.S.
OTHER NEWS The Equal Employment Opportunity Commission filed its first lawsuits to protect transgender people in the workplace, accusing R.G. & G.R. Harris Funeral Homes in Garden City and a Lakeland, Fla., eye clinic of illegally firing employees who were making a transition to female, AP reported. Wayne County Circuit Court Judge Sheila Gibson, who was repeatedly late to work, was suspended without pay for 30 days, effective Oct. 8, AP reported. The Michigan Supreme Court accepted a settlement between Gibson and the state Judicial Tenure Commission. Carla Sledge, former Wayne County CFO, and Steven Collins, the county’s chief assistant corporation
counsel, were arraigned on charges of misconduct in office and willful neglect of duty tied to the troubled Wayne County Jail project, AP reported. Detroit’s transportation system is getting more than $32 million in federal and state grants to buy up to 50 new hybrid and clean diesel buses for its aging public fleet, AP reported. Construction started on Sea Life Michigan, a 35,000-square-foot aquarium being built at the Great Lakes Crossing Outlets in Auburn Hills. The attraction, from London-based Merlin Entertainment plc at the Taubman Centers Inc.owned mall, is scheduled to open next spring. Republican Gov. Rick Snyder and Democratic opponent Mark Schauer agreed to appear Oct. 12 at a televised town hall-style forum, breaking their impasse over whether to debate the state’s issues side by side this fall. The Detroit Symphony Orchestra’s neighborhood concert series will continue this year on the strength of a $3.75 million grant from the William Davidson Foundation. The DSO has renamed the performances the William Davidson Neighborhood Concert Series. President Barack Obama issued a federal disaster declaration for Macomb, Oakland and Wayne counties in the wake of massive flooding last month, making available federal funding to those affected. Michigan Gov. Rick Snyder said that the financial emergency has been resolved in Allen Park, and he appointed a transition advisory board to aid the return to local control after two years, AP reported.
DBpageAD_DBpageAD.qxd 9/17/2014 4:29 PM Page 1
速
PN Full pg_DBpageAD.qxd 9/23/2014 11:48 AM Page 1
THE 2015 SPRINTER
When Wh en iit’s t’t’s titime me ttoo tta take ake k your you ourr business busi bu s neess to the next level, start with a van you can count on to get you there. With a 2-stage turbocharged diesel engine and 7-speed 7G-TRONIC transmission, superior fuel efficiency and legendary durability, the 2015 Sprinter will match your intensity, mile after mile. The 2015 Sprinter—ready to drive you forward. www.freightlinersprinterusa.com
DRIVEN LIKE YOU Options shown. Not all options are available in the U.S. ©2014 Daimler Vans USA, LLC. All rights reserved.
FTL_CrainsDetroit_CONSTRUCTION_10.875x14.5in_2015.indd 1
9/22/14 10:20 AM