Crain's Detroit Business, April 20, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

April 20-26, 2015

New rules for nonprofits: Lots of them

Detroit City FC kicks it up, aims to go pro

Tech firm helps Ford build a bike

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On the beam for cancer treatment

ISTOCK PHOTO

DETROIT BUSINESS

Zoo’s formula for producing its power: E = e-a-t Page 4

Investors plan to revive the Brewster Wheeler site with retail and housing, but developers also see potential not far away

McLaren, Beaumont to open proton centers Why proton beams?

By Jay Greene jgreene@crain.com

Proton beam therapy is a type of radiation treatment that uses protons rather than Xrays to treat cancer. A proton is a positively charged particle that is part of an atom. At high energy, protons can destroy cancer cells.

Seven years after fierce battles over the need for multiple proton beam cancer centers, McLaren Health Care Corp. this spring expects to open the first proton beam therapy center in Michigan, next to its 458-bed Mc Laren Regional Medical Center in Flint. McLaren officials told Crain’s they hope to conduct their first treatment on a prostate cancer patient in one of the three rooms that are part of the $50 million McLaren Proton Therapy Center. But Troy-based Beaumont Health, which first proposed a $159 million proton beam center in 2008, isn’t far behind. Beaumont plans to open a $40 million, single-room proton beam center in Royal Oak in spring 2017. Proton beam therapy is a controversial form of megavoltage radiation that some have suggested is effective in some prostate and pediatric cancers because it causes less damage to surrounding tissue while directing high dosages at tumors. It also has been used to treat lung

In 1990, hospitals in the U.S. began using proton beams to treat patients. But the method is controversial because of a lack of definitive clinical trials. Unlike traditional radiation treatment, which can damage surrounding tissue, proton therapy can target tumors more precisely with lower radiation doses to surrounding healthy tissue. Proton therapy is seen as having some benefit to treat tumors surrounded by sensitive structures — such as the eye, brain and spinal cord — where the potential for radiation damage is high. Source: American Cancer Society

See PROTON, Page 21

Special Report

NEWSPAPER

A prettier picture for Brush Park? By Kirk Pinho

The Karmanos Cancer Institute and other health care organizations in the region are strengthening their oncology networks, Page 11

crainsdetroit.com Vol. 31 No 16

[LARRY PEPLIN PHOTOS]

The now-cleared site of the Brewster-Douglass housing projects (top) lies just beyond the basketball courts of the Brewster Wheeler Recreation Center (above left).Old buildings meet new near where Alfred and Brush streets intersect (above right).

$2 a copy. $59 a year.

kpinho@crain.com

reater downtown could be looking at a reawakening of one of its most historic — yet languishing — enclaves now that redevelopment plans have been announced and the city negotiates with and seeks developers for more than 30 acres of land in and around Brush Park. But the big unanswered question is: What will happen with the areas immediately to the south and west of the Brewster Wheeler Recreation Center site at I-75 south of Wilkins Street? Last week, the city announced that two redevelopment teams will turn their efforts to the recreation center’s history and to its future with a $50 million project with restaurant and meeting space and approximately 150

[UNION JOINTS LLC]

A rendering of the BrewsterWheeler mixed-use project.

residential units with first-floor retail. But beyond that project, between three separate requests for proposals, the city has put up 32.6 acres of land for development nestled between the Midtown and Eastern Market District areas and east of the Ilitch family’s developments surrounding a new arena for the Detroit Red Wings. See BRUSH PARK, Page 19

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CRAIN’S DETROIT BUSINESS // April 20, 2015

MICHIGAN

BRIEFS Battery maker LG Chem to RadioShack adds Sprint name double workforce in Holland as 31 stores reopen in Mich. Holland-based LG Chem Michigan Inc. scheduled a job fair for Tuesday as the maker of electric vehicle batteries for the auto industry plans to double its workforce in 2015, MiBiz reported. In a statement, the company said it planned to employ several hundred people by the end of 2015. When LG Chem broke ground in 2010, the company said it would create more than 400 jobs in Holland. Although the company had planned to begin production in 2012, sluggish demand for plug-in electric and hybrid vehicles delayed operations until the second half of 2013. In 2013, the plant began producing batteries for the Chevrolet Volt, a battery-powered hybrid being redesigned for the 2016 production year. Other automaker clients are Ford Motor Co., Renault SA, the Hyundai/Kia group, Volvo Car Corp., Audi AG and Daimler AG. In its news release, LG Chem did not identify its new customer.

RadioShack, which announced in February plans to close 1,784 underperforming U.S. stores, including 25 in Southeast Michigan, has reopened many of them as co-branded Sprint-RadioShack stores. Sprint plans to hire about 70 people for 31 reopened Michigan stores, which will be outfitted with the “store within a store” concept over the next few months, according to a news release. On April 2, General Wireless Inc. , an affiliate of Standard General LP , announced it had received U.S. Bankruptcy Court approval to acquire the inventory and assume leases of the RadioShack stores. Sprint will be the primary brand, occupying about one-third of the retail space at existing locations, the release said.

Meijer: No plan for urban push by thinking outside big box Although many of its rivals are doing so, Walker-based Meijer Inc.

doesn’t plan to shift from its traditional big-box format in favor of smaller stores in urban areas, MiBiz reported. “We talk about that, but we’re not there yet,” Erik Petrovskis, the retailer’s director of environmental compliance and sustainability, said last month at a Michi gan’s Great Southwest Sustainable Business Forum event in St. Joseph. Current designs for Meijer superstores call for about 190,000 square feet of space. In recent years, the company has experimented with smaller formats, including a 102,000square-foot store that opened in 2010 in suburban Chicago.

MICH-CELLANEOUS 䡲 Brian Klawiter, owner of the DieselTec auto shop in Grandville, wrote on his company’s Facebook page that “homosexuality is wrong” and that he won’t welcome “immoral behavior” at his business. The Grand Rapids Press reported that Klawiter later posted that his family received death threats as well as comments that suggested people saw his post and, as a result, read it. Followed, naturally, by reacting. 䡲 North Country Sky airline will offer flights this summer between Chicago and Pellston Regional Air port in northern Michigan, the Traverse City Record-Eagle reported. The round-trip flights will range from $350 to $405 a person and run from June 24 to Aug. 19 on Thursdays, Fridays, Sundays and Mondays. Each two-hour flight will stop in Manistee

to pick up additional passengers. 䡲 Pennock Hospital in Hastings will become the 12th hospital in the Spectrum Health system, MLive.com reported. Pennock’s new name will be Spectrum Health Pennock. Grand Rapids-based Spectrum will make a $46 million capital commitment over the next 10 years and continue essential services at Pennock for at least 10 years. Still to be determined is the fate of a $70 million hospital planned by Pennock. 䡲 Kalamazoo College President Eileen Wilson-Oyelaran will retire in June 2016, according to the college’s website. Wilson-Oyelaran has headed the school since July 2005. 䡲 IBM Corp. plans to add 100 jobs at its East Lansing operations by next year and spend $200,000 on new equipment, the Lansing State Journal reported. 䡲 March passenger traffic at Ger-

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . 21 BUSINESS DIARY . . . . . . . . . . . . . . . . 15 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 16 CLASSIFIED ADS . . . . . . . . . . . . . . . . 17 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . . 9 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 15 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 22 WEEK ON THE WEB . . . . . . . . . . . . . . 22

COMPANY INDEX: SEE PAGE 21 ald R. Ford International Airport set an all-time monthly record, MLive.com reported. Officials said 231,138 passengers traveled to and from the Grand Rapids airport last month.

Corrections 䡲 A story about Detroit Tigers merchandise on Page 1 of the April 13 issue should have said Matt Powell is a sports industry analyst for Port Washington, N.Y.-based NPD Group. A previous professional affiliation was used. 䡲 A story about Arborland Mall on Page 6 in the April 13 issue should have said the mall was sold for 20 times net sales in 2005. An incorrect figure was used. 䡲 In the April 13 story “GOP balks at funding Healthy Michigan plan,” Sen. Jim Marleau, R-Orion Township, was incorrectly identified as chairman of the Senate Health Policy Committee. Sen. Mike Shirkey, R-Clarklake, was recently appointed chairman. Marleau, who continues to sit on the Health Policy Committee, is now chairman of the Senate Community Health subcommittee.

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Nonprofits given something to study One of many law changes: Liability protection expands to paid directors By Sherri Welch swelch@crain.com

A trio of new laws amending the state’s Nonprofit Corporation Act has nonprofits and their lawyers wading through a raft of provisions to figure out their effect. Public Acts 557-559, which took effect in January, made updates to reflect current nonprofit practices and also made the act more closely parallel the state’s Business Corporations Act.

New for nonprofits: A close look at the changes to the Nonprofit Corporation Act, Page 17.

One of the most commented upon changes is a provision that expands nonprofit directors’ indemnification to include paid directors and protects all directors from liability for gross negligence. Under the new law, nonprofit directors only have liability for instances of intentional, self-serving

actions or those made to intentionally hurt an organization. Without question, nonprofit director and volunteer officer indemnification has been expanded under the amended law, said Rob Collier, president of the Council of Michigan Foundations. “People could raise questions about that, but the business of our nonprofit sector has become so complicated, to get talented people to serve on your board they need to

Rob Collier: “To get talented people to serve on your (nonprofit) board, they need to know there’s some protection.”

know there’s some protection,” Collier said. Business executives considering serving on nonprofit boards question if it’s a level playing field with the business sector in terms of liability protection, Collier said. “Now it is.”

Though the new provision more broadly indemnifies all nonprofit directors and volunteer officers, it’s still advisable for nonprofits to carry directors and officers liability insurance, said Duane Tarnacki, member in the Detroit office of Clark Hill PLC. Tarnacki served on a subcommittee to the state bar’s business section as it worked on the amendments. Tarnacki also serves as counsel for the Council of Michigan Foundations. See NONPROFITS, Page 17

[FORD GLOBAL TECHNOLOGIES LLC]

The MoDe:Me,one of Ford Global Technologies’ two electric bicycle prototypes,was named best product gadget at the Mobile World Congress.

The Detroit City Football Club averaged 2,878 fans a game last season at Cass Tech High School , including a season high of 3,398.

Tech firm Tome helps Ford build a 2-wheeler By Tom Henderson thenderson@crain.com

[JON DEBOER]

Detroit City FC looks to kick it up to pro level Owners in talks with investors, say fan base is there By Bill Shea bshea@crain.com

he Detroit City Football Club intends to transition from a fourth-tier semipro team to a higher-lever professional club after the season, its owners said. And that could involve building a soccerspecific stadium in the city. As the club prepares for its season opener against AFC Cleveland at 7:30 p.m. May 15 at Cass Tech High School, ownership remains in talks with investors, said team co-owner Sean Mann.

Hockey Town, meet Soccer City? Detroit City FC isn’t the only local club with its eyes on higher levels of pro soccer, Page 20

The goal is in 2016 to move to the 24-team Tampa, Fla.-based United Soccer League or the 11-team New York City-based North American Soccer League, he said. They’re the third and second-tier levels of pro soccer in the U.S., respectively, underneath Major League Soccer. “It’s a matter of putting together an ownership group that has a certain net worth and a facility,” Mann said. “It all comes down to

money. We’ve developed a fan base that appeals to higher leagues. It makes it an appealing market. We proved we can get people to come downtown and pay to watch soccer.” Mann, 34, declined to name the potential investors. Moving on up DCFC’s league, the National Premier Soccer League, is a fourth-tier league — and one of the two top amateur leagues — within the seventier Chicago-based United States Soccer Federation’s organizational pyramid. The USSA

MUST READS of the week... A no-hit wonder In this week’s installment of our Looking Back series, Crain’s goes back 30 years to see what became of a startup record label and the man who wanted to “put Detroit back on the map.” Page 10

If you’re Martian, say ‘cheese’ Seven University of Michigan faculty members are going to help take the ultimate family photo: the universe. Read about it in Tom Henderson’s blog. crainsdetroit.com/blogs [ISTOCK PHOTO]

See SOCCER, Page 20

Is Ford Motor Co. going to become a bicycle manufacturer? Maybe, said Bill Coughlin, president and CEO of Ford Global Technolo gies LLC. The company is testing that Sigal’s seed idea with the takes root. In help of a Royal less than a year, Oak-based tech Tome Inc. is company. profitable, has Ford Global large customers unveiled two pro- and will be able to totypes of electric fund rapid growth bicycles at the out of revenue, Mobile World Con- says CEO Jake gress in March. Sigal, Page 18 One, called the MoDe:Me, was built by Los Angeles-based Dahon, the world’s largest maker of folding bikes. Both electric bikes were embedded with sensors and software designed by Tome Inc. and connected to the Web to tell riders when they should turn left or right to get to their destination. See BIKE, Page 18

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Detroit Zoo aims to turn waste into power with $1.1M project By Sherri Welch

How the biodigester will work

swelch@crain.com

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The Detroit Zoo is headed for greener pastures with its plan for the first biodigester at a U.S. zoo. The $1.1 million project will convert the 400-500 tons of manure and other organic waste produced annually at the zoo into methane-rich gas to power the 18,000-square-foot Ruth Roby Glancy Animal Health Complex. The biodigester will also produce compost for the animal habitats, gardens and public spaces on the zooâ&#x20AC;&#x2122;s 125 acres, saving it $70,000-$80,000 in energy costs and another $30,000$40,000 in waste disposal fees. With construction scheduled to launch in June, the project could be completed by October. The estimated cost for the project â&#x20AC;&#x153;is a pretty big barrier to entry for most zoos,â&#x20AC;? COO Gerry VanAcker said. â&#x20AC;&#x153;But we expect a return on investment in close to 10 years.â&#x20AC;? The Detroit Zoo has set a goal to be zerowaste by 2020. And the biodiGerryVanAcker: gester â&#x20AC;&#x153;gets us a Zoo closer to zero- lot closer to that waste goal goal,â&#x20AC;? he said, while generating 7 percent to 8 percent of the zooâ&#x20AC;&#x2122;s annual electricity needs. The project has been in the works for the past couple of years. Two renewable-energy grants totaling $27,000 from the Michigan Economic Development Corp. funded a two-part feasibility study conducted by Michigan State Universi ty â&#x20AC;&#x2122;s Anaerobic Digestion Research Education Center. With the rest of the grant, the zoo hired Albert Kahn Associates Inc., Detroit, to develop a blueprint for the facility, which will be northeast of the administration building. Detroit-based Integrity Building Group LLC is contractor on the project. The Fred A. and Barbara M. Erb Family Foundation gave a $600,000 grant, thanks to zoo trustee John Erb. And the MEDC has committed up to $100,000 for the project through the Public Spaces & Community Places program, which provides matching grants for public space projects supported through online crowdfunding platform Pa tronicity. (See box, this page.) It plans to chip in $100,000 from its 2015 capital budget and has $100,000 grant proposals in to the Michigan Energy Office and the De partment of Environmental Quality. Although the biodigester is not a typical community place-type project, â&#x20AC;&#x153;we saw this as a great opportunity because it is a place that attracts a significant amount of the public and it brings such a huge, important aspect of sustainability and promoting green elements,â&#x20AC;? said Lisa Pung, community assistance team manag-

[DETROIT ZOO]

Imagine a quick oil change building with four bays. Thatâ&#x20AC;&#x2122;s what the biodigester will look like, Detroit Zoo COO Gerry VanAcker said, with each bay made of cast concrete vaults that are explosion proof. A bay will be filled with waste every day for a week before the pile is sprayed with a nutrient-rich â&#x20AC;&#x153;liquid gold,â&#x20AC;? as Michigan State Universityâ&#x20AC;&#x2122;s Anaerobic Digestion Research Education Center calls it, he said. That liquid, a byproduct harvested from other anaerobic biodigestion, will spur the pile in the bay to begin producing methane. That bay is then sealed for three weeks, and the floors are heated to spur gas production. The accumulated methane-rich gas moves from the bay into a rubber bladder on the buildingâ&#x20AC;&#x2122;s roof, VanAcker said. From there, it will travel into a diesel generator that generates electricity.

Zoo launches crowdfunding campaign The Detroit Zoological Society launched a crowdfunding campaign April 17 at Patronicity.com/Detroit Zoo to help fund a new biodigester in tandem with its annual Earth Day event, GreenFest. The goal is to raise $55,000 of the projectâ&#x20AC;&#x2122;s $1.1 million cost. If the effort is able to hit its goal by June 15, it will receive a matching amount from the Michigan Economic Development Corp. through its Public Spaces & Community Places program. The zoo is offering donor incentives including wildflower seeds from its greenhouse, stationery made from recycled elephant dung, a â&#x20AC;&#x153;Poo at the Zooâ&#x20AC;&#x201C;Who Dung It?â&#x20AC;? T-shirts and bags of zoo compost for their garden.

er at the MEDC. The biodigester is expected to produce three-quarters of the electricity needed for the health complex, which functions like any hospital with X-rays, surgeries, medication dispensing and a nursery. MSUâ&#x20AC;&#x2122;s Anaerobic Digestion Research Education Center will help launch the biodigester and operate it for the first year under a $100,000 contract, VanAcker said. Zoo employees will shadow the MSU team so they can take over the operation after the first year. Estimates are that the biodigester will take just eight to 10 hours of staff time each week to operate, VanAcker said. The zoo doesnâ&#x20AC;&#x2122;t expect byproducts from the biodigester to trouble neighbors. â&#x20AC;&#x153;The only times the smell is exposed are when the doors are open,â&#x20AC;? VanAcker said. And â&#x20AC;&#x153;with all the bells and whistles we have in the design, itâ&#x20AC;&#x2122;s going to be nearly impossible to explode.â&#x20AC;? The remaining compost left after the waste has released the methane gas may be used in gardening, and the zoo plans to use the majority of it on its grounds, VanAcker said. Currently, the zoo collects organic waste in a truck thatâ&#x20AC;&#x2122;s much like a trash hauler and transports it to Detroit Dirt for composting. â&#x20AC;&#x153;We wonâ&#x20AC;&#x2122;t have to do that any-

more, so we save the expense of tipping fees and wonâ&#x20AC;&#x2122;t have to replace the truck,â&#x20AC;? VanAcker said. The Hellabrunn Zoo in Munich, Germany, operates a biodigester, and the Toronto Zoo is in the initial phases of developing one through a public-private effort Detroit benchmarked, VanAcker said. None are operating at U.S. zoos. â&#x20AC;&#x153;Detroit is clearly leading the way with the biodigester,â&#x20AC;? said Doug Piekarz, CEO of the Akron Zoo and past vice chairman of the Associa tion of Zoos and Aquariums â&#x20AC;&#x2122; green scientific advisory group. â&#x20AC;&#x153;We had looked at (one) â&#x20AC;Ś but werenâ&#x20AC;&#x2122;t able to do it because of code issues. ... Our solid-waste authority is attempting to work through those issues.â&#x20AC;? Conservation is a focus area for all AZA-accredited zoos and aquariums, Piekarz said. In the end, you would do this where the ROI is reasonable, he said. And â&#x20AC;&#x153;based on what I know about Detroitâ&#x20AC;&#x2122;s situation, theyâ&#x20AC;&#x2122;ve gone about this exactly right.â&#x20AC;? The zoo project is likely to serve as a role model for other U.S. zoos, Piekarz said. â&#x20AC;&#x153;Now we have someone to point to to say, â&#x20AC;&#x2DC;If they could do it, why canâ&#x20AC;&#x2122;t we?â&#x20AC;&#x2122; â&#x20AC;?äĄ˛ Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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Saga feeds its appetite for middle-market media By Chad Halcom chalcom@crain.com

Saga Communications Inc. may be on the hunt to add more middlemarket radio stations, even after a proposed deal to buy five in northern Virginia clears a Federal Communications Commission review. The Grosse Pointe Farms-based broadcast operating company, (NYSE: SGA) founded by local industry veteran Edward Christian, has reached an agreement to buy the assets of Harrisonburg, Va., stations WSVA-AM, WHBG-AM, WQPOFM , WJDV-FM and WTGD-FM from

the VerStandig family of VerStandig Broadcasting. The $9.64 million acquisition, which the company expects to close in June pending FCC approval, would bring its portfolio to 97 radio stations, more than half a dozen television stations and the Illinois Radio Network. But it no longer has properties in Michigan, since Saga sold the Lansing-based Michigan Radio Network and Michigan Farm Radio Network , along with two Minnesota radio networks, to Learfield Communica tions in Missouri for $1.64 million in

December. The VerStandig deal would be the first radio station buy since Saga acquired Ithaca, N.Y.based WFIZ-FM from ROI Broadcasting Inc. for $720,000 in January 2014. â&#x20AC;&#x153;Our focus is on middle-market stations â&#x20AC;&#x201D; so Michigan would be an appeal to us, but Detroit would be (less so),â&#x20AC;? CFO Samuel Bush said of Sagaâ&#x20AC;&#x2122;s acquisition plans earlier this month. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve grown a lot over the years and we like to grow, but weâ&#x20AC;&#x2122;re also very regimented buyers. Weâ&#x20AC;&#x2122;re not going to buy just because a station looks good on paper â&#x20AC;&#x201D; weâ&#x20AC;&#x2122;ll buy if

itâ&#x20AC;&#x2122;s a pretty good fit for us.â&#x20AC;? In that sense, the company strategy differs from radio market giants like Atlanta-based Cu mulus Media Inc. , Samuel Bush: which holds 460 â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re very stations comregimented buyers.â&#x20AC;? pared with 525 two years ago and has been selling stations in smaller markets like Kalamazoo and Lansing to focus on major mar-

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kets and on syndicated content. Cumulus, which owns WJR 760 AM , WDVD 96.3 FM and WDRQ FM 93.1 locally, closed on an acquisition of mass media company Westwood One Inc. in late 2013. Saga, meanwhile, said it tries for a more decentralized structure and has a historically lean upper management â&#x20AC;&#x201D; the corporate office accounts for fewer than 20 of its 800 full-time employees. But Bush said the headquarters has grown over the years with the business itself. Net income was $14.9 million, or $2.55 per share, on revenue of just under $134 million in 2014, compared with about $15 million, or $2.64 per share, on revenue of $129.5 million in 2013 (Saga completed a four-for-three stock split and sold a Mississippi station that year). Saga, like much of the broadcast management industry, has been regaining an interest in acquisitions in the past couple of years following the global economic downturn and lack of financing in 2008, Bush said. â&#x20AC;&#x153;It happens in waves, based on either the economy or changes within an industry. And in (commercial radio) it would seem like another wave is on the horizon,â&#x20AC;? said Rich Homberg, president and general manager of Detroit Public Television and former general manager of WWJ AM 950 and other Infinity Broadcasting stations in Detroit. Homberg also said Saga has benefited from Christianâ&#x20AC;&#x2122;s industry knowledge as a former president and general manager of WNIC 100.3 FM. â&#x20AC;&#x153;Ed Christian for 40 years has been one of the smartest guys in the room. Heâ&#x20AC;&#x2122;s managed his company incredibly well,â&#x20AC;? he said. Bush also said advertising still dominates Saga revenue â&#x20AC;&#x201D; only about 5 percent comes from nontraditional sources like hosting events and Internet streaming â&#x20AC;&#x201D; and 2014 also saw growth from the midterm elections. Political campaign advertising accounted for $4.7 million in 2014 revenue across Sagaâ&#x20AC;&#x2122;s more than 25 markets, while it was only about $800,000 in 2013. The Harrisonburg, Va., radio market will be a new one for Saga, which operates three stations under subsidiary Tidewater Communica tions over two hours away in Norfolk. The company is still interested in adding new markets, Bush said, but has no plans to mirror the size or business model of giants like Cumulus or iHeart Media Inc. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re very locally concentrated and we think thatâ&#x20AC;&#x2122;s where we should be. Our management style is to be focused at the local market,â&#x20AC;? he said. â&#x20AC;&#x153;That doesnâ&#x20AC;&#x2122;t mean we wonâ&#x20AC;&#x2122;t use a number of syndicated programs. We do, but theyâ&#x20AC;&#x2122;re tailored for a specific purpose and itâ&#x20AC;&#x2122;s to augment the offerings from the local stations. Itâ&#x20AC;&#x2122;s never going to dominate the format.â&#x20AC;? äĄ˛ Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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CRAIN’S DETROIT BUSINESS

OPINION Focus on job skills would reap benefits J

.P. Morgan Chase & Co. released a report detailing what most here already know — there’s a mismatch between the needs of local employers and the skills of many metro residents, particularly in Detroit. The report was released as part of the five-year, $100 million commitment to Detroit’s economic recovery that Chase announced last May. It focuses on the need for “middle-skill” workers, whose education Bringing up the falls somewhere between a education levels high school diploma and a college degree. (See story, Page of city residents 14.) is ... important More than one-fifth of city because it betters residents don’t fit that criterion because they lack a high people’s lives. school diploma or GED, including more than half of Latino residents. The gap is important because there are lots of middle-skill jobs here: more than 320,000 in 2013, accounting for nearly 17 percent of all jobs. Most of those are in health care and manufacturing. And they can pay well: Middle-skill health care positions have a median hourly wage of $27.77, for example. The report makes several recommendations, including developing a regional master plan to prepare Detroit residents for middle-skill occupations and building curriculum around the same goal. Clearly, bringing up the education levels of city residents is an important workforce development priority, but it’s also important because it betters people’s lives. This issue assumes even more importance in light of Detroit City Council’s insistence that job guarantees be part of the new hockey arena project, among others. But that can be a hard bar for employers to meet if the skills aren’t there. Perhaps the council should instead require companies to invest in high-quality, accountable programs that raise the opportunities and abilities of Detroiters. That could be a long-term gain for everyone.

MARY KRAMER Publisher mkramer@crain.com

Another chance to help Ukraine n the global stage, Vladimir

OPutin gets my vote for “scariest

leader.” (North Korea’s “Fearless Leader” comes in second as “craziest.”) That’s why I want to hear retired four-star Gen. Wesley Clark when he speaks about the Ukrainian crisis at the Detroit Economic Club on April 28. Clark, a former NATO Supreme Allied Commander, argued in Newsweek earliGen.Wesley er this month Clark: To speak at that the U.S. and DEC on April 28. allies should help arm Ukraine in anticipation of a Russian assault this spring. Ukraine needs high-tech gear, he wrote, from intelligence tools to long-range antiarmor systems and radar to detect firing positions for long-range rockets to sniper rifles with night-vision sights. Vera Andrushkiw, one of metro

Detroit’s estimated 50,000 Ukrainian-Americans, helped connect Clark to the Economic Club. (Clark is also speaking on Thursday at Wayne State University about national security issues.) Andrushkiw is vice president of the D.C.-based U.S.-Ukraine Foundation. She remembers when, after the fall of the Soviet Union, Ukraine gave up nuclear weapons in exchange for promises of protection from the U.S. She also remembers that support from Detroit — philanthropic and academic — helped to bring Ukraine its second free-market business school in Lviv in 1991. The late Helen Petrauskas, a top woman executive at Ford Motor Co., was among a core group of Detroit Ukrainians who persuaded my good friend Bill Volz, then dean of the School of Business Administration at Wayne State University, to help create the Lviv Institute of Management. Professors from WSU went to Ukraine, and students and professors from Ukraine came to Detroit.

Comerica Bank helped to train future bankers. KPMG, Kmart and other companies offered short stints for visiting Ukrainians to help them learn more about capitalistic enterprises. “They needed to learn free-market economics,’’ Andrushkiw said. Crain’s even got into the act when one of our reporters, Brad Wernle, went to Ukraine as a guest lecturer, teaching about news media, business reporting and public relations. “It was a dynamic time,” Andrushkiw said. “We had no money to host students in Detroit. We had to arrange lectures, find them places to stay and businesses to connect them. They were bright students with minimal English.” Through Ford, Petrauskas supplied vans for transportation. Later, she gave a gift to the Lviv school for a new library in honor of her father. The late Harry Malinowsky, a builder in the Brighton area, paid to have classic business texts translated. With the threat of a Russian invasion, it’s hard to remember those optimistic days. Save Ukraine Now, a nonpartisan humanitarian group, will hold fundraisers April 28 and 29 while Clark is in town: fundraiser/briefing breakfasts both days and a banquet the first night, all at the Ukrainian Cultural Center in Warren. For more information, visit www.saveukrainenow.org or email ukushner@saveukrainenow.org.

LETTERS

A vote against Crain’s print redesign Editor: I would like to comment on the March 30 issue of Crain’s Detroit Business. I have been a subscriber since 1985. The publication was an excellent presenter and reviewer of business, both locally and nationally. Regardless of your “research” and use of “focus groups,” your new publication essentially is in the same style as one of those tabloid newspapers from New York City. Specifically, each page looks very busy. In the traditional sense of newspaper design (which I learned

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

in junior high school in Cleveland Heights, Ohio, back in 1947-48), you

are putting important news items in different places on each page rather than having the important news on each page at the top and outside of the page. I won’t discuss the ads, but comments could be mentioned, especially when the visual aspects of the ads are more carefully thought out than the use of photos in the various news stories throughout the publication. I could go on, but I leave those thoughts to other readers. Burton Zipser Royal Oak

The mayor has a velvet glove KEITH CRAIN n the last couple of weeks, there

Ihas been a bit of a brouhaha

about the new hockey town development on the part of the Detroit City Council. Zoning for the new arena has been postponed for a week at a time and now it’s going to be coming up again on Tuesday. Chances are pretty good that this time, after City

Council has had its say, it will be approved and work will proceed. It was interesting to note that it wasn’t until last week that Mayor Mike Duggan had any comments about the issue and sort of let it all run on its own accord. But make no mistake, the mayor has a very tight grip on the city and the City Council and is just allowing council to express its own bluster. Mayor Duggan is a master of leadership. He was when I watched him turn around the Detroit Medical Center, and he was during his

mayoral campaign. He seems able to govern with an iron fist in a velvet glove. It’s a perfect combination when you have a cantankerous collection of council members who think they are the mayor. Ever since Coleman Young ended his tenure, the council and the mayor’s relationship has been contentious at best. Every mayor since Young saw the council as an adversary and the relationships were never very good. It is fascinating to watch today’s mayor and City Council interact.

Duggan never does anything to undermine their position or their authority. But somehow, everything gets done and quite efficiently. I don’t think anyone wants a mayor without some checks and balances, but during the last couple of decades, the City Council was a real impediment to progress in Detroit. During the bankruptcy, Mayor Duggan was able to work quite well with the emergency manager, but it would be fair to say that the council had no role during the bankruptcy. Today, everything seems to be

running relatively smoothly. Duggan had some role in shaping the power structure of the current council; it seems they feel empowered, or at least relevant. And that is always important when you have elected officials, each with his or her agenda. For all the outward signs, we have our checks and balances. But most importantly, we have a mayor who is getting things done in our city. Things that are long overdue. It may be an iron fist. But make no mistake, it’s covered with a velvet glove.

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Detroit in the driver’s seat for auto-tech mashup OTHER VOICES Lisa Vallee-Smith Lisa Vallee-Smith is CEO of Airfoil Group, Southfield uring the depths of Detroit’s bankruptcy crisis, the most optimistic supporters of the Motor City clung to the prospect that Detroit had nowhere to go but up — and to the surprise of many, it did. In fact, Detroit has soared to become not just a resurgent center of automotive design and production but also one of the nation’s hottest spots for technology. Young tech professionals are filling the lofts and offices of the city’s downtown. The commercial real estate services firm Jones Lang LaSalle recently ranked Detroit as the 31st best high-tech market in the country, joining Chicago, MinneapolisSt. Paul and Indianapolis as one of the few top tech markets in the Midwest. The city is becoming a welcome home for leading-edge startups through organizations like TechTown Detroit and Bizdom and companies like Rocket Fiber, which is creating a high-speed fiber-optic cable infrastructure for the city’s center along the M-1 Rail line. The real momentum for Detroit’s future high-tech growth, however, can be found in the labs and on the test tracks of the city’s automakers

Nominations sought for 40 under 40 awards Since 1991, Crain’s Detroit Business has gathered 40 of the community’s high achievers for a special salute. Past winners have started companies, found success at a young age at established businesses and made nonprofits stronger.

and suppliers. In a span of what seems to have been just months, the auto industry has morphed into something very new, very different and very high tech. Far beyond the playing fields on which automotive design and hightech science traditionally have converged — areas like infotainment and emissions control — automobiles now are designed around connectivity and such autonomous driving features as adaptive cruise control, radar, video cameras and sensors that already enable vehicles to drive and park themselves. In fact, we are witnessing a

mashup of the automotive and technology sectors, with Detroitbased automakers opening Silicon Valley labs while Silicon Valley tech firms like Google, Tesla and apparently even Apple are building autonomous vehicles. The role of the automobile itself has evolved in a way that points the auto industry in entirely new directions. In January, Ford Motor Co. opened a new research and innovation center in Palo Alto, Calif., at the heart of Silicon Valley, and CEO Mark Fields explained, “At Ford, we view ourselves as both a mobility and an auto company, as we drive innova-

tion in every part of our business.” “Mobility” is a term we are accustomed to associating with the smartphones, tablets and laptops we carry with us. But shortly, our most complex mobile device will be the car in our driveway. For the newest generation of consumers, the car they buy is less important than the technology it carries. Unlike their parents, millennials increasingly tend to view cars and trucks not so much as vehicles equipped with ever smarter technology but rather as very smart technology packaged in an automobile. In the months ahead, Detroit will

be talking about the prowess of its vehicles in terms that are far less about horsepower, torque and displacement and far more about radar sensor control units and stereo multifunction cameras. With its growing technology talent base, its history in evolving the automobile and its strategic focus on high-tech innovation, Detroit is positioned to become the focal point for the new mobility industry. As the auto-tech mashup accelerates, Detroit is ready to drive itself to new levels of excellence and entrepreneurship on the brand-new road ahead.

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Crain’s is seeking nominations for the 2015 class of 40 under 40, which recognizes achievers across metro Detroit under age 40 based on factors such as financial impact and community leadership. Winners will be profiled in the Oct. 5 issue and honored at an awards event in November. With more than 680 alumni invited, the event brings together the current class with colleagues, clients, family and friends to celebrate. To be eligible, nominees must be age 39 or younger as of Oct. 5, 2015. Nominations must be received by April 27. Winners will be notified this summer. Nominations are submitted online and can be found at crainsdetroit.com/section/ nominate. For questions regarding the nominations: Contact Bill Shea at bshea@crain.com or (313) 446-1626. For technical questions regarding the nomination form: Contact YahNica Crawford at ycrawford@crain.com or (313) 4461641.

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Detroit no Hitsville for record label founder, but ‘no regrets’ By Dustin Walsh dwalsh@crain.com

Producer and former Brownsville Station guitarist Bruce Nazarian created independent record label Motech in 1985 to “put Detroit back on the map” for recording hit music. But the lure of a lucrative producing career in New York City and Detroit’s dwindling music scene at that

time ended Motech before its first birthday. Nazarian, 66, started the label with a $250,000 advance from MCA Records Inc. , which was absorbed into Geffen Records in 2003, to produce his own band’s record “Night Rider” in 1983. Nazarian, then a member of Automatix, used the funds to buy studio recording

April 22, LOOKING BACK Crain’s 1985, issue profiled Bruce Nazarian, a record producer and musician who wanted to reignite Detroit’s recording industry. He found a better sound in New York City. More at crainsdetroit.com/30 equipment for an upper flat on Lauder Street in the city with hopes of making Motech a successful independent dance music label. “I can’t give you a Motor City success story,” Nazarian said. “We spent so much time selling records in New York, we thought we could put Detroit back on the map with the label, but it became a natural consequence of the economics of the city as it dwindled. “The kind of music I was producing was inexplicable to many people in Detroit,” Nazarian said. “So I saw the writing on the wall; the economics in Detroit sucked, so I moved to a better place to produce.” Nazarian was lured away from Detroit and Motech to join Mike Theodore — an ex-Detroit producer responsible for co-producing Rodriguez’s 1970 album, “Cold Fact,” as well as Dennis Coffey’s 1972 hit, “Ride Sally Ride” — in New York City to produce. Nazarian’s production career includes its own set of hits, including

Midway’s dance hit “Set It Out,” Nighthawk’s “Eye of the Tiger” and Mitch Ryder’s cover of “Like a Rolling Stone,” and he co-produced Bruce Nazarian: several tracks “The economics in with famed DeDetroit sucked.” troit producer Don Was. Was went on to produce tracks for the Rolling Stones, Bob Dylan, Waylon Jennings, Elton John and dozens of other superstar musicians. Nazarian never reached the same music industry VIP status as Was, but he continues to produce independent smooth jazz records in Los Angeles. He hosted a weekly radio show called the “Digital Guy” until last year, when he took a job at a record company. Nazarian declined to reveal his title or the company he works for due to past legal matters. “Don Was was not the force of

nature he is today, back in 1985. He just turned out luckier than I,” Nazarian said. Brian Pastoria, partner at Detroit-based Harmonie Park Enter tainment and Media Group , said many artists and producers, including himself, were weighing the decision to leave Detroit in the 1980s. “It became a serious decision for most of us then,” said Pastoria, who continues to produce records in the city. “The industry just wasn’t here anymore, and it’s still not here. I stayed because of family. Detroit has had such a huge impact globally, but do we celebrate that and are we known for our music industry? No.” Nazarian said he doesn’t return to Detroit often and doesn’t pine over abandoning Motech, but he does miss the “Detroit sound.” “I have no regrets, considering where the recording industry went over the past 30 years,” Nazarian said. “The way I play music, the way I produce it, is absolutely a function of living in Detroit when I did. I am a product of all those wonderful influences — pop, rock ’n’ roll, R&B — that were Detroit.” 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Detroit-based GreenLancer Ener gy Inc. announced April 15 that it has finished raising a Series B funding round of $5 million from a syndicate of new and existing investors. The company, which uses freelancers to plan and handle permitting for solar energy projects, has expanded its space in the Ford Building in downtown Detroit and is looking to hire experienced software developers. It raised its A round of $500,000 in July 2013. The company was founded in 2011. “We strive to be the industry’s premier choice for residential solar system designs,” said CEO Zac MacVoy. Last April, GreenLancer won the $50,000 Clean Energy Trust Business Model Innovation Prize at the Clean Energy Challenge in Chicago. In 2012, one of the company’s co-founders, Patrick McCabe, was named to the Crain’s class of 20 in their 20s. McCabe, who was CEO at the time, is now COO. — Tom Henderson

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PEOPLE IN

SPECIAL REPORT

HEALTH CARE

Patricia Posa,

Posa

system performance improvement leader for St.Joseph MercyHealth,has been named a Michigan Health & Hospital Association Keystone Center senior fellow.

Read more health care news and sign up for our Health Care Extra newsletter at crainsdetroit.com/healthcare

Sachin Kheterpal, M.D., a physician anesthesiologist and an associate professor at the University of Michigan, has been appointed to Kheterpal the team that will lay the groundwork for President Barack Obama’s Precision Medicine Initiative.

William Conway, M.D., CEO of the Henry Ford Medical Group, has been selected as one of the 50 Most Influential Physician Conway Executives and Leaders by Crain’s Modern Healthcare, a sibling publication of Crain’s Detroit Business.

Karmanos now treats 6,500

new cancer patients in downtown Detroit.

Brad Stach, Ph.D., division head of audiology at Henry Ford Hospital, has received the American Academy of Stach Audiology’s Distinguished Achievement Award.

Gerald Feldman, M.D., a professor of molecular medicine and genetics, pathology and pediatrics at the Wayne State University School of Medicine, was recently named president of the American College of Medical Genetics and Genomics. Renay Gagleard, service line administrator for women and children’s services at Hurley Medical Center, has been named chief nursing officer at the Detroit Medical Center’’s Huron Valley-Sinai Hospital.

Steven Almany, M.D., has been named medical director of the cardiac catheterization lab at Beaumont Hospital in Troy.

Zaid AlFaham, M.D., of Beaumont Almany Hospital in Royal Oak won the grand prize for his research abstract presentation from the American College of Nuclear Medicine and the Society of Nuclear Medicine and Molecular Imaging.

[JOHN SOBCZAK]

The merger of Karmanos and McLaren has brought together doctors Gerold Bepler (left) and Justin Klamerus,who had been president and medical director of McLaren Cancer Institute.Klamerus now is chief quality officer and executive vice president of community-based programs for Karmanos.

Cancer centers bulk up Karmanos, others add facilities, technology, specialists By Jay Greene jgreene@crain.com

he decision by the Barbara Ann Karmanos Cancer Institute in the fall of 2013 to join McLaren Health Care Corp.

was a launching point to build a statewide presence. Expansion-minded McLaren, with its 10 hospitals, provided Detroit-based Karmanos what it needed: Greater access to capital, lower supply and equipment costs through economies of scale, and access to more patients for advanced cancer treatment and clinical trials. The move comes as other health care organizations are concentrating on strengthening their own oncology

provider networks, adding facilities and technologies such as genetic testing and hiring specialists when needed, executives said. Those moves come in part because of incentives under the Affordable Care Act to keep as many patients as possible in a given network. Leading oncology competitors to McLaren in Southeast Michigan include the University of Michigan Health System, St. John Providence Health System, Henry Ford Health System and Beaumont Health. Still to be resolved in the McLarenKarmanos merger is ongoing litigation between the two entities and the Detroit Medical Center over whether McLaren

can market Karmanos in Oakland and Wayne counties. (See story, Page 13.) Karmanos growth plans In the 15 months since the merger took place — using $78 million pledged by McLaren as part of the acquisition — Karmanos has been hiring cancer researchers, renovating operations and completing plans on inpatient and outpatient expansions, said Gerold Bepler, M.D., CEO of the National Cancer Institute-accredited institute. At least $20 million will be used for research to hire scientists and their teams, Bepler said. So far, Karmanos has hired four scientists and plans to hire 16 more, along with several dozen senior or midlevel investigators and technicians. See CANCER, Page 12

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CANCER, from Page 11: Health systems add programs in aftermath of Affordable Care Act During the past year, Karmanos also more than doubled the number of patients enrolled in clinical trials, to 211 during 2014 from 90 in 2013. Karmanos plans to add three clinical trials this year to 19 underway to capitalize on the greater patient access. In addition, the institute supports more than 700 cancer research programs with Wayne State Univer sity. Bepler said Karmanos also has upgraded equipment and renovated its infusion center and inpatient clinics. “At the end of the year, we plan to look at our ambulatory network” in Southeast Michigan, he said. Karmanos has two outpatient centers in Farmington Hills and a joint venture in Monroe. To provide uniformity, Bepler said, Karmanos has been certifying each McLaren hospital cancer center in Karmanos’ treatment protocols, quality-of-care index and more than 350 common care plans. McLaren also is developing a com-

Cancer trends: It’s the No. 2 killer – but decline in new cases expected Cancer is now the second-leading cause of death among U.S. adults, behind heart disease but ahead of lung disease, accidents and strokes, the American Cancer Society says. Cancer care in the U.S. costs more than $125 billion each year, or 5 percent of the nation’s $2.5 trillion health care bill.

But improvements in cancer screening — including fast-developing genetic testing and treatment — along with a decline in smoking have contributed to a 20 percent decline in cancer death rates in the U.S. since 1991, the society said. “The mortality rates are dropping because people are living with cancer longer,” said Gerold Bepler, M.D., CEO of the Detroit-based Barbara Ann Karmanos Cancer Institute. About 77 percent of all cancers are diagnosed in people 55 and older. In 2011 — the last year such data were available — 21,000 people in the state died from cancer, according to a 2013 report by the Michigan Department of Community Health. In Michigan, the three leading causes of cancer in 2011 were prostate (8,675), lung (7,652) and breast (7,409), Community Health reported.

Other growing areas of cancer include colorectal, gastro-intestinal, gynecological and blood cancers that include lymphoma and leukemia. Declining are head and neck and urology cancers. While new cancer cases have been trending upward in Michigan over the past several decades, the American Cancer Society estimates that the state will experience a 2 percent decline in new cases this year, to 57,420 from 58,616 in 2014. “2015 will probably be the first year in 40 to 50 years that the number of new cancer cases will go down,” Bepler said. Hospital discharges for cancer have been declining over the past dozen years, according to the Michigan Department of Community Health. In 2012, the last year data were collected, 37,642 patients were discharged for cancer care, down 12 percent compared with 43,033 in 2003.

[ISTOCK PHOTO]

mon electronic health record for oncology, working with Elekta Ltd. and its software called Mosaiq. Because of the affiliation with McLaren, Bepler said, Karmanos now

treats 6,500 new cancer patients in downtown Detroit, or 500 more than when it was independent. Bepler said that awareness of Karmanos is increasing in Michigan and

MARGINS BEING SQUEEZED BY DECREASING REVENUES AND INCREASING COSTS?

that primary care providers associated with McLaren hospitals are referring more patients to the institute. To generate referrals to Detroit, he said, he has spent time getting to know doctors at McLaren’s hospitals. Overall, the McLaren Cancer Institute, renamed Karmanos Cancer Institute, has eight inpatient cancer programs, 11 outpatient centers and seven outpatient radiation centers. It sees a total of 12,000 new cancer patients, a 4 percent increase from 2013. Influx of outpatient care

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As technology and screening improve, cancer care is moving more into the outpatient arena, said Theodore Lawrence, M.D., director of the University of Michigan Com prehensive Can cer Center. Theodore UM, which Lawrence: Seeking operates more more partnerships than 40 outpatient centers, recently opened satellites with cancer services in Brighton and Northville to expand its reach closer to Detroit as well as west of Ann Arbor, Lawrence said. “The strategy of seeing more inpatients in Ann Arbor is not going to happen,” he said. For example, UM outpatient visits have increased at an average 3 percent clip annually in the past decade and totaled 102,300 in 2014. In 2000, that number was 56,800. As part of its expansion, UM has created a statewide radiation oncology network with affiliations with MidMichigan Health in Midland and Traverse City-based Munson Medical Center to collaborate on all cancer programs. “We have been trying harder to form more partnerships statewide for at least the last five years,” said Lawrence, a radiation oncologist who took over the cancer center this year. “I do want to accelerate this, anything we can do with cancer consistent with the health system’s overall strategy.”

— Jay Greene

At MidMichigan, for example, “We attend tumor boards with them, conduct genetic counseling, do video conferences and collaborate on quality initiatives,” Lawrence said. “A small fraction of their patients come here for consultation, and we do their bone marrow or liver transplants.” The UM network also includes community affiliations with seven hospitals to co-manage radiation oncology programs. UM specialists coordinate care and, in some cases, refer to the cancer center, he said. The hospitals are Allegiance Health, Jackson; Alpena Cancer Cen ter; McLaren Greater Lansing; Metro Health Village, Wyoming; Providence Assarian Cancer Center, Novi; Provi dence Cancer Center, Southfield; and VA Ann Arbor Healthcare System. Beaumont’s cancer plan David Wood, M.D., Beaumont’s chief medical officer, said Karmanos will help improve McLaren’s cancer services and increase care coordination within the system. “We are going ahead with our David Wood: plan to provide Beaumont to offer coordinated onlatest technology cology care across Beaumont and want to be able to spread protocols very similarly” across Beaumont’s eight hospitals, said Wood, a cancer surgeon who has worked in the past for Karmanos and UM. “We want to make us attractive for statewide referrals as well,” Wood said, adding that Beaumont will do that by offering prompt access with the latest technology, including proton beam therapy. (See story, Page 1.) But Wood said Beaumont doesn’t have formal relationships with other hospitals for oncology care. “Our oncologists — medical, surgical and radiation — have extensive relationships with other doctors” in Michigan, he said, and that is how See Next Page

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referrals are generated. In 2014, Wood said, Beaumont had 171,000 outpatient encounters, a 7 percent increase from 160,000 in 2012. Inpatient admissions held steady at 3,300. “Our volume is going up on the outpatient side but not as fast on the inpatient side,” he said. “Much of the treatment with oral drugs is moving to outpatient.” St. John’s cancer plans Bob Hoban, St. John Providence’s senior vice president of strategy and centers of excellence, said that historically, St. John hasn’t competed with Karmanos. “We compete a little bit with McLaren” in Mt. Clemens, Hoban said. “So far, we haven’t seen any strong moves by Macomb in the cancer area.” Last year, St. John’s six cancer centers and nine infusion centers

DMC deal stymies Karmanos growth plan One hang-up in the growth strategy of the Barbara Ann Kar manos Cancer Institute has been the inability of McLaren Health Care Corp. to market Karmanos in Oakland and Wayne counties. When Karmanos acquired the Detroit Medical Center’s $100 million cancer operation in 2005 for $10 million, it agreed to advertise, market services and brand its DMC name only in Wayne, Oakland and

had 4,000 new cancer cases generating $160 million in net revenue,

Macomb counties, except for the area around McLaren Macomb Hospital in Mt. Clemens. After the merger was announced on Oct. 30, 2013, McLaren and Karmanos sued the DMC for the right to market services using the Karmanos name in Oakland County. The DMC then sued McLaren and Karmanos for breach of contract. The two sides are trying to settle. — Jay Greene

an amount that has been increasing over the past several years,

Hoban said. St. John’s outpatient cases grew 10 percent last year, with inpatient behind at a 3 percent growth rate, he Bob Hoban: St. said. John standardizing To enhance treatment protocols cancer screening, another new emphasis for St. John is genetic therapy. The health system has hired two geneticists and a genetic counselor. It also recently began a molecular pathology program to provide laboratory support to identify specific mutations in can-

cer tumors. “This is a major growth area,” Hoban said. Hoban also said the St. John system is standardizing protocols through the St. John Providence Oncology Network to treat patients in consistent ways using best clinical practices and multidisciplinary teams. One of St. John Providence’s new areas of emphasis in cancer care has been developing the program under contract at Crittenton Hospi t a l M e d i c a l C e n t e r . Last year, St. John took over Crittenton’s program. 䡲

TOP FIVE SIGNS YOUR EMPLOYEES MIGHT HAVE INFERIOR DENTAL COVERAGE:

CON ROUNDUP The following are selected certificate of need filings for March 9-April 13:

THEIR NETWORK INCLUDES ONLY TWO DENTISTS.

Letters of intent

䡲 Wellbridge of Clarkston: Begin operation of a new nursing home, replacing 85 beds; $10.8 million. 䡲 Bortz Health Care of Warren : Acquire 152-bed nursing home from Warren Opco LLC and operate under a five-year lease; $6.2 million. 䡲 Bortz Health Care of Oakland , Orion Township: Acquire 106-bed nursing home from Oakland Opco LLC and operate under a five-year lease; $3 million. 䡲 Bortz Health Care of Ypsilanti : Acquire 144-bed nursing home from Ypsilanti Opco LLC and operate under a five-year lease; $3.9 million. 䡲 Bortz Health Care of Green Lake, Orchard Lake: Acquire 85-bed nursing home from Green Lake Opco LLC and operate under a fiveyear lease; $3.9 million. 䡲 Park Geriatric Village, Highland Park: Acquire 114-bed nursing home from Highland Park Opco LLC and operate under a five-year lease; $3.1 million. 䡲 Redford Geriatric Village , Detroit: Acquire 98-bed nursing home from Redford Opco LLC and operate under a five-year lease; $2.8 million.

CLEANINGS CAN ONLY BE SCHEDULED ON THE LAST TUESDAY OF THE MONTH.

ONLY THE TOP FRONT TEETH ARE COVERED.

CAVITIES ARE NOT TREATED BECAUSE THEY ARE CONSIDERED “CHARACTER BUILDING.”

THEY DON’T HAVE DELTA DENTAL.

Applications received

䡲 Harper University Hospital, Detroit: Add two operating rooms on the second floor of Harper’s Cardio vascular Institute Surgery Center; $5 million. 䡲 Children’s Specialty Center of Michigan, Troy: Acquire and move the surgical service from DMC Surgery Hospital to a new, freestanding surgical outpatient facility at 350 W. Big Beaver Road; $12.7 million. Decisions

䡲 Botsford Hospital, Farmington : Replace 104 hospital beds and six operating rooms and add three operating rooms in a newly constructed patient wing; $160 million. Approved.

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UPCOMING

PARTNER EVENTS

CEED 31st Annual Award celebration Keynote speaker Andre Taylor, founder and CEO, Taylor Insight Worldwide LLC April 23 • 5-9 p.m. Suburban Collection Showplace, Novi Visit MICEED.org or call (734) 677-1400 10th Annual Nonprofit Management Conference Hosted by the Troy Chamber of Commerce and its Non-Profit Network (NPN), presented by PNC Bank. Continental breakfast, networking, two breakout sessions, lunch and two afternoon sessions. April 29 • 8 a.m.–3 p.m. Woodside Bible Church, 6600 Rochester Rd., Troy Troy Chamber members: $50; non-members: $100 Two or more attendees from the same organization receive a $10 discount per person. Space is limited and reservations must be made in advance. To register, call the Troy Chamber at (248) 641-3694 or e-mail: jody@troychamber.com. For details, visit www.troychamber.com and click on the Non-Profit Network tab. CEO Luncheon Series Featuring Rick Haas (R.P.), President & COO of Mahindra & Mahindra, Ltd May 13 •11:30a.m. – 1:30p.m. Kingsley Inn, Bloomfield Hills.

Detroit Society for Human Resource Management (Detroit SHRM) “Strategies to Create A Global Mindset and Build Cultural Competence” Speaker: Neal R. Goodman, Ph.D., Co-Founder & President, Global Dynamics, Inc. In this highly-interactive session we examine why Cultural Competence (CC) has become the most significant emerging competency for domestic and global organizations. Learn how to apply CC to enhance your organization’s competitive advantage and develop an action plan to build CC in your organization. May 18 • 5-8 p.m. • Westin Hotel, Southfield Detroit SHRM members: $45; non-members: $60 Register at www.detroitshrm.org or call (248) 478-6498. Let’s Put Southfield on the Map April 22 • 9-11 a.m. DeVry University, 26999 Central Park Plaza www.southfieldchamber.com Marketing & Sales Executives of Detroit (MSED) 23rd Annual Marketing & Sales Professionals Golf Outing to Benefit MSED Scholarships Golf and network with marketing and sales professionals from our community AND make an important contribution to the future of our profession through scholarships funded from the proceeds. June 19 • 8 a.m.-4 p.m. Shenandoah Country Club, West Bloomfield Individual golfer: $160; foursome: $600 Corporate foursome: $750* *includes foursome, hole sponsorship and signage Sponsorships available from $200-$5,000 For additional information and to register, visit www.msedetroit.org or call Meeting Coordinators at (248) 643-6590.

Chase report: Detroiters’ skills gap must be closed By Tom Henderson thenderson@crain.com

J.P. Morgan Chase & Co. released a report last week detailing the mismatch between the needs of employers in Southeast Michigan and the skills of current job seekers in Detroit. The report was released as part of the five-year, $100 million commitment to Detroit’s economic recovery that Chase announced last May. “Detroit’s continued economic growth is tied to the quality of its workforce,” said Chauncy Lennon, Chase’s head of workforce initiatives, in a news release. “This report seeks to help the middle-skill workers identify pathways to well-paying jobs, which will expand the number of qualified workers and attract new business opportunities to accelerate Detroit’s growth.” Despite the reduction of jobs and population in the past 10 years, the demand for qualified workers in Detroit exceeds the supply. While roughly 12 percent of the residents age 25 or older in a sixcounty area in Southeast Michigan lack a high school diploma, 22 percent of Detroit’s residents lack a high school diploma or GED, including more than 55 percent of Latino residents. And while unemployment rates in the region are well below their highs in 2009, the numbers are still alarming. For example, the report says that unemployment in the

metropolitan region is 6.7 percent, but it is 13 percent in Detroit — 5.5 percent for whites, 13.6 percent for African-Americans and 10.3 percent for Latinos. The poverty rates in the city are even more alarming: 40 percent for whites, 38 percent for African-Americans and 36 percent for Latinos. From 2013 to 2014, openings in health care and manufacturing, the area’s largest industry sectors, represented 56 percent of new job postings for middle-skills jobs in Detroit. The report defines middle-skill workers as those with more than a high school degree but less than a bachelor’s degree. As of 2013, there were 321,700 middle-skill jobs in the region, accounting for about 17 percent of all jobs. There were more than 207,000 middle-skill jobs in health care and manufacturing, and more than 5,700 of these types of jobs are expected to open every year through 2018, in part because of an aging workforce. The report said about 22 percent of all health care and manufacturing employees are 55 years or older. According to the report, the median average hourly wage for middle-skill health care positions is $27.77, yet job postings often go unfilled for months. The region’s living hourly wage is $17.08. As for manufacturing, the report says that in the Detroit region, it ac-

counts for 33 percent of middle-skill demand, and many manufacturing occupations are expecting to grow at rates well above the national average in the coming years. For example, employment of machinists is projected to rise here by 17 percent by 2020, while the national average is expected to remain flat. The median average wage for a middle-skill manufacturing worker is $22.40 an hour. Yet the report says job postings in various categories often go unfilled for 40 days or more. Helping Detroit city residents obtain well-paying middle-skill jobs must be a regional workforce development priority, the report said. In order to meet employer demand, the report offers several recommendations to address the skills gap: 䡲 Develop a regional master plan to align regional workforce goals and outcomes to prepare Detroit residents for middle-skill occupations in high demand sectors. 䡲 Encourage employers, educators and community-based organizations to collaborate by building an employer endorsed curriculum to effectively prepare residents to secure middle-skill industry occupations in the region. 䡲 Align talent development investments by public, private and philanthropic stakeholders with industry focused vision and goals. More details from the Detroit report can be found at jpmorgan chase.com.

Crain’s wins 16 Excellence in Journalism awards Crain’s Detroit Business staff members earned 16 awards for reporting, design and headline writing Wednesday night at the Detroit Society of Professional Journalists annual Excellence in Journalism banquet. More than 200 awards were given from more than 400 entries in print, radio and online media categories for work published in 2014. Crain’s was awarded first place in the digital media presentation category for “Detroit Rink City,” the report of the new Detroit Red Wings arena and surrounding development. In that same category, Crain’s 20 in their 20s awards section earned an honorable mention. Other Crain’s awards, in the category of newspapers with circulation of less than 100,000: 䡲 First place, investigative reporting: “The cure for bogus bills,” reporter Chad Halcom , for a story about how metro Detroit has attacked Medicare fraud. Freelancer Bridget Vis helped research the project, and Director of Digital Strategy Nancy Hanus created an interactive database. 䡲 First place, feature page design: Pierrette Dagg, creative services di-

rector, for her display of 40 under 40 winners; Dagg also won second place, Page 1 design for “Detroit Rink City.” 䡲 First place, personality profile: “He took on a cause, became a casualty,” former Lansing correspondent C h r i s G a u t z ’s story about Frank Foster, a northern Michigan legislator defeated in the Republican primary for backing an end to discrimination based on sexual orientation. 䡲 First place, general news: “How Michigan lost grip on Method,” Entrepreneurship Editor Amy Haimerl’s and reporter Kirk Pinho’s description of how Michigan lost a manufacturing plant to Chicago. Chris Gautz won second place in the category for “Pavement of partisanship,” which detailed how the Republican Legislature directed road dollars to Republican districts. 䡲 First place, headline writing: Senior Editor Gary Piatek. Senior Editor Bob Allen won second place in the category. 䡲 Second place, consumer/ watchdog reporting: Senior Reporter Jay Greene , for “CON rules de-emphasize open heart surgery numbers,” which looked at how

certificate of need regulations rely less on high numbers of operations in evaluating heart surgery programs. Greene also won third place in breaking news for “Oakwood looking to sell?” a scoop on the possible sale of the Oakwood Health System. 䡲 Second place, explanatory story: “Will auction build value for housing?” Amy Haimerl ’s story on whether Detroit’s housing auction would help raise appraisal values for city homes. 䡲 Second place, feature story: “The Wright way to fund,” Senior Reporter Sherri Welch’s story on the financial struggles of the Charles H. Wright Museum of African American History. 䡲 Second place, localization of a national story: “The METrics of college costs,” Kirk Pinho ’s examination of how the cost of the Michigan Education Trust program, launched to lock in tuition rates for families, has become unaffordable for most. 䡲 Second place, sports reporting: “Major donor Ross backs embattled Brandon,” Enterprise Editor’s Bill Shea ’s exclusive interview with Stephen Ross.

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EXPANSIONS

DEALS

BorgWarner Inc., Auburn Hills, has opened a new facility in Chungju, South Korea, and an expanded manufacturing facility at its campus in Ramos Arizpe, Mexico. Website: borgwarner.com.

& DETAILS

Unique Concepts Online LLC, Ann Arbor, has launched tranquiltempo.com, a new online store, which offers water fountains.

Submit news to cdbdepartments@crain.com

ACQUISITIONS & MERGERS Agree Realty Corp., Bloomfield Hills, announced that it closed on the acquisition of 10 retail properties in seven states for an aggregate purchase price of approximately $17.5 million. The recently closed deals include Taco Bell and Wendy’s locations, a Jiffy Lube service center, a KFC restaurant and a Dollar General store. Website: agreerealty.com. Altair Engineering Inc., Troy, announced that it has completed the acquisition of Multiscale De sign Systems LLC, New York, developer of products focused on micromechanics, microstructural optimization, and life prediction of complex materials. Websites: altairhyperworks.com, multiscale.biz. ProQuest LLC, Ann Arbor, through its affiliate Bowker, has acquired SIPX Inc., Palo Alto, Ca., creator of a digital course materials

SPOTLIGHT JACK TALKINGTON: CFO Crestmark Bank Jack Talkington has been promoted to the new position of CFO at Crestmark Bank, Troy, and has become a member of the executive committee. Talkington Talkington, 59, will be responsible for overseeing Crestmark’s accounting department and the interest rate risk management/funding and special projects areas. He previously was senior vice president of special projects. Talkington joined Crestmark in 2008 with the acquisition of Commercial Capital Lending. He most recently launched the company’s SBA division and was integral in the acquisition of Bloomfield Hills-based TIP Capital, both in 2014. He will also maintain an office in Baton Rouge, La. Talkington received his bachelor’s degree in accounting from Arkansas Tech University.

solution that addresses a variety of copyright and costs concerns for universities. Website: proquest.com.

NAME CHANGE Mid American Group Inc., Chicago, with an office in Livonia, an insurance and risk management consultant and broker for middlemarket companies, has changed its name to Axion RMS Ltd. Telephone: (248) 207-6374. Website: midamgroup.com.

CONTRACTS G2 Consulting Group, Troy, a geotechnical, geoenvironmental and construction engineering firm, has been selected by the Michigan Department of Transportation as part of the team for the design and reconstruction of the I-75/University Drive interchange in Oakland County. Websites: g2consulting group.com, michigan.gov/mdot.

STARTUPS Great Lakes GrowthWorks, a new strategy consulting firm, has opened at 220 S. Main St., Suite 301, Ann Arbor. Telephone: (734) 221-3860. Website: glgrowthworks.com.

PolyFlex Products Inc., Farmington Hills, a provider of plastics, urethane and rubber solutions for material handling and manufacturing process applications, announced an engineering and logistics agreement with Shanghai EC Global International Trading Co. to import and export engineering and logistics support and technical assistance worldwide. Website: polyflexpro.com.

Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

PEOPLE

ON THE MOVE Send news items and photos to cdbdepartments@crain.com

ARCHITECTURE Kenneth Alder to project manager, Fusco, Shaffer & Pappas Inc., Ferndale, from project manager, Grissim Metz Andriese Associates PC, Northville. Also, Laura Cunningham to project manager, from senior tenant coordinator, Taubman Co. LLC, Bloomfield Hills; Jim DuRussel to project manager, from project manager/sales and marketing, Economides Architects, East Lansing; and Mechthild HeerdeOlind to project designer, from architect, J Bradley Moore & Associates Architects, Ann Arbor.

CONSULTING Robert Mangiapane to partner, risk management practice group, Cambridge Consulting Group, Troy, from risk consultant, Hartz Insurance Co., Detroit.

Mangiapane

FINANCE Mark Smith to chief marketing officer, Northwestern Mutual, Troy, from director business development, Quicken Loans Inc., Detroit. David MacGuidwin to vice president, global sales and marketing, Falcon

Group Inc., Farmington Hills, from mortgage banker, Quicken Loans Inc., Detroit.

HEALTH CARE

Fitzgerald-Mays

Linda Fitzgerald-Mays to vice president of quality and clinical outcomes, Botsford Hospital, Farmington Hills, from director of clinical outcomes.

HOSPITALITY Nassima Goumeziane to director of food and beverage, Westin Book Cadillac Detroit, Detroit, from complex director of banquets, Westin Fort Lauderdale Beach Resort/Sheraton Fort Lauderdale Beach Hotel, Fort Lauderdale, Fla.

LAW Marko Belej to coordinator, tax practice group, Jaffe Raitt Heuer & Weiss PC, Southfield. He is a partner at the firm. Meghan Kennedy Riordan to shareholder, Dean & Fulkerson PC, Troy, from member, Kerr Russell & Weber PLC, Detroit.

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16 WEDNESDAY 11th Annual Economic Forum Breakfast. 7:30-10 a.m. April 22. Michigan Hispanic Chamber of Commerce. Guests include Steve Arwood, CEO and president, Michigan Department of Talent and Economic Development; Alejandra Castillo, national director, Minority Business Development Agency; G. Mustafa Mohatarem, chief economist, General Motors Co.; and John Rakolta Jr., chairman and CEO, Walbridge Aldinger Co. Cindy Goodaker, executive editor, Crain’s Detroit Business, will moderate. Detroit Athletic Club, Detroit. $75 members, $100 nonmembers. Contact: Barb Lange, (248) 792-2763, ext. 101; email: blange@mhcc.org; website: mhcc.org. Global Cities Initiative: Building and Sustaining a Globally Competi tive Region. 8-11:30 a.m. April 22. Detroit Economic Club. Featuring Sandy Baruah, president and CEO, Detroit Regional Chamber of Commerce; Mike Duggan, mayor, city of Detroit; Bruce Katz, vice president and founding director, Metropolitan Policy Program, the Brookings Institution; Rodrick Miller, president and CEO, Detroit Economic Growth

CALENDAR Corp.; and Nancy McLernon, president and CEO, Organization for International Investments. Westin Book Cadillac, Detroit. $45 DEC memDuggan bers, $55 guests of DEC members, $75 nonmembers. Ticket sales end at noon April 21. Contact: (313) 963-8547; email: info@econ club.org; website: econclub.org. CEO Insights. 11:30 a.m.-1 p.m. April 22. Troy, Auburn Hills chambers of commerce. Speaker is Richard DeVore, executive vice president and regional president for Detroit and Southeast Michigan, PNC Financial Services Group. Oakland Center, Oakland University, Rochester Hills. $35 Troy Chamber members, $45 nonmembers. Contact: Rebecca Wiles, (248) 853-7862, email: rwiles@auburnhills chamber.com; website: auburn

table of 10. Contact: Jordan Twardy, (248) 398-3388; email: jordan@eightmile.org; website: eightmile.org

hillschamber.com. Detroit Diversity Luncheon. 11:30 a.m.-1:30 p.m. April 22. Women of Financial Executives International. Speaker: Mary Liz Curtin, owner, Leon & Lulu, will speak on “Building a Brand With Personality - The Story of Leon & Lulu.” Forest Lake Country Club, 1401 Club Drive, Bloomfield Hills. $35 for nonmembers, free for FEI Detroit chapter members. Contact: Sharon Kimble, (734) 277-7519; email: feidetroit@comcast.net; website: financialexecutives.org

UPCOMING EVENTS 16th annual 8MBA Leadership Luncheon. 11 a.m.-2 p.m. April 24. Eight Mile Boulevard Association. Moderated by Charlie Langton of WWJ 950, featuring the “Big 4”: Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans, Macomb County Executive Mark Hackel and Oakland County Executive L. Brooks Patterson. $60 in advance or $70 at the door, $500 for a

Karmanos Cancer Institute’s 33rd Annual Dinner. 6:30 p.m. April 25. Barbara Ann Karmanos Cancer Institute. Debra and Bob Ferguson, senior vice president, global public policy, General Motors Co., and chairman of the GM Foundation, chair the event. Proceeds support expansion of Karmanos’ intensive care unit and development of a 24-hour Acute Care Clinic. Hank Winchester, anchor/reporter for WDIV Local 4, will emcee. The Design Dome, Warren. $525. Contact: Roxanne, (313) 576-8108; email: evansr@karmanos.org; website: karmanos.org/annualdinner. 10th Annual Nonprofit Management Conference. 8 a.m.-3 p.m. April 29. Troy Chamber of Commerce and its nonprofit network. Conference includes continental breakfast and lunch, networking

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Crain’s 2015 M&A Awards Join Crain’s Detroit Business, in partnership with the Association for Corporate Growth - Detroit Chapter, to meet the M&A Awards winners and finalists and hear the stories behind the top transactions of 2014 from the dealmakers themselves. It takes place 5-9 p.m. May 12 at the Troy Marriott. Tickets are $100 in advance, or $95 for current ACG members. Groups of 10 or more are $95 each. Preregistration closes May 11 at 9 a.m. If available, walk-in registration will be $120 per person. For information, contact Kacey Anderson, (313)446-0300, cdbevents@crain.com. and morning and afternoon breakout sessions. Speakers include Jimi Plouffe, founder and CEO, Momentum; David Zuza, fund development director, Troy Historic Village; Michelle Wooddell, president and CEO, Cobblestone Solutions LLC and professor at Grand Valley University; and Mark Geary, corporate communications, Beaumont Health System; others. Woodside Bible Church, Troy. $50, Troy chamber members, $100 nonmembers. Contact: (248) 641-3694; email: jody@ troychamber.com; website: troychamber.com. Networking Reception. 5:30 p.m. April 29. Detroit Regional Chamber. Mark Hackel, Macomb County executive, is the keynote speaker. $10, or $25 at the door, for members. Nonmembers pay $590 and cost includes membership. Contact: Maggie Oldrenburg, (313) 596-0482; email: moldenburg@ detroitchamber.com; website: detroitchamber.com/events. Energy Conference & Exhibition 2015. 8 a.m.-3 p.m. May 5. DTE Energy and the Engineering Society of Detroit. Christopher McGill, vice president of policy analysis, American Gas Association, is the keynote speaker. Highlights include a focus on technology, industrial, commercial, financial and construction; energy-related product and service exhibits; recognition of energy-efficient initiatives; and a fleet of new and classic vehicles. Suburban Collection Showplace, Novi. $85 ESD members, $100 nonmembers, or $154 for nonmembers who attend and join ESD. Contact: Leslie Smith, (248) 353-0735, ext. 152; email: lsmith@esd.org; website: esd.org.

Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

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NONPROFITS, from Page 3: New rules expand liability protection for board members The new amendments don’t protect against suits brought by employees for claims such as employment discrimination or wrongful discharge, he said. But not everyone sees the broader protections as a good thing. Robert Meisner, founder of The Meisner Law Group PC in Bingham Farms and an expert in condominium law, believes the expanded protections will thwart condo owners’ attempts to recoup damages from Robert Meisner: developers over New rules will hurt construction iscondo owners. sues, mismanagement of the association and other financial issues. That’s because the boards of new condo developers typically are seeded with employees of the developer until enough units are sold to transition the board to co-owner representation, Meisner said. In the past when issues arose, he has sued the limited liability company that developed the condo project and the employee directors of the nonprofit association, arguing that those directors have conflicts of interest when it comes to identifying construction issues or setting monthly fees that cover maintenance. Through that route, any monetary damages awarded would be paid by the insurers providing directors and

A closer look at nonprofit rule changes Amendments to the Nonprofit Corporation Act codify some current practices and also enable nonprofits to make other changes. Many of them do not take effect automatically, though. Nonprofits may need to amend their bylaws to adapt.

of privacy concerns or if it would harm the organization to release it. For example, those in advocacy groups may want to keep private the names of individual members to protect them from harassment.

The changes would:

Provide for a quorum of a nonprofit board or a board

Expand liability protection for nonprofit directors to include paid directors and protect against monetary damages for all negligence. Under the new law, nonprofit directors have liability only for instances of intentional, self-serving actions or those made to intentionally hurt an organization. While many nonprofits do not pay board members, some do, including about a third of private foundations, said Duane Tarnacki, a member in the Detroit office of Clark Hill PLC. Among them are the Kresge, Skillman and William Davidson foundations. And other local nonprofits including NSF International, Altarum Institute, the National Association of Investors Corp., dba Better Investing, also compensate directors.

Enable private foundations to have as few as one director rather than three as required for other nonprofits. Enable nonprofits to merge with a limited liability company. This enables, for example, a nonprofit that sets up an LLC to own a building to merge it into the parent nonprofit if it wanted to own the building directly or sell it and put the cash back into the nonprofit. Charitable 501(c)(3) nonprofits must have consent from the attorney general.

Regulate nonprofit distributions and transfers by the Nonprofit Corporation Act, not the Uniform Fraudulent Transfer Act. Allow membership and stock nonprofits to limit members’ access to certain corporate information because

officers liability insurance. “Previously, developer designees

committee to be as small as one third of the membership.

Permit nonprofits organized on a membership basis with 20 or more members to approve mergers, assets sales, dissolutions, among other things, by a majority of the members voting rather than by a majority of members entitled to vote.

Authorize the removal of directors in a directorship nonprofit only for cause, so that minority opinions aren’t being removed without a reason. Directors appointed by a third party can be removed by that third party with or without cause. Permit directors or members to confer certain board powers to someone other than the board, such as a parent health system that wants to reserve power over a subsidiary hospital board, for example. Enable any charitable purpose nonprofit to include “foundation” in its name, rather than just those formed to receive, administer and pay funds for charitable purposes.

Require attorney general approval for nonprofits for mergers and conversion to a different type of corporation, in addition to dissolution.

Enable membership organizations, such as trade associations, country clubs and social clubs, to vote through mail, email, online or in person. This is already common practice. Permit nonprofits to employ physicians and other members of “learned professions” such as physicians and lawyers. This too is common practice.

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“Now whether they’re a volunteer or not, they fall within the same protections as directors on the board elected by (condo)co-owners. They have closed the loophole to be vulnerable for their acts or omissions while they owned the condo association.” Steve Sowell, principal of Steve Sowell & Associates PLLC in Mt. Clemens, said he doesn’t see that the expanded liability protection adds much to the mix for condo associations. He believes directors could still be sued for breach of fiduciary duty. “All the amendments have done, in my view, is throw open indemnification from volunteer directors to all directors,” Lowell said. “And for condo associations, it’s rare that board members are paid.” Kenneth Neuman, founding shareholder at Neuman Anderson P.C. in Birmingham, echoed the thought that broader protection is needed to attract talent to nonprofit boards. “Of course, if there’s gross negligence or intentional misconduct then I would agree a board member ... shouldn’t be afforded indemnification.” But as Meisner points out, the liability exception for gross negligence is no longer spelled out in the law. “To the extent it’s unclear whether acts of gross negligence are subject to indemnification ... it will likely wind up a question in the courts, and the courts will have to look at what the legislative intent was,” Neuman said.

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CRAIN’S DETROIT BUSINESS // April 20, 2015

Tech projects take Tome Inc. from seed to flourishing By Tom Henderson thenderson@crain.com

Less than a year after Royal Oakbased Tome Inc. was launched with a seed round of $250,000 to try to carve out a niche in what has become a hot tech sector — the Internet of Things — the company is profitable, has large customers and will be able to fund rapid growth out of revenue, says CEO Jake Sigal. Tome is working on projects with Detroit-based Quicken Loans Inc.; Humanscale Corp., a large New York City furniture maker; and Dearborn-based Ford Global Technologies LLC. The first project Tome did with Ford Global involved designing the sensors and hardware that were the brains behind an electric bike that won the Best Product-Gadget award at the Mobile World Congress in March. (See story, Page 3.) Sigal said the company had revenue of $450,000 in nine months last year and projects $1.5 million this year, which he says allows it the luxury of being able to grow without him and his co-founder, company President Massimo Baldini, having to dilute their equity by raising a round of venture capital, although that still could happen. Baldini and Sigal previously were partners at Livio Radio, a developer of in-vehicle connectivity software. Sigal founded Livio in 2008 with $10,000 borrowed from his parents. In 2010, the same year Sigal was named to Crain’s 20 in their 20s, the company got an undisclosed in-

Quicken Loans is buying 20 Humanscale desks that incorporate Tome Inc. sensors and will evaluate how employees use and like them after 90 days.

[HUMANSCALE CORP.]

vestment from the InvestMichigan! Growth Capital Fund. In 2013, Livio was sold to Ford Motor Co. for an amount described as less than $10 million, and Sigal and Baldini soon left to start Tome. “If you go back to the Ford culture of yesteryear, if the founders had left a company you bought, you’d say, ‘I can’t believe they left the Ford family, let’s give them the silent treatment and not work with them,’ ” said Bill Coughlin, president and CEO of Ford Global Technologies. “But we’re delighted to work with Jake and Massimo,” he said. “They more than met our expectations.

With the culture of Ford moving forward, this is part of building our network of entrepreneurs to work with.” Tome uses a combination of wireless sensors and software for a variety of potential applications as it markets itself as an early member of the Internet of Things, a term for the interconnectivity of sensors, devices and cloud-based data storage. Examples would be wearable technologies that monitor such things as blood pressure and pulse rates and transmit data to doctors and smart home appliances. Or bikes that alert riders to cars coming up from behind. Last May, Sigal told Crain’s that

Tome would focus on products for the Internet of Things. Late last year, it licensed technology to Humanscale, which makes what are called sit-stand desks, a fast-growing line that allows workers to take breaks from sitting all day by raising their desks and standing awhile. In 2014, a New York Times survey of related studies showed convincing evidence that spending most of your day sitting puts you at an increased risk for obesity, diabetes, heart disease, cancer and early death. Tome’s technology keeps track of the time employees spend standing, totals the extra calories they burn while doing so and sends visual reminders to their computer screens if they wish. The system can even send data to fitness trackers such as Fitbit. The combination of furniture and sensors will be marketed as OfficeIQ when Humanscale formally launches the products in July, following NeoCon 2015 , a three-day trade show in Chicago in June that is North America’s largest interior design show and conference. Tome and Humanscale have launched a pilot project at Quicken headquarters. Quicken is buying 20 Humanscale desks that use Tome’s sensors and will evaluate how employees use and like them after 90 days. Melissa Price is CEO of dPOP! , a commercial interior design firm that is part of Detroit-based Rock Ventures LLC , and is director of facilities for Quicken. She said she came across a booth shared by Sigal and Chris Gibson, the vice president of marketing and product management at Human-

scale, at the Consumer Electronics Show in Las Vegas in January and was ntrigued by the technology. She said she was familiar with sitstand desks since all of Quicken’s workstations in Detroit, about 1,300, have them. “I’m always looking for new technology we can use, not just for the sake of cool, but for the sake of function.” Price said the sensor-based tracking can boost company wellness programs and give management feedback on how their employees are using the equipment or can be encouraged to use it more effectively. Gibson said Humanscale is launching three other pilot projects now and 10 more in June, all with large customers. Sigal said phase one of Tome’s growth strategy is to sell into the office furniture market. He said the second and much larger phase, potentially, will be selling licenses to companies on a per-employee recurring revenue basis to monitor behavior at work and help manage wellness and health care programs. “If phase two takes off fast enough, we might have to take on venture capital to fund growth,” said Sigal. “I’ve been in contact with local VCs to let them know what we’re up to, and they’re interested.” Tome has grown from three employees last May to eight. Sigal said he plans to hire 12 more over the next 18 months. The company is now in an incubator on East Fourth Street in Royal Oak, but it plans to move into 3,400 square feet of space farther east on Fourth in June. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

BIKE, from Page 3: Are 2-wheelers in Ford’s future?

Friday, June 12, 2015

2015

MGM Grand Detroit #MCMOE2015

NOW ACCEPTING SUBMISSIONS! Submit by mail, visit www.michiganchronicle.com or email us at events@michronicle.com. Michigan Chronicle, 479 Ledyard, Detroit, MI 48201, (313) 963-5522. SUBMISSION DEADLINE: APRIL 24TH 5PM

The bikes also have ultrasonic sensors in the rear that warn the rider a car is approaching from behind by setting off vibrations in the handlebars, and warns the driver by tuning on lights at each end of the handlebars. The MoDe:Me was named best product gadget of the thousands displayed at the huge Mobile World Congress in Barcelona, Spain. The event had about 1,900 exhibitors and upward of 90,000 attendees. A heavier-duty version for bike couriers, called the MoDe:Pro, was built by Ford in-house. Both came equipped with 200watt motors and 9-amp-hour batteries and were designed as part of Ford’s Smart Mobility Program. They are envisioned as part of what Coughlin calls multi-modal transportation, which he thinks will be big in urban areas of the future. People will use a combination of cars, trains, buses and portable bikes to get to their destinations. Smartphone apps will tell them how to take what form of transportation available in which city to best get

where they are going. For example, drive your car to the nearest bus or train station, carry your folded bike on board, get off at the appropriate exit and pedal the rest of the way. Since the prototypes went over so big at the congress, does Ford now become a bike maker? “We’re debating that internally,” said Coughlin. “What’s best for Ford? We could license it out. Or we could come to the conclusion that we can and should make the bikes ourselves. I think it’s most likely going to be a licensing solution, but we’ll see.” Coughlin said Ford had filed quite a few patent applications on the bikes. Coughlin said he is working with Tome on another project called Info Cycle, which will be a small sensorsbased kit that will attach to a bike and wirelessly collect and transmit a wide range of data, such as wheel speed, acceleration and altitude. The purpose would be to gather data to decide how bikes can meet future transportation needs. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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BRUSH PARK, from Page 1: Developers see rec center project as catalytic piece If done right, and with the proper timing, redevelopments of an 8.4acre swath of the Brush Park neighborhood to the west of the Brewster Wheeler site and the 18 acres of land north of it best known as the site of the former Brewster-Douglass housing projects — could reinvigorate that section of town, real estate experts say. This could be the turning point, they say, for that pocket of town to see more than 1,000 new rental units, commercial space and other uses. John Rhea, managing partner at Rheal Capital Management LLC, a codeveloper of the 150 Brewster Wheeler apartments, said that even though there isn’t much in the area now, there will be demand for the residential units once constructed. The area’s prime location and potential are already clear to many people, he said. “There are urban pioneers, people who can see the vision and are excited about getting in early,” he said. Rheal Capital is one of the four real estate and restaurant investors working on the 6.2-acre Brewster Wheeler redevelopment project. The others include Crain Communications Inc. Executive Vice President/Director of Corporate Operations KC Crain, restaurateur Curt Catallo and Livonia-based Schostak Bros. & Co. Delayed start According to John Roach, communications director for Mayor Mike Duggan, a request for proposals to develop the adjacent vacant Brewster-Douglass site, owned by the Detroit Housing Commission, is expected to be issued this spring. The commission would issue the RFP; demolition on the former public housing buildings was completed in August. In addition, development proposals for the largely vacant chunk of the Brush Park neighborhood — bounded by Mack Avenue, Beaubien Street, Woodward Avenue and the I-375 service drive — are under consideration. Roach declined to specify a time frame for when the chosen developer would be named. This isn’t the city’s first go-round trying to jumpstart Brush Park redevelopment. Past efforts have had marked starts and stops dating back over a decade. Most recently, in November, the city extended the bidding deadline on the August RFP for the two parcels by a month to Dec. 15, 2014. The city has spent more than $39 million in that area since 2001 on things like infrastructure, demolition, land acquisition and prep work priming it for redevelopment. There are 47 parcels in the Brush Park RFP; four of these have houses, and all are considered historic. But with the Brewster Wheeler site redevelopment, that makes the Brewster-Douglass land and the 7.5acre and 0.9-acre parcels all the more attractive to other developers, real estate experts say. “There will be demand at some point, whether it’s right away or not,” said Richard Baron, chairman and CEO of St. Louis-based McCormack

conjunction with some townhomes and some single-family close together similar to what you would find in neighborhoods around downtown Birmingham.” Seeking pioneers

[UNION JOINTS LLC]

The 1950s-era basketball court inside the BrewsterWheeler Recreation Center will make way for a restaurant. Baron Salazar Development Inc., the developer behind the $55 million first phase of the Orleans Landing project along the Detroit River. Having three Richard Baron: fresh developSoonerorlater, demand will be there ments coming online in a relatively short period of time would bode well for the neighborhood, which was once home to some of the city’s wealthiest families, like the Whitneys, the Kahns and the Hudsons, real estate experts said. “The rollout of these three development opportunities in fairly tight succession is very positive because any one of them, or any two of them, on their own, would be noteworthy but not really transformative,” said Eric Larson, founder, president and CEO of Bloomfield Hills-based Larson Realty Group and CEO of the Downtown Detroit Partnership. “All three together are transformative because of the density it creates.”

Community, historical ties Last Tuesday marked the press conference and community announcement on specifically the Brewster Wheeler piece. Union Joints LLC, a development group including Crain and Catallo, plans a new restaurant and meeting space in the 52,000-square-foot former recreation center in a $10 million development. Crain, also group publisher of Automotive News, Autoweek, Crain’s Chicago Business, Plastics News, Rubber & Plastics News and Tire Business, co-owns the Vinsetta Garage restaurant in Berkley with Catallo. Catallo also is owner of the Clarkston Union and Union Woodshop restaurants in downtown Clarkston. The restaurant is expected to be built on the center’s 1950s basketball court — and a boxing ring and gym also will be incorporated into the design. The center is where Joe Louis once trained and the Harlem Globetrotters once played. Meanwhile, Livonia-based Schostak Bros. & Co. is working with

“The rollout of these three development opportunities in fairly tight succession is very positive because any one of them, or any two of them, on their own, would be noteworthy but not really transformative.” Eric Larson, Downtown Detroit Partnership

Rhea on the plan for 150 housing units in a $37 million development on the site at I-75 south of Wilkins. In addition, it will cost about $3 million to develop a 1-acre swath of green space on the property. Ann Arbor-based Quinn Evans Architects is designing the project, and Detroit-based Jenkins Construction Inc. is the general contractor . At least 51 percent of the construction and rehab work will be handled by Detroit businesses, and a number of community tie-ins are planned, such as a kitchen incubator; culinary arts training that will give priority to participants in the Alternatives for Girls nonprofit — which supports young women at risk of homelessness; and space for biking nonprofit Slow Roll Inc. headquarters. Waves of construction The construction approach on the residential side, however, is expected to be less “Big Bang” and more of a staged rollout. Constructing what Larson estimated would eventually be north of 1,000 residential units on the three sites too quickly wouldn’t be wise because they couldn’t be leased in a short time frame. “You need to space them out a little bit,” Larson said. But a phased rollout could work

well, said Robert Gibbs, managing principal of Gibbs Planning Group Inc. He estimated multifamily demand could support construction of between 150 to 200 residential units per year in the area. Gibbs, whose Birmingham-based urban retail planning company recently did work near the three sites, said units would appeal to students and employees at Wayne State University and other nearby employers. Data he provided from ESRI Inc. shows that although population in the three-mile radius surrounding the developments is expected to fall from 91,621 last year to 89,405 in 2019, the percentage of households making at least $35,000 is expected to increase, with the largest bumps being those making $75,000 to $99,999 (3.9 percent up to 5.4 percent) and $100,000 to $149,999 (2.2 percent to 3.6 percent). But the area can’t be limited to multifamily rental housing, said Austin Black II, president of City Living Detroit, a Detroit-based real estate brokerage firm. “It can’t be all rentals,” he said. “Maybe some midrise buildings in

Unlike other prominent downtown multifamily developments in recent years, the knock against the apartment project, is that, however ideal the location, it’s still a largely barren area. Yet overall, the blank-slate nature of the area is ideal for developers, said Herbert Strather, a developer who is CEO of the Strather Academy and Strather Associates LLC in Detroit. “It’s probably the very best possible scenario,” he said. “You have no restraints — just your imagination.” Black, who said he sold a significant number of homes in Brush Park in the mid2000s, before a lot of the infrastructure improvements were made, said people will overlook Austin Black: the vacant landHousing “can’t be scape for the time all rentals” being. “A lot of people saw the potential based on where it was located. That was before M-1, before Whole Foods.” And Rhea, a Detroit native who graduated from the University of Detroit Jesuit High School before receiving degrees from Wesleyan University in Middletown, Conn., and the Harvard Business School, said the development, which will have studio, one-bedroom and two-bedroom units, is a way for people to get in on the ground floor of a budding area. “Neighborhoods take time. I lived in Harlem and watched it go through its transition,” he said. “Yes, they might have to look at an open field now, but over time, they will also take in watching that develop and take pride and say, ‘I was one of the first people who moved here.’ ” 䡲 KirkPinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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SOCCER, from Page 3: Detroit fans, corporate sponsors respond to the pitch of Le Rouge is American soccer’s governing body. Unlike foreign leagues, it takes money rather than wins on the soccer field to move up to a larger soccer league in the United States. USL teams typically have a $1 million annual operating budget, said Mann, whose full-time job is as a Detroit-based lobbyist with Lansing-based Michigan Legislative Con sultants. NASL clubs cost $2 million to $3 million to operate. This season, Detroit City will have a $400,000-plus budget, or more than double last season, he said. Ownership has said the team is profitable. The new money comes from new corporate sponsors, such as the Metro Detroit Chevy Dealers Local Marketing Association and Henry Ford Health System each signing one-year deals to put their logos on the club’s jerseys in 2015. Troy-based Flagstar Bank also signed on this season as the club’s official bank, and is underwriting its community outreach efforts. The team sold its entire allotment of $50 season tickets ($65 with a 2015 season scarf) for its sevengame home schedule at Cass Tech High School. The club also plays a number of friendly, or non-league, games during the season. The team also makes money from selling clothing, caps, scarves, stickers and other goods from its online store at DetCityFCstore.com. It also raised prices for merchandise and tickets this season. The new cash is being spent to improve the soccer club, ownership said. “It allows us to scale up, to boost our staffing and capabilities,” Mann said. The team’s lone year-round fulltime staffer is general manager Donovan Powell, hired in 2013 to run the business side of the club. The influx of money has allowed the team to hire an in-season social media coordinator, Mann said. The club uses a dozen paid staff members for games. More games, more money DCFC ownership said the club needs to be on the field more often in order to move up. The team plays a 14-game regular-season schedule, with half on the road. It finished 8-3-3 last season, good for second place in the NPSL Midwest Region’s Great Lakes West Conference. Lansing United won the conference. “Our biggest holdup right now is we just don’t play enough games,” Mann said. “That kind of revenue stream, with our fan base in this market, is very doable.” USL clubs play a 28-game season, split between spring and fall, and NASL clubs play a 28-game season from March to September. The Detroit City FC business model plan is to increase revenue by playing in a professional league, which ownership believes will increase ticket sales and ancillary revenue. It also will increase costs because unlike the semipro NPSL, the

Soccer impresario still looks to launch expansion pro team in Detroit Detroit City FC isn’t the only local soccer club with its eyes on higher levels of pro soccer. Longtime metro Detroit soccer impresario Dan Duggan announced in April 2014 he had preliminary approval from the Tampa, Fla.-based United Soccer Leagues to launch a United Soccer League professional expansion team in Detroit. Planning and financing work behind the scenes delayed the Detroit USL expansion at least a year, to 2016. “I am still planning on launching the team in March of 2016, and the league is excited to add the Detroit market to the pro soccer level,” Duggan said via email. “The only unanswered question remains where the stadium will be

higher leagues use paid players. Le Rouge, as the Detroit club is nicknamed, averaged 2,878 fans per game last season at Cass Tech, including a season-high 3,398 on July 11 against the Fort Pitt Regiment. Detroit’s average isn’t incredibly far off the higher-level league averages: USL clubs averaged 3,114 fans per game in 2014, and NASL teams averaged 5,409 per game. MLS clubs last year averaged 19,151 per game, the biggest average in the league’s 19 seasons. “We’ve had talks about building our own facility. It’s a tougher sell than rehabbing an existing facility, but it’s on the table, as well,” Mann said. “We’ve kind of outgrown where we’re at now.” Cass Tech can seat about 2,500 for a game. Mann said the club had to turn away 300 or 400 fans at some games last season. DCFC is considering playing at Keyworth Stadium in Hamtramck in 2016, and is studying the stadium’s suitability and physical status, co-owner Alex Wright said. Other potential locations were not disclosed. Fans and players Detroit City FC caught on with what owners say is a hipster fanbase from both the city and suburbs, but also includes suburban parents and kids. Fueling the popularity is the club’s success: It’s 24-5-9 in its first three seasons, and won its division two seasons ago but lost in the divisional finals. The winning is thanks to a roster that includes a number of college, amateur and professional veterans. Former Detroit City players in MLS include Adam Bedell of the Colum bus Crew and Kofi Opare of D.C. United. Ex-Crew forward Knox Cameron is on this year’s Detroit City roster. NPSL rosters consist of unpaid players, mainly high school, collegiate and former professional athletes. Because they’re considered amateurs, athletes maintain their college eligibility while playing in

built. We are meeting weekly with the necessary principals that need to help get this done, but as you very well know, Dan Duggan: things don’t get Plans for new team done in the city delayed until 2016 in rapid fashion so we are struggling to get people to make the necessary commitments.” He declined to name potential investors. His intention is to build a 5,000-seat stadium. “We have stadium renderings done, and that is helping move the project along, but not to my pace,” he said, adding that he has three

more meetings scheduled in April as part of the land acquisition approval process. The USL doesn’t disclose financial details about expansion teams, but USL Pro teams reportedly have been bought for more than $500,000. The new Detroit team would cost about $2 million to operate annually, Duggan told Crain’s in April 2014, and he estimated a 5,000-seat stadium in the city could be built for up to $5 million. The USL is the third-tier professional soccer league in the United States and Canada, under only the second-tier North American Soccer League and top-tier Major League Soccer. Some USL squads are owned by

Detroit City FC Facts

MLS, and many are affiliated with MLS clubs as developmental teams. The USL is seeking to become a second-tier league itself within the soccer hierarchy, the Post reported. The USL added 11 clubs for this season, fielding 26 teams in 2015. Duggan owns the semipro Michigan Bucks in Pontiac and is a former USL Premier Development League executive of the year. The USL Premier Development League is the highest level of amateur soccer in the U.S., and is a step below the USL. It acts as a USL feeder league. Duggan’s Bucks club, which he founded in 1995, won the USL Premier Development League championship last year. — Bill Shea

self within the soccer hierarchy, the Post reported. The NASL has average annual salaries of $15,000 to $30,000, with some players earning up to $100,000, according to a report from professional soccer networking service Fieldoo. An outside observation

[JOHN DEBOER]

Co-owner Sean Mann said that last year,Detroit FC had to turn away up to 400 fans at some of its games at Cass Tech High School.

䡲 All Detroit City home games this year will be live-streamed on the team’s website, DetCityFC.com. 䡲 The club’s co-owners are Sean Mann, who founded the semipro Detroit City Futbol League in 2010; Alex Wright; David Dwaihy; Ben Steffans; and Todd Kropp.

䡲 For the second consecutive year, the club has qualified to play in the U.S. Open Cup, a 91-team tournament that includes the top amateur clubs in addition to the professional organizations atop the U.S. soccer organization pyramid. DCFC will play the Michigan Bucks, in the inaugural meeting between the clubs, at 7:30 p.m. May 13 at the Bucks’ home field, Ultimate Soccer Arenas in Pontiac. Semipro clubs such as Detroit FC and the Bucks enter in the first round of the cup, while the pro squads, including 17 Major League Soccer teams, begin play in the fourth round. The tournament dates to 1914. MLS clubs have won it every year but one since league began play in 1996. 䡲 The organizational pyramid of the seven-level, Chicago-based United States Soccer Federation has three professional divisions, with the 20-team Major League Soccer at the top. Detroit City’s league, the National Premier Soccer League, is one of the two highest-level amateur leagues in the pyramid. The federation is the U.S. system’s governing body for both amateur and pro soccer. Unlike European soccer, U.S. teams do not jump up or down levels based on winning. — Bill Shea

the developmental league. An above-average USL player is estimated to earn $2,000 a month, with some making $3,000 and more, The Washington Post reported in March, while Sports Business Daily reported in 2013 that the

league’s salaries range from $12,000 to $40,000 a season. Some USL squads are owned by Major League Soccer, and many are affiliated with MSL clubs as developmental teams. The USL is seeking to become a second-tier league it-

Soccer industry observers praise Detroit City’s management of its growth and business plans. “They’ve been approaching it the right way. They recognize that soccer is not only a business, or a franchise. It’s a club,” said Birmingham native Greg Lalas, vice president of content for MLS’ digital arm and editor-in-chief of MLSsoccer.com from his home in Brooklyn, N.Y. “The ownership group is very smart and careful and they don’t go into anything blind,” said Lalas, a former MLS player and brother of soccer hall-of-famer Alexi Lalas. “They want to make sure they do it right, and stay true to their ethos of being part of the community and city of Detroit.” He’s met with Detroit City’s ownership, and even buys season tickets every year to support the club despite never having attended a game. “I wanted to support it. It’s been really fun to watch from afar, at least,” he said. Lalas cautioned that turning professional will be a major step, and will require an expanded front office that can deal with soccer’s unique business practices, such as exchanging players from overseas. “It makes sense that Detroit City FC takes the next step. It’s logical. There are clubs that start in some of the leagues at the lower levels that don’t have such a fervent fan base,” he said. “It’s a big leap going from semipro to a real professional situation. All of a sudden, it becomes a little more of a business. Players are under contract. You can pay for better quality.” 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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PROTON, from Page 1: McLaren, Beaumont plan to open centers cancer and cancers of the head and neck, although the lack of peer-reviewed clinical trials has been criticized. Nationally, 13 proton beam therapy centers are operating, and at least 12 more are in development, according to the National Association for Proton Therapy. Depending on the size of the center, costs range from $30 million to more than $200 million. ‘Nothing can beat it’ Hesham Gayar, M.D., chairman of radiation oncology at McLaren’s Great Lakes Can cer Institute in Flint and medical director of the proton center, said McLaren plans to conduct clinical and basic science studies to Hesham Gayar: prove the value of McLaren to study proton therapy. proton’s power “For pediatric spinal cases, nothing can beat it,” said Gayar, who came to McLaren three years ago from M.D. Anderson Cancer Center in Houston. Gayar said McLaren has a variety of clinical protocols in place for a range of proton-based cancer treatments. Two of the proton center’s rooms will be for adults and the third for pediatric cases, he said. Don Kooy, CEO of the McLaren Flint hospital, said the proton center will enhance the existing cancer center operations, drawing more patients from the state and Midwest. At full capacity, the center will treat Don Kooy: New 100 patients a center will attract day, Kooy said. more patients “We will have much more volume” overall in the cancer center, he said. “It will expand our numbers, not subtract from them.” Craig Stevens, M.D., Beaumont’s chairman of radiation oncology, said McLaren’s center will not affect the number of proton treatment patients at Beaumont. “We have a large system with 11,000 new patients coming into our system each year,” Stevens said. David Wood, M.D., Beaumont’s chief medical officer, said adding

[BEAUMONT HEALTH]

Beaumont Health plans to open its $40 million,single-room proton beam center in Royal Oak in spring 2017. proton therapy will be a boon for Beaumont patients. “We believe proton beam therapy is appropriate for select types of cancers, including pediatric,” Wood said. “We think it will be a destination center for the state and region and enhance our cancer center.” McLaren’s proton beam machinery and Radiance 330 cyclotron were made in Russia and shipped to Michigan three years ago, Kooy said. Construction and approval from the U.S. Food and Drug Administration took several years to complete, he said. “We can start whenever we want,” Kooy said. “We are doing internal quality control testing now to make sure it is all working.” The first treatment will be for prostate cancer, Kooy said. “It is the simplest to do and has the most outcomes research,” he said. “We can do prostate in five treatments rather than 30” for intensity modulated radiation therapy, also known as IMRT or photon therapy. “It saves patients time, and it is better for patients and important for payers who pay for it,” Kooy said. Insurance coverage mixed But will health insurers such as Blue Cross Blue Shield of Michigan , Priority Health , Aetna Inc. , United Healthcare and Health Alliance Plan pay for the treatment? Several locally based health in-

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Barbara Ann Karmanos Cancer Institute .. 11

McLaren Health Care .................................. 1, 11

Beaumont Health ...................................... 1, 12

Meisner Law Group ........................................ 17

Brewster Wheeler Recreation Area ................1

Michigan Bucks ............................................ 20

Council of Michigan Foundations ................ 3

Neuman Anderson ........................................ 17

Crain’s Detroit Business .............................. 14

Rheal Capital Management ........................ 19

Detroit City Football Club .............................. 3

Saga Communications .................................. 6

Detroit Zoo ...................................................... 4

St. John Providence Health System ............ 13

Ford Global Technologies .............................. 3

Steve Sewell & Associates .......................... 17

Gibbs Planning Group .................................. 19

Tome ............................................................ 3, 18

Great Lakes Cancer Institute ...................... 21

Union Joints .................................................... 19

GreenLancer Energy ...................................... 10

University of Michigan .................................. 12

surers say they will cover some proton therapy, including Priority, HAP and Blue Cross. However, national insurers Aetna and Cigna Corp. have announced they will not cover proton beam therapy for prostate cancer. Cigna will pay for eye cancer only. United Healthcare will cover only skull-based tumors, abnormal connections between arteries and veins in the brain, and some pediatric cancers. Priority Health officials told Crain’s that the insurer covers some proton beam therapy services when traditional radiation treatment is difficult or impossible. Blue Cross will pay for proton therapy in a limited number of conditions. They include uveal melanoma, a rare cancer of the eye; chordoma, a cancer in the base of the skull, neck and lower back; pediatric tumors; and brain tumors where critical structures may be at risk. Naim Munir: HAP Naim Munir, will cover some M.D., HAP’s proton therapy chief medical officer, said the health insurer will cover some proton beam therapy when evidence suggests that proton therapy would be more effective than other choices. That could include certain types of brain and eye tumors and pediatric cases, Munir said. Over time, Kooy said, other Michigan health insurers are likely to cover proton therapy and expand treatment coverage once they see results. Proton pros, cons The advantages and disadvantages of proton versus photon therapy have generated robust scientific debate, said Joe Spallina, a consultant with Ann Arbor-based Arvina Group LLC , which specializes in health care and cancer program strategic planning. “Proton therapy does have less residual tissue damage than IMRT and a shorter treatment period for prostate patients,” Spallina said. While Medicare pays for prostate cancer proton therapy, Spallina said, proton centers need to generate at least 50 percent of their business from commercial insurance or selfpay to cover their higher overhead

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit April 10-17. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. Great Lakes Adjusting & Apprais ing LLC , 18315 W. Seven Mile, Detroit, voluntary Chapter 7. Assets and liabilities not available. 4L Ventures LLC , Taylor Industrial Properties LLC , Lee Steel Corp ., 45525 Grand River Ave., Novi, voluntary Chapter 11. Assets and liabilities not available. — Natalie Broda

costs. A 2013 study on Medicare patients published in the Journal of the National Cancer Institute found proton therapy cost 70 percent more than photon therapy. “We will lower the costs because the treatment periods will be much less,” said McLaren’s Gayar. In 2008, the Economic Alliance for Michigan opposed plans for several proposed proton beam centers, primarily because of the high construction costs and a lack of evidence of superior treatment over traditional cancer therapies. Concerns on cost, use Besides the earlier Beaumont plan, several other hospitals, led by Detroit-based Henry Ford Health System and the Ann Arbor-based University of Michigan Health Sys tem, had considered building a proton beam center in a joint venture. They later studied a $300 million carbon ion therapy cancer center before tabling the plans because of the recession in 2009. Bret Jackson, the alliance’s president, said a recent model policy from the American Society for Radi ation Oncologists recommends that proton beam therapy is appropriate for certain head and neck tumors in adults and children. “We are concerned about the amount of money spent purchasing the equipment and facility to house it,” Jackson said. “We are also concerned about the utilization of service where tumors are not appropriate. (Hospitals) may try to push utilization to recoup the financial investment in the facilities on inappropriate cases.” McLaren has a joint venture with ProTom International, a Flower Mound, Texas-based company. Beaumont is developing its project with Proton International, an Atlantabased proton therapy development group. When Beaumont completes its two-story building, the 17,000square-foot proton center will be on the first floor with an 8,000-squarefoot second floor that will house the pediatric oncology and hematology program of Beaumont Children’s Hospital. “We will have the capability to treat cancer that would have otherwise been considered unsalvageable and incurable,” said Beaumont’s Stevens. He estimates the proton beam center will create at least 30 clinical positions at Beaumont. Kooy said McLaren will employ 50-60 when all three rooms are operating. Next to the proton beam center is a 32-room hospitality house, a hotel for patients and their families that opened in July 2013, said Greg Lane, McLaren’s chief administrative officer. The hotel rooms, partially subsidized by the Ann Arbor-based Hope Foundation, are $35 per night or $50 for larger rooms, Lane said. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

CRAIN’S DETROIT BUSINESS 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) 446-6032 or mwise@crain.com Executive Editor Cindy Goodaker, (313) 446-0460 or cgoodaker@crain.com Managing Editor Jennette Smith,(313) 446-1622 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) 446-0344 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) 446-6059, nwitte@crain.com Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 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) 446-0416 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) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Sales Manager Tammy Rokowski Senior Account Executive Matthew J. Langan Advertising Sales Christine Galasso, Catherine Grace, Joe Miller, Sarah Stachowicz Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Audience Development Director Eric Cedo Events Manager Kacey Anderson Creative Services Director Pierrette Dagg Senior Art Director Sylvia Kolaski Marketing Coordinator Ariel Black Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik,YahNica Crawford Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com 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 Office 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 October, and no issue the fourth 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 2015 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

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WEEK ON THE WEB/APRIL 11-17

RUMBLINGS

UM to build $160M pathology facility on north research campus

San Diego startup ‘right at home’ with SE Mich. facility

niversity of Michigan regents approved a $160 million project that will create a 139,000-square-foot home for most of the University of Michigan Health System’s clinical pathology activities and renovate another 47,000 square feet of existing space. The new facility will occupy four vacant buildings at the North Campus Research Complex, less than 3 miles from the main medical campus in Ann Arbor.

COMPANY NEWS 䡲 Dan Gilbert’s Detroit-based Bedrock Real Estate Services LLC is under contract to buy the 1,300space Lothrop Parking Garage in the New Center Area directly east of the Albert Kahn Building, two real estate sources said. The Kahn building will go up for auction along with the Fisher Building this summer, and sources said the pending deal could be a sign Gilbert is looking to make a strong move to buy the buildings. 䡲 Prestolite Electric LLC said that Chinese conglomerate Zhongshan Broad-Ocean Motor Co. Ltd. completed its acquisition of the Plymouth Township-based transportation supplier. Terms of the deal were not disclosed. Prestolite will continue to be led by CEO Tony Wong. 䡲 Milwaukee-based Johnson Controls Inc., whose automotive interiors business is in Plymouth Township, announced a final agreement to form a joint venture, Yanfeng Automotive Interiors, with Chinese supplier Yanfeng Automotive Trim Systems Co. Ltd. JCI will hold a 30 percent minority stake. 䡲 Detroit-based Henry Ford Health System said more than 35,000 new Model G gowns, made by Dearborn-based Carhartt Inc., are going to its hospitals this month, offering more style and fixing a lack of rear coverage. 䡲 A portfolio of 12 Michigan self-storage properties — among them at sites in Ann Arbor, Chesterfield Township, Lake Orion, Novi, Westland and Ypsilanti — sold for $61.3 million in what the seller is calling the highest per-square-foot price ever paid for such a portfolio in the state. Maurice Pogoda, president of Farmington Hills-based seller The Pogoda Cos. Inc., said Simply Self Storage, the Orlando, Fla.-based buyer, paid $81.79 per square foot for the 749,000-square-foot portfolio of National Storage Center properties. 䡲 Ann Arbor-based Duo Security Inc., a provider of cloud-based network security, said it has raised a Series C funding round of $30 mil-

an Diego high-efficiency engine startup Achates Power Inc. is opening its engineering center in Farmington Hills. The maker of opposed-piston engines signed a lease earlier this year at 39303 Country Club Drive in Farmington Hills. The 4,000square-foot space will house 12 engineers and program managers, and the company expects to reach 20 employees by the end of the year, said CEO David Johnson. John Major, former COO at military contractor Plasan North America Inc., was hired to lead the office and will be Achates’ regional vice president of Midwest operations. Contracts secured this year with the U.S. Army Tank Automotive Research, Development and Engineering Center (TARDEC) in Warren and a major automaker led to the decision, Johnson said. Southeast Michigan “has been in our sights for years, but the move is a sign of our growth,” Johnson said. “The location and proximity to current and future customers is very important to us. We’re sort of a fish out of water in San Diego, but we’re right at home in Southeast Michigan.” Backed by the Walton family, majority owners of Wal-Mart Stores Inc. and other funds, Achates has raised $100 million in capital since its founding in 2004.

[MARY JANE MURAWKA/WAYNE STATE UNIVERSITY]

McGregor Memorial Conference Center,on the campus ofWayne State University,was designed by renowned architect Minoru Yamasaki. lion, bringing the company’s total funding to about $48 million. Duo will use the funding in engineering and international expansion. 䡲 The Wayne County Airport Authority announced that its new headquarters building will bear the name of former Wayne County Road Commission Chairman Michael Berry. The building will be constructed next to the North Terminal at Detroit Metropolitan Airport and is expected to open in 2017. 䡲 Troy-based Talmer Bank and Trust, Ann Arbor Spark and Southfield-based BlueWater Technologies were named among the bestrun businesses in Michigan at Eastern Michigan University’s College of Business annual Business of the Year Awards luncheon.

OTHER NEWS 䡲 Mayor Mike Duggan announced the Detroit Neighborhood Initiative, which will write mortgages up to 110 percent of a home’s value — or up to 150 percent if purchased through Detroit Land Bank Authority auctions. Bank of America, Boston-based Neighborhood Assistance Corp. of America and Detroit-based Opportunity Resource Fund were enlisted to create a loan to get around federal regulations that usually prohibit lending more than a home’s worth. 䡲 A new Asian fusion restaurant is coming to Detroit’s former Chinatown area this fall. The Peterboro will derive its name from its location at Cass Avenue and Peterboro Street, inside the former home of Showcase Collectibles. 䡲 An exhibit featuring photos from the National Geographic special report “Taking Back Detroit” was unveiled online and opened inside the First National Building in Detroit. The exhibit, sponsored by Michigan State University, Bedrock Real Estate Services LLC and Quicken Loans Inc., will run through May 10 and feature the work of photographer Wayne Lawrence, whose portraits of Detroiters are a centerpiece of the online report. The report will be available on newsstands April 28. 䡲 The Greening of Detroit, a nonprofit that supports urban reforestation efforts, is planting about 4,000 trees across Detroit this year, AP reported. Plantings are scheduled every Saturday, except for Memorial Day weekend, through mid-June; volunteer in-

formation is posted online. 䡲 The McGregor Memorial Conference Center, the 1958 Wayne State University building designed by renowned architect Minoru Yamasaki, has been designated as a national historic landmark by the National Park Service, AP reported. 䡲 Dennis Via, commanding general of the U.S. Army Materiel Command, the Alabama-based division that oversees the Tacom Life Cycle Management Command and the Tank-Automotive Research, Development and Engi neering Center at the Detroit Arsenal in Warren, said during a visit to Warren that his command recently reduced personnel at its headquarters — and likely has more scaling back to do if federal budget rollbacks return. 䡲 As part of what organizers are calling the biggest mobilization of workers in the U.S., protesters in Detroit called for pay of $15 an hour and a union for fast-food and other low-wage workers, AP reported. The “Fight for $15” campaign is being spearheaded by the Service Employees International Union. 䡲 Republican Ben Carson, the neurosurgeon who has been exploring a run for president, will announce his decision in his hometown of Detroit May 4, according to a Facebook post, Bloomberg reported. It would be the first political campaign for Carson, who graduated from medical school at the University of Michigan. 䡲 Police arrested eight people during a protest at a University of Michigan regents meeting over the minority enrollment, AP reported. 䡲 Michigan’s seasonally adjusted unemployment rate fell to 5.6 percent in March, 2 percentage points lower than one year earlier, the Department of Technology, Management & Budget said via AP. The state now has an unemployment rate just 0.1 points above the national rate of 5.5 percent.

OBITUARIES 䡲 Frank Audette, creator of the Troy Motor Mall and founder of the former Audette Cadillac dealership in West Bloomfield Township, died April 10. He was 90. 䡲 Robert Griffin, a Republican who represented Michigan in the U.S. Senate (1966-78) and was a Michigan Supreme Court justice (1987-94), died April 16. He was 91.

Lee Steel files Chapter 11 not long after expansions Novi-based Lee Steel Corp. filed Chapter 11 bankruptcy protection last week, only a few years after several high-priced expansions. The steelmaker, which employs 65, owes fewer than 200 creditors between $50 million and $100 million, according to its filing in U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit. The filing comes less than two years after the company closed its Detroit plant on Varney Street and moved into a $26 million, 250,000square-foot plant in Romulus. A 120,000-square-foot plant near Grand Rapids opened in 2000. Laura Marcero, managing director of Troy-based turnaround firm Huron Consulting Group and chief restructuring officer for Lee Steel, said that “those investments and the recent decline of the steel industry and prices caused the company to experience significant financial distress. I wouldn’t be surprised if more steel companies potentially file Chapter 11 ... given where the market is.” Steel production in the U.S. has dropped more than 6 percent in 2015, according to a report by Market Realist earlier this month. Much of that is attributed to reduced steel consumption by China. However, the grim market hasn’t

prevented potential buyers from taking an interest, Marcero said. She expects a deal for the entire company or parts of it to be in the works by early fall. ZackTaylor: For now, Lee CEO of Lee Steel. Steel will continue to operate as normal, with debtor-in-possession financing through the end of June of $2.5 million from Huntington Bank. The company is in its second generation of family ownership, under CEO Zack Taylor. His brothers, Tom and Scott, fill out the company’s leadership team.

RetroSense honored for gene therapy innovation Ann Arbor-based RetroSense Therapeutics LLC, a spinoff from Wayne State University, was honored last week in San Diego as the most innovative company at the annual Angel Capital Association convention, the largest annual gathering of angel investors in the world. The company is developing a lead product under the working name of RST-001 that uses gene therapy to restore some vision in patients suffering blindness due to retinitis pigmentosa or advanced dry age-related macular degeneration. Last year, the U.S. Food and Drug Administration granted orphan drug status for RST-001 for the treatment of RP, which can sharply increase its speed to market and decrease its cost. There are no FDA-approved drugs to improve or restore vision in patients with those conditions. Receiving the award were company founder and CEO Sean Ainsworth and WSU professor Zhou-Hua Pan, the scientific director of the Ligon Research Center of Vision at the Kresge Eye Institute in Detroit. Pan’s research was licensed by Ainsworth when RetroSense was founded in 2009.

[COURTESY OF RETROSENSE]

RetroSense founder and CEO Sean Ainsworth (right) and Wayne State University faculty member Zhuo-Hua Pan accept the Luis Villalobos Award for innovation at the Angel Capital Association convention.

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