Crain's Detroit Business, April 27, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

DETROIT BUSINESS April 27-May 3, 2015

Surfing garb in the Motor City? How gnarly

LOOKING BACK: The withdrawal of bank HQs in Mich.

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No-fault bill: $1B from health care? Unlimited medical untouched, but payment rates for care are cut By Chad Halcom chalcom@crain.com

A proposed overhaul to Michigan’s no-fault automotive insurance law could pull more than $1 billion of revenue away from the state’s health care industry, but it is unclear whether it would save drivers more money over the long run. The House Insurance Committee

voted 9-6 along party lines Thursday to report two no-fault reform bills, SB 248 and SB 249, to the House floor, where party leaders are expected to discuss them further this week. A slightly different version passed the Senate 21-17 earlier this month. The bills would cap the amount health care providers could bill for services covered under no-fault and provide for a two-year $100 annual

rollback in premium charges. The legislation also establishes a new Michigan Catastrophic Claims Association to begin covering all medical costs over a benefits cap on insurers, which starts at $545,000. This fund replaces the current nonprofit claim association, which was established in 1978 and has more than $18 billion in accumulated assets to cover claims, and would have only the as-

sets it collects directly from vehicle owners. The current MCCA would become the Michigan Legacy Claims Associa tion and continue reimbursing insurers for over-the-cap expenses on policies issued before the new fund takes over claim coverage. The result, over time, could be one fund that has billions more in assets than it actually needs and another that could dramatically increase premiums if it See NO-FAULT, Page 29

Beringea backs U.K.med device biz looking to be local

The “living office” at Herman Miller headquarters in Holland. The idea: Office design should help meet business goals. MarxModa LLC wants to sell the living office from a downtown Detroit headquarters

By Tom Henderson thenderson@crain.com

[HERMAN MILLER INC.]

Ex-biz consultant becomes chair man With local acquisitions, startup seeks headquarters in Detroit to sell Herman Miller’s ‘living office’ By Sherri Welch swelch@crain.com

For years, Joe Marx sold business management consultant services to Fortune 500 companies. Now he’s selling them strategic office designs and Herman Miller office furniture. Through two separate first-quarter deals, Marx and his Grand Rapids-based Marx Consulting Group LLC acquired WorkSquared Inc . in Novi and Pontiac-based Facility Matrix Group for undisclosed amounts.

WorkSquared’s prior owners were Laurie VanLangevelde and Daniel Rosema; Chris Sowers and David Daugherty previously owned Facility Matrix Group. Marx has since merged the two companies to form the state’s sole Herman Miller dealership: MarxModa LLC, retaining a combined 100 employees. The now-Pontiac-based company operates Joe Marx: Acquired from sites in Grand Rapids, Kalamazoo, Lansing, WorkSquared, Traverse City, Livonia and downtown Detroit, an FacilityMatrixGroup appointment-only showroom in Bedrock Real Es See MARXMODA, Page 27

According to the Centers for Disease Con trol and Prevention , hospital-acquired infections are the fourth-leading cause of death in the U.S. A small company in the U.K., with help from a local venture capital firm, wants to help stop hospital germs in their tracks. Backed by $4.5 million in funding by Farmington Hills-based Beringea LLC , All In One Medical , which is based in Wolverhampton, England, has been scouting locations in Southeastern Michigan for a manufacturing facility it wants to have running within a year. The plant will employ 35-40 to make its patented disposable antimicrobial curtains, room dividers and window blinds for hospitals and medical clinics. Using the same chemicals that coat the curtains and blinds, the company is launching a line of antibacterial powders, soaps and lotions under the brand name of Fantex. It has See BERINGEA, Page 28

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MICHIGAN

BRIEFS Take-and-bake brand adds another pizza to portfolio

troit-based Ilitch Holdings Inc.

Take-and-bake food maker Champion Foods LLC in Huron Township has added a new brand to its fold of more than 10 private-label pizza brands —and this one has a food personality behind it. Hungry Girl Originals — the creation of Lisa Lillien, a blogger, TV personality, author and face behind the Los Angeles-based Hungry Girl brand — is being distributed in 132 Meijer Inc. stores throughout Michigan. The pizzas are designed to be low in calories and high in fiber and protein. The pizzas can be found in the deli section and retail at $6.99 for two pizzas. Hungry Girl pizza has been in production at Champion Foods for the past two years. Peter Smith, national marketing manager for Champion Foods, said his team and Lillien met through a mutual contact in the industry. Champion Foods specializes in take-and-bake pizzas, breadsticks and cookies. It is represented by De-

Perrigo board rejects $28.9B bid from Mylan

— Natalie Broda

Directors at Perrigo Co. plc rejected a buyout offer from London-based Mylan N.V., citing the company’s own growth potential through product development and from business related to past and future acquisitions, MiBiz reported. Perrigo Chairman and CEO Joe Papa announced the action during a conference call to discuss Perrigo’s quarterly results. Mylan’s offer was $28.9 billion or $82 a share. “The board concluded that the proposal substantially undervalues the company and its future growth prospects and it is not in the best interest of Perrigo’s shareholders,” Papa said. “Simply put, the board believes that a continued execution by the management team against our existing global growth strategy will deliver superior shareholder value.” Perrigo has grown rapidly in recent years through a series of acqui-

sitions. The Mylan offer came after two major deals. On March 30, Perrigo closed on a $4.5 billion cash, debt and stock deal for Belgium-based Omega Pharma NV , Europe’s fifthlargest producer in the continent’s $30 billion over-the-counter market. In December 2013, Perrigo acquired Dublin, Ireland-based Elan Corp. for $8.6 billion. The acquisition allowed Perrigo, formerly based in Allegan north of Kalamazoo, to claim Ireland as its headquarters along with a lower corporate tax rate.

MICH-CELLANEOUS 䡲 Kevin Elsenheimer was appointed executive director of the Michigan State Housing Development Authority, according to a release. He replaces Wayne Workman, who had been both deputy state treasurer for local government services and MSHDA’s acting executive director. 䡲 A proposed $558,000 fine against Grand Rapids Plastics in Wyoming for safety violations would be the largest issued by the Michigan Occupational Safety and Health Ad ministration in more than a decade, MLive.com reported. Russell Scharenbroch Jr. was crushed in an injection molding press. 䡲 A company named AP CH-MI, LLC filed a lawsuit alleging that a plant it bought last year, the former OwensBrockway Glass Container Inc. operation in Charlotte southwest of Lansing, contains 5 million pounds of arsenic and cadmium contamination, the Lansing State Journal reported.

䡲 The Blue Water Convention Center opened this month in Port Huron south of the Blue Water Bridge. The $9 million project is expected to create nearly 250 jobs, according to a release. 䡲 A subsidiary of Uptown Reinvestment Corp. signed a deal to buy the Capitol Theatre in downtown Flint and plans to spend an estimated $21 million to redevelop and reopen the building, MLive.com reported. 䡲 The Federal Reserve Board approved Chemical Financial Corp.’s proposed $184.1 million acquisition of Lake Michigan Financial Corp., MiBiz reported. Midland-based Chemical Financial is now the seventh-largest bank in Michigan based on deposit market share. 䡲 The board of Battle Creek Un limited named Marie Briganti its new president and CEO, the economic development organization said in a release. She replaces Karl Dehn, who resigned last September. 䡲 Aquinas College in Grand Rapids received a $2.2 million gift

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . 18 BUSINESS DIARY . . . . . . . . . . . . . . . . 25 CALENDAR . . . . . . . . . . . . . . . . . . . . . . 25 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . . 9 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . . . 31 WEEK ON THE WEB . . . . . . . . . . . . . . 31

COMPANY INDEX: SEE PAGE 29 from the estate of Helen Palmatier, The Grand Rapids Press reported. The gift will fund an endowed professorship at the Catholic liberal arts college and a number of interdisciplinary degree options. 䡲 Traverse City ranked No. 4 on Smithsonian magazine’s list of top 20 small towns in the U.S. to visit in 2015. Estes Park, Colo., was No. 1.

Corrections 䡲 A story on Page 4 of the April 20 issue should have said the Detroit Zoo plans to invest $100,000 from its capital budget in the biodigester project. The article incorrectly implied that the Michigan Economic Development Corp. was contributing that money. 䡲 Because of incorrect information supplied to Crain’s, an item in the April 20 Deals & Details column incorrectly listed Axion RMS Ltd. as a name change for the Livonia office of Mid American Group Inc. Axion is actually a new company started by former employees of Mid American Group.

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BY THE NUMBERS: THE MICHIGAN ECONOMY

[GLENN TRIEST]

How’s this for a business plan,courtesy of Detroit Surf Co.founder Dave Tuzinowski: “I basically made a T-shirt for myself to wear.” His 10-year-old company has since added surfboards and other equipment to its apparel line.

Detroit Surf’s up as apparel sales take off Founder rides T-shirt wave, curls into boards By Bill Shea

Board silly. The Detroit Surf Co. gets its boards from a place not exactly known for hanging 10. Meet Blkbox Surf LLC in Oxford Township, Page 26

bshea@crain.com

Detroit native Dave Tuzinowski spends a chunk of each year in Maui, where he has a place and surfs the picturesque Hawaiian waves. It’s also where the Detroit Surf Co. was born 10 years ago. To stand out from the beach crowd in their brand-name surf apparel — Quiksilver, Billabong, Hurley and O’Neill are the giants — Tuzinowski decided to make himself a unique shirt. He opted to mix his hobby and his hometown and came up with the Detroit Surf Co. name. “I basically made a T-shirt for myself to wear,” Tuzinowski said. “There was no business plan or business model. It was just something for me to wear. My nickname out there is ‘Detroit.’ As soon as I get off the airplane, five or 10 minutes later, I’ll hear, ‘Hey Detroit!’ ” Before long, he was getting asked about the shirt — so often, in fact, that it irritated his wife. People wanted the shirts. Surfers wanted to know about the Detroit Surf Co. “That’s when the lightbulb went

off in my head. Why am I not selling these things?” he said. So, when he returned home, he trademarked the name. ‘Did for fun’ The Detroit Surf Co. became a real company in 2005, with Tuzinowski selling on the streets and beaches of Maui. At first, it was simply niche apparel, but Tuzinowski later added actual Detroit Surf Co.-branded surfboards and other equipment. “It was something we did for fun. It was a part-time thing,” he said. Tuzinowski’s day job back home was running Net Express , the telecom consulting company he launched in 1994. The clothing soon overtook his time. “We would carry around a backSee SURF, Page 26

[LISA SAWYER/CRAIN’S DETROIT BUSINESS]

MUST READS of the week... E D I T O R I A L : Crain’s take on Prop 1

She puts the $ to the X’s and O’s

Perfect, it ain’t. But Proposal 1 may be the best illustration yet that perfect can be the enemy of “pretty good” — especially when it’s the anti-tax Michigan Legislature setting the parameters of perfection. That’s what’s behind Crain’s stance on the ballot proposal to fix the state’s abysmal roads. Page 8

Alison Maki was looking for a change from the world of accounting a decade ago, and she found it crunching numbers for the Detroit Lions. Today, she’s one of eight women who are CFOs in the NFL. Page 30

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Bagging the right grocer seen as key for Bloomfield Park site By Kirk Pinho kpinho@crain.com

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It’s not quite a “food desert” like some consider parts of the city of Detroit to be, but the area surrounding the failed Bloomfield Park development site screams for a new grocer. That’s why one of the crucial aspects of the planned $180 million redevelopment at Square Lake and Telegraph roads will be what type of grocer ends up at the 87-acre site. Whether developer Redico LLC lands a specialty grocer to take between 30,000 and 40,000 square feet, or a much larger one of between 120,000 and 140,000 square feet, will determine exactly how much of the site, rebranded as the Village of Bloomfield , needs to be demolished. The development needs to be approved by the project’s Joint Development Council, a three-member body consisting of Bloomfield Township Supervisor Leo Savoie, Pontiac Mayor Deirdre Waterman and Dennis Cowan, partner in the Bloomfield Hills office of Plunkett Cooney PC. If approved, construction on the site, which straddles Bloomfield Township and Pontiac, could begin next summer. Examples of specialty grocers include Texas-based Whole Foods Inc. and Phoenix-based Fresh Thyme Farmers Market , which is new to Michigan, while the larger outlet could include something like a Meijer Inc. store, the Grand Rapids-area-based company for which Redico developed its first Detroit location two years ago in the Gateway Marketplace development at Eight Mile Road and Woodward Avenue. Dale Watchowski, CEO, COO and president of Southfield-based Redico, declined to identify grocers who have expressed interest in opening a location at the site. “Initially, we had received a great deal of interest from specialty grocers,” he said. “You can probably think of many of them that are in kind of the midsize format.” But he said he has plenty of friends in the area who lament having to travel several miles to get to the nearest Meijer or Kroger Co. store. “This market is very much underserved,” he said. Some of the closest grocers are Meijer stores in Waterford Township at M-59/Highland Road (six miles away) and Southfield at 12 Mile Road and Telegraph (eight miles); Kroger stores in Bloomfield Township at Long Lake Road (two and a half miles) and Telegraph (five miles) and in Waterford Township at M-59/Highland and Crescent Lake Road (seven miles); and Trader Joe’s in Bloomfield (five miles). There is also a Costco wholesale

store immediately south of the Bloomfield Park site. Gibbs said the Telegraph market could support another grocer, which “is a necessary anchor to most shopping centers.” The two plans presented to the development council earlier this month, plan A and plan B, aren’t wildly different, minus the grocery aspect. Both include retail and office space, medical office space, a movie theater, restaurants, senior housing, and single-family, multifamily and senior housing. Sandeep Malhotra, director of research and consulting with Sandeep Chicago-based Malhotra: food market reShoppers want search firm Technomic Inc. , healthier foods. said shoppers in general are trending toward healthier food choices, so a specialty grocer would make sense for the Village of Bloomfield. “One of the overarching reasons specialty (grocery) has seen growth

is that consumer awareness and acceptance of food that’s better, cleaner and less processed is definitely on the upswing,” he said. “That’s the wave that the Whole Foods of the world are riding. It’s no longer an area just for the well-to-do.” In a soon-to-be released report called “Food Industry Transformation — The Next Decade,” Technomic says that supermarkets and supercenters will see their market share of retail food sales fall nearly 10 percent by 2025, losing that to specialty grocers, club stores, convenience stores, dollar stores and online shopping outlets. Within three miles, the median household income is $45,000, while within five miles, it’s $53,000 — and within 10 miles, it’s $65,000, according to data provided last year by Robert Gibbs, managing principal of Birmingham-based Gibbs Plan ning Group Inc. By 2019, average household income is expected to increase to $88,000, $100,000 and $109,000 in those geographic radius areas, respectively. For Mark Nickita, co-founder See Next Page

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THE MILLER LAW FIRM

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and president of Detroit-based architecture and planning firm Archive DS and a Birmingham City Commission member, the important thing is to attract a grocery tenant that “supplements the other development in the area.” “I’m sure that’s what they (Redico) are looking to do, find the right mix of users that Mark Nickita: enhances that as an overall destiNeed to find the right mix of stores. nation for shopping of all sorts,” he said. That’s because some specialty grocers aren’t one-stop-shops, and shoppers may have to make a separate trip for certain items, in some cases. “They are increasingly used to making multiple trips,” he said. “I get XYZ at Trader Joe’s, ABC at Meijer and DEF at Costco.” There are 60,000 people living within a three-mile radius of the site, while 154,000 live within five miles, and 630,000 live within 10, according to data provided by Gibbs. Detroit-based SmithGroupJJR is the architecture firm on the project. A general contractor has not yet been selected. In a joint venture with California-based PCCP LLC in October, Redico purchased the Bloomfield Park foreclosure rights from San Francisco-based Wells Fargo Bank NA last year.The 1.7 million-square-foot Bloomfield Park development was originally envisioned as a massive mixed-use development including retail space, office space, condominiums and parking. But the project faced financial challenges and Beachwood, Ohiobased Developers Diversified Realty Corp. and New York City-based Coventry Real Estate Advisors bought a 50 percent stake and managing control of the park in 2006, the same year the project was moving through the foreclosure process when original developer Craig Schubiner was behind on a $35 million predevelopment loan. Construction was halted at the half-completed, 18-building complex in November 2008. The site remains a hodgepodge of buildings in various stages of completion. Many of the buildings are expected to be demolished starting as soon as the fall, Watchowski said. Southfield-based Farbman Group had been marketing the foreclosure rights on the property since January 2013 and represented Wells Fargo in the sale. “We’ve gotten a very warm reception from the community on the development plan,” Watchowski said. “Of all the mixed-use developments we are currently doing, this is by far not the largest, but it’s received the most attention, and in terms of feedback, the most positive feedback.” 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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LOOKING BACK

Crain’s, April 29, 1985, issue noted the opening, with little fanfare, of banking borders in Michigan. More at crainsdetroit.com/30

Freed to finance: Counting the cost of bank expansion, 30 years later Bank execs: No complaints over consolidation By Tom Henderson thenderson@crain.com

“States open bank borders,” read a front-page headline in the April 29, 1985, issue of Crain’s Detroit Business. A short headline, devoid of drama, with little hint of how much dramatic change was about to occur in the world of banking — slowly at first, then with tsunami speed. How much have things changed? It seems quaint now, but until Indiana, Ohio and then Michigan legislators allowed their banks to do business in neighboring states, state law prohibited banks in Michigan from having branches more than 25 miles from their headquarters. Dennis Koons, president and CEO of the Lansing-based Michigan Bankers Associa tion, said that in some ways, the law was a relic of the horse-andbuggy days, when it might have taken several days to travel Dennis Koons: that far, and also Consolidation wave a result of a regucontinues today. latory emphasis after the Great Depression that many small banks were better for the system than larger banks because any failures would be easier for the new Federal Deposit Insurance Corp. to cover. Today, you can be sitting in a hut in Tahiti, take a photo of a check and deposit it into your account, which you opened in a metro Detroit branch of a bank headquartered in San Francisco. It wasn’t until 1997 that federal legislation opened interstate banking across the entire U.S., the result of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. The “Riegle” part of the act was for Donald Riegle, the U.S. senator from Flint who was chairman of the Senate Banking Committee. But interstate banking restrictions had begun moving that way in 1985. As the Crain’s story was published, state bankers were lobbying legislators to allow them the same freedom that bankers in Indiana now had. “Indiana has legislation, and let’s assume Ohio is next,” Crain’s quoted Donald Heikkinen, then senior vice president of the Michigan Bankers Association. “Banks in those states could get big first. If this happens, it would be very important for Michigan to be there right away.

The withdrawal from Michigan The top 15 banks based on market share, 1996 versus 2014. The banks highlighted in white are headquartered outside Michigan. Number of state Market Bank Headquarters branches Deposits Share

1996 1. National Bank of Detroit Detroit

323

$16.25 billion16.23%

2.Comerica Bank

Detroit

271

$15.80 billion15.50%

3. First of America Bank

Kalamazoo

380

$11 billion

10.83% 8.16%

4. Standard Federal Bank Troy

140

$8.3 billion

5. Old Kent Bank

211

$8.2 billion 8.04%

6. Michigan National Bank Detroit

204

$7.2 billion

7.05%

7. Charter One Bank

Cleveland

$3.2 billion

3.15%

8. Citizens Bank

Flint

$2.7 billion

2.62%

9.Huntington Bank

Columbus,Ohio 43

$1.8 billion

1.79%

10. Great Lakes Bancorp

Ann Arbor

$1.4 billion

1.40%

11. First Michigan Bank

Zeeland

$1.1 billion

1.04%

12. D&N Bank

Houghton

$950 million 0.93%

13. Monroe Bank & Trust

Monroe

$742 million 0.73%

14. Republic Bank

Owosso

$703 million 0.69%

15. KeyBank

Cleveland

$644 million 0.63%

1. Chase Bank

New York

299

$37 billion 20.90%

2. Comerica Bank

Dallas

215

$25.8 billion 14.61%

3. PNC Bank

Pittsburgh

223

$15.6 billion 8.81%

4. Fifth Third Bank

Cincinnati

248

$13.8 billion

5. Bank of America

Charlotte, N.C. 157

$13.2 billion 7.45%

6.Huntington Bank

Columbus,Ohio 167

$8.3 billion

7. Flagstar Bank

Troy

106

$6.9 billion

3.87%

8. FirstMerit Bank

Akron, Ohio

140

$5.3 billion

3.02%

9. Chemical Bank

Midland

158

$5.2 billion

2.96%

10. Charter One Bank

Providence, R.I. 98

$4.5 billion

2.57%

11.Wells Fargo Bank

San Francisco 19

$2.5 billion

1.41%

12.TCF National Bank

Wayzata, Minn. 53

$2.5 billion

1.10%

13. Mercantile Bank

Grand Rapids

$2.3 billion

1.31%

14.Talmer Bank and Trust Troy

$2.1 billion

1.17%

15. Independent Bank

$1.9 billion

1.10%

Grand Rapids

2014

Ionia

7.79% 4.71%

Source: Federal Deposit Insurance Corp.

“We’d like to see the headquarters of the survivors in Michigan.” Just the opposite happened. In 1985, all banks in Michigan were based here. In 1996, only three of the 15 largest banks in Michigan were based elsewhere, all in Ohio. By last June, eight of the 10 largest banks in the state were headquartered in other states. (See chart.) Gobblers become the gobbled For a while, though, expansion by Michigan banks worked out as executives had hoped. A story in the Chicago Tribune on Aug. 18, 1991, carried the headline “Michigan banks find Illinois ripe for picking” and detailed how bankers

in the state had eagerly entered the large Chicago market, catching the locals more or less unaware. The piece began with a profile of the late Charles “Chick” Fisher III, the chairman and CEO of Detroit-based NBD Bancorp, the holding company for the National Bank of Detroit. “From his office in Detroit, the auto-dominated city where economic greatness seems the province of days gone by, Fisher controls a banking company that is not only the largest in Michigan but one of the fastest-growing in Illinois. “Across Michigan, in a converted YMCA, Daniel R. Smith runs $14 bilSee Next Page

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lion First of America Bank Corp., the sixth-largest player in Illinois banking, from Kalamazoo, a town of 80,000. “Why have these Michiganders become such powers in Illinois banking? Because Illinois waited too long to make a break with the past, said the bankers and other analysts.” But just as Michigan banks began gobbling up Chicago banks in the 1980s, national and large regional banks starting buying our banks in the mid-’90s, a trend that continues. NBD was founded in 1933, then owned equally by General Motors Corp. and the U.S. government as part of an effort to stabilize the banking industry during the Depression. In 1995, the bank announced that it was being bought by the First National Bank of Chicago, which was later bought by Chicago-based Bank One Corp. , which was later bought by J.P. Morgan Chase & Co. In 1997, Cleveland-based National City Corp. bought First of America, and in 2008, Pittsburgh-based PNC F i n a n c i a l S e r v i c e s G r o u p I n c . bought National City. More recently, in 2013, Akron, Ohio-based FirstMerit Corp. bought Flint-based Citizens Republic Bancorp Inc. Last year, Evansville, Ind-based Old National Bancorp bought Ann Arbor-based United Bancorp Inc. In 1985, there were about 14,000 banks in the U.S. and 361 banks headquartered in Michigan, said Koons of the Michigan Bankers Association. Today, there are about 6,000 banks in the U.S., with 110 based in Michigan. “We continue to see a wave on consolidation as we speak,” Koons said.

and the Bank of Ann Arbor, and banks that were founded just before the recession, had no bad loans and have been thriving, such as Troy-based Talmer Bank and Trust or Farmington Hills-based Level One Bank. “There’s no question that a small bank in Ontonagon can tailor a financial product for a customer or for its community better than a bank with a larger footprint can do,” Koons said. David Sowerby, chief investment strategist in the Bloomfield Hills office of Loomis Sayles & Co. LP, agreed that consolidation has been good for consumers. But he also thinks the community has lost something by having fewer local bank CEOs. “I’m a free-market guy and support the deregulation that has taken place. The economy and the consumer have benefited,” Sowerby said. “The piece I lament is the absence of the significant CEO or chairman at the major lenders here in the 1980s and early 1990s, like Dean Richardson at Manufacturers Bank, Don Mandich at Comerica , Chick Fisher at NBD, Tom Ricketts at Standard Federal. “I recognize that Comerica has a regional president and that Chase has a regional president, but there’s still a lack of the kind of C-level executives who influence corporate giving and corporate policy. ” Big banks defend local TLC Michael Ritchie, Michigan market president of Comerica Bank, praised his company’s commit-

ment to the state despite a headquarters now in Dallas. “I can only speak for Comerica, but we’re dedicated to stewardship,” Ritchie said. “We employ 5,000 people here, we provided 48,000 hours of community service in Michigan last year, and we were a top six giver to United Way.” Sandy Pierce, vice chairman of FirstMerit Corp. and chairman and CEO of Southfield-based FirstMerit Michigan, said that if large, regional banks are less receptive to small commercial borrowers and less a force for philanthropy or civic duty, then her bank is the exception. “The magic to me is to have Sandy Pierce: customers feel “We put decision- like they’re with makers in every a local bank,” market.” she said. “We have $25 billion in assets, but we put decision-makers in every market.” As for community involvement, Pierce chairs the Henry Ford Health System board and is on the boards of the United Way for Southeastern Michigan , Downtown Detroit Part nership , Detroit Riverfront Conser vancy and College for Creative Studies and was chairman of the Detroit Financial Advisory Board during the recent bankruptcy of the city. 䡲

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For the most part, local bankers and industry watchers don’t bemoan the lack of Michigan-headquartered banks or the trend of consolidation. “It’s been for the benefit of consumers,” Koons said. “It’s brought greater efficiencies and greater market presence. “In 1985, if you worked downtown and lived more than 25 miles away, you probably needed two banks if you wanted to cash your check on your lunch hour.” John Donnelly, managing director of the Grosse Pointe investment bank Donnelly Penman & Partners , which focuses on the banking industry, said consolidation and the presence of large national and regional banks have been good for consumers and businesses. Large banks can provide services such as wealth management and large commercial loans that smaller banks can’t. “They do quite a good job of serving their large customers.” Donnelly said. “The middle-market guy that needs to borrow half a million, he might have a tough time getting personal service at a big bank. But that’s where you give community banks credit. They’re pretty ferociously competing for that business.” That includes established community banks that weathered the recession in good shape, such as St. Clair Shores-based First State Bank

14 MILE

SIGNATURE A SSOCIATES L e asing /Man agemen t

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CRAIN’S DETROIT BUSINESS

OPINION Not pretty, but Prop 1 could work W

hen it comes to Proposal 1 on the May 5 ballot, it’s tough to say the measure is absolutely the best solution to Michigan’s road-funding headaches. Perfect, it ain’t. But perfect can be the enemy of “pretty good.” An anti-tax fever in the state Legislature prevails, so thinking a “no” vote will somehow force lawmakers to come up with a better plan is not realistic. It’s simply difficult to find $1 billion or more a year in the current general fund budget; the bulk of state spending is in earmarked programs that don’t allow dollars to transfer to other uses, such as road fixes. Some basic facts bear repeating: First, Michigan spends less on roads, per capita, than just about any other state. Using 2010 census figures for population, the amount spent, by one estimate, is $154 per person per year. State transit officials say that compares with $530 for Pennsylvania, $412 for Illinois, $302 for Wisconsin, $239 for New York, $289 for Indiana, $275 for Minnesota and $214 for Ohio. Second, the status quo is not an option. Fuel consumption is dropping and, hence, so are fuel tax dollars earmarked for roads. And the sales taxes currently charged to fuel do not go to roads but to schools and local government. Meanwhile, delay and disrepair are dangerous. The pro-Prop 1 campaign has cataloged the safety risks. Just wait for a mishap — a chunk of concrete through a windshield of a family visiting Pure Michigan — to see a steep drop in out-of-state visitors. Let’s remember: Tourism is one of the state’s leading industries. In exchange for higher wholesale fuel taxes, the sales tax will be eliminated on fuel sales. The increase in the sales tax makes up for the dollars that otherwise would flow from fuel sales to schools and local governments. And for low-income residents who will bear the brunt of a sales tax increase, the proposal increases the state’s Earned Income Tax Credit and a homestead property tax credit for low-income seniors and adults with disabilities. It isn’t the prettiest resolution. But it can work. We join other voices, from the Small Business Association of Michigan to the chambers of commerce in Detroit and Grand Rapids and area elected leaders ranging from Detroit Mayor Mike Duggan to Oakland County Executive L. Brooks Patterson, in supporting Proposal 1.

LETTERS

Crain’s print redesign brings out best in content Editor: I am a longtime subscriber to Crain’s, both in Cleveland and Detroit. After reading another subscriber’s vote against your new print design (“A vote against Crain’s print redesign,” April 20, Page 8), I decided to weigh in with my vote for your new print design. The new design is fresh, offering the very best in local and national news coverage. I do not see the writer’s reference to Crain’s as a New York-style tabloid to be accurate. Your new font, spacing, topic headlines, organization and pictures bring out the best in the publication and stories. I find it easy to read with an updated look and feel. As for the references to issues with your ads, I again disagree with the writer. The ads present the look and message the buyer desires, not those of your publisher or editor. I enjoy reviewing the ads to get a better feel for the companies that feel advertising with you provides a positive return. Keep up the great work and

Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: cgoodaker@crain.com

count my vote for the new look. Jim Schmitz Troy

Ideas to clip on interview for DIA director’s successor Editor: We recently learned that Graham Beal, the director, president and CEO of the Detroit Institute of Arts, will retire on June 30 after 16 years at the helm. During those years, bow-tie clad Beal has elevated the quality and solid reputation of the DIA, and it will be difficult to replace his energy and artistic prowess. One can only speculate on what the board is looking for in a replacement, but as such I would like to offer my suggestion. Perhaps as De-

troit is attracting a diverse and varied populace to downtown and the vicinity, it would be appropriate for the new director to relate culturally to the residents. In that regard, here are some questions I Graham Beal: To would include in retire, along with his the interview bow tie. process: “If you were to emulate the previous director, would you be tying your own bow tie or would it be a clip-on?” And, “in the classic art portrait, ‘Dogs Playing Poker,’ can you name the breed of the dogs and the card game they are playing?” Of course, candidates will come forward with extensive credentials and artistic accomplishments, but us common folk hope he or she will still be able to share a coney dog with us sometime in downtown Detroit even with a clip-on bow tie. Bill Kalmar Lake Orion

TALK ON THE WEB Re: Feds sue Quicken Loans, allege improper FHA lending

Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity.

The Justice Department is only but one federal agency that is out of control. Thankfully, Quicken seems intent on challenging the legal thugs. To do that takes courage and a ton of money (as the feds just print their money as needed). This suit likely has more to do with hurt feelings at the Justice Department or to do with some lawyer trying to get a promotion by taking down a successful company.

his ability to appear personable, his recognition outside of Michigan and Michigan’s political influence in the country. I do hope that he follows through on the dream. Getting him out of Michigan for a bit would help our GOP Legislature to reset their standards back to the platform they are supposed to represent.

– William J

— Janice Dillaha

Re: Snyder dodges direct question on presidential bid

City Council OKs zoning change for Red Wings arena

If it is true that he is inclined to run for POTUS, I would say Mr. Snyder overestimates his role in changing the economic climate in Michigan. He overestimates his command of geopolitical issues. He overestimates his ability as a public speaker,

It’s good to see the Detroit City Council and Olympia finally got it done. With M-1 Rail and all the new development going on, can’t wait for everything to come together in 2017. Keep moving Detroit forward!

Re: Midwest Steel’s $50.7M leads pacts for hockey arena Projects like these only help the city. I don’t understand how everyone is so anti-new arenas. You’re turning empty garbage land into prime real estate that will generate money through property taxes and income taxes. This will lead to more development in other areas (Brush Park), leading to more tax money. More tax money for the city equals more money to spend elsewhere (police and schools). It’s literally a winwin. Sure, taxpayers will front some of the bill through various government institutions, but the city of Detroit I think only lost the land when it sold it to the Ilitches for something like $1. Pretty much it’s a free stadium for the city. — Nino

– Jeff Keathley

See TALK, Page 9

Let’s not rush to judgment on Quicken Loans KEITH CRAIN ast week the U.S. Department

Lof Justice sued Quicken Loans

for making a lot of bad loans over a four-year period. The week before, obviously in anticipation of the Justice Department’s lawsuit, Quicken Loans had sued the federal government to quash any charges that they, the feds, were contemplating.

I have no doubt that there will be a lot of folks who, for whatever reasons, are convinced that the only way Quicken Loans got so big and successful is that it was doing something wrong. I am equally sure that there are just as many folks who are convinced that this is nothing more than a witch hunt on the part of the federal government and, for whatever reasons they, the feds, are wrong. I think that everyone should probably take a deep breath and

wait for the facts to emerge over the next few months or even years. Right now, the federal government, with a track record of vindictive actions from departments like the IRS and other places, doesn’t have a good level of credibility with the nation. Dan Gilbert, with his astounding success over the last decade, is a natural target for the feds. All of this makes for a great soap opera, but it will take time to figure out what’s really going on.

The only thing you know for certain is that Quicken Loans’ profits will diminish after they finish hiring and paying lawyers to present their side of whatever the case turns out to be. This is a story that will last a very long time. These sorts of accusations from the federal government usually take months and years to adjudicate, and I am sure that this one is not going to be any different. In the meantime, we should all remember that an accusation, even from the federal government, is

nothing more than that. If and when the feds are able to convince and convict, we’ll all know about it in a big way. I am sure that the feds will make sure that we all are kept up to date in a public forum during their lawsuit. If history is any indicator, these cases are usually shades of gray rather than black or white. There will be plenty of speculation as to the guilt or innocence of Quicken Loans. We would all be wise to assume innocent until proven otherwise. Time will tell.

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New for-hire vehicles must be subject to transportation laws OTHER VOICES Matt Oddy Matt Oddy is operations manager for Checker Cab, Detroit

s companies like Uber and Lyft

Amake inroads into Michiganâ&#x20AC;&#x2122;s

for-hire passenger transportation market, itâ&#x20AC;&#x2122;s important to make sure that the stateâ&#x20AC;&#x2122;s for-hire transportation laws are being applied fairly and equally to all companies. The state regulates for-hire passenger transportation through the Limousines Transportation Act 271 of 1990 and the Michigan Vehicle Code. All vehicles transporting passengers are defined as limousines under the law and must have a commercial license plate. Drivers are required to have a chauffeurâ&#x20AC;&#x2122;s license. To differentiate themselves in the market, limousine companies have come up with clever marketing labels such as black car, luxury sedan, stretch limousine, limo taxi and now transportation network company, as Uber and Lyft call themselves. Regardless of how the vehicle or service is marketed, they are all transporting passengers, using a form of limousine, and being driven by a chauffeur. TNCs like Uber and Lyft, however, claim that Michigan law doesnâ&#x20AC;&#x2122;t apply to them â&#x20AC;&#x201D; that they are not commercial vehicles because they use a technology-based business model (primarily a mobile phone application enabling passengers to connect with drivers via the Internet). Obviously, that argument defies common sense. Using technology in

transportation is not new. GPS, mobile phone-based trip booking and wireless handheld computers have been used for years by limousine and taxi companies in local markets and around the world. Would an airline be able to ignore Federal Aviation Administration flight rules or operate unlicensed if its passengers used a phone application to purchase tickets? Of course not. Yet TNC vehicles and drivers are allowed to transport passengers in Michigan without a chauffeurâ&#x20AC;&#x2122;s license. Thatâ&#x20AC;&#x2122;s simply wrong â&#x20AC;&#x201D; and dangerous. Drivers and passengers deserve

to be protected by state regulations requiring vehicle safety inspections and adequate commercial personal injury and property insurance coverage â&#x20AC;&#x201D; just as traditional taxi and limousine companies are. Claiming they are not operating commercial vehicles because of the way customers contact them via cellphone, TNC drivers currently carry only personal insurance policies. However, for-hire transportation is universally recognized as a commercial activity, which would automatically invalidate the policy and potentially leave injured drivers, passengers and pedestrians at risk.

Current licensing rules and regulations â&#x20AC;&#x201D; known as Red Wing laws â&#x20AC;&#x201D; were developed to protect the public after the devastating limousine crash of Detroit Red Wings star Vladimir Konstantinov in 1997. The limousine he was riding in was being driven by an unlicensed driver with a suspended license. The state in December 2013 issued an order to stop vehicles and drivers from violating the law, but for unknown reasons it has not enforced it. This is blatantly unfair. If the state isnâ&#x20AC;&#x2122;t going to enforce the rules for some for-hire transportation providers, the same leniency

should be applied to all. Senate Bill 184 has been introduced to amend the Limousine Transportation Act to allow big cities to regulate TNC vehicles as limousines. Criticism that the legislation restricts free trade and creates barriers to entry in the market is untrue. The legislation does not implement a single new state regulation on TNC drivers or vehicles. It simply requires that existing laws be equally applied to all for-hire transportation providers, including TNC drivers and vehicles. For-hire drivers and passengers will all be safer when the law is applied equally to all.

ITâ&#x20AC;&#x2122;S NOT HOW WELL THEY WORK FOR US. ITâ&#x20AC;&#x2122;S HOW WELL THEY WORK FOR YOU. Eric W. Dietz

Shari Krasinski, CTP, CPCP

oFlCe Cell eriC DieTZ HUnTingTon CoM

oFlCe Cell SHari KraSinSKi HUnTingTon CoM

Re: Bankruptcy judges express regret on absence of cameras

Brian Marshall

Brad Norman

What about regret in regard to reducing the pensions of old people. What a noble thing to do. Just like fighting â&#x20AC;&#x153;Bambi.â&#x20AC;?

oFlCe Cell Brian MarSHall HUnTingTon CoM

oFlCe Cell BraD norMan HUnTingTon CoM

Terrance B. Pryor

Scott Wolffis

oFlCe Cell TerrY PrYor HUnTingTon CoM

oFlCe Cell SCoTT WolFlS HUnTingTon CoM

TALK ON WEB

SVP, Regional Manager Private Client Group

SVP, SaleS Manager Treasury Management

From Previous Page

SVP, #oMMerCial Region Manager Middle Markets

SVP, MiCHigan Regional SaleS Manager Auto Finance & Dealer Services

â&#x20AC;&#x201D; Carolyn Mazurkiewicz

Re: Belle Isle sports fields to be renovated in federal effort Does it make sense to send tax dollars to D.C., then the bureaucrats there take their cut for overhead and then those dollars go to fix a park on Belle Isle? All that for $325K. Exhibit X of a broken system.

SVP, Regional Manager Commercial Real Estate

SVP, !rea Manager oF MiCHigan Business Banking

â&#x20AC;&#x201D; William J

Re: Legislature not convinced on aid for schools with deficits When are we going to stop bailing out Detroit? They, and every other school district, need to live within their budgets ... just as the taxpayers who support them must do. â&#x20AC;&#x201C; Louise Braun

The Huntington National Bank is an Equal Housing Lender and Member FDIC. and Huntington are federally registered service marks of Huntington Bancshares Incorporated. Huntington. Welcome. is a service mark of Huntington Bancshares Incorporated. 2015 Huntington Bancshares Incorporated.

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CRAIN’S DETROIT BUSINESS // April 27, 2015

Desmond buys Price Funeral Home in Troy

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Longtime Troy-based funeral home A.J. Desmond & Sons Funeral Directors last week bought the Price Funeral Home, giving Desmond three locations. The addition of Price will add 165 to 175 funerals to the 850 handled annually by Desmond’s Troy and Royal Oak locations, said Terry Desmond, president of A.J. Desmond and son of its founder and namesake. The Price Funeral Home, in Troy, is being rebranded as the A.J. Desmond & Sons Price Chapel. Desmond will spend about $300,000 to refurbish the 30,000square-foot Price facility in coming months, including new landscaping, improved building access, remodeled restrooms, lobby enlargement and the addition of a merchandise selection area for urns, markers and remembrance items. The Price Funeral Home was founded in Troy in 1955 by William Price. He died in 2010 at age 79, and his wife, Susan, has since operated the business on the west side of Rochester Road between Big Beaver and Wattles roads. “We were much more colleagues than competitors,” Desmond said of William Price. The Desmond family — six are part of the funeral home business — was seeking to expand when Susan Price approached them a year ago to discuss a potential sale. “She just decided it was time for her to move to a different phase of her life,” Desmond said. “This was the right opportunity. It was a coming together of two very similar cultures.” A sales price wasn’t disclosed. Desmond declined to discuss revenue, but the median cost of a casketed funeral in the U.S. in 2012 was $7,045, the most recent data available from the National Funeral Directors Association. Michigan this year is forecasted to have a 41.5 percent burial rate and 56.7 percent cremation rate. The median charge for cremation with a non-casketed service in 2013 was $3,250, NFDA data shows. There were 19,486 U.S. funeral homes operating in 2014, a decline of nearly 10 percent since 2004, according to the National Directory of Morticians Redbook. Desmond traces its roots to the A.J. McInnes Funeral Home, a former funeral home in Highland Park. McInnes employee Albert Desmond eventually took it over, and it adopted its current name in 1973 when it opened its first Troy location. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT

CHAD HALCOM Reporter’s Notebook WEB: crainsdetroit.com/halcom TWITTER: @chadhalcom

Settlements grow in price-fixing suits Civil settlements recently have exceeded $260 million in a sprawling Detroit lawsuit alleging more than a decade of price-fixing in the auto supply chain. U.S. District Judge Marianne Battani this month gave preliminary approval to a deal for TRW Automotive Holdings Corp. and German affiliate TRW Deutschland Holding GmbH to settle for $8 million with direct purchaser plaintiffs, which are other auto companies who allegedly bought components at colluded prices. Since February, Hitachi Automotive Systems Ltd . and Panasonic Corp. have also agreed to pay nearly $83 million combined to settle with dealership and consumer plaintiffs. TRW previously agreed to pay $7.1 million to dealerships and consumers in settlements late last year. The new settlement resolves litigation for three major classes of plaintiffs. Suppliers Yazaki Corp. , Lear Corp., Autoliv Inc. and Nippon Seiki Co. Ltd. and TRW already had agreed to more than $187 million of combined settlements. Allegations of global supplier price-fixing dating back to at least 2000 first drew public attention after the FBI in February 2010 raided Yazaki North America’s offices in Canton Township, along with the Southfield offices of Kariya, Japan-based Denso Corp . and Tokai Rika Group North America in Plymouth Township. The Japan Fair Trade Commis sion also around the same time raided the offices of Furukawa Electric Co. Ltd., the first of 34 companies to plead guilty to U.S. criminal charges since 2011 at federal courts in Detroit and elsewhere. Those companies have agreed to nearly $2.5 billion in criminal fines, but the civil case in Detroit has compiled claims from around the U.S. on behalf of classes of automakers, dealerships and the businesses and consumers who bought cars with parts made at alleged colluded prices. Some government agencies and trucking companies are also plaintiffs. In the latest settlements, Panasonic resolves legal claims involving its alleged role in setting prices for automotive switches, steering angle sensors and lighting controls, while Hitachi’s settlements cover claims for inverters, starters, fuel injection systems and other components. TRW’s latest settlement covers suppliers or OEMs who purchased safety systems components from the company since January 2003.

LAW

GENERAL AND IN-HOUSE COUNSEL AWARDS Public companies, revenue over $1 billion WINNER: Kirsten Hewitt, Whirlpool Corp., this page FINALIST: Carlos Herrera, General Motors Co., Page 12

[PIERRETTE DAGG/CRAIN’S DETROIT BUSINESS]

The litigator as innovator A general counsel must be a master of more than just law

orporate attorneys worry about a lot more than the law. Questions like these are constantly crossing their minds: Can marketing use this photo? Is our company’s information protected sufficiently? Are the purchasing orders taking the future of the economy, and potential downturns, into account? The people profiled on these Those are just few of the questions that keep general pages will be recognized at a counsels and their teams up at night. They do the work of special event in their honor June 10 at the Westin Book worry, and scenario-planning, for so many segments of Cadillac Detroit. Read many companies. Their efforts focusing on business more about the event strategy, integrated with legal knowledge, is at the heart of on Page 17 or at the fifth annual Crain’s General Counsel of the Year awards. crainsdetroit.com/gc After accepting nominations from across Michigan, these winners were picked by Crain’s editors with the advice of a judging team made up of executives and lawyers able to offer many perspectives on what defines excellence in an in-house attorney. This year’s winners, profiled on Pages 11-16, represent stories of innovation and creativity. Yes, they are lawyers — but they are also part of the company’s leadership team when it comes to strategy. n an evolving global business that’s

WINNER: Public companies over $1 billion in revenue

Ibrought Whirlpool revenue just under

$20 billion, Kirsten Hewitt — and a law department staff of nearly 200 around the world — help the home appliance company navigate change, challenges and opportunities. This past year, that’s included closing the $551 million acquisition of a 51 percent stake in China-based Hefei Rongshida Sanyo Electric Co. Ltd., and $1.4 billion in stock acquisitions to give a Whirlpool subsidiary ownership of Indesit Co.

Kirsten Hewitt Age: 50 Title: Senior vice president, corporate affairs, general counsel and corporate secretary, Whirlpool Corp., Benton Harbor Recent achievement: She and her staff helped close international acquisitions of two major home appliances manufacturers, and with outside counsel won a verdict in an Ohio class-action lawsuit.

S.p.A., based in Italy. The Hefei Sanyo acquisition, for example, impacted the company by

Private companies over $1 billion WINNER: Lois Bingham, Yazaki North America Inc., Page 13 FINALIST: Janet Kelley, Meijer Inc., Page 13

Pro bono WINNER: Michelle Busuito, SMART, Page 14 FINALIST: William Coughlin, Ford Motor Co., Page 14

Private companies, revenue $100 million to $1 billion WINNER: Daniel Follis Jr., Compuware Corp., Page 15

Rising star WINNER: Sean Etheridge, Stryker Corp., Page 16 FINALIST: Christina Flint, Diplomat Pharmacy Inc., Page 16

This year’s judges Jocelyn Benson, dean, Wayne State University Law School

Latrina Edwards, assistant general counsel, Auto Club Group; president, Michigan chapter, Association of Corporate Counsel

Robert Kurnick Jr., president, Penske Corp.

Bernie Lourim, corporate counsel, Fanuc Robotics America Inc.

Wendy Richards, director of legal and policy programs, Michigan Community Resources

improving distribution and making costs more competitive, Hewitt said, in comments sent by email. The Indesit acquisition, she said, “was a tremendous strategic fit for us, more than doubling our presence in the world’s largest appliance market. The fit is also good in terms of complementary products, brands and distribution networks.” “Our mission is to use our leadership and legal expertise to create outcomes that deliver a strategic and competitive advantage for Whirlpool by protecting the company and advancing the company’s strategy,” she said. See HEWITT, Page 12

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT: LAW – GENERAL AND IN-HOUSE COUNSEL AWARDS

FINALIST: Public company with revenue over $1 billion

Carlos Herrera Age: 53 Title: Chief intellectual property counsel, General Motors Co., Detroit Recent achievement: Before joining GM late last year, Carlos Herrera led the intellectual property legal strategy for Toledo-based Owens Corning Corp. There, he examined its parent portfolio and reduced IP protection spending by millions of dollars.

arlos

CHerrera

has been on the job at GM for only seven months, but he’s already examining the Detroit automaker’s patent portfolio to establish a game plan. The intellectual property attorney is well-versed in rightsizing portfolios — identifying which patents to protect and those that should be allowed to lapse. At Owens Corning, Herrera identified which patents to protect and which to forgo, a complex and delicate matter, he said.

“We really changed the strategy around our innovation by identifying patents best suited to be secured as trade secrets instead of through the patent office, which is expensive,” Herrera said. “We minimized a lot of patents that weren’t providing much more value, and we were able to really see a cost reduction attached to our portfolio.” Herrera said companies often protect IP long after the patent is useful, as happens when a new technology eclipses the patent. “There’s a lot of money spent on legal fees and outside counsel, and every time there’s a debate with the patent office, a fee is attached,”

Herrera said. “It’s important to go back and find whether you should be spending money to maintain a patent or use that money to leverage our position with other patents.” Herrera also served as in-house counsel for Boeing Co., Tyco International Ltd. and others. Herrera, a native of Cuba, provides executive mentoring to minorities as part of the National Society of Hispanic MBAs. He earned a bachelor’s degree in aeronautical engineering from Embry-Riddle Aeronautical University and a law degree from the University of Toledo.

Global Perspective. National Strength. Midwest Values.

— Dustin Walsh

HEWITT, from Page 11: Whirlpool’s global law department played key roles at every stage of the recent projects, including up-front strategy and due diligence, negotiations, antitrust clearance, governance, compliance work, communications, and integration planning and implementation, Hewitt said. Last year, the law department and outside counsel won a verdict, which has since been appealed, in a class-action case in Ohio involving certain models of frontloading Whirlpool washing machines. The complaint, brought on behalf of about 150,000 Ohio residents, alleged that Whirlpool manufactured and sold machines that were defective. The defect, according to the complaints, was that they accumulated mold and could not clean themselves adequately, causing consumers to take actions such as running extra cleaning cycles, leaving the door open between uses and scouring the washer after every use with bleach. Whirlpool saw the case as an overly broad “no injury” class action in which the claims lacked merit and were important to litigate rather than settle. “These types of no-injury class actions are particularly dangerous to all manufacturers — not just Whirlpool — as they try to turn the most routine functions, like household maintenance or use and care habits, into multimillion-dollar paydays for class-action lawyers,” Hewitt said. “It is vital that we do our part to fight against these kinds of cases that create an unfair burden for manufacturers and, ultimately, their customers.” — Amy Lane

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT: LAW – GENERAL AND IN-HOUSE COUNSEL AWARDS

WINNER: Private company, revenue over $1 billion

Lois Bingham Age: 47 Title: Vice president, general counsel, secretary and compliance officer, Yazaki North America Inc., Canton Township Recent achievement: Instituting a regional legal strategy for the North and Central American operations of Yazaki, including creating a legal department in Mexico and reducing the use of outside counsel. The moves resulted in a 19 percent decline in overall legal spending and a 58 percent reduction in spending on outside counsel.

fter the Great Recession leveled the region’s automotive industry, automakers and suppliers were seeking efficiencies — mostly for cost

FINALIST: Private company, revenue over $1 billion

Janet Kelley Age: 61 Title: Senior vice president, general counsel, Meijer Inc., Grand Rapids Recent accomplishment: Avoiding much of the litigation that plagues most retailers through a combination of training, policies,

reductions but also to expedite business. Lois Bingham embraced that idea when she was promoted to lead Yazaki’s legal operations across North and Central America in 2012. As she set out to create an appropriate department for its growing base in the region, her first move was to conduct an internal assessment of the company’s legal assets and redefine the scope of the department. At the time, Bingham’s department contained one other attorney and a paralegal, along with mounting legal work from increasing operations in Mexico and Central America. “I really needed to figure out if my new department was structured to meet our needs, which it was not,” Bingham said. “The organization was restructuring to procedures and an arbitration/grievance process.

hen Janet Kelley points to the

W success of the legal team at

Meijer, the answer starts with business, not law. Each of the business groups in the company has an assigned attorney who is responsible for keeping a relationship with the business, attending meetings and calls and offering advice.

“My team knows the company and the business. They are able to be proactive instead of reactive, which produces a much better result.” take on more of a regional operation, and while we could have limped along just handling the U.S. matters, we couldn’t handle the overall regional structure.” Bingham opened a legal office in Mexico, which accounts for most of Yazaki’s manufacturing operations

in North America, and added specialized in-house attorneys to handle the day-to-day operational needs of the supplier. Bringing more of the work inhouse cut Yazaki North America’s spending on outside counsel — which was reduced 58 percent in the 2014 fiscal year from 2013. “Outside of salary, the next biggest line item is on outside counsel, and we have tremendously reduced that,” Bingham said. “My team knows the company and the business. They are able to be proactive instead of reactive, which produces a much better result.” Bingham’s team also created a legal defense for more than 60 civil class-action lawsuits — many stemming from the massive antitrust investigation of the industry led by U.S. regulators. In 2012, Yazaki North America’s parent, Japan-based Yazaki Corp.,

agreed to pay a $470 million fine for its role in a price-fixing scheme related to wire harnesses. Since then, Bingham has established a regionwide compliance program that extends far beyond antitrust matters, she said. “A lot of (compliance) functions were decentralized, and we needed to do things differently and create an effective program that reaches employees in all levels of the organization,” Bingham said. “We wanted to make sure everyone was accountable because this is important — not just because the law says it is, but it’s important to our company values.” Bingham is an active member on nonprofit boards, including Chicago-based legal diversity organization Just the Beginning and the Legal Aid and Defender Association, among many others.

“This partnership has essentially eliminated the age-old issue that legal departments face of not being informed about business changes at all or maybe at the last minute,” she wrote in a nomination letter for Crain’s.

“Our attorneys are true business partners who sit at the table and add value to the decision-making process.” Kelley, who has held her post since 2009, points to a number of other programs as having a positive impact on the company under her leadership. She led the creation of an information management governance committee to work on

information management, security and privacy. Likewise, a patent committee was created to help with intellectual property issues. Meijer also has been able to keep its legal costs low. Kelley attributes that to managing work internally, working efficiently with fewer attorneys and being vigilant in pursuing recoveries from third parties.

— Dustin Walsh

— Daniel Duggan

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT: LAW â&#x20AC;&#x201C; GENERAL AND IN-HOUSE COUNSEL AWARDS

WINNER: Pro bono

Michelle Busuito Age: 32 Title: Assistant general counsel, Suburban Mobility Authority for Regional Transportation Recent achievement: Organized fundraisers and awareness for untested rape kits in Wayne County that led to a formalized initiative.

n 2009, more than 11,000 untested DNA rape kits were discovered in an abandoned Detroit police storage unit â&#x20AC;&#x201D; drawing shocked international

attention. Wayne County Prosecutor Kym Worthy and others, horrified by the discovery, made analysis of the backlog a priority. The work reportedly has resulted in 15 convictions so far, but the processing isnâ&#x20AC;&#x2122;t over. Each kit costs $49 to test, and the cash-strapped government agencies need money to test 2,300 kits. There are similar collections of untested kits in cities nationwide. Thatâ&#x20AC;&#x2122;s not the typical work for a

Â&#x153;Â&#x161;Â&#x2018;Â˘Â&#x160;Â¤Â§Â&#x2014;Â&#x160;Â¤Â&#x201C;Â&#x153;Â&#x161;ÂŁ Â&#x201C;Â&#x152;Â&#x2019;Â&#x17D;Â&#x2014;Â&#x2014;Â&#x17D; ÂŚÂŁÂŚÂ&#x201C;Â¤Â&#x153; á şá ¸á šá ˝ Â&#x17D;Â&#x161;Â&#x17D;ÂĄÂ&#x160;Â&#x2014; Â&#x153;ÂŚÂ&#x161;ÂŁÂ&#x17D;Â&#x2014;

ÂĄÂ&#x153; Â&#x153;Â&#x161;Â&#x153; ÂŞÂ&#x160;ÂĄÂ? Â&#x201C;Â&#x161;Â&#x161;Â&#x17D;ÂĄ Thank you for your hard work and dedication to SMART and the community!

corporate attorney. But, it is for Michelle Busuito. â&#x20AC;&#x153;I live in this city,â&#x20AC;? she said, â&#x20AC;&#x153;and you canâ&#x20AC;&#x2122;t have economic potential if you donâ&#x20AC;&#x2122;t feel safe. This is something that presented itself to me, and I saw a way to help give it a voice.â&#x20AC;? Busuito got involved with the cause through some friends in 2013 and helped raise money for and awareness about the untested rape kits. She remains with the program as part of an advisory committee. Part of her role was fundraising â&#x20AC;&#x201D; in particular in March 2014, when actress Mariska Hargitay, who plays a sex crimes investigator on TVâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Law & Order: Special Victims Unit,â&#x20AC;? visited Detroit as part of her activism for victims of sexual assault and abuse. One fundraiser was to educate state elected officials about the untested rape kits â&#x20AC;&#x201D; and Gov. Rick Snyder has since signed legislation that puts timelines on how health agencies and police departments

handle sexual assault evidence kits. The other event was to raise awareness in the business community. The success of the event led to a more formal campaign: Enough Sexual Assault in Detroit. The Enough SAID campaign is an independent collaboration of the Michigan Womenâ&#x20AC;&#x2122;s Foundation, the Wayne County Prosecutorâ&#x20AC;&#x2122;s Office and the Detroit Crime Commission. Busuito, whose day job is assistant general counsel for the local suburban bus system, was part of the public launch of the campaign in January. She continues to act as an adviser and leader for the effort. Before her position at SMART, she worked as a clerk for the Michigan Supreme Court, where she saw a lot of criminal cases. The experience underscores, in her mind, the importance of giving a voice to crime victims. The campaign is the mechanism to raise funds to provide the

support necessary to process the kits and investigate and prosecute offenders on behalf of the victims, she said. Busuito also helped organize the sexual assault â&#x20AC;&#x153;Take Back the Nightâ&#x20AC;? event, scheduled to take place April 26 at her alma mater, Kalamazoo College. â&#x20AC;&#x153;Rape doesnâ&#x20AC;&#x2122;t know socioeconomics or any kind of boundaries,â&#x20AC;? Busuito said. â&#x20AC;&#x153;And when itâ&#x20AC;&#x2122;s something that will impact one in five women, I think about all the women in my life, like my younger sisters, and that makes this such a personal fight.â&#x20AC;? Her work on this project has had an impact, said Wendy Richards, a judge of this yearâ&#x20AC;&#x2122;s awards and director of legal and policy programs for Michigan Community Resources. â&#x20AC;&#x153;What made Michelleâ&#x20AC;&#x2122;s project stand out is that it did provide access to justice to those who appear to have been denied.â&#x20AC;?

FINALIST: Pro bono

Somewhere between working on patents for students, helping run an auto-oriented nonprofit and offering intellectual property advice to nonprofits, William Coughlin has a day job. A big day job. As president and CEO of Ford Global Technologies and an assistant general counsel with Ford Motor Co., he oversees intellectual property for the Dearborn-based automaker. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s ideal when you can find a project that is important for the company â&#x20AC;&#x201D; and thatâ&#x20AC;&#x2122;s really important â&#x20AC;&#x201D; but also means something for the community,â&#x20AC;? Coughlin said. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s a real joy when you can find that.â&#x20AC;? Coughlin helped launch a pro bono program through the U.S. Patent & Trademark Office in Detroit to help low-income inventors get the experienced patent lawyer help they need to protect their inventions. â&#x20AC;&#x153;Students and young people, as history has shown us, have some of the brightest ideas but lack the

resources to protect them,â&#x20AC;? he said. â&#x20AC;&#x153;This is kind of like a chance to set them on a path to change the world.â&#x20AC;? In addition, Coughlin has helped launch Autoharvest, a nonprofit that serves as a neutral and global online meeting place for innovators with an interest in advanced manufacturing intellectual property. He also has worked worked with Michigan Community Resources on a list of questions that nonprofits should be asking themselves about intellectual property. â&#x20AC;&#x153;You donâ&#x20AC;&#x2122;t always think about nonprofits as having IP problems, but there are a lot of questions they need to be asking themselves,â&#x20AC;? Coughlin said. â&#x20AC;&#x153;The donor lists they use, the materials they create, licensing issues, there are a lot of questions that need to be asked.â&#x20AC;?

William Coughlin Age: 61 Title: President and CEO, Ford Global Technologies, and assistant general counsel, Ford Motor Co. Recent accomplishments: Helped launch a pro bono project with the U.S. Patent & Trademark Office to help entrepreneurs and students, out of a desire to see more patents from idealistic people make it to the marketplace.

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT: LAW – GENERAL AND IN-HOUSE COUNSEL AWARDS

WINNER: Private company, $100 million to $1 billion in revenue

Daniel Follis Jr. Age: 49 Title: Former senior vice president, general counsel and secretary, Compuware Corp. Recent accomplishment: In 2014, he worked on the divestiture of three business units and the sale of an iconic Detroit office building, then helped take Compuware private in a $2.4 billion M&A deal.

t was a career year in 2014 for

IDaniel Follis Jr. — one that seemed

more like a career than a year. It began in January with the hyper-aggressive New York City hedge fund, Elliott Management Corp., agreeing to hold off on any further efforts to advance a takeover bid it had announced in December 2012. A few days later, Compuware sold three underperforming units to a Los Angeles-based private equity firm for $160 million. In August came secret negotiations with Thoma Bravo LLC, a Chicago-based private equity firm, with a deal announced Sept. 2 that the Detroit-based information technology company was being sold for $2.5 billion. Later in September, the company announced it was splitting into two units, with the mainframe business continuing to operate under that name and the business that helps companies monitor the performance of their software applications in real time operating as Dynatrace. In October, Compuware’s board approved a plan to distribute to its shareholders the 82 percent of stock the company owned in Covisint

Corp., which it had spun out in an initial public offering in 2013. And in December, Compuware shareholders approved the sale to Thoma Bravo. On top of that, there was a real estate deal — first reported by Crain’s in November — to sell Compuware’s headquarters in Campus Martius to Dan Gilbert’s Bedrock Real Estate Services and Meridian Health for $142 million. “Compuware didn’t need to be in the real estate business,” Follis said. “It was more expensive to be landlord with the space we needed than it was to be a tenant.” Others in the business world took notice of the breakneck pace at Compuware in 2014. “It was staggering how much Compuware accomplished in a year,” said Jesse Cohn, the Elliott Management portfolio manager who had led negotiations with Compuware. “I worked a lot with outside counsel, Skadden, Arps, and they were blown away by what we went through in a year,” said Follis, referring to the New York law firm of Skadden, Arps, Slate, Meagher & Flom LLP. “Every day was an adventure. It was the opportunity of a lifetime and fun to be part of,” said Follis, who joined Compuware in 1998 and was promoted to general counsel in 2008. He resigned earlier this year. “With the company going private and the change in executive leadership, I decided it was the right time to pursue new opportunities,” he said. He looks back on all the deals as having a positive impact on the company and the city. “It was great working with Bob Paul, Joe Angileri and the team,” he said. Paul was chairman and CEO and Angileri president. “It worked out well. We executed on the plan. We kept the company in Detroit. People still have their jobs.” — Tom Henderson

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPECIAL REPORT: LAW – GENERAL AND IN-HOUSE COUNSEL AWARDS

WINNER: Rising star

Sean Etheridge Age: 36 Title: Legal counsel, Stryker Corp., Kalamazoo Recent achievement: Led Stryker’s legal team in the asset acquisition of privately held CHG Hospital Beds Inc., bolstering Stryker’s hospital bed offerings.

mentor once told Sean

AEtheridge: Always find ways to increase expertise.

And he’s had a long list of experiences early in his career. Etheridge has worked through

complex corporate transactions, lighter entertainment law work and, most recently, mergers and acquisitions for a global medical technology company with nearly $9.7 billion in annual revenue. Building a track record of corporate deals, however, hasn’t pulled him away from giving back through pro bono work. That has included, at the law firm Morrison & Foerster LLP in San Diego, representing an Iranian

citizen seeking political asylum in the United States. Etheridge was lead counsel in the case and argued against the U.S. Department of Homeland Security, winning his client asylum. The case was many things — intense, fulfilling, stressful and time-consuming — and it also showed Etheridge the “blood, sweat and tears” that can go into such personal work, every day. “It was very eye-opening, at the beginning of my career,” he said. He moved on to a firm in Chicago and then to Honigman Miller Schwartz and Cohn LLP’s Ann Arbor office as a partner focused primarily on private equity and

venture capital deals. Working at Honigman with a variety of industries, Etheridge said, he got “a great experience being on the front line of deals, learning to manage teams, learning to interface with clients. “It was really a great place to establish a solid foundation for me to be able to act as a subject matter expert … for mergers and acquisitions,” he said. And acquisitions are a focus at Stryker Corp., where Etheridge joined the company’s corporate law and securities group and in less than a year led the legal team in acquiring London, Ontario-based CHG Hospital Beds Inc.

The all-cash transaction, terms of which were not disclosed, brought into Stryker CHG’s manufacture and sales of products, including low-height hospital beds that reduce the risk of patient falls. As part of a three-person group housed in Stryker’s approximately 50-person legal department, Etheridge also assists Stryker business units with matters such as corporate ethics and governance, regulatory filings, bond offerings and commercial contracts. Etheridge said working at one company with 18 divisions — customers, for him — presents an opportunity to learn. “I think I’m really excited to dive more deeply into Stryker at this point,” he said. “It’s really a knowyour-customer approach that I’m hoping to take over the next few years.” — Amy Lane

Employers and Lawyers, Working Together

FINALIST: Rising star

Christina Flint Age: 31 Title: Assistant general counsel, Diplomat Pharmacy Inc. Recent accomplishment: Working with a legal and financial team that acquired three companies and executed an initial public offering.

or Christina Flint, her career

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right place at the right time. What started with an idea of looking for a job closer to her home ended with her in the position to work on an initial public offering, three acquisitions and rapidly climb the organizational chart at a major company. After working at two metro Detroit law firms — Dickinson Wright PLLC and Hall, Render, Killian, Heath & Lyman PLLC — she started thinking about an in-house legal position. Also on the list was something closer to her Grand Blanc home. It turned out the fast-growing, Flint-based Diplomat Pharmacy was looking for an in-house attorney. “It was a perfect fit,” she said. From there, Flint was off and running. Diplomat has been in growth mode; acquiring companies and preparing for its October IPO. As a young attorney, it was a chance for Flint to play a role in that complicated transaction, as well as three M&A deals. It’s led to greater responsibilities as she’s been promoted three times since joining the company in 2012. “It’s been a chance to be exposed to new areas that I’d never be exposed to otherwise,” she said. “Part of it is the right place at the right time, and part of it is that my boss let me take the reins on some significant contracts.” — Daniel Duggan

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SPECIAL REPORT: LAW – GENERAL AND IN-HOUSE COUNSEL AWARDS

John Dean set to keynote Crain’s counsel awards dduggan@crain.com

When it comes to fascinating tales of abuses of power and coverups, nothing tops Watergate. Detroit’s legal community will have a chance to hear those stories from the trenches — direct from the attorney who had a front-row seat: John Dean. Dean, who was counsel to President Richard Nixon from July 1970 to April 1973, will be the keynote speaker for the fifth annual Crain’s General & In-house Counsel Awards on June 10 at the Westin Book Cadillac Detroit. In recent years, Dean has become a national speaker on ethics and policy. His speeches for attorneys include tapes from the Library of Congress archives and his own take on an attorney’s role in advising the president of a potential wrong-doing. He’s written numerous books on his time in the White House, including the most recent: The Nixon Defense: What He Knew and When He Knew It. The keynote presentation will cap an event focused on in-house attorneys.

Winners of the General Counsel of the Year awards, profiled on pages 1116, will be recognized at the event. There will be a portion of the event open only to in-house attorneys so they can share best practices privately. Later in the day, panel discussions will dive into practical information for in-house attorneys. Hot topics to be addressed: 䡲 Managing the ups and downs of the business cycle. 䡲 What your CFO wants you to know: Practical financial advice for attorneys. 䡲 E-discovery: The bigger picture on strategies for discovery as case research becomes more immersed in technology. 䡲 Cybersecurity: Proactive approaches for legal teams to take. The title sponsor of the event is Ogletree, Deakins, Nash, Smoak & Stewart PC . The event is hosted in partnership with the Michigan chapter of the Association of Corporate Counsel and the State Bar of Michigan-Business Law Section InHouse Counsel. Individual tickets are $150. To register, go to crainsdetroit.com/events. 䡲

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Ruling: Work-from-home request not reasonable By Judy Greenwald Crain News Service

A federal appeals court ruling that telecommuting was not a reasonable accommodation for a disabled Ford Motor Co. worker under the federal Americans with Disabilities Act is a significant victory for employers that could have created problems for businesses had the court ruled otherwise. “Had it gone the other way, the floodgates would have opened” for employees to seek telecommuting accommodations, said Michael Soltis, a shareholder with law firm

Jackson Lewis PC in Stamford, Conn., of this month’s 8-5 ruling by the Sixth U.S. Circuit Court of Appeals in Cincinnati in Equal Employment Opportunity Commission v. Ford Motor. Jane Harris worked as a resale buyer for Ford Motor Co. and suffered from irritable bowel syndrome, according to court records in the case. In 2009, Harris’ supervisors denied her request to telecommute up to four days a week as an accommodation for her disability, concluding her position was not suitable for it. She was terminated in 2009, after she had filed a discrimi-

nation charge with the EEOC. Last week’s en banc ruling reversed an April 2014 ruling by a three-judge appeals court panel that ruled in the EEOC’s and Harris’ favor. The most recent ruling, which granted Ford summary judgment dismissing the case, said the ADA “does not endow all disabled persons with a job — or job schedule — of their choosing” and that “regular and predictable attendance” was a requirement of Harris’ job with Ford. An EEOC spokeswoman said, “We are reviewing the decision and con-

“Had it gone the other way, the floodgates would have opened.” Michael Soltis,Jackson Lewis PC

sidering our options.” “It’s a big win for employers and is pretty much of a bench slap to the EEOC in terms of it not even being a close case, according to the en banc majority,” said Gerald Maatman, a partner at law firm Seyfarth Shaw LLP in Chicago.

The earlier appeals court panel ruling “was a step away from how courts had ruled” on this issue, and created employer uncertainty that has now been resolved, said Mark Girouard, a shareholder with law firm Nilan, Johnson, Lewis P.A. in Minneapolis. Despite the ruling, however, employers should still look at each telecommuting request “on its own merits,” advised Jonathan Yarbrough, a partner with law firm Constangy, Brooks, Smith & Prophete LLP

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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.

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 May 11. Winners will be notified this summer. Nominations are submitted online and can be found at crainsdetroit.com/section/no minate. For questions regarding the nominations: Contact Bill Shea at bshea@crain.com or (313) 446-1626.

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For technical questions regarding the nomination form: Contact YahNica Crawford at ycrawford@crain.com or (313) 4461641.

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS // April 27, 2015

CRAIN'S LIST: LARGEST LAW FIRMS Ranked by number of attorneys in Southeast Michigan Company Address Rank Phone; website

Top local executive

Total local attorneys Jan. Of 2015/ Partners Associates Counsel Paralegal Michigan Worldwide 2014 2015 2015 Other 2015 2015 Jan. 2015 Jan. 2015 Representative clients

David Foltyn chairman and CEO

208 205

162

248

Honigman Miller Schwartz and Cohn LLP 2290 First National Building, 660 Woodward Ave., Detroit 48226-3506 (313) 465-7000; www.honigman.com

BlackEagle Partners; DIA; GM; Huron Capital Partners; Kellogg; Ramco-Gershenson; Rock Financial/Quicken/Rockbridge; Taubman; Trinity Health; and Village Green

Dickinson Wright PLLC 500 Woodward Ave., Suite 4000, Detroit 48226 (313) 223-3500; www.dickinsonwright.com

William Burgess CEO

168 165

130

209

388

Aetna, AT&T, Beaumont Health' Carhartt, FCA US LLC, Ford, Johnson Controls, J.P. Morgan Chase Bank N.A., Kettering University, Quantum Health, Wal-Mart

Dykema Gossett PLLC 400 Renaissance Center, Detroit 48243 (313) 568-6800; www.dykema.com

Peter Kellett chairman and CEO

152 159

180

346

Ford, International Transmission Co., Onewest Bank FSB, Ocwen Financial Corp, JP Morgan, GM, Cedarcrestone, Bank of America, Ismie Mutual Insurance, Nationstar Mortgage

Michael McGee CEO

139 141

182

253

Miller, Canfield, Paddock and Stone PLC 150 W. Jefferson Ave., Suite 2500, Detroit 48226-4415 (313) 963-6420; www.millercanfield.com

Chrysler, Comerica, Ford, Detroit Edison, Meritor, Siemens, BorgWarner, City of Detroit, Michigan Finance Authority

Ralph McDowell chairman

137 132

100

141

Bodman PLC Sixth Floor at Ford Field, 1901 St. Antoine St., Detroit 48226 (313) 259-7777; www.bodmanlaw.com

Comerica Bank; Bank of America; Archdiocese of Detroit; Blue Cross Blue Shield of Michigan; Lear Corp.; Ford family; Grede Holdings; Key Plastics; Meridian Health Plan; Sparton Corp.

Clark Hill PLC 500 Woodward Ave., Suite 3500, Detroit 48226 (313) 965-8300; www.clarkhill.com

John Hern CEO

124 126

148

298

Justin Klimko president and managing shareholder Bill Sider CEO and managing partner

114 109

118

132

Butzel Long PC 150 W. Jefferson Ave., Suite 100, Detroit 48226 (313) 225-7000; www.butzel.com

Beaumont Health, MGM Grand, Dura Automotive, KSPG Automotive, Indian Head, UM, Oakland Community College, Exxon Mobil

104 100

104

Sun Communities, Strength Capital Partners, Redico

Plunkett Cooney PC 38505 Woodward Ave., Suite 2000, Bloomfield Hills 48304 (248) 901-4000; www.plunkettcooney.com

Henry Cooney president and CEO

98 108

131

142

Kitch Drutchas Wagner Valitutti & Sherbrook PC 1 Woodward Ave., Suite 2400, Detroit 48226-5485 (313) 965-7900; www.kitch.com

Mark Wisniewski chairman/CEO

92 84

100

Bank of America, Huntington National Bank, First American Title Insurance, Beaumont Health, Liberty Mutual Insurance Co., Michigan Municipal League, PNC Financial Services Group, The Travelers Cos., Frankenmuth Mutual Insurance Co., The Doctors Co. State Farm Mutual Insurance, Henry Ford Health, AIG Property Casualty, MHA Insurance Co., Tenet Health, Ascension Health, Ciena Healthcare, HCR Manorcare, Allegiance Health, Utica Mutual Insurance

Brooks Kushman PC

Mark Cantor president

76 72

Giarmarco, Mullins & Horton PC 101 W. Big Beaver Road, 10th Floor Columbia Center, Troy 48084-5280 (248) 457-7000; www.gmhlaw.com

Executive committee

70 70

70 59

Howard & Howard Attorneys PLLC 450 W. Fourth St., Royal Oak 48067 (248) 645-1483; www.howardandhoward.com

John Gillooly chairman of executive committee Mark Davis president and CEO

Garan Lucow Miller PC 1000 Woodbridge Place, Detroit 48207 (313) 446-1530; www.garanlucow.com

66 67

125

BASF; BMO Harris Bank N.A.; Chrysler Group; Dow Corning; Konami Gaming; Magna Mirrors of America; Sears Holdings; ThyssenKrupp

Jeff Raff, Macy Ford and Jeff Weisserman managing partners

63 73

Bank of America, J.P. Morgan, Wells Fargo, Comerica

Trott Law PC B 31440 Northwestern Hwy., Suite 200, Farmington Hills 48334 (248) 642-2515; www.trottlaw.com

8 9 10

Jaffe Raitt Heuer & Weiss PC 27777 Franklin Road, Suite 2500, Southfield 48034-8214 (248) 351-3000; www.jaffelaw.com

Town Center, 22nd Floor, Southfield 48075 11 1000 (248) 358-4400; www.BrooksKushman.com

This list is an approximate compilation of the largest law firms in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Total number of attorneys does not include of counsel. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the law firms. Firms with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available.

B Formerly Trott & Trott PC LIST RESEARCHED BY SONYA D. HILL

Continued on Page 23

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS // April 27, 2015

CRAIN'S LIST: LARGEST LAW FIRMS Ranked by number of attorneys in Southeast Michigan From Page 21 Company Address Rank Phone; website

Top local executive

Total local attorneys Of Jan. 2015/ Partners Associates Counsel Paralegal Michigan Worldwide 2014 2015 2015 Other 2015 2015 Jan. 2015 Jan. 2015 Representative clients

Harness, Dickey & Pierce PLC

Executive committee

59 62

105

Kerr, Russell and Weber PLC

Executive committee

55 55

AVL Test Systems, Michigan State Medical Society, Quantum Fuel Systems Technologies, Shanghai Zhongli Automobile Parts, Volkswagen Group, Wade-Trim Associates

Mark Morley and Bruce Truex co-chairmen, executive committees

51 54

Secrest, Wardle, Lynch, Hampton, Truex and Morley PC 2600 Troy Center Drive, P.O. Box 5025, Troy 48007-5025 (248) 851-9500; www.secrestwardle.com

Anthony Asher president and CEO

50 50

Sullivan, Ward, Asher & Patton PC 25800 Northwestern Hwy., 1000 Maccabees Center, Southfield 48075-8412 (248) 746-0700; www.swappc.com Collins, Einhorn, Farrell & Ulanoff PC 4000 Town Center, Suite 909, Southfield 48075 (248) 355-4141; www.ceflawyers.com

Neil MacCallum chairman Michael Sullivan president Mark Zausmer managing shareholder

43 41

41 37

ITC Holdings, Philadelphia Ins, State Farm Mutual Auto, Farm Bureau Insurance, EMC Insurance, SMART, City of Dearborn, Auto Owners Ins, Wal-Mart, Pall Life Sciences

Maddin, Hauser, Roth & Heller, P.C. 28400 Northwestern Highway, Southfield 48034-1839 (248) 354-4030; www.maddinhauser.com

Mark Hauser CFO Steven Sallen president

40 42

William Jansen Executive partner

39 37

192

Warner Norcross & Judd LLP 2000 Town Center, Suite 2700, Southfield 48075-1318 (248) 784-5000; www.wnj.com

Fifth Third Bank, TCF National Bank, Shellpoint Mortgage Servicing, Kroger Co., Garden Fresh Salsa Co. Inc., CNA Insurance Co., Zurich North America, The Hartford, AIG, Fidelity National Title Group, First Merit Bank, Level One Bank, Nationstar Mortgage, M1 Concourse Amway, Borg Warner' Consumers Energy, Dow Chemical, Fifth Third Bank, Mahle Industries, Spectrum Health, Stryker, Robert Bosch, Whirlpool

Ralph Castelli Jr. president, CEO and managing partner

37 33

Kemp Klein Law Firm 201 W. Big Beaver Road, Suite 600, Troy 48084-4161 (248) 528-1111; www.kempklein.com Vandeveer Garzia, P.C.

William Kiriazis president

36 32

Allstate, Travelers, Coca Cola, CNA, Delta Air Lines, Life Time Fitness, Progressive Insurance, Southwest Airlines, Citizens Insurance

Gregory Wysocki CEO and managing partner

35 35

Kotz Sangster Wysocki PC 400 Renaissance Center, Suite 3400, Detroit 48243-1618 (313) 259-8300; www.kotzsangster.com

BMT Aerospace USA; Detroit Economic Growth; Olga's Kitchen; Peerless Steel; Skanska USA Building; Salvation Army; Trico Products; TTi Global; Virginia Tile; ZF North America

Daljit Doogal Detroit office managing partner

33 34

812

Foley & Lardner LLP One Detroit Center, 500 Woodward Ave., Suite 2700, Detroit 48226-3489 (313) 234-7100; www.foley.com

Wynnchurch Capital, Kohler Co., Nexteer Automotive, Amcor Limited, Visteon Corporation, TI Automotive, Steve Madden LTD, Suncoke Energy, Tower Automotive, Pulte Group

Management committee

33 32

Dawda, Mann, Mulcahy & Sadler PLC 39533 Woodward Ave., Suite 200, Bloomfield Hills 48304 (248) 642-3700; www.dawdamann.com

Young Basile Hanlon & MacFarlane PC 3001 W. Big Beaver Road, Suite 624, Troy 48084 (248) 649-3333; www.youngbasile.com

Andrew Basile Jr. president

33 31

30 30

30 28

134

Borroughs, Bradford White, Kellogg, Flagstar Bank, GeorgiaPacific, Kawasaki Motors, Metro Health Hospital, Michigan Sugar, Sappi/S.D. Warren, Sauder Woodworking

Corporate Drive, Suite 200, Troy 48098 16 5445 (248) 641-1600; www.hdp.com Woodward Ave., Suite 2500, Detroit 48226 17 500 (313) 961-0200; www.kerr-russell.com

20 21 22

Zausmer, August & Caldwell PC 31700 Middlebelt Road, Suite 150, Farmington Hills 48334 (248) 851-4111; www.zkac.com

W. Long Lake Road, Suite 600, Troy 48098 25 840 (248) 312-2800; www.vgpclaw.com

30 30 32 32 34

Bruce Kahn Seyburn Kahn PC 2000 Town Center, Suite 1500, Southfield 48075 co-managing shareholder, (248) 353-7620; www.seyburn.com executive VP Michael Santeufemia co-managing shareholder Richard Hooker Varnum LLP and Scott 39500 High Pointe Boulevard, Suite 350, Novi Huizenga 48375 partners (248) 567-7400; www.varnumlaw.com Couzens, Lansky, Fealk, Ellis, Roeder & Lazar PC 39395 W. 12 Mile Road, Suite 200, Farmington Hills 48331 (248) 489-8600; www.couzens.com

Jeffrey Levine managing partner

29 32

Talmer Bank, Prince Group, Nissan, Police & Fire Retirement/ General Retirement Systems of Detroit, Security Corp., First American Title Insurance, Flagstar Bank, Midway Products Group, Ashley Capital

Cummings, McClorey, Davis & Acho PLC 33900 Schoolcraft Road, Livonia 48150 (734) 261-2400; www.cmda-law.com

Christopher Schultz managing partner

29 28

Hall, Render, Killian, Heath & Lyman PLLC 201 W. Big Beaver Road, Suite 1200, Troy 48084 (248) 740-7505; www.hallrender.com

Kimberly ComminsTzoumakas managing partner

28 41

175

Michigan Municipal Risk Management Authority; Detroit Edison; Olympia Entertainment; Michigan Community College Risk Management Authority; Plastipak; Wayne County Airport Authority; Farmer's Insurance Exchange; Consumers Energy; Dean Foods; Morley Candy Makers NA

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SPOTLIGHT ANDY FORNAROLA: Executive vice president and director of community banking, Flagstar Bank Andy Fornarola has been named executive vice president and director of community banking at Flagstar Bank in Fornarola Troy. He oversees the commercial, retail and government banking divisions, warehouse lending, consumer finance, community reinvestment, marketing and quality initiative. Fornarola, 58, was executive vice president and head of consumer finance at First Niagara Bank, Buffalo, N.Y. He has also held leadership positions at M&T Bank, Chase Manhattan and HSBC. He has a bachelor’s degree in economics from the University of Rochester (N.Y.) and an MBA from the William E. Simon Graduate School of Business Administration at the University of Rochester.

PEOPLE

Frimo Inc., Wixom, from general sales manager, Krauss Maffei Corp., Florence, Ky.

Send news items and photos to cdbdepartments@crain.com

Ed Church to vice president and treasurer, International Automotive Components Group, Southfield, from interim treasurer.

ON THE MOVE ARCHITECTURE Michael Cooper to corporate president, Harley Ellis Devereaux Corp., Southfield. He continues as managing principal. Also, Daniel Lafferty to Cooper corporate operations leader. He continues as project management leader.

to executive vice president and CFO, from vice president of finance.

LAW Steven Kohl to chairman, resources, energy and environment group, Warner Norcross & Judd LLP, Southfield, and Kurt Brauer to chairman, agribusiness and food industry group. Both are partners at the firm. Evan Kaploe to senior attorney and tax management practice group leader, Plunkett Cooney PC, Bloomfield Hills, from owner/attorney, Evan H. Kaploe

DISTRIBUTORS

Sellers

Scott Sellers to executive vice president, operations, McNaughton-McKay Electric Co., Madison Heights, from vice president of operations. Also, John Kuczmanski

Kaploe

Michael Maddelein to vice president of engineering, Inteva Products LLC, Troy, from vice president of engineering services, Tech Mahindra Ltd., Southfield.

MARKETING Jill Lulkin to business development director, pulse220, Ferndale, from director of business development, Conpoto LLC, Detroit.

Lulkin

MEDIA Scott Meier to Detroit market manager, Spartan Sports Network, Farmington Hills, from president and COO, ViewTurn.com, Troy.

PLLC, Southfield.

MANUFACTURING

NONPROFITS

Steve Willis to director of sales,

Kim-Lan Trinh to director of

planned giving and major gifts, United Methodist Retirement Communities Foundation, Chelsea, from associate director of development, Michigan Opera Theatre, Detroit. Diane Banks to project manager, programs, Leadership Macomb Inc., Mount Clemens, from environmentalist III, Macomb Banks County Health Department, Mount Clemens. Also, Kristen Di Felice to project manager, public relations, social media and events, from project manager, Constellation Communication Corp., Atlanta.

SERVICES Veronica Malia to managing director, domestic outsourcing, Genesis10, Troy, from senior vice president, portfolio manager, Bank of America, Troy. Nicole Sokloski to events manager, Display Group, Detroit, from sales manager, Emerald City Designs LLC, Farmington Hills.

Sokloski Art Eckert to vice president, project and development services, Jones Lang LaSalle Inc., Royal Oak, from vice president, Plante Moran Cresa LLC, Southfield. Joseph Pongracz to program manager, Ford Motor Co. programs, Process Development Corp., Canton Township, from engineer.

2,700 MILES OF HIGH-SPEED MICHIGAN

Jud Hudnut to program manager, Residex LLC, Novi, from Midwest region sales manager, Turfgrass division, Residex LLC, Howell.

TECHNOLOGY

Winter

Scott Jackson to vice president sales, Gravity Software LLC, Southfield, from senior vice president of business development, Columbus, Royal Oak.

123Net has a high-speed ﬁber optic network stretching 2,700 miles across Michigan, and we’re not stopping anytime soon. We’re always ready to go the extra mile, ensuring Michigan businesses have access to reliable, high-capacity connectivity.

YOUR BACKBONE FOR BUSINESS F I BE R • COL OC ATI ON • VOI C E • W I R E L E SS

Trisha Winter to chief marketing officer, Amplifinity Inc., Ann Arbor, from vice president of brand and communications, Dynatrace LLC, Detroit.

866.460.3503

123. NET

People on the Move announcements are limited to management positions. Email cdbdepartments@crain.com. Include person’s name, new title, company, city in which the person will work, former title, former company (if not promoted from within) and former city in which the person worked. Photos are welcome, but we cannot guarantee they will be used.

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CRAIN’S DETROIT BUSINESS // April 27, 2015

DEALS

Website: transitionslegal.com.

Hallite Seals Americas Inc., Wixom, a global manufacturer of hydraulic sealing solutions and a member of the Fenner PLC Group of companies, introduced the compact double acting piston seal, replacing the company’s legacy 714 series. Website: hallite.com.

Joe Blachy Call Me: 231-409-9119

Schmidt Realtors 420 Howard Petoskey MI

STARTUPS

MOVES

SANDUSKY BEACH HOUSE Vacation Rental. 4 Bdrms/3 Full BA. Private Beach in Front. Sandusky Bay in Back w/private dock. 2.7 Miles from Cedar Point. Fully Equipped Kitchen. Washer/Dryer. Gas Grill. Wifi. Large House. GHDJAPTS@LIVE.COM for flyer. 937-542-1420

APARTMENT BUILDINGS

HAZEL PARK

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.

24 Unit Apartment Building 100% Occupied, Onsite Manager $639,000 Cash Out.

586-786-6118

Networking Reception. 5:30 p.m. 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 Oldenburg, (313) 596-0482; email: moldenburg@detroit chamber.com; website: detroit chamber.com/events.

Freed, president and CEO, Priority Health; and Steven Brill, attorney and author of American’s Bitter Pill. Detroit Marriott Renaissance Center. $45 DEC members, $55 guests of DEC members, $75 nonmembers. Ticket sales end at noon April 29. Contact: (313) 963-8547; email: info@econclub.org; website: econclub.org.

THURSDAY

UPCOMING EVENTS

America’s Bitter Pill. 11:30 a.m.1:30 p.m. Detroit Economic Club. Speakers: Nancy Schlichting, CEO, Henry Ford Health System; Michael

Energy Conference & Exhibition 2015. 8 a.m.-3 p.m. May 5. DTE Energy and the Engineering Society of Detroit. Christopher McGill, vice

Vets Business Boost. 1:30-5 p.m. (Check in starts at 1 p.m.) May 5. Michigan Department of Technology, Management and Budget Procurement’s Contract Connect. Veteran-owned businesses looking for contracting opportunities will learn the ropes. Presentations from the Procurement Technical Assistance Center, Pure Michigan Business Connect, Vet Biz Central and the National Veteran Business Development Council. Free. Constitution Hall, 525 W. Allegan, Lansing. Contact: DTMB-micontractconnect@ michigan.gov. 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.

i ss a

ABSOLUTE

AUCTION

GROSSE POINTE FARMS

WEDDING SERVICES

E S T A

Waterfront Weddings T

R O S E

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. The event 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.

president of policy analysis, American Gas Association, is the keynote speaker. 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.

Crain’s 2015 M&A Awards

Ren a

WEDNESDAY 10th Annual Nonprofit Manage ment Conference. 8 a.m.-3 p.m. Troy Chamber of Commerce. Conference includes continental breakfast and lunch, networking 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 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.

and el

e nc

CALENDAR

MARKET PLACE

AUCTIONS Ri d

Transitions Legal PLLC has moved from 40900 Woodward Ave., Bloomfield Hills, to 280 N. Old Woodward Ave., Suite LL20, Birmingham. Telephone: (248) 290-0560.

WATERFRONT PROPERTY

AUCTIONS

Axion RMS Ltd., an insurance broker and risk management consulting firm, has opened at 39111 Six Mile Road, Livonia. Telephone: (734) 432-3150. Website: www.axionrms.com.

UltraLevel Inc., Southfield, an IT provider, has launched CloudSafe Ltd. a new company designed to handle private cloud computing. The company operates out of SSAE-16 (Statements on Standards for Attestation Engagements) audited data centers in Southfield and Grand Rapids. Websites: cloudsafe.com, ultralevel.com.

EMAIL: joe@joeblachy.com

FOR ALL FACTS: joeblachy.com

OpTech LLC, Troy, an IT, engineering and health care talent management firm, was awarded a

An Educational-Informational Guided Tour of Real Estate Styles and $-Values. Including Highlights of Cultural, Recreational, Medical and People Resources. To explore Homes and Condos for “Soon to Retire” & Family Vacations Wednesday June 10 - 7 PM Through Saturday June 13 - 1 PM Quality Tour includes: Hotel, Petoskey Area Bus, Most Meals, Professional Broker-Guide: $499 per person

B Y

Fourmidable Group Inc., Bingham Farms, a property management firm, has been named the management company for four new residential communities to be constructed in Tennessee. Website: fourmidable.com.

EXPANSIONS Patti Engineering Inc., Auburn Hills, has opened its fourth office, in Chattanooga, Tenn., to meet manufacturers’ need for specialized automation integration expertise. Website: pattieng.com.

LUXURY PROPERTY

MGM Grand Detroit, Detroit, a casino owned by MGM Resorts International, announced that McCann Detroit, Birmingham, is now its integrated agency of record. Websites: mgmgranddetroit.com, mccanndetroit.com.

task order with the U.S. Coast Guard for electronic support services. The award is through the Department of Homeland Security and allows OpTech to compete on future task orders. Website: optechus.com.

Continental Automotive Systems Inc., Auburn Hills, an international automotive supplier, has developed Trailer Reverse Assist, a trailer detection and control system that uses a rear camera for enhanced viewing and control.The trailer can be steered with a knob from inside the vehicle or from a wireless tablet/smart device. The technology will be ready for production in 2018. Website: continentalautomotive.com.

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Call Us For Personalized Service: (313) 446-6068 CLOSING TIMES: Monday 3 p.m., one week prior to publication date. Please call us for holiday closing times. FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds Confidential Reply Boxes Available PAYMENT: All classified ads must be prepaid. Checks, money order or Crain’s credit approval accepted. Credit cards accepted.

See Crainsdetroit.com/Section/Classifieds for more classified advertisements

Submit news to cdbdepartments@crain.com

CONTRACTS

REAL ESTATE

NEW PRODUCTS

& DETAILS Condominium Management Associates LLC, Farmington Hills, a property management firm, announced it has been retained to provide services to The Fifth Royal Oak Luxury Loft Condominiums, Royal Oak; Hickory Ridge of Rochester Hills, Rochester Hills; West Bloomfield Pond, West Bloomfield Township; and Golf Ridge Villa Homes, Livonia. Website: condomanage.net.

Northern Michigan DestinationWeddingsUpNorth.com

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JOB FRONT POSITIONS AVAILABLE SMACNA (Sheet Metal and Air Conditioning Contractors N a t i o n a l Association) Metropolitan Detroit Chapter actively seeking candidate to fulfill role of Executive Director. Position desires minimum 4 year Bachelor’s Degree with 10 years HVAC or construction Association industry experience highly preferred. Must have strong experience in following areas: public relations, meeting / planning, labor relations, industry relations, governmental affairs, budgeting / financial management, Association Management administration. Excellent communication and problem solving skills required. Candidate must be willing to travel 4-6 times annually. Full time position comes with excellent Salary, Car Allowance, Health Benefits, Vacation and 401K. Send resume or email request for full job description at smacnadresume@gmail.com Application deadline April 30, 2015.

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CRAIN’S DETROIT BUSINESS // April 27, 2015

SURF, from Page 3: Dude, it turns out that the Motor City makes waves in the water pack of shirts literally everywhere we went,” he said. “It went to a truck full to a van full to a house full of stuff. I asked myself, ‘Am I doing my real job, or am I doing this?’ ” The recession in 2009-10 made the choice for him. “It was hard to making money as an independent internet access company,” he said. He closed his consulting business in 2010 and devoted his time to the Detroit Surf Co., creating more designs and products, and adding items aimed at women and children. Not long after, he ran into Matt Campbell, a veteran surfboard shaper and owner of Blkbox Surf LLC in Oakland County’s Oxford Township. They eventually decided to produce Detroit Surf Co. boards. The boards are not for rookies, but intended for veteran surfers and paddle boarders, said Tuzinowski. They serve mainly as a loss leader to give the company credibility. “We’ve had a good working relationship with them over the years. It’s a great company. Their products are 100 percent Michigan-made,” Tuzinowski said. “We essentially just started as an apparel company and moved into being an actual surf company.” Detroit Surf Co. also sells branded snowboards and skateboards. More than apparel It’s the apparel that brings home the money, about $400,000 a year

Oxford’s biz makes waves with stand-up paddle boards The Detroit Surf Co.’s surfboards come from Blkbox Surf LLC in Oakland County’s Oxford Township. Blkbox was founded in 2003 by Matt Campbell, a Rochester native who is a former pro snowboarder and surfer. The company originally created custom traditional surfboards handshaped from scratch by Campbell, but has switched to almost entirely stand-up paddle boards. Demand for SUP boards, as they’re known, has exploded. The sport has almost doubled in popularity from 2010, when it was first tracked by the Washington, D.C.-based nonprofit Outdoor Foundation’s annual outdoor sports participation report, through 2013, when it hit nearly 2 million U.S. participants. Traditional surfing has held steady at about 2.6 million participants, according to the report. Blkbox’s boards are custom from beginning of the build, meaning

right now. Pearl Jam frontman Eddie Vedder and Quicken Loans founder and Chairman Dan Gilbert have worn Detroit Surf Co. clothing, Tuzinowski said.

they don’t come from pre-formed foam blanks. Instead, Campbell creates them from scratch to client specifications, from dimensions, materials, rails and fins preferences, and graphics, said Adrienne Shifflett, a Blkbox Surf co-owner. “They’re fast but really stable,” she said. “Our boards literally are sold all over the world.” Stand-up paddleboards — users stand atop the wider than traditional surfboards and navigate with a paddle — are especially popular in the Great Lakes because they don’t require waves. “It’s really taken over the bulk of the business,” said Matt Lennert, co-owner of Blkbox Surf. Almost all of Blkbox’s 200 boards made last year were SUP boards, he said. The handful of traditional surfboards it made in 2014 were custom jobs for longtime clients. It offers custom-made carbon fiber race boards that retail for $4,000 to $5,000.

Detroit Surf Co.-branded T-shirts retail for $19.99 to $24.99, while a Dickies work shirt is $49.99. The company logo is on a Carhartt hoodie that sells for $59.99, while other hoodies are $34.99 to $44.99. A dozen styles of hats range from $14.99 to $29.99. The company also sells accessories such as mugs, dog leashes, posters and vinyl stickers. A Detroit Surf Co. surfboard or stand-up paddleboard sells for $1,900. “The margins aren’t very big on the boards. It takes a long time to shape them, about 40 hours, and the lead time to get one made is six to eight months,” Tuzinowski said. The company has sold fewer than 50 surfboards and stand-up paddleboards. “It’s a tough way to make money. It’s low margin, a lot of overhead. It’s not a way to get rich. It’s a fun part of the business, but it’s not what makes the money,” he said. Other equipment is more lucrative, with better profit margins. More recently, Tuzinowski added Detroit Surf Co.-branded snowboards, selling about 50 this past winter, he said. Engineering, design and production, done in Grand Rapids, is being worked out to handle more orders for next winter. “That’s a growing segment for us,” he said. “We’re looking for next winter to be pretty big.” The snowboards retail for $449. The company also sells about 400 branded long-board skateboards annually, which are shaped on the West Coast but are hand-finished and assembled here, he said. They retail for $75 to $139.99. “Hardest part is trying to get retailers locally to carry our products. I’m not really sure why that is. I don’t have any real stores that will sell my stuff,” he said. “The clothing will sell like mad.” Instead, he sells the hard goods

The company’s standard carbon fiber race/touring model retails for $3,399 and is the most common SUP it sells. That would translate into revenue of about $680,000 for last year. “The boards we’re making are design and performance oriented,” Lennert said. Most of the boards are for racing and touring rather than wave riding. Blkbox will begin to offer some apparel in the next year, but it will remain primarily a board maker. “Our main business model is to expand our hard goods,” Lennert said. The company intends to create more entry-level boards, and create more price points. The research and manufacturing happens in a 2,400-square-foot pole barn on Campbell’s property, which includes two sanding rooms and a glassing shop. The company does testing on a nearby lake, Lennert said. — Bill Shea

[GLENN TRIEST]

Detroit Surf Co.-branded T-shirts retail for $19.99 to $24.99. directly online or at stands. Detroit Surf Co. has space in Ferndale’s Rustbelt Market that retails soft goods but also has had boards on display for sale. “Most people know that as our de facto store,” Tuzinowski said. The company’s apparel is carried at retailers such as Shinola ’s sister store, Willys Detroit , and Caruso Caruso in Birmingham, which plans to display Detroit Surf Co. surfboards in a window clothing display this year and sell some of its skateboards in addition to the apparel. “I’m pretty stoked to work with him,” said CarusoCaruso co-owner Lennon Caruso. “If I’m going to put in it my window, I believe in it.” Lifestyle brand Tuzinowski’s business strategy is to sell premium surf apparel and develop it into a lifestyle brand. Upscale retailers don’t want inexpensive, mass-produced product on their shelves, he said. “There are a million people in Detroit selling Detroit-branded apparel. We’re not a $10 T-shirt company,” he said. “You want to be a premium brand, selling premium products. We’re focused on being a unique brand.”

[BLKBOX SURF LLC]

BlkBox founder Matt Campbell creates his boards not from pre-formed foam blanks but from scratch to customer specifications.

Tuzinowski said he ships goods daily, and has sold to clients in every state. “It’s almost to the point where it’s overwhelming,” he said. “I get up every day at 6:30 a.m. and work until 7 p.m. I’m going to need more assistance in doing so.” He has not yet cracked the brickand-mortar surf apparel market in California or Hawaii. “Most of the surf shops don’t want to clear shelf space. It’s frustrating,” he said. “Really, where the money is at is the soft goods.” The Hawaiian surf shops are dominated by the major corporate brands. “They won’t entertain any indie brands. It’s all word-of-mouth,” Tuzinowski said. But people still want Detroit Surf Co. gear, he said. “In the surfing world, you have something unique, it’s immediately cool because nobody has it,” he said. The company’s brand also has caught the eye of marketers. Ford Motor Co. ’s advertising agency, Dearborn-based Team De troit , took a Detroit Surf Co. snowboard, surfboard and skateboard to the South by Southwest festival in Austin, Texas, in 2013, he said. Tuzinowski is conflicted about his company’s growing success. “The more employees and more revenue I had, the more headaches I had. I’m trying not to repeat those mistakes I made. Keeping myself happy is most important,” he said. Tuzinowski, who has trademarked dozens of names and URLs similar to Detroit Surf Co., said he has been approached with investment offers, but he’d rather sell the company entirely to one of the major brands. “I might entertain something like that,” he said. “We’re growing exponentially.” 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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4/24/2015

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MARXMODA, from Page 1: Selling ‘living office’ idea tate Services’ Madison Building. MarxModa has already secured new business with companies big and small, Marx said, from Quicken Loans to General Motors Co., General Electric Co. and Michigan State Uni versity . Other local clients include Jet’s Pizza and Hour Media LLC. Marx said he expects to double the company’s combined $80 million in revenue within five years, adding employees as needed. “I’m blessed to have access to the people who run these companies because I’ve worked with them,” Marx said. “The whole philosophy of this company will be: How do we combine business leaders’ strategies with the way people work?” The work environment also is key in talent attraction and retention, Marx said. “We’re going to appeal to the business strategy of people who run businesses and create environments that enable them to achieve results,” he said.

Metro Detroit roots After 15 years of working with the top leaders of big companies like GE, GM, Ford Motor Co ., Delphi Au tomotive Corp. and GlaxoSmithKline on everything from mergers and acquisitions to global manufacturing strategy, sales excellence and talent attraction and retention, Marx said he and his wife decided it was time to come home to metro Detroit. The Detroit-area natives both had lost their fathers and made the decision to move closer to their mothers, who still live here. As he was informing clients that he planned to wind down his business, Marx said one of those clients had a proposal for him. Herman Miller Inc . President and CEO Brian Walker had worked with Marx and said he could see the alignment between his management consulting work and the Holland, Mich.-based manufacturer’s “living office” concept pairing Brian Walker: strategic office Saw Marx, Herman design and its Miller alignment. products to help clients meet business goals. The approach takes a fair amount of problem-solving, Walker said, something he’d seen Marx do as he worked with the Herman Miller team. Marx, who worked in sales for Herman Miller years ago, also has a great network of people he knows not only as clients but as friends, Walker said. “In our business, if you can find a leader people are attracted to, you’re going to find customers ... as well.” Walker said Marx had the same thoughts on where Michigan is headed and where the opportunities are. “Detroit has got, I think, a real shot at being one of the comeback stories of the next decade,” Walker said. “I think we both saw that if

you’re really going to lead in Michigan, you’ve got to be on both coastlines.” Seeking office space Since merging the two Herman Miller dealers into one, Marx said he has been touring available downtown Detroit office sites with 12,000-20,000 square feet of space, with the goal of moving the company’s headquarters from Pontiac by year’s end. “If you look at greater Detroit, it’s probably half of the Michigan market,” he said. “The focus on people moving into downtown Detroit creates significant opportunities for us.” So far, most of the downtown spaces Marx has toured are not large enough. He said he may decide to split the headquarters between Detroit and Birmingham . MarxModa would have nearby competition in Detroit from at least one office furniture dealer. Airea Inc ., a Farmington Hills-based Ha worth office furniture dealer owned by former Detroit Pistons guard Vinnie Johnson, opened a downtown studio on the ground floor of the Compuware Building in 2013. Airea outfitted the studio with nontraditional work zones ranging from a single-person lounge to a 40person conference space and set it up as a place people can hang out while Web surfing or meeting with clients. The goal, President David Kiwior said at the time, was to gain new clients as they became familiar with the options Airea offered. Facility Matrix Group and WorkSquared were Nos. 2 and 3, respectively, on Crain’s 2014 list of the largest office furniture dealers, each with $33 million in revenue in 2013, behind National Business Supply Inc. in Troy, which had over $91 million revenue. Facility Matrix Group, which even has an office “nest”— or an elevated thinking space — at its Pontiac site, also ranked No. 20 among Crain’s coolest places to work last year.

Scarcello Associ ates Inc ., a commercial interior design firm she founded 34 years ago. Aside from Herman Miller, Harrell Scarcello: they include Office furniture now Grand Rapidsfits way folks work. based Steelcase Inc. (NYSE: SCS), Holland-based Haworth Inc . and Pennsylvania-based Knoll Inc . (NYSE: KNL). “Everyone is realizing that ... how you support people, enable them to work efficiently and innovatively, is a critical driver of how successful your business is going to be,” Scarcello said. The consolidation of FMG and WorkSquared into a single Herman Miller dealer leaves only Haworth with two dealers in the region, she said. Marx merging the two companies is a departure from past consolidation in the market, Scarcello said, given that both were vigorous companies when he acquired them. Past consolidation that has happened, such as Knoll dealer Interior Dynamics Inc . in Troy folding around 2008 and Steelcase dealer Workplace Integrators in Bingham Farms closing before that were the result of more distressed businesses, she said. “The stakes are high for the manufacturers to have their local dealer base be very strong,” Scarcello said. 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

A SUITE DEAL

New ways of working The nontraditional work environment that aligns with corporate goals is something that has grabbed Eberspaecher North America Inc .’s attention as it plans a 40,000square-foot office space as part of an expansion to triple the size of its Brighton facility to more than 300,000 square feet, said program manager Frank Zsirai. Zsirai said the company sought an outside perspective to develop a working environment “that helps us perform better as an organization and a team.” Some examples of features planned in the Brighton space: sitto-stand tables and more open environments to foster collaboration between designers and engineers. All large office furniture makers are providing nontraditional work environments that better fit the way folks are working, said Harrell Scarcello, president of Southfield-based

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4/24/2015

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BERINGEA, from Page 1: U.K. firm wants to raise the curtain on Michigan manufacturing one British patent for its curtains and has applied for four international patents for its Fantex products. All In One has launched the product line in the U.K. and is in the process of getting approval from the U.S. Food and Drug Administration to sell it here. It won’t need FDA approval for another line of powders and lotions it will market to pet owners of dogs, cats, horses and the cleanup needed for their bedding or sleeping areas. John Hawkins, chairman of All In One, was here last week looking at commercial sites to lease in the range of 20,000 to 25,000 square feet

where he can install equipment to make curtains and blinds. He said he will be back in a month to look at more sites. John Hawkins: He said the Expects $75 million in company plans to revenue forAll in One. have $75 million a year in revenue in five years, split equally between the U.S. and the U.K., with 300 U.S. employees. He currently employs about 40 in the U.K., where the company has revenue of about $5 million.

“It makes sense for us to be in the U.S.” said Hawkins. “The health care market here is four and a half times the market in the U.K.” Hawkins, a former managing partner with the consulting firm Accenture, said the firm’s disposable curtains, which go around a patient’s bed, and the window blinds are treated with antimicrobial chemicals to reduce hospital infections such as MRSA, or methicillinresistant staphylococcus aureus. A year ago, Beringea invested $4.5 million in All In One from two funds it manages in London: the ProVen Venture Capital Trust plc

fund and the ProVen Growth & In come Venture Capital Trust plc fund. Now, Beringea plans a matching amount to finance the U.S. expansion. The funding may come from its Michigan Growth Capital Partners Fund LP, which was formed in 2008 with an investment of $150 million from the state of Michigan’s retirement system. The growth fund was a component of the $300 million InvestMichigan program the state started that year. Beringea has $335 million in assets under management in its Michi-

gan operations and about $225 million more in its U.K. operations. All In One Medical is a dba for Disposible Cubicle Curtains Ltd., which was founded in 2003. Its curtains and blinds will continue to be marketed under the All In One brand. In 2009, the company won what it claims to be the U.K.’s most prestigious corporate award, the Queen’s Award for Enterprise Innovation, for its disposable curtain. According to Charlie Rothstein, Beringea’s senior managing director, All In One has found a U.S. chemical company to make the Fantex line for sale in the U.S., pending FDA approval, and plans to eventually find a Michigan manufacturer. Charlie Rothstein: The products “There are so many are water soluble opportunities.” and are claimed to be nontoxic. Rothstein said Beringea plans to license Fantex formulations for use by other manufacturers, such as for antimicrobial clothing and in running shoes, and has begun negotiations with a major clothing manufacturer in the U.K. “There are so many opportunities,” he said. In a demonstration at Beringea’s headquarters, Malcolm Moss, a founding partner at Beringea who runs the London business, which operates as Beringea LLP , poured some of what is called absorbent spill powder into a small plastic Malcolm Moss: bowl containing Did the product an inch of fluid. demo himself. Thirty seconds later, the fluid and powder had formed a spongelike mass that could be picked up and thrown away. Moss said the powder can be used to clean up blood spills or urine from household pets, and as the sponge forms, it lifts the blood or urine out of whatever surface it is on, including carpets. Hawkins said the company has distributors in the Middle East, Scandinavia and Australia and is looking to add distributors in other regions. Earlier in April, Beringea LLC and Beringea LLP invested about $13 million of a $19 million round in D3O , a maker of a soft, shock-absorbing material used in impactprotection products, with applications for many industries, including sports, military and work wear. That, too, had another Michigan connection. Recently, D3O introduced a line of flexible protective gloves that were designed with the help of the Biomechanical Engineer ing Center at Wayne State University. Beringea plans to have the center help in further product development. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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4/24/2015

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NO-FAULT, from Page 1: Proposal could cut $1B from state health care comes up short of covering costs. Changes have been proposed repeatedly to Michigan’s 42-year-old insurance law, though most were defeated by elected officials or at the ballot box, or died at the end of past legislative sessions. Few have seen this much traction. In the last legislative session, two of the biggest bones of contention were whether unlimited lifetime medical benefits should continue for patients with no-fault claims and how much health care providers should be paid for caring for them. The unlimited medical benefits remain under the current legislation. The version passed by the House Committee would limit charges for care of no-fault claimants to 150 percent of the Medicare reimbursement rate, much less than what is paid now. Despite the fact that the bills have been passed by the Senate, some say they remain uncertain of exactly how they would play out if passed. “I’m always concerned when we do something up here that ends up with more questions than answers,” said opponent Sen. Mike Kowall, RWhite Lake Township. “I think (the bill) is going to create more havoc than it’s going to repair.” Health care hit? The new cost structure could reshape the financial landscape of health care. Laura Appel, senior vice president of strategic initiatives at the Michigan Health and Hospital Association, said some initial research by that organization on the bills’ impact said health systems statewide could take a revenue cut of more than $1 billion per year from reimbursement changes. “And that (estimate is) just from the numbers we can look at, not counting post-acute care or attendant care or some kinds of nursing home care expenses that aren’t our (costs),” she said. But Rep. Tom Leonard, R-DeWitt Township, said the 150 percent of Medicare expense cap is also slightly above the industry average for what insurers currently pay under conventional health care plans, he said. “The obstacle some of us can’t get over is that auto insurance companies are paying three or four times what commercial health insurers pay for some of the same expenses. If they (hospitals) want to talk what is fair, I need them to help me define what is fair,” he said.

What Senate Bills 248-49 do Any medical providers who give care to a patient covered by no-fault personal injury protection can collect no more than 150 percent of what Medicare would pay for the same services.

Auto insurers must offer a two-year, $100 per-vehicle annual rollback on the insurance premium that goes to fund the Michigan Catastrophic Claims Association.

The Michigan Catastrophic Claims Association, which funds long-term care costs for the critically injured, would become a legacy fund after a new association is created for future claims.

Home health care providers who are family members would be capped at $15 per hour for attendant care services, starting three years after the law takes affect. Attendant care is a large portion of the claim association’s reported costs each year. Trained health professionals, including family members, are allowed to bill at higher rates. Unlimited lifetime medical benefits for no-fault claimants — a bone of contention in previous attempts to reform no-fault insurance — remains unchanged.

“I’m willing to work with any group on this issue, including the hospitals, but I would need them to explain to me why it’s necessary and fair to make those insurers pay three or four times as much.” A 2011 story in Crain’s cited a table distributed by the Coalition for Auto Insurance Reform, a group of insurers and business organizations, that showed no-fault reimbursement to providers for a spinal X-ray of $227.55 in the Detroit area, while Medicare would pay $55.89 and workers’ comp, $77.06. An MRI of the neck was reimbursed at $3,258.68 under no-fault, but at $483.98 under Medicare and $769.63 under workers’ comp. New MCCA same as old MCCA? The major difference between the new MCCA and the legacy organization appears to be that the new entity will be subject to Freedom of Information Act requests and generally be more accountable to the public. The legacy organization has repeatedly declined to provide details of its finances and currently is embroiled in litigation seeking to make it subject to FOIA. More openness is an upside, but there’s some risk to insurance payers. The current association earned more than $360 million in investment income in fiscal 2014, according to its latest financial report. That fund also has been paying just over $1 billion per year in reimbursements to its member insurers, across nearly 15,000 covered acci-

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: A.J. Desmond & Sons Funeral Directors .... 10 Archive DS ........................................................ 5 Beringea ..............................................................1 Blkbox Surf ......................................................26 Comerica Bank ................................................ 7 Compuware .................................................... 15 Crain’s Detroit Business ................................ 17 Detroit Lions .................................................. 30 Detroit Surf........................................................3 Diplomat Pharmacy ...................................... 16 Donnelly Penman & Partners ........................ 7 Eberspaecher North America ...................... 27 Facility Matrix Group ........................................1 FirstMerit Michigan ........................................ 7 Ford ............................................................ 14, 18 General Motors ................................................12 Gibbs Planning Group .................................... 4

Herman Miller ....................................................1 Insurance Institute of Michigan ................ 29 Loomis Sayles ....................................................7 Marx Consulting Group .................................... 1 MarxModa ........................................................ 1 Meijer .............................................................. 13 Michigan Bankers Association ...................... 6 Michigan Catastrophic Claims Association......1 Michigan Health & Hospital Association .. 29 Price Funeral Home ........................................10 Redico .............................................................. 4 SMART ............................................................ 14 Stryker ..............................................................16 Village of Bloomfield ...................................... 4 Whirlpool .......................................................... 11 WorkSquared .................................................... 1 Yazaki North America ....................................13

dent victims in recent years. The new claims would collect its premiums from drivers — not insurers, as the current association does — and would pay claim costs directly rather than reimbursing insurers as well. The bills would also require the legacy fund to continue until the last of its claim payments are paid before it can transfer all its remaining assets to the new association and dissolve. The average catastrophic claim has about a 30-year life expectancy, said Peter Kuhnmuench, executive director of the Insurance Institute of Michigan — and since the fund regularly takes on claim costs for children and teens, it could last much longer. But every no-fault payer, including the new association and the legacy one, benefits from the new cost control measure, Kuhnmuench and Leonard both said. That means the old MCCA could pay out millions less per year than what was projected when the association set its premiums, and its assets could last years longer before they’re depleted. This year, for example, insured motorists are paying $186 per year through their premiums to the MCCA, including more than $150 to cover all the future benefits of this year’s policy claims. The association is reducing the annual fee to $150 July 1. The new fund, meanwhile, would have no assets other than what motorists pay in once it’s certified, and insurers would not be liable for any shortfall if its claim costs exceeded projections. The current fund collects a $29.71 charge to cover past cost deficits, which reduces to a $4.50 charge this July. The new fund would have to collect its shortfall out of future premiums. Gloria Freeland, executive director of the new association, said becoming a legacy fund doesn’t mean all of the association’s future costs are immediately known. New claims enter the system from years past all the time, she said, as costs climb above the insurers’ benefit limits. Kuhnmuench also said the new fund’s assets should grow at first as premiums exceed payouts, giving it time to grow into its mission. Many new insurance claims will also need

time to exceed the initial $545,000 benefits cap. “I don’t think the new premium will be any different than the current assessment, because they’re going to do the same projection for the number of people in a 12month period who will need benefits going forward. Their cash flow that first year will have very little going out, although that will of course escalate over time,” he said. Projections and costs Passage of the bills isn’t a given. Opposition groups like the Coalition Protecting Auto No-Fault , composed of health care providers, attorneys and others, have said early polling and research showed the bills were just shy of majority support on the House floor — though that was before the two-year premium rollbacks were added. House Republicans who are expected to meet and discuss the bills’ progress this week are also likely to hear from Oakland County Executive L. Brooks Patterson, himself an accident victim requiring long-term care and an opponent of no-fault reform. Patterson said last week he has been texting and emailing state legislators, protesting their plans to change the current no-fault law. Yet to come Appel said she is concerned that the premium rollbacks for consumers are temporary and could even be offset by large premium increases drivers might pay into the new Catastrophic Claims fund, if it has a deficit and insurers aren’t required to cover it. “If that new fund fails, you now have $545,000 of coverage. That’s all you have,” she said. Kuhnmuench said the premium rollbacks at $100 per vehicle represent an immediate revenue cut of more than $690 million for auto insurers statewide, with no guarantee that their new claim costs will match that drop. “We don’t know the actual savings until the changes come in, and claims come in under the new law,” he said. “We can try to control claims costs a little bit, but we’re not controlling the frequency and severity of accidents.” John Cornack, president of the Coalition Protecting Auto No-Fault and of the Eisenhower Center, an Ann Arbor residential services center for people with brain injuries, said he is concerned the bills primarily reduce insurance companies’ responsibilities to patients without necessarily protecting consumers from exorbitant premiums over time. “We can’t sit by and watch and see if these things will tally up a different way for the (insurance) industry. They’re already doing just fine. We’re not even asking for our money back on what we’ve paid,” he said. “We just ask that they (insurers) quit attacking a system that’s running well.” Dustin Walsh and Tom Henderson contributed to this report. Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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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New Lions CFO tackles complex finances By Bill Shea

Allison Maki

bshea@crain.com

As an auditor with the Detroit office of Ernst & Young LLP during the heaviest fallout from the calamitous accounting scandals of the early 2000s, Allison Maki’s annual busy season became 12 months long. “I was ready for a change,” she said. One of her clients at EY was the Detroit Lions , and the team’s thenCFO, Tom Lesnau, knew she was ready to do something different. “He knew I was ready to leave,” she said. “He said, ‘Why don’t you come join us here?’” So she did, joining the football team as its director of finance in 2004 after seven years with EY (her first job after graduating from Albion College in 1997). On April 21, the Lions announced that Maki, 40, was promoted to CFO and senior vice president for administration. She’s one of eight female CFOs in the 32-team National Foot ball League. That means she has oversight of every penny coming in or going out of the Lions organization, from the hundreds of millions in revenue from ticket sales and from the NFL’s enormous shared broadcast contracts, to the eye-popping salaries paid to star players Matthew Stafford and Calvin Johnson. Maki now oversees the Lions’ finance group, human resources and facility operations at the Lions headquarters and training facility in Allen Park, and she will assist in the oversight and management of key business partners, the team said. She takes over from Luis Perez, who becomes senior vice president of business development and strategy after four years as CFO.

Age: 40 Job: CFO, senior vice president of administration, Detroit Lions. Past: Assurance and advisory business services manager with Detroit office of Ernst & Young LLP (1997-2004); joined Lions in 2004. College: Bachelor’s degree in economics and management from Albion College. Personal: Lives with husband, Ryan, in South Lyon with their twins.

league has provided us a little more stability in offering up programs that maybe we want to be a part of us, more support from a finance perspective.” Ensuring compliance with accounting rules and the NFL’s financial regulations are part of her daily routine as CFO. “You want to look at, in general, what other requirements you have for league reporting look like,” she said, adding that bolstering cybersecurity is one of her priorities on her to-do list. On the football side, she’ll work increasingly closer with her direct boss, Lions President Tom Lewand, when it’s time to negotiate player contracts. She has to ensure the money is there to pay everyone. “When we get close to free agency, Tom and I will be in more communication,” she said. Those discussions will include using cash on hand, bor-

rowing money or tapping lines of credit, if such moves are deemed the most efficient way of paying the bills. “From a financial perspective, cash is king. It really rules the roost,” she said. Her boss sings her praises. “Allison is an incredibly intelligent, dynamic and pragmatic executive,” Lewand said. “She has added enormous value to the Lions over the years, both in our finance department and as part of our independent audit team. In the process, she has earned the respect of many around the NFL and in the community of financial institutions.” Big small business While fans often think of NFL clubs as large corporations, Maki has a different perspective: “At the end of the day this a small business with a lot of dollars running through it, but there are a lot of costs.”

Managing the money Maki is the top accountant for a business whose labor expenditures get plenty of public scrutiny. Forbes.com in August estimated that the Lions had $254 million in 2013 revenue, with a nearly $16 million operating income loss. The team doesn’t discuss financial specifics, and league insiders dispute Forbes’ estimates. Based on the limited annual financial disclosure from the publicly owned Green Bay Pack ers, it’s known that the Lions would have received about $187.7 million from shared national revenue in 2013, and even more last season. Maki and her staff are tasked with handling all of the money in an efficient manner. “We are here to control costs,” she said. The NFL is a $12 billion organization, and the most popular sports league in the country, meaning it’s constantly in the spotlight — and the league headquarters keeps close tabs on the 32 clubs’ financials. It has to because its billions are shared among the teams. “You want to make sure you have good interaction with the league finance staff,” Maki said. “I think the

[NATHAN SKID]

Allison Maki controls and X’s and O’s of the Lions’ money,from revenue that comes in from ticket sales and broadcast contracts to the salaries given to players such as Matthew Stafford and Calvin Johnson.

(It’s a small business owned by one of America’s iconic and wealthiest families, the Fords, and the club is estimated by Forbes to be worth $960 million.) Aside from the $145 million in player salaries currently on the books — and millions more for coaches, front office personnel, trainers, and stadium and other staff — the Lions pay out significant sums for things such as the utilities for Ford Field. Without revealing specifics, it apparently costs a lot of money to keep the lights on and air-conditioning running. “There are a lot of costs that go under looked (by the public),” she said. One of those costs, which the Lions won’t discuss publicly, is the debt on Ford Field. The team privately financed an estimated $325 million of the stadium’s $500 million construction cost, with the remainder being a mixture of public funding and corporate contributions. Maki was a speaker during the 2013 Michigan Women in Finance annual meeting at Detroit Athletic Club, and biographical information published about her indicated that she had recently led a debt refinancing for the team — believed to be the remaining stadium debt. She declined to discuss the refinancing specifically, but did acknowledge that such moves are part of her job. “We’re always challenging our costs. If there are other avenues to mitigate current costs we have, we’re willing to go down those roads,” she said. But it’s the roster that is where most of the money goes. “In this business, your biggest expense is always going to be your player payroll,” she said. The team’s front office was criticized earlier this year for its handling of contract negotiations with free agent defensive tackle Ndamukong Suh, who left the Lions for a six-year, $114 million deal with the Miami Dolphins that includes $60 million in guaranteed cash. Detroit offered $102 million with $58 million guaranteed, the Detroit Free Press reported on March 9, citing unnamed sources. It was Maki’s job to ensure the Lions had the finances in place to handle such a deal. Lewand and team General Manager Martin Mayhew are the chief negotiators with the players — meaning Maki doesn’t get the venom from fans or pundits. Instead, she gets to spend her time on financials and planning for the future, and modernizing how the team handles its money. “Keeping up with where the rest of the world is going. It is so specialized,” she said. “Are we paying our suppliers and vendors the same way we did 20 years ago? Are we automating enough? We’ve got the right resources to take care of things unique to the Lions and sports. “I’m interested to see maybe 10 years out from today, what is digital

NFL’s female CFOs 䡲 Allison Maki, Detroit Lions 䡲 Karen Murphy, Chicago Bears 䡲 Kelly Flanagan, Jacksonville Jaguars

䡲 Christine Procops, New York Giants

䡲 Jeanne Bonk, San Diego Chargers 䡲 Cipora Herman, San Francisco 49ers 䡲 Karen Beckman, Seattle Seahawks 䡲 Jenneen Kaufman, Tennessee Titans Source: Detroit Lions

going to look like and what will be the financial impact on us,” she said. Cars to footballs Maki thought her Ernst & Young career would take her somewhere other than professional football. “Because you’re in Detroit, it’s so manufacturing and automotive based,” she said. Her early work as an auditor included tier-one and tier-two suppliers, and miscellaneous companies such as a cemetery — and the Lions. “It was so heavily automotive dominated, I thought at the time I would go into that industry. It’s not like I came out of college thinking I had to get into one of the sports teams in town,” she said. “I wanted to see where accounting takes me.” Some of Maki’s predecessors were auditors, too, including Chuck Schmidt and Tom Lesnau. Lesnau, a longtime front office figure with the Lions, is now a senior adviser to the club. Schmidt went on to run the team as executive vice president and de facto general manager before quitting in 2001. NFL teams became more sophisticated corporate entities as the sums of money generated by the broadcast contracts and merchandising grew into the billions throughout the 1990s and 2000s, and Maki was hired to help navigate increasingly complex finances that were under regular scrutiny. “As the business kept getting bigger and bigger, we realized we needed someone with public accounting expertise,” Lesnau said. “She fit in well with everybody, and she excelled at grabbing new tasks as the league would push them down, such as more reporting and financial accounting from the teams.” Maki did grow up cheering for the Lions. The Northville native is the granddaughter of Italian immigrants who became Lions fans when they arrived here, she said, and before having children, she attended University of Michigan football games and high school games her husband helped coach. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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WEEK ON THE WEB/APRIL 18-24

RUMBLINGS

Display Group’s Packard site work continues

Stein Mart to enter region with move into former Borders in Rochester Hills

Renovations are moving forward with the Display Group’s $750,000 makeover of a building on the site of the former Packard auto factory. The updates are for a building at the Detroit complex known as Building 22, AP reported. The event specialist made the 255,000square-foot warehouse into its new headquarters and celebrated last week. Renovations include a new 10,000-square-foot event space.

ON THE MOVE

䡲 David Lamb was named president and CEO of Oxford Bank Corp. and its subsidiary, Oxford Bank, effective May 1. Lamb, 52, replaces C. James Best, who will remain a consultant during a transition period. Since 2008, Lamb was president and CEO of Southfield-based Hantz Holdings Inc. and Hantz Bank. 䡲 Doug Glazier, chief development officer at Detroit-based Henry Ford Health System, left to become executive director of the Leukemia & Lymphoma Society, Michigan Chapter in Madison Heights. He succeeds Laura Loughridge, now vice president of development at the Michigan Science Center in Detroit. 䡲 The Southfield-based National Bone Marrow Transplant Link named Peggy Burkhard executive director. She succeeds founding Executive Director Myra Jacobs, 74, retiring after 23 years. Burkhard, 49, has been public relations and marketing director for the Ann Arborbased Donate Life Coalition of Michigan.

COMPANY NEWS

䡲 The U.S. Department of Justice sued Quicken Loans Inc. in U.S. District Court in Detroit, alleging the Detroit-based mortgage lender improperly originated and underwrote federally insured mortgage loans. The government alleges that Quicken originated hundreds of Federal Housing Administration-insured loans between September 2007 and December 2011 that were not eligible for the federal program. 䡲 New York-based Ashkenazy Acquisition Corp., which owned the now-shuttered Northland Center, missed its payment this month on a $37.43 million loan tied to Eastland Center in Harper Woods. The loan transferred to Needham, Mass.based CWCapital Asset Management LLC due to imminent default. 䡲 Southfield-based Presbyterian Villages of Michigan and Northvillebased Homestead Home Health Care formed a joint venture to provide community-based and in-home care and services for seniors. 䡲 BoostUp, one of Detroit Venture Partners’ portfolio companies, said it is one of eight companies nationwide to be accepted into the 2015

[NATALIE BRODA]

SIGNS OF SPRING: Ifthese newlyblooming daffodils next to the Belle Isle Conservatory in Detroit make you smile,check out a series of spring scenes in the D in an online gallery at crainsdetroit.com/photo. class of Reach, a Chicago-based accelerator program for technology companies. 䡲 Eugene, Ore.-based Will Leather Goods, a seller of highend, hand-crafted leather bags and accessories, is headed for a 9,000-square-foot location at 4120 Second Ave. to open Sept. 1. 䡲 Chesterfield Townshipbased Burtek Enterprises Inc. won a three-year pact to supply Bethesda, Md.-based Lockheed Martin Corp. with exterior and frame components for at least 128 launch systems for U.S. Navy shipboard missiles. 䡲 Ann Arbor-based Michigan Angel Fund closed on a second investment fund of $2.05 million, targeting early-stage investing in Michigan tech startups. 䡲 A new five-year pilot program between accounting firm Deloitte LLP and Cornerstone Schools will provide enhanced math, accounting, problem solving, management and business ethics training to students. 䡲 Livonia-based TRW Automotive Holdings Corp. agreed to sell its linkage and suspension business to Tokyo conglomerate THK Co. Ltd. for $400 million. The divestiture is expected to close by the end of the third quarter. 䡲 The Detroit Lions signed a three-year corporate marketing deal with New York City-based daily fantasy sports giant FanDuel Inc.; financial terms were not disclosed. Meanwhile, the Lions’ 2015 schedule includes a franchise-record six nationally televised games, including a homeopening Sept. 27 appearance on NBC’s “Sunday Night Football” against the Denver Broncos. 䡲 German industrial conglomerate ThyssenKrupp AG announced plans to invest $869 million in North America by 2020 in an effort to profit from increased auto production in the region. The company operates its North American steel operations in Southfield as ThyssenKrupp Steel North America Inc. and has several regional subsidiaries. 䡲 Ford Motor Co. plans to cut 700 jobs and eliminate the third shift at its small-car assembly

plant in Wayne, in the company’s first large-scale layoff of tier-two wage workers, Automotive News reported.

OTHER NEWS 䡲 The Detroit City Council approved a zoning change needed to begin building the $535 million hockey arena for the Detroit Red Wings, and the Downtown Development Authority green-lighted nearly $55 million in construction contracts for the project. The largest was a $50.7 million contract with Detroit-based Midwest Steel Inc. for structural work. 䡲 Metro Detroit’s suburban bus system, the Suburban Mobility Authority for Regional Transportation, launched a “RideSMARTBus” app, available for Android and Apple mobile devices. Developed by Lansingbased Gravity Works, it has realtime bus tracking technology, a trip planner and service alerts. 䡲 Friedman Integrated Real Estate Solutions LLC confirmed the Albert Kahn Building and the Fisher Building are heading to an online auction June 22-24. 䡲 The sale of the Pepper Shoe Building in downtown Detroit to Livonia-based Schostak Bros. & Co. has closed. Schostak plans to turn it into an additional 42 loftstyle apartments with 5,000 square feet of first-floor retail space at the Lofts of Merchants Row.

OBITUARIES 䡲 A. Alfred Taubman, founder of Bloomfield Hills-based Taubman Centers Inc. and prominent local philanthropist, died April 17. He was 91. 䡲 Elizabeth Weaver, a former Michigan Supreme Court justice who stunned her colleagues when she said she had secretly recorded their discussions, died April 21. She was 74. 䡲 John A. (Jack) George, former longtime chief psychologist at Oakwood Hospital, Dearborn, and former associate professor at Wayne State University, died April 18. He was 82.

As television commercials airing locally may have been hinting for some time, Stein Mart is entering the Southeast Michigan market. The Jacksonville, Fla.-based discount clothing and housewares store is moving into the former Borders location in Rochester Hills. Construction is underway to add 5,600 square feet to the 51,000square-foot building, said Sara Roediger, manager of planning for the city of Rochester Hills. Stein Mart will occupy 32,000 square feet, adjoining the Pet Smart location also operating from the building at 1122 Rochester Road between Avon and Hamlin roads. The city Planning Commission approved the project in December. The retailer hopes to be in the building by June 1, said Rochester Hills Mayor Bryan Barnett. “The city is really excited to welcome Stein Mart,” Barnett said. “We think it will be a great regional draw.” No incentives were provided to attract the retailer, he said. After Borders closed in 2011, Famous Furniture operated from the site, owned by Ramco-Gershenson Properties Trust, Farmington Hills. The Rochester Hills location is one of 11 new sites Stein Mart plans to open this year. Other locations set to open include Atlanta; Florida (two stores); Southern California (three stores); Long Island, N.Y.; Phoenix; and Virginia Beach, Va. The Rochester Hills location will be Stein Mart’s second in Michigan. A store in Portage, near Kalamazoo, opened in 2001.

It’s official: Kevyn Orr plans to rejoin Jones Day It’s officially official: The man who shepherded Detroit through the largest municipal bankruptcy in U.S. history expects to rejoin soon the law firm he left two years ago. Former Detroit Emergency Manager Kevyn Orr will return to the Jones Day office in WashingOrr ton May 1, the firm announced last week. Gov. Rick Snyder appointed Orr as Detroit’s emergency manager in March 2013. Under Orr, Detroit filed for bankruptcy that July. Orr stepped down in December 2014 as Detroit emerged from Chapter 9. Orr was hired by New Jersey Gov. Chris Christie this year to help fix Atlantic City’s finances.

Event to honor careers, service of local women At a Tuesday night event, the Southeast Michigan Women of Achievement and Courage Awards

will honor the careers and community service of four local women: Marlene Boll of The John A. & Marlene L. Boll Foundation; Donna Inch, chairman and CEO, Ford Land; Grace Lieblein, vice president, global quality, General Motors Co.; and Andra Rush, chairman, Rush Group. Boll is receiving a Trillium Award, a lifetime achievement award. The awards, to be held at the MGM Grand Detroit, are hosted by the nonprofit Michigan Women’s Foundation, which also hosts a West Michigan achievement program. See www.miwf.org.

State’s newest celebrities to join hall The Detroit chapter of Variety The Children’s Charity plans to induct several local personalities, including Crain’s Detroit Business Publisher Mary Kramer, into the Michigan Celebrity Hall of Fame during a May 1 gala. This year’s honorees are Kramer; Fox 2 co-anchors Monica Gayle and Huel Perkins; and WJR 760 AM radio host Paul W. Smith. They’ll join past honorees, including Broadway legend Elaine Stritch, ABC News Kramer correspondent Bob Woodruff, Detroit Free Press columnist Mitch Albom, retired WXYZ-Channel 7 anchor Diana Lewis, and the late author and Wall Street Journal columnist Jeffrey Zaslow. The black-tie fundraiser to benefit Variety takes place at Emagine Royal Oak, beginning at 6:30 p.m. Tickets are $150-$350. See www.variety-detroit.com.

Volunteers can plant more trees at Hantz Woodlands Organizers expect at least 1,000 volunteers — individuals, businesses, neighborhood organizations and others — to show up to plant 5,000 more trees at Hantz Woodlands on Detroit’s east side on May 9. Holes at Hantz Woodlands, which is billed as one of the nation’s largest urban tree farms, will be predug for the 4- to 6-foot tulip poplar trees; volunteers will simply put the tree in the hole and cover it with dirt. This is the second time a volunteer tree-planting will be held, following last year’s planting of more than 15,000 saplings. The farm is on 15 acres within about 150 Hantz-owned acres. The site is in the square mile bounded by Mack and Jefferson avenues and St. Jean and Van Dyke streets. For more details, see www.hantzfarmsdetroit.com.

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